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April 2010
Madhavan Nambiar Secretary, Ministry of Civil Aviation Praful Patel Minister, Civil Aviation
Arvind Jadhav CMD, Air India
Vasudevan Thulasidas Former CMD, Air India
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EDITOR-IN-CHIEF’S NOTE
Indian aviation hates the ‘C’ word
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hen the gloom and doom overtook Indian aviation in 2008 in sync with the downward spiral of the economy in the West, the word that was often repeated was: ‘consolidation’. That was the need of the hour. The general inference was that unless there were synergies and one ran a tight ship, doomsday was round the corner. Two years down the line, Indian aviation continues to bleed, although the first signs of recovery are visible. And, mind you, all this has happened without any consolidation. Those who consolidated are the worst off: Air India-Indian Airlines, Jet Airways-Air Sahara and Kingfisher Airlines-Air Deccan. IndiGo and SpiceJet are on top of their game and the other two — Paramount and Go — continue to prosper despite their share of woes. So, what are the lessons of these 24 difficult months? ‘Consolidation’ isn’t a very comfortable word in
the India aviation milieu. Why, they don’t even like synergy. The worst example is AI-IA that have merged, but is literally a free-for-all. The Jet Sahara merger is now slowly getting in place, but Naresh Goyal is still to recover from the blotches on his balance sheet. And, Kingfisher continues to reel under huge losses and has actually shrunk in size to what it was two years ago. So much for consolidation and safety in numbers.
Even ‘synergy’ isn’t exactly a welcome word.
That’s what Kingfisher and Jet were supposed to do two years ago. Now they are synergising to make sure their flights to London are back-to-back-taking off from either way within half-an-hour of each other! Ditto for several other destinations.
A focus on the basics and a long-term perspective
of the business helps. Both SpiceJet and IndiGo
CRUISING HEIGHTS April 2010
have been exceptional in their on-time/route planning and customer satisfaction. In fact, if anything it’s a race between these two to be the best airline of the country.
As IATA has rightly outlined, there seems to be a
‘structural shift’ against Business Class. Institutions that migrated to the LCC model these last two years seem to prefer the prospects of economy travel unless the trip is long haul. Even full service carriers like Jet have been forced to make adjustments for this segment within their existing set-up.
It is also evident that there is nothing united about
the aviation business. It’s a completely free thinker’s game and each one to himself. No wonder the Federation of Indian Aviation is a toothless wonder: they haven’t managed to get a thing past the government and they continue to wallow and hope that deliverance is around the corner.
Officers in the Ministry of Civil Aviation do not tire of elaborating that there is simply no 'unified voice' from the industry. In fact, they describe this as one of their biggest problems in dealing with issues like bilaterals. While there could be a genuine difference in perception on such matters, what is really startling is the effort to drag each other down. One of the main reasons why foreign direct investment hasn’t come into the aviation sector so far is because many key players are lobbying vigorously at cross-purposes. Similarly, when it comes to policy — as with ground handling — there is no common position. Inevitably, as things move forward, it will be airlines versus airlines and airlines versus airport operators. As in the Mahabharata (where the warriors retired at night to start afresh the next morning), our stalwarts can take a break when there is a slump and start afresh when things look up as they are doing now. When will they ever learn!
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Off the cuff
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Ready scans In a month or so, travellers flying out of Delhi's Indira Gandhi International Airport (IGIA) would be subjected to pass through body scanners. IGI's upcoming terminal — T3 — will be the first of its kind in the country to deploy body scanners which will produce an image of a passenger’s body to detect hidden objects. The Ministry of Civil Aviation is considering installing these body scanners on a trial basis once the new terminal is commissioned. After Delhi, Mumbai could be the next airport to get these scanners. Apart from the question of impropriety and invasion of privacy, the question that is being increasingly asked is: Are these body scanners safe? These fullbody scanners fall into two main categories: millimeter wave and backscatter. The first directs radio waves over a body and measures the energy reflected back to render a 3D image. The latter is a low-level X-ray machine that creates 2D images. The scanners are supposed to be the high-tech (and energyinefficient) version of a pat down, and can detect items such as nonmetallic weapons and explosives not picked up by metal detectors. Millimeter wave scanners produce 30 to 300 gigahertz electromagnetic waves, and reveal explosives if they are denser than other materials. This means that these scanners emit less radiation than a typical cell phone, according to the US Transportation Security Administration TSA. The backscatter machines, meanwhile, are low-level X-ray machines that expose bodies to as much radiation as about two minutes of flying in an airplane does. As for privacy, these stateof-the-art technology cannot store, print, transmit or save the image.
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WANTED: A HERO TO SAVE AIR INDIA p36 Once upon a time there was an airline; healthy, wealthy and with a shining crown. Today, there is a sick airline, deep in debts and losing its reputation by the day. That is the story of Air India. A list of reasons behind this regression and what can be done to send it soaring in the air again.
NEWS DIGEST
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Air Asia sets off a big and unusual competition in the aviation industry, airlines providing salvation @ the “maximum possible”costs, GHIAL reveals its ambitious Aerospace Park project, IATA revises its forecast and much more. CRUISING HEIGHTS April 2010
SPOTLIGHT
p44
In the second edition of India Aviation at Hyderabad, it was evident that recession had been pushed to the backburner. The presence of the world’s top aircraft manufacturers was proof that Indian aviation had come of age.
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contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST
SPECIAL REPORT p28
CRUISING HEIGHTS Volume IV No 12
Editor-in-Chief K SRINIVASAN Managing Editor
TIRTHANKAR GHOSH Consulting Editor
R KRISHNAN
FOCUS
Country’s interest or consumer’s? That’s the theme for the turf war between Air Canada and Emirates which wants to fly to more destinations in Canada. The inside story.
p31
While the three Government-run flight training institutes have been performing excellently, the institute at Hyderabad has ambitious plans. It wants to make Air India self-reliant as far as pilots are concerned.
Co-Ordinator Editor
PRIYANKA SAXENA Special Correspondent (Mumbai)
ROOHI AHMAD Reporters
JASLEEN KAUR, SREYA SHANDILYA, PUNIT MISHRA Art Director
BHART BHARDWAJ Design
RUCHI SINHA, PRADEEP JHA, SHIV Photo Editor
H C TIWARI Director
RAVI SHARMA (Mob. 9650433900)
Director (Admin & Corporate Affairs)
RAJIV SINGH
GLOBETROTTING CARGO
p64
The weird outfit of Lady Gaga landed her in trouble in the air, and a flight had to be cancelled due to fights between stewardesses.
p49
India is all set to have its first air freight station (AFS) in Chennai. The station is seen as the first step towards the development of cargo villages, one of the major demands of the freight forwarding community in the country.
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BACK PAGE
p72
More trin-trin will be heard on planes now, as carriers allow mobile services in the skies.
SNIPPETS
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Pawan Hans has signed two JVs with Eurocopter, IGI runway is being improved, Emirates has started flights to Senegal and Air China to Bengaluru and lots more.
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Cover photos: Praful Patel and V Thulasidas by H.C.Tiwari Cover Design: Ruchi Sinha
CRUISING HEIGHTS April 2010
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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 Adver-tisements 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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Extremism not allowed
PERISCOPE
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“Airlines can’t be allowed to unreasonably alter fares to enjoy benefits of a monopoly on certain routes at the cost of the traveller.”
PRAFUL PATEL, Minister, Civil Aviation, on airlines for charging abnormally low and high fares.
LETTERS TO EDITOR
The interview of Praful Patel (“We have set the ball in motion, March ’09) was interesting to read. The Civil Aviation ministry has its major work cut out for 2010. Praful Patel has rightly pointed out that 2010 will provide stability to the Indian aviation sector. His predictive analysis of the sector spells good times as the sector showed an upward trend during the end of 2009. The interview reflects his clear vision and foresight to bring the aviation sector back into reckoning. Siddharth Deb, Kolkata March 2010
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Illustrations: Rajeev Kumar
The cargo story (Air India readies to lift big, March ’09) provided an analysis of the newer trends emerging in the Indian cargo sector. Air India cargo is taking a big leap forward by introducing more cargo services which is a welcome step especially when the cargo sector in India is passing through tough and turbulent times. The future projections from the Air India cargo chief, Anita Khurana, looks quite impressive in the long run. Ram Singh, Bhopal
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(Pushed back — once again for the third time, March ’09) took a look at the issue of the Ground Handling Policy (GHP) seriously. The implementation of the GHP remains on paper since 2007. It has been quite a while since it was introduced and its non-implementation is a serious issue as it brings out major fallacies in the policies of the Ministry of Civil Aviation. The government should have taken steps to finalise the Ground Handling Policy after talking to the stakeholders. The crux of the matter is that the policy implementation has not had any courage of conviction. Iqbal Khan, Hyderabad All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin (East), New Delhi -13, OR mail to cruisingheights@newsline.in.
Gimme back! “They have confirmed $145 million they will pay as compensation for the delay and so we have tried to push the entire delivery...” ARVIND JADHAV, Chairman and Managing Director, National Aviation Company of India Ltd (NACIL) on the delay in delivery of Dreamliner B787-800.
Whatever is happening… “It is unjustified, it is deplorable.” British Prime Minister GORDAN BROWN on British Airways’ cabin crew strike.
Switch on your mobile, please! “We have received suggestions and the Ministry (Civil Aviation) has also asked us to examine it. I am looking at the legal requirements.”
NASEEM ZAIDI, Director General of Civil Aviation on reviewing norms on using mobile phones on aircraft.
Truly speaking “India is very important to us. It is one of our largest markets and we are committed to expand here.”
AKBAR AL BAKER, CEO, Qatar Airways on ramping up capacity in the India-Qatar sector.
Give me a sky, give me a plane “We can reach great heights.” RASHMI MIRANDA, Commander of Air India’s Mumbai-New York non-stop long haul flight that flew for the first time today with an all-women crew to mark the International Women’s Day.
Not prohibited (now) “Previously there were too many taboos that left no room to manoeuvre. These have disappeared.” ULRICH OGIERMANN, Chairman, The International Air Cargo Association (TIACA) on the positive outlook of the cargo companies after recession.
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There are airlines and airlines but which one is the best of them all. Every year, travellers around the world choose the best airlines in a survey conducted by Skytrax. In the tenth anniversary of the awards, airlines were judged in 34 categories.
The winners were selected by more than 16 million air travellers from over 95 different nationalities. Cathay Pacific won the Airline of the Year award for the third time in the last ten years. Malaysia Airlines took the title of Worlds Best Cabin Staff for the sixth time in the last ten years.
Emirates, another repeat winner in the Airline Awards, was named winner of Best Airline In-flight Entertainment — for the sixth time in ten years. Singapore Airlines won two awards: the Best Airline First Class and Best First Class Airline Catering titles. The carrier also won the second rank in the Airline of the Year award category. Qatar Airways won the Best Airline in the Middle East and also walked away with the award for Best Economy Class. Etihad Airways was named for the Best Business Class as well as for the best Business Class Catering.
COLD STATS
Top of the airline charts
LOOKING GLASS ...So they are no longer two, but one. Therefore what has been joined together, let no minister or committee separate”
Be positive “The changed economic scenario has seen a steady rise in air traffic growth.” NIKOS KARDASSIS, CEO, Jet on positive economic changes and development.
For a change “Today we have some good news to present. The good news is that we’re cutting our loss forecast in half.” GIOVANNI BISIGNANI, Director General, IATA on changing its earlier loss predictions after a stronger recovery than expected by airlines in Asia and Latin America.
CRUISING HEIGHTS April 2010
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FIREWALKERS INC
As fuel prices touch the stratosphere, airlines owners get edgy. It’s like walking on hot coals: they are cutting costs, dropping routes and wondering what to do next
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June 2008
The right stuff, all the time, on time Get your copy today. Call 91-120-4145555 or SMS SUB CH at 53030
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FIREWALKERS INC
As fuel prices touch the stratosphere, airlines owners get edgy. It’s like walking on hot coals: they are cutting costs, dropping routes and wondering what to do next
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OFF THE RECORD
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hat on heavens has happened to V Sridhar, the former Chairman and Managing Director of Pawan Hans Helicopters Ltd? Some years back, he took voluntary retirement from service to focus on opportunities outside the public sector environment. Fortunately for him, there were several ICAO opportunities available and he spent some time in Africa. And then, the luck of the roulette swiftly changed and he was caught up in a CBI enquiry into some issues during his tenure. As a result, he had to surrender his passport, forget about overseas assignments and focus on getting his name cleared. And as the case dragged on and on and the CBI continued its enquiries, Sridhar did the next best thing to working for the UN. He decided to chill out, concentrate on his love for photography and prepare to make another expedition to Mount Kailash. His photographs have to be
seen to be believed. They are professional quality, shot with an eye for detail and a great feel for the right frame! But will the case ever be over for Sridhar to get back into the groove. Some time back in a brief conversation, Sridhar was full of praise for his successor, R K Tyagi and the manner in which he had transformed Pawan Hans into the frontline of the civil aviation PSUs. Not just that, he felt they had been exemplary in dealing with the issues related to his case. In the end, he shrugged his shoulder and walked off. It was as if he simply wanted to say Que Sera Sera (whatever will be will be).The latest one hears is that Sridhar’s case is now winding up and the good man will soon be a free bird (or maybe he is by the time you get to read this copy).We called his home to check and someone said: Saab Narmada foto lene gaye hain (he has gone to the Narmada to take pictures). We will make sure to carry one in the next issue of CRUISING HEIGHTS.
V Sridhar
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Photo: H.C. Tiwari
Que Sera Sera
Praful Patel
Silver lining!
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n the midst of all the doom and gloom, the Civil Aviation Minister has had a few silver linings. He was on a whistle-stop tour of the US in the last week of March that saw him in a flurry of meetings in Washington: with the US Secretary of Commerce Gary Locke; US Secretary of Transportation Ray LaHood and the US Federal Aviation Administrator (FAA) Randy Babbitt in Washington. The civil aviation sector had emerged as the fastest growing component of bilateral trade, accounting for about 15 per cent of US exports to India. Mantriji also addressed a 200-strong gathering of US government officials, US business representatives, NRIs, and Indian Americans at the celebration of ‘Air India’s Capital-to-Capital Connectivity: Bringing Washington and Delhi Closer’; a cultural reception organised by the US-India Business Council with a few partners to publicise the new Air India link between Washington DC and New Delhi. The airline has taken a big hit on the route (over Rs 700 crore in this fiscal) and there are reports about second thoughts at continuing on this sector. It’s actually astonishing that a class product like this is in such red, but that’s what happens when the onward connectivity at either end isn’t seamless. And that’s still a long way away. Anyway to come back to the point, the high point of the visit was the minister’s presentation to business students at Kellogg on the success of Indian aviation.
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Narrow escape for Mulayam Singh
Q:
Dinesh Trivedi
Let the good times roll
T
Mulayam Singh Yadav
the BSP next day lashed out at the SP saying that it was rowdy elements from the SP that was responsible for a breakdown of the system at the airport. “The poor socialists don’t know that when their big leader arrives by air, they have to keep off the runway. For them, it is a simple road on which to cycle.” What’s your answer Mulayam?
VVS D at the Show
Photos: H.C. Tiwari
here is no doubt that Union Minister of State for Health, Dinesh Trivedi's passion for aviation supersedes everything else. Trivedi specially flew to Hyderabad for the air show only to attend the inaugural ceremony and flew back soon after. Although, he is now a minister and no more a member of the Civil Aviation Consultative Committee, Trivedi keeps track of the Indian aviation scene and the movers and shakers of the industry continue to gravitate towards him for advice, suggestion and help. Another interesting link is the fact that Trivedi’s key aid these days is Kamal Choubey. This dapper officer was, till the other day, a member of Praful Patel's staff and in that sense, there was some continuity in the inaugural function. It was just like the good old times.
Who do you blame when a cyclist bursts into the runway just as a plane is about to land? A: Poor security B: Mayawati C: None of the above Well ‘C’ can quite easily be ruled out, but depending on your political preferences, it could well be a combination of ‘A’ and ‘B’ as made out by Samajwadi Party chief Mulayam Singh Yadav. He had a narrow escape recently when a cyclist suddenly appeared on the runway just as his plane was landing at the Saifai aerodrome in Uttar Pradesh’s Etawah district. On his way from Delhi to Lucknow, Yadav had made a brief stopover at Saifai, about 250km from the state capital. Yadav was quick off the blocks. He described it as a ‘serious security lapse’, that was because of Mayawati. “It is the Mayawati government, whose sub-divisional magistrate is supposed to take care of airport safety and security; therefore, it is surely an official lapse,” said Mulayam and as an afterthought added: “I am grateful to God almighty to have saved my life.” The airport was built in the village during Mulayam Singh’s chief ministerial stint and was used essentially by him and his family (they are the only ones who jet in and out of the area, being the big ticket Samajwadis!). But the most ingenuous explanation for the undoubted lapse came from a police official: “The cyclist was someone who had been deputed to shoo away a neelgai (blue-bull) that had strayed close to the runway.” Not to be outdone,
VVS Laxman with Debashis Saha
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ebashis Saha sure has friends in the right places. One of them is the elegant Hyderabadi maestro, VVS Laxman. The ace Indian middle-order cricket superstar came especially to the InterGlobe aviation chalet along with his young son. Celebrities like Laxman are usually hoitytoity and have little humility or grace. But VVS is an undoubted exception. For him, his friendship with Debashis preceded everything else and he was completely at ease sitting and sipping a cola with his son and chatting with Deb. That's cricket, Laxman!
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Ad-ing to the competition
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hen most visitors to the India Aviation Air Show at Hyderabad on the morning of March 3, 2010 saw the quarter page advertisement in the Times of India, they could do nothing but just stick their tongue out as a reflex action. It was an ad placed by the extremely aggressive Air Asia which has been slowly making its presence felt on the Indian aviation map taking the virulent
competition foreign carriers have unleashed on each other including Indian carriers to literally new heights. With BIG SALE emblazoned on a bright red background, the advertisement could have been mistaken by anyone for a garments’ sale. But it was no sale season in Hyderabad as Diwali was over a long time ago and New Year more than two months old. But as a reader closely saw the print, he could not miss the small image of an aircraft with the livery of Air Asia. The sale advertised a ridiculously low fare of Rs 2,999 to Kuala Lumpur from six South Indian destinations — Trivandrum, Kochi, Trichy, Chennai, Hyderabad and Bengaluru — and Kolkata. It said “all in fare from INR” in bold with a small fine print below “one way”. The fare was higher by Rs 2,000 at Rs 4,999 when KL was to be reached from Delhi and Mumbai. However, the real lollipop was the ridiculously low fare of just Rs 717 in Indian Rupees if the passenger wanted to fly onwards to Bangkok, Phuket from KL, Rs 1,448 if he desired to sun bathe in Bali, Rs 1,886 if he wished to see the Disneyland or any place in Hong Kong and Rs 2,179 if he wanted to fly from KL to the Gold Coast or Perth. The bookings were to be made between March 3 and March 7 for travel period
infrastructure
news >>>>
ANTI-HIJACK LAW TO BE AMENDED
The anti-hijacking legislation is being amended to include death sentence as punishment for perpetrators and a mandate to the government to order a hostile plane to be shot down if it is intended to be used as a missile. The decision, which also calls for a complete no-negotiations policy with hijackers, was brought up in the cabinet by the Civil Aviation Ministry after the ministerial group headed by Home Minister P Kandahar hijacking Chidambaram had examined and approved it. The group included Law Minister M Veerappa Moily, Human Resource Development Minister Kapil Sibal and Civil Aviation Minister Praful Patel. The new measures seek to deter hijackers and will come into
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from September 25, 2010 to February 13, 2011. Book now at airasia.com or via mobile.airasia.com said the strip below the ad. It was a strategic decision by Air Asia to publish the advertisement on the day the Air Show started. It caught all the aviation-gazing eyeballs it could. On all flights up to four hour duration, Air COMPETITION Asia flies MASTER: Airbus A320. We Tony Fernandes, CEO, Air Asia tried to sensitise the
force after an amendment in the country's Anti-Hijacking Act, 1982. The government will place the proposed Amendment Bill in Parliament when it meets. The amended law will allow the Indian Air Force, when ordered by a competent authority, to intercept a hijacked aircraft and force it to land. A hostile plane can also be shot on the evidence that it could be used as a missile to hit a vital installation. The Amendment also calls to immobilise a hijacked aircraft on Indian soil if it has not taken off. This apart, a new clause will also be inserted for punishment to those who launch a conspiracy to hijack an aircraft. The cabinet decision follows a prolonged debate sparked off by the 1999 hijacking of an Indian Airlines aircraft to Kandahar in Afghanistan, forcing the Indian government to free three jailed militants. The no-negotiations policy aims at preventing situations like the one in 1999 when three terrorists — Omar Sheikh, Maulana Masood Azhar and Mushtaq Ahmed Zargar — were swapped in exchange for the release of the hostages. An Indian, 25-year-old Rupen Katyal, was killed. The aircraft was forced to land in three different airports — at Amritsar, Lahore and Dubai — before spending a week on the tarmac in Kandahar with 186 hostages on board.
CRUISING HEIGHTS April 2010
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Fare prices?
O
bigwigs of the civil aviation ministry, the Directorate General of Civil Aviation (DGCA) and even asked the CEO of Qatar Airways Akbar Al Baker who was present at the show about this new Air Asia phenomenon. All that Al Baker could say was, “This will Naseem Zaidi seriously hit Air India” and he was right. What will Air India Express do now or for that matter our other Indian private carriers do to meet this cutthroat competition?
ne often hears that when the for salvation should not be a bother for going gets tough, the tough is the government. But the government supposed to get going. But in stepped in to say that it was concerned. India, the so-called tough However, the Dehradun ticket was not have decided to go to the government. the only ‘culprit’; a carrier was reported Now we have Praful Patel, Civil charging high fares for flying the small Aviation Minister, saying that airlines distance between Bengaluru and Hubli. cannot be allowed to unreasonably alter The DGCA not only issued notices fares to enjoy benefits of monopoly on to the two Indian carriers for the high certain routes at the cost of the traveller. fares but also issued a notice to Air Asia This was a reference to a couple of for charging low fares. As for Air Asia, Indian private carriers who were reportedly charging Rs 10,000 for their DelhiDehradun sector — a distance which you can cover in less than six hours from Delhi with a stop or two. But Dehradun itself is a different story. After the Airports Authority of India (AAI) upgraded the airport and extended the runway to receive A320, it informed various airlines that to start flying to Dehradun now that it SALVATION AT A PRICE: Different airlines argue that was the great season of the if devotees have no problem in paying any price to fly to Dehradun, then why the ministry is making Kumbh Mela. At first, no carrier such a hullabaloo. bothered to fly to the destination, but later at least two airlines, the argument was that the government one of them a full service began would not allow the offer of such shuttling the spiritually-driven to the ridiculously low fares that helped the banks of the Ganges via Dehradun. It predatory pricing airline to drive even tied up with one of the Yoga competition out of business and Swamis who has a private bathing ghat. eventually become a monopoly in future. Now if a devotee wants to fly to Patel was quoted as saying in a daily, “I Dehradun paying what he wants to pay have asked the DGCA to ensure a system
NIGHT LANDING AT IMPHAL
An aerial survey for night landing at Tulihal Airport has been conducted by a joint team of the Airports Authority of India (AAI) and Civil Aviation Authority. The aerial survey was Imphal airport conducted by a flight from Kolkata which flew around the places where four Solar Powered Obstruction Light (SPOL) had been installed. A source from the AAI said that the aerial survey was done in order to test the visibility of the lights emitted from the SPOLs and whether these could detect areas where high mountains were located. The team also conducted a survey on the visibility of the runways at the Tulihal Airport. These SPOLs have been installed on four hills — Baruni (Nongmaiching) Hill, Heibok Hill, Chingphu Hill and Phunal Maring Hill — surrounding the airport to facilitate landing of planes during night time.
SHIMLA AIRPORT RUNWAY HAS SHRUNK
The runway of the Shimla airport has shrunk due to soil erosion and there are plans to undertake its restoration, Himachal Pradesh Chief Minister Prem Kumar Dhumal recently said. “The runway of the Shimla airport has shrunk due to soil erosion. Its actual length has been reduced to 3,800 feet from 4,100 feet due to soil erosion,” Dhumal, who also holds the tourism and civil aviation portfolio, said in a written statement in the State Assembly. “The Airports Authority of India has planned to undertake restoration work so that effective length of the runway could be restored to the Shimla airport original one,” he said. He said the Indian Institute of Technology (IIT) at Roorkee had also prepared a feasibility report in this regard. The CM, in his budget speech, also said that the government was exploring the possibility of establishing an airport of international
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NEW BEGINNING: The Jolly Grant Airport, Dehradun.
to strike a right balance of fares”. A DGCA official remarked that such predatory pricing did not even cover costs and it was a clear indication that the airline wanted to drive out competition. The argument is excellent and valid except for the fact that if we flip it and see what was done in the past, it falls flat on the same runway where the DGCA wants the likes of Air Asia to stop in its tracks. This is not the first time such an advertisement has made an appearance. It is only that this ad came at a time when the airline industry globally is still struggling to come out of the woods. During the good times when the Ministry of Civil Aviation began to offer liberal bilaterals to the Gulf and UAE-based carriers, not a day passed without readers seeing massive front page ads in reputed dailies with the carriers announcing connections to destinations in Europe and the US where it was coast to coast via their Home Hub at fares which none of the
Indian carriers could even match. To top it all, the home-grown carriers could not provide the kind of luxury that was thrown in by these Gulf carriers. Similarly, the introductory fares by Air Asia to Sharjah from various destinations in India were even lower than those charged by Air India. What happened to the earlier policy of the DGCA when a few years ago foreign carriers had to file their fares with the directorate. If it was consciously withdrawn what has caused it to wake up? The clincher has been offered by Praful Patel who is reported to have stated that “I have asked the DGCA to ensure a system to strike a right balance of fares.” So, if the fares cannot be high and cannot be too low, then DGCA may as well fix the fares. What we are pointing out is not in the defence of the Air IndiaIndian combine. The operation costs, including administrative and wage costs, of the Air India-Indian combine are so
high that should the DGCA go about trying to fix fares that at least recovers the cost of AI-IA flights then the Maharaja’s seat load factor will drop to single digits as no one will be able to afford flying on AIIndian. As it is, one only needs to go on the internet and look for domestic fares: Air India is way ahead of competition not in terms of beating the private carrier but in scoring self-goals. Suppose Air Asia or any other airline like Air Arabia were to decide that while the one way fare from India meets the socalled but still unknown DGCA fare fixing system, what prevents them from setting such fares that takes care of a big part of the return fare from their home hub? It is, therefore, better left to the airlines concerned. Or, why allow so many bilaterals that bring with it the incentive to drop fares — all in the name of fishing for more passengers from India’s undoubtedly huge catchment area.
standard in the state. “The private sector will be encouraged to build airports at places where there is minimum requirement of land,” he said. To attract high-end tourists in the state, the government was also planning to invite private players to operate helicopter taxis.
HAL VERDICT RESERVED
The Karnataka High Court has reserved its verdict with regard to a batch of Public Interest Litigations (PILs) seeking reopening of HAL airport for civil and commercial operations. The division bench, headed by Justice N Kumar, reserved its verdict after hearing all the parties, including Attorney General G E Vahanvati, representing the Union government. The court asked the Director General of Civil Aviation (DGCA) to submit a report on the capacity of Bengaluru International Airport, following divergent claims by the Airports Authority of India (AAI) and BIAL. The court also directed the Union Government to place on record, the file relating to the decision of the Prime Minister in 2000, regarding cessation of civil and commercial operations at HAL airport, after the new airport comes into existence. The Attorney General had told the court that it was the Prime Minister
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A Kingfisher jet at Bengaluru’s old HAL airport.
who took the decision to close HAL airport for civilian and commercial operations. “It is wrong to say that HAL airport is closed. It is only closed for civilian and commercial operations. Since 1947, it was a civil enclave under the DGCA. The government has only withdrawn the permission granted earlier.” The PM's decision was based on the report of the task force on infrastructure, wherein setting up of Greenfield (new) airports was recommended. It was discussed that once
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“One-stop shop for aviation activities”
FUTURE PERFECT: Photograph of Hyderabad airport on March 23, 2008, the day it opened.
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he GMR Hyderabad Rajiv Gandhi International Airport will soon become an important landmark on the country’s aviation map as it unfolds its dream Aerospace Park project which is coming up within the confines of a big SEZ (Special Economic Zone) that will provide investors all the incentives meant for a FTZ (Free Trade Zone). It will be the only Aerospace Park which will be a runaway access. It will ultimately have five
important sectors: an aviation and aerospace training section, an aerospace supply chain, a manufacturing and sub-assembly, MRO services and a development and KPO, respectively. As for the MRO, the main hangar will have a separate space for widebody aircraft while the adjacent hall or hangar within the main hangar will have two narrowbody lines. Next to it would be the paint shop. This airframe MRO can be expanded in
the new international airports were set up, the civilian enclaves would be closed for civilian and commercial operations. There was no sell-out or throwaway in the July 5, 2004 concessional agreement entered into with BIAL, as alleged by the petitioners. “As far as recommendations of parliamentary committees are concerned, they are only advisory in nature. They are not mandatory and binding. The recommendations act as inputs and assist the government. Nobody takes them lightly,” he said. The AG said DGCA had residuary power vested with it to take corrective action if BIAL treaded beyond the conditions imposed in the licence. City advocate G R Mohan, Lead India campaign winner R K Misra, Bengaluru City Connect Foundation and others had filed PILs seeking reopening of HAL airport. They contended that the 142nd department-related parliamentary committee on transport, tourism and culture had recommended reopening of HAL airport, which was closed on May 23, 2008. Earlier, the AAI had submitted in the Karnataka High Court that it had not been consulted before the closure of HAL airport and it had no role to play in the closure. The AAI counsel submitted before a division bench headed by Justice
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cellular fashion as seen in the illustration. There is also space for an engine MRO. As for airframe MRO, it will have the capability to undertake D checks on A320s and B737s and C Checks on A330s and B777 aircraft. Incidentally, a regional aviation training centre set up in a JV with CFM has begun functioning. The facility will train technicians and engineers on CFM 56-5/7 engines, the kind of engines that are being used by Indian’s Airbus A320 family aircraft (newly acquired) and the Boeing 737-800s of Air India Express. The GMR Aerospace Park is also in discussion with reputed engine/ component MRO companies to set up their units in the SEZ Aerospace Park. HEIGHTS spoke to CRUISING D Ravindran of GMR Hyderabad Airport, who is literally a man in a hurry to put up the MRO facilities. A member of the board of the 50:50 JV between Malaysian Airlines (MAS) and GMR Aerospace Engineering company Limited (MAG), Ravindran is now working overtime to see that the MRO conducts its first “operation” by mid- 2011. What is the state of the MRO? Has it gone beyond the blueprint, construction activity etc.? The design for the MRO facility has been finalised. Currently, the tendering process for the construction is on, and work is expected to commence soon.
N Kumar that AAI's role was limited to administering and handling air traffic control at the HAL owned airport.
GENPACT BAGS AEROTROPOLIS DEAL
Genpact and Bengal Aerotropolis Projects (BAPL) have announced the signing of a fiveyear contract for BAPL’s IT operations in India. As part of this engagement, Genpact will provide BAPL with a unique hosted IT application and infrastructure services model that will allow BAPL to focus on its core business of developing aerotropolis projects Pramod Bhasin, and scale operations without undertaking President and large capital investments in IT. CEO, Genpact The partnership would enable BAPL to move to a state-of-the-art cloud-based IT model and also help the company shift from a capital-heavy owned model to an operational expense model, thereby freeing up resources and capital, which it needs at this stage of growth. Genpact will further help design and implement a pay-as-you-go business platform that will provide BAPL with land management, sourcing and financial management functionality. This platform
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NEWS DIGEST What is the financial commitment between GMR and MAS? Or, what will be the equity component and what would it cost to set up the MRO first phase and when will the second phase take place? The first phase would cost between $65-70 million. Based on the market demand, the second phase would commence at a later date and hence it would be a bit too premature to talk about the investment. You talked of Jet also taking equity when both GMR and MAS divest 13 per cent each so that Jet gets 26 per cent? But we are told Jet is in a serious financial crisis. In that case, do you have an alternative to Jet as a joint venture partner? The board of Jet Airways (India) Ltd has approved an investment of up to 26 per cent in MAS GMR Aerospace Engineering Company Ltd. We have signed an MoU for the commitment of aircraft base load from Jet Airways for the proposed MRO facility. We are confident that they will honour this commitment in the coming months. What will be the catchment area for this MRO? Will it depend only on aircraft from India or on wide-bodied planes which are less than five hours’ or more flying distance from Hyderabad? The catchment area would be in and around the Indian sub-continent and also within the region. Will there be a clash or conflict of interest between the two partners when both will be doing the same job? That has been adequately taken care of in the joint venture agreement, and we have a
FUTURE READY: Ravindran explains the Aerospace Park project.
large enough catchment area. The pie is big enough for everybody! You are aware that Duke’s proposed MRO in Nagpur has been shut down. That leaves only the Boeing MRO in Nagpur, Air India’s own MRO in Mumbai and Air India’s MRO supposed to be coming up in Delhi? Besides, there is also Air Works and Indamer. What will the competition be like? Competition is inevitable. However, we would bring in our best efforts to be a competitive MRO in the region. Also, our first-mover advantage should stand us in good stead. The 34 years of maintenance expertise of Malaysia
Airlines would help us become competitive. Currently, most of the airlines in India send their aircraft to MAS facilities in Kuala Lumpur which has proven service standards. This would be an added advantage to our MRO JV. What would be unique about the GMR MRO in Hyderabad and what would be your USP? Our USP would be that we are based within an operational airport. Also, more important, we will be within a notified Special Economic Zone (GMR Aerospace Park). Our plan at GHIAL (GMR Hyderabad International Airport Limited) is to develop an Aerospace Cluster that complements the aviation
is based on the latest technology of Oracle’s R12 platform. Bengal Aerotropolis Projects Ltd (BAPL) is developing India's first set of Airport Cities — “Aerotropolis” in Durgapur and Ludhiana by utilising the best elements of international urban design and operational efficiencies through strategic alliances and partnerships. BAPL’s first aerotropolis project, in Durgapur, is expected to be operational by 2011-12. The aerotropolis project, which is expected to be completed in a span of 5 to 7 years, will involve a total investment of approximately Rs.10,000 cr. Changi Airports International (CAI) of Singapore has taken a 26 per cent stake in BAPL and CAI CEO Wong Woon Liong and Deputy CEO Eugene Gan have joined the BAPL board.
BIOMETRIC SMART CARDS FOR AIRPORT
All airport and airline officials and other staff at Delhi airport will be issued smart cards instead of the Airport Entry Passes (AEPs) that are the norm now. The passes, issued by the Bureau of Civil Aviation Security (BCAS), has not been issued since December 13, 2009. All passes have been made valid till March-end due to the delay caused by upgradation to a biometric-based airport access system. Other airports across the country will follow suit. Apart from the card holder's fingerprint details, the smart cards
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Delhi airport will be the first to have smart cards for its employees.
will contain personal details, photograph and address, and signatures of competent authorities. “Verification of personnel for issuance of new cards is complete. The smart cards will be issued soon. Infrastructure at the airport, too, has to be upgraded,” said a senior Ministry official.
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TOUGH COMPETITION: With companies like Boeing, Landmark and Air Works, the MRO venture will create a cut-throat atmosphere.
industry and also the Airframe MRO facility.
Will there also be a Aircraft Maintenance Engineers School in the same SEZ and who is going to help GMR in setting it up? The Aviation Academy will eventually have secondary and tertiary courses, both in the Technical and Commercial domains. This can be done with any of the established training service providers. Is there any plan to upgrade all these skill-imparting facilities into a fully fledged aviation university? Yes, most certainly. Our ultimate goal is to be a one-stop shop for all aviation and aerospace-related activities, and that includes quality education, too.
DABOLIM AIRPORT EXPANSION ON
Civil Aviation Minister Praful Patel told the Rajya Sabha recently that the AAI had set aside financial support and was in the advanced stages of putting out all tenders for the expansion of Dabolim airport. Patel said the Centre was trying to begin work at
AAI: Poor despite the ‘riches’
Photo: H.C. Tiwari
What about an engine JV with CFM. Is it only for CFM-5 or does it also include CFM-7? What is expected of this JV and what kind of role will it play? CFM International has set up its regional Engine Training Centre in the GMR Aerospace Park (SEZ). This training centre will mirror CFM facilities currently operating in France, the United States and China and would initially provide advanced courses in line maintenance and inspection of CFM56-5B and CFM56-7B engines. The facility will also be able to provide customized training as per requirements on other CFM engines. The facility will be capable of training up to 500 engineers each year. We are currently in discussion with various Engine MRO operators worldwide, to set up a facility within our Aerospace Park.
What is the status of your pilot or flying academy? Who are the JV partners and what special benefits do they bring with themselves to fight competition from other flying schools? Various clearances like NOC from the airport operator and ATC clearance are being sought from AAI and DGCA in order to establish the flying academy. Asia Pacific Flight Training (APFT) will initially be set up independently. APFT is the leading flight training centre with certification from civil aviation authorities of Malaysia and Indonesia. The centre currently has over 200 cadet pilots from Malaysia, Indonesia, Burma, Pakistan, and Afghanistan. APFT uses the state-ofthe-art new Diamond aircraft with glass cockpits. Experienced instructors are from the Indian Air Force and Malaysia Airlines.
V P Agrawal
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he Airports Authority of India (AAI) has a definite case for compensation. Consider this: the profits made by the stateowned airport operator is likely to be the same at nearly Rs 650 crore in 2009-10 as it was in 2005-06 before the PPP initiative took away its most profitable Delhi and Mumbai airports and left it with the Hyderabad and Bengaluru airports where it ceased
the earliest. “There is nothing like a sale deed between the Navy and the government. At the moment, we function under a memorandum of understanding. All formalities are then subsequently carried out.. Dabolim would continue to function as an airport and if there is requirement of a second airport, Mopa has to be pioneered by the state government,” Patel said. Rajiv Pratap Rudy of the BJP said that the AAI had requested for 51 acres of land from the Navy for the purpose of upgrading Dabolim airport. Upon the Navy declining this, the AAI requested it to provide 7.5 acres of additional land to extend the apron, the minister said.
APPROVED GREENFIELD AIRPORTS
As of now, the Government has given ‘in-principle’ approval for setting up of new Greenfield airports for public use at Navi Mumbai and Sindhudurg in Mahrashtra; Mopa in Goa; Bijapur, Simoga, Hassan and Gulbarga in Karnataka; Kannur in Kerala; Pakyong in Sikkim; Durgapur in West Bengal; Paladi/Jaipur in Rajasthan and Datia/Gwalior in Madhya Pradesh. The information was given by the Minister of Civil Aviation, Praful Patel, in a written reply to a question in the Rajya Sabha. Dabolim Airport, Goa
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Lean Manufacturing Competitiveness Scheme for MSME Sector About the scheme The Lean Manufacturing Competitiveness Scheme (LMCS) was launched by Shri Dinsha Patel, Hon'ble Minister of State (Independent Charge), Micro, Small and Medium Enterprises, Government of India on 29th July, 2009, at Vigyan Bhawan, New Delhi under National Manufacturing Competitiveness Programme (NMCP). Wherein National Productivity Council (NPC) has been entrusted to act as National Monitoring & Implementing Unit (NMIU) for the scheme under the aegis of the Office of DC-MSME. In the pilot phase, the scheme is to be implemented in 100 mini clusters spread all over the country and depending on success achieved, it would be extended to more clusters in the future. The objectives of the scheme To enhance the competitiveness of MSMEs by application of Lean Manufacturing techniques; To benefit MSMEs by improving the Productivity, Quality and Cost of units through reduction of wastes; Induction of good management practices; Improvement in safety of work place etc.; To enable MSMES to compete in the national and international markets; and To promote sustained development, sharing of knowledge, benchmarking and inter-firm comparison among MSMEs. Eligibility Criterion The scheme is open to all the units through out the country which qualify as Micro, Small or Medium unit as per the definition of the MSME Act, 2006. The interested and willing units are required to form a Mini Cluster (MC) of 10 Âą 2 units by signing an MoU among themselves, form an Special Purpose Vehicle (SPV) to become eligible to take part in scheme. Lean Manufacturing Consultants (LMCs) will be empanelled and attached to each identified cluster for the implementation of scheme. The scheme provides 80 per cent financial support by Government for the first year for hiring the LMC to implement lean manufacturing practices and 20 per cent to be borne by the SPV. The scheme requires that the SPV continues the lean manufacturing practices for the second year also. Empanelment of LMCs For the participation in scheme as LMCs, any Individual or a Consultancy Firm duly registered with or certified by a reputed certification agency in the field of manufacturing technology, quality control etc can apply. Interested consultants working in Lean Manufacturing may submit EOI to NPC for empanelment along with the filled-in questionnaire. The questionnaire can be downloaded from the website http://www.lmcs-npc.gov.in. Kindly mention whether you want to participate as Individual Consultant or a Consultancy Firm. More details on scheme are available on the above-mentioned website.
Contact Details: Director & Group Head (Process Management) National Productivity Council, Utpadakta Bhavan, 5-6 Institutional Area, Lodhi Road, New Delhi 110003. Ph.No. 24607316, 24607367. Fax No.011-24615002 Website: www.lmcs-npc.gov.in www.npcindia.org
Office of Development Commissioner Micro Small & Medium Enterprises, Nirman Bhavan, New Delhi. PabX No.23063800, 23063802, 23063803. Fax: 23061726 & 23061068 Website: www.dcmsme.gov.in
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operations. AAI’s profits had zoomed to Rs 1,150 crore when Bengaluru and Hyderabad airports were still under its control. Three years ago Delhi and Mumbai airports were handed over to GMR and GVK following the PPP model in which the AAI has 26 per cent stake. However, in Hyderabad and Bengaluru, the older airports were closed and the entire traffic was shifted to the Greenfield airports built by GMR and Swiss-Siemens combine, respectively. (GVK WHAT’S THE BENEFIT?: The old Bengaluru Airport has now taken substantial stakes in Bengaluru airport or with 13 per cent equity and board Bengaluru International Airport representation in the new airports Limited (BIAL) and could soon inch its began to see its earnings virtually way to majority holding. vanishing. According to V P Agarwal, While Delhi and Mumbai airports Chairman, AAI, since the day the two may have been leased out by AAI and Greenfield airports opened for for which it is receiving a license fee, it commercial traffic — Hyderabad in might also have increased its revenues March 2008 and Bengaluru in May were it still operating as a result of rise 2008 — AAI’s back-of-the-envelope in air traffic witnessed in the last three calculation shows that it lost nearly Rs or four years. 320 crore. While refusing to enter into Though critics of state-owned any debate as to whether the license enterprises may differ, it does not in any fee it got from Delhi and Mumbai was case take away the fact that the number more than what it lost in the closure of of flights would have gone down. After Hyderabad and Bengaluru airports, the all, with the same kind of infrastructure AAI maintained that its overall profit Indian airports handled a huge rise in air had now virtually levelled out to what traffic between 2005 and 2007 before it was in 2005-06. From a debt-free recession hit the scene. company, the AAI after it began to To come back to Bengaluru and modernise the two metro airports in Hyderabad airports where the traffic Chennai and Kolkata and 35 non-metro moved to the new airports and the AAI airports country-wide, has now become
CHENNAI AIRPORT EXPANSION WORK ON TIME
Replying to supplementaries during Question Hour in the Rajya Sabha, Civil Aviation Minister Praful Patel said major expansion at Chennai airport was being carried out to augment passenger aircraft and cargo handling capacities. “The task is likely to be completed by January 2011,” he said. On other developments in
the South, he said: A new integrated terminal building was being constructed at Madurai airport and Coimbatore airport terminal building would be expanded and modified by May 2010. A master plan to upgrade Tuticorin airport in phases had been prepared and the Tamil Nadu government had been asked to provide 586 acres of land free of cost and free from all encumbrances to the Airports Authority of India, he said.
Chennai airport
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an organisation whose future rests solely on debt. Anticipating such a scenario, the AAI management under Agarwal had explored various avenues to raise resources including the much talked-about tax-free bonds to which the Finance Ministry issued a summary “No”. As an apology for compensation so far, the government has allowed its select non-metro airports to raise user development fees (UDF) for a specified period both from domestic and foreign-going passengers. But this is not something only for the AAI as this was permitted first to the private operators who entered the scene in the four metros of Delhi, Mumbai, Hyderabad and Bengaluru. AAI is expecting to get Rs 150 crore by way of UDF in its ten nonmetro airports. Along with the UDF in its metro airports, the collections annually could rise to Rs 250 crore which is still about Rs 100 crore less than what it was earning in Bengaluru and Hyderabad airport before it lost those. So, with nil reserves, what are AAI’s prospects? Not very comfortable, to say the least, considering it has undertaken to do major modernisation in Chennai and Kolkata where we are told there is pressure from official agencies asking the AAI to trim down the expansion plans. Should this happen, then it will
FLIGHT CORRIDORS FOR HELICOPTERS
DGCA has decided to introduce separate Visual Flight Route (VFR) corridors at the Delhi and Mumbai Airports to ensure safe and efficient operations of helicopters and also to meet the longpending demands of the helicopter industry. A large number of helicopters operate within the Control Zone of Chattrapati Shivaji International Airport, Mumbai and Indira Gandhi International Airport, New Delhi and also from Juhu Airfield which lies within the control zone of Mumbai — for oil exploration, tourism and corporate and business purposes. The helicopter operations get delayed due to air traffic congestion at these International Airports. Hence, the decision to introduce helicopters flying corridors within Mumbai and Delhi control zones for Visual Flight Rules (VFR) Routings.
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be the greatest let down for In this current fiscal alone, the people of Chennai and the fiscal gap confronting AAI is Kolkata. At the same time, it nearly Rs 5,000 crore of which will also slow down the Rs 2,800 crore is on committed process in other major cities. projects. As stated earlier, AAI The AAI has already has raised Rs 600 crore through borrowed Rs 600 crore from banks and another Rs 300 crore various banks and another Rs by way of bonds. That still 300 crore is being arranged leaves Rs 1,900 crore gap, through bonds. Throughput which is for projects already charges for oil companies committed. Of the 35 nonsupplying fuel to airlines has metros, 24 of them have been been revised or pruned and nearly completed. A piece of new Ground Handling good news that AAI recently contracts have been given out. shared with us was that in the Strangely, the government 2010-2011 Budget, the Finance WHERE IS THE PROFIT?: Departure lounge at old Begumpet Airport somehow believes that AAI is Ministry extended a budgetary less worthy than the worthless Air India Handling operations in Chennai while support of Rs 600 crore as against Rs which is losing money in crores each the same NACIL is paying a much 125 crores in fiscal 2009-10. In a way day while AAI is making at least Rs 2 higher revenue share for doing similar this was largely Lord Balaji driven. crores in all of its operations jobs in other metro airports operated by Former AP Chief Minister late Y S R nationwide. Air India has been given an the private sector. After AI was sent to Reddy had committed in Tirupati that equity support of Rs 800 crore and the ICCU, it now seems to be the turn of the Centre would soon spend Rs 300 another Rs 2,000 crore is in the pipeline AAI unless the government rises to the crore to upgrade Tirupati airport with but AAI is told that it has to wait. There occasion and sees reality. new terminals and an extended runway are any number of companies waiting to The AAI has kickstarted the process of more than 10,000 feet to allow the buy AAI’s assets in terms of airports to bring out its IPO and just four months big birds or widebody planes like the and redevelop them while there is no ago — in December 2009 — it A330s, the B777s directly from one to pay even a paisa to buy the assets appointed KPMG to value the international destinations. Since AAI is of Air India which are primarily the organisation. Once the valuation is handling the airport, the Chief Minister bilaterals and some real estate. The done, the IPO, etc will follow. An inside expected AAI to do it. In the same bilaterals which Air India had few years calculation by AAI indicates that it meeting, he also announced that Prime ago and were worth at least a billion or could be valued at nothing less than Rs Minister Dr Manmohan Singh would two in rupee terms is now worth next to 1 lakh crore. On date, AAI’s equity is come to inaugurate it. After his nothing as there are too many players Rs 350 crore which needs to be raised untimely demise, the Government of sharing the same pie. sharply to increase its borrowing ability. India as a mark of respect and the late The AAI has been asked to charge a Without expanding its equity leader’s commitment thought it wise to concessional revenue share of just five and valuing its assets, an IPO will provide a handsome budgetary support per cent from NACIL for its Ground make sense. to AAI to complete the Tirupati project. Also keeping in view the short endurance of helicopters, the promotion of the industry and for safe operations, the need was felt to introduce VFR Routings which was also recommended by the KAW Committee. For this purpose, the DGCA had asked the Airports Authority of India (AAI) to design the Visual Flight Rules (VFR) Helicopter Routings. Suggestions were invited from all helicopter operators. Various meetings were held at Bombay and Delhi between helicopter operators, AAI and DGCA to discuss the routings. The suggestions were considered and the routes were modified to facilitate the operations and at the same time ensure that air safety was not compromised at any stage. The flying trials have been conducted TOP PRIORITY: Now, a clear route for helicopters in Delhi and Mumbai. separately at Bombay and Delhi regions with the help of helicopter operators under strict supervision of concerned Directorates in DGCA and approved by the Flight Operations Inspectors from the Flight Inspection Director General of Civil Aviation. AAI has been asked to Directorate, DGCA. The routes were further modified promulgate these VFR Helicopter routings and notifications wherever required and were scrutinised in detail by would be issued soon.
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LEADING THE REVIVAL: Asia Pacific carriers will see $900 mn profits and Hongkong airport (above) would be a major player.
CLOSE BEHIND: Latin American carriers will have another year of profits and Galeão International Airport (above) in Rio de Janeiro will see a lot of action.
It is only half the battle
T
he International Air Transport Association (IATA) has, believe it or not, halved its loss forecast for 2010 to $2.8 billion (compared to the $5.6 billion loss forecast in December 2009). The improvement is largely driven by a much stronger recovery in demand seen by year-end gains that continued into the first months of 2010. Relatively flat capacity translated into some yield improvement and stronger revenues. IATA also lowered its 2009 loss estimate to $9.4 billion from the previously forecast $11.0 billion loss. “We are seeing a definite two-speed industry. Asia and Latin America are driving the recovery. The weakest international markets are North Atlantic and intra-Europe which have continuously contracted since mid-2008,” said Giovanni Bisignani, IATA’s Director General and CEO in late March.
Forecast highlights include:
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CRUISING HEIGHTS April 2010
Photo: H.C. Tiwari
Improving Demand: Passenger demand (which fell by 2.9 per cent in 2009) is expected to grow by 5.6 per cent in 2010. This is an improvement on the previous forecast in December of 4.5 per cent growth. Load Factors: Airlines kept capacity relatively in line with demand throughout 2009. A strong year-end recovery pushed load factors to record levels when adjusted for seasonality. By January, the international passenger load factor was
75.9 per cent while cargo utilisation was 26 per cent, up from 24 per cent in 2009. at 49.6 per cent. Revenues: Revenues will rise to $522 Yields: Tighter supply and demand billion. That is $44 billion more than conditions are expected to see yields previously forecast and a $43 billion improve: 2.0 per cent for passenger and 3.1 improvement on per cent for cargo. This is a considerable 2009. improvement from the precipitous 14 per cent fall experienced by both in 2009. (See page 51 for more details.) Premium travel: Premium travel, while slower to recover than economy travel, now appears to be following a cyclical recovery in volume terms. But it is still 17 per cent below the early 2008 peak. Premium yields, which are 20 per cent below peak, may be suffering a structural shift. Fuel: With improved economic conditions, the price of fuel is rising. IATA raised its expected average oil price to $79 per barrel from the previously forecast $75. That is an increase of $17 per barrel on the $62 average price for 2009. The combined impact of increased capacity and a higher fuel price will add $19 billion to the industry fuel bill bringing it to an expected $132 billion in 2010. As a percentage of operating costs, this represents Giovanni Bisignani
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FALLING: European carriers will have to face a $2 bn loss and Frankfurt airport (above) will have to be satisfied with low volumes.
“Revenues are half-way to recovery$42 billion below the 2008 peak and $43 billion above the 2009 trough. Important fundamentals are moving in the right direction. Demand is improving. The industry has been wise in managing capacity. Prices are beginning to align with the costs-premium travel aside. We can be optimistic but with due caution. Important risks remain. Oil is a wildcard, over-capacity is still a danger, and costs must be kept under controlthroughout the value chain and with labour,” said Bisignani. Regional differences in airlines prospects are sharp: Asia-Pacific carriers will see the $2.7 billion 2009 loss turn to $900 million in profits on the back of a rapid economic recovery being driven by China. Cargo markets are particularly strong with long-haul cargo capacity for shipments originating in Asia experiencing a capacity shortage. Demand is expected to grow by 12 per cent in 2010. Latin American carriers will post an $800 million profit for the second consecutive year. The region’s economies are less debt-burdened than the US or Europe. Economic ties to Asia helped isolate the region from the worst of the financial crisis. Carriers in parts of the region have benefitted from liberalised markets which have facilitated some cross-border consolidation, giving greater flexibility to deal with changing economic conditions. Demand is expected to grow by 12.2 per
cent in 2010. European carriers will post a $2.2 billion loss — the largest among the regions. This reflects the slow pace of economic recovery and faltering consumer confidence. Demand is expected to grow by 4.2 per cent in 2010. Intra-European premium travel is expected to recover more slowly. In December 2009, it remained 9.7 per cent below previous year levels. North American carriers will post the second largest losses at $1.8 billion. The jobless economic recovery continues to burden consumer confidence. Demand is expected to improve by 6.2 per cent in 2010. But with intra-North America premium travel still down 13.3 per cent as of December ‘09, the region remains in the red. Middle East carriers are expected to experience demand growth of 15.2 per cent in 2010, but will see losses of $400 million. Low yields in long-haul markets connected over Middle East hubs is a burden on profitability. African carriers are likely to post a $100 million loss for 2010, halving 2009 losses. Demand is expected to improve by 7.4 per cent. But this will not be sufficient for profitability as they continue to face strong competition for market share.
Structural Adjustments “The stark contrast between profiCRUISING HEIGHTS April 2010
tability among Asian and Latin American carriers while losses continue to plague the rest of the industry clearly demonstrates the fact that airlines have not been able to develop into global businesses. The restrictions of the bilateral system prevent the kind of cross-border consolidation that we have seen in industries such as pharmaceuticals or telecoms. Airlines are battling the challenges of the financial crisis without the benefit of this important tool. It’s time for change,” said Bisignani. In November 2009, IATA’s Agenda for Freedom initiative facilitated the signing of a multilateral statement of policy principles focused on liberalising market access, pricing and ownership. Seven governments (Chile, Malaysia, Panama, Singapore, Switzerland, the United Arab Emirates and the United States) and the European Commission signed the document. Kuwait joined the group by endorsing the principles in March. “The second stage talks between the US and Europe are the big opportunity for 2010. The slow recovery in both regions should be an invitation for change. Liberalising ownership would boost both markets. Even more importantly, as these markets combined represent about 60 per cent of global aviation it would send a strong signal for global change. Brands, not flags, must guide the industry to sustainable profitability. That cannot happen until governments throw away the outdated restrictions of the bilateral system,” said Bisignani.
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A
ccording to The National, an Abu Dhabi English daily: “Canada has the world’s tenth largest economy, but Emirates is allowed only three flights to the country per week — something one official at the airline described as the equivalent of running a corner store but being allowed to open only on Mondays, Wednesdays and Saturdays. Emirates serves only Toronto and uses its Airbus A380 super jumbos to balance the high demand with its limited slots. It would like to fly daily to the city, and to Vancouver and Calgary as well. But despite a two-year campaign by Emirates to win more access, Transport Canada, the government authority, has consistently said no. In whose interest has Transport Canada been ruling? The answer is Air Canada’s. The flag carrier draws a lot of water in Canada and has nearly 25,000 employees. And it is ailing, as are many airlines today in the slow global economy. It took a C$1.02 billion loan package from thegovernment last summer.” Now the battle has taken an ugly twist with the United Arab Emirates (UAE) increasing pressure on Ottawa in its efforts to get additional landing rights for its commercial airlines by tying a direct link between a positive outcome to those talks
UAE officials have made it clear to their Canadian counterparts that if Emirates and Etihad Airways are not granted additional access to the Canadian market, the renewal of Canada’s lease in the Middle East could be in jeopardy
and the continued operation of Canada’s forward operating base in the Middle East. UAE officials have apparently made it clear to their Canadian counterparts that if Emirates and Etihad Airways are not granted additional access to the Canadian market, the renewal of Canada’s lease on its “Camp Mirage” in the Middle East could be in jeopardy when it comes up for renewal in June. The exact location of the base is kept under wraps because of national security issues, and Canada has never formally acknowledged its existence. But the base in Dubai is a poorly-kept secret, and acts as an important staging ground for the Canadian Forces serving in Afghanistan. It is also where the troops can take leave during their deployment in Kandahar. Canadian newspapers reported that Canada’s Department of National Defence favoured making moves to keep the UAE onside and preserving the base, but Foreign Affairs and Transport Canada are concerned about caving in because of the precedent it would set for other countries to make demands for new flights. Currently, the UAE carriers share six daily flights to Canada a week. Emirates released a study recently that suggests that if it were allowed to increase its services to Toronto, and add other destinations such as
MOOSE IN THE HEADLIGHTS For observers in India, the battle royale between Emirates and Air Canada will strike a familiar note. All the old questions are being asked once again, this time in far-off Ottawa. Should the government to aid a lumbering, ineffective national carrier or ineffective national carrier or champion, what is best for the consumer? 28
CRUISING HEIGHTS April 2010
HALF FULL OR HALF EMPTY: Emirates A380 ready to take off.
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FIGHT FOR SURVIVAL: The Lester B Pearson International Airport at Toronto, Air Canada's hub,
Calgary and Vancouver, it could potentially create 2,800 jobs across the country and generate up to $480mn in additional tourism dollars, taxes and other economic activity in Canada. “The increased passenger traffic to Canada generated by Emirates flights will stimulate Canada’s domestic carriers because a good portion of the new passengers coming to Toronto, Vancouver or Calgary will take connecting domestic flights once they arrive in Canada,” said the report. Emirates has the support of the Prime Ministers of Alberta (Calgary) and British Columbia (Vancouver), but its expansion has been opposed by both Transport Canada and Air Canada. Transport Canada says the current demand for flights between Canada and the UAE does not justify further liberalisation of the air space. But Air Canada has been much more aggressive, noting Emirates’ own study said it fills only about 65 per cent of its current flights to Toronto three times a week. Emirates uses the world’s largest aircraft, the Airbus A380, on the route. The country’s largest carrier has argued Emirates simply wants to use its Dubai hub to connect Canadian passengers to other destinations in Asia, the Middle East and Africa, eroding Air Canada’s business and that of its Star Alliance partners in the process. “They can’t fill their plane as it is but dubiously insist they can immediately quadruple traffic to 375,000 people a year by stimulating travel,” said Peter Fitzpatrick, Air Canada spokesman, about Emirates’ latest report. “This study is simply another attempt to bully Canada into a lop-sided air services agreement that holds no economic benefit for the country.” With the expanded service, an additional 274,927 passengers would be transported to and from Canada annually, according to the research, which was conducted by the transportation consultancy InterVistas. Most
“Competition for international traffic flows must exist on a level playing field that provides equal opportunities for all. Any trade agreement — and that is what an air bilateral agreement is — must be fair, balanced and mutually beneficial.” — CALIN ROVINESCU CEO, Air Canada
CRUISING HEIGHTS April 2010
of the economic benefits would come in the form of tourism, new business activity and taxes, the study said. Air Canada’s response was to call the report “fictional” and to urge the public to see through this “subterfuge”. Air Canada has consistently spoken in terms of airlines fighting against each other, with itself as the home team underdog, when the real issue is consumer choice. One newspaper described it as a moose in the headlights reaction! In a long piece, www.canada.com said: “Air Canada itself is categorical about the need to protect itself from the new world of air travel. In a lengthy diatribe directed at Emirates, Air Canada CEO, Calin Rovinescu further elaborated this reactionary theme: “Competition for international traffic flows must exist on a level playing field that provides equal opportunities for all. Any trade agreement — and that is what an air bilateral agreement is — must be fair, balanced and mutually beneficial.” What he meant was mutually beneficial for the airlines — not for consumers.” With the British Columbia Transport Minister Shirley Bond by his side, Emirates’ Vice President (Government Affairs) Andrew Parker said Canada stands to gain $480 million in tourism and business dollars, plus 2,800 jobs through passenger traffic and cargo export capacity, citing the report. He laid the blame of the restrictive policies at the door of a misguided attempt to keep Air Canada’s competitive position, but pointed out that the national carrier does not fly directly to Dubai, using instead partners such as German airline Lufthansa. And after a decade of trying, the airline could be reaching the end of its rope in wanting to continue to direct resources toward Canada. “This year is a really important year on this file,” Parker said. “We have been tenacious and committed to Canada because we see business potential, but we are not a charity or coming at this for altruistic purposes.” The Centre for Asia Pacific Aviation threw its weight behind Emirates in this argument. Its Chairman, Peter Harbison, in a hard-hitting analysis explained: “Half of Canada’s tourists by air originate in the US. This US reliance may partly explain why Canada languishes near the bottom of the list for inbound travel from other countries. But it is unlikely the only reason. Despite Canada’s vastly superior range of tourism attractions and much larger population, it gets less traffic than remote Australia. Australia welcomed just over five million inbound tourists by air last year. If American travellers are extracted from Canada’s inbound numbers, a mere 3.5mn foreign tourists visited the country by air in 2009. Canada is a country boxing well below its weight in
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SPECIAL REPORT terms of international tourism by air.” In answer, Air Canada CEO Calin Rovinescu argued, “What Emirates wants to do is flood the Canadian market with capacity. It’s strategy is to scoop up travellers going elsewhere in the world and funnel them through Dubai, further strengthening Dubai as a global flow hub. This would have the effect of severely damaging our hubs in Canada and our network in Europe and elsewhere.” The longer term impact of letting Emirates fly into Canada, said Rovinescu, would be “devastating and could have the effect of restricting or even marginalising Vancouver as a hub. When an international carrier dumps seats into a market like Canada, it becomes harder for Canadian airlines to operate internationally. Ultimately, this translates into less economic activity, fewer jobs and fewer routes served.” The Emirates strategy, he said, would “constrain the growth of Canadian airports by turning them from hubs into stubs at the end of a spoke that leads only to the Emirates’ hub in Dubai.”
CAPA ON AUSTRALIA-UAE TRAFFIC
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Not only Emirates Airline, but also Etihad and Qatar Airways operate there. And the UAE carriers don’t just operate to one Australian port. Emirates flies to Sydney (three times daily), to Melbourne (three times daily), to Brisbane (twice daily) and to Perth (twice daily). Several of these services also extend across to New Zealand and return, where, apart from passengers, the carrier uplifts good loads of freight which had been stranded since all other airlines on the very busy three hour sector market went narrow-body. Then there is Etihad. The other large UAE airline also operates to Sydney (twice daily), to Melbourne (daily) and to Brisbane (daily). Additionally, Qatar Airways operates a daily service to Melbourne. Between them, they operate almost 40,000 seats weekly into Australia. The bulk of these seats do not carry end-to-end Australia-Gulf passengers (although inbound tourism from the Middle East to Australia is consequently the country’s fastest growing market). Most travel to and from European, other Middle East and African points, as well as carrying New Zealand origin and destination passengers.
Harbison’s argument was perceptive : “But there is surely not a lot for the foreign carriers to ‘scoop up’ on Europe services; few passengers will be prepared to backtrack all the way from Dubai to western Europe en route from Canada; so there is hardly any threat of diversion away from Air Canada’s UK and continental European services. More relevant, there are carriers like British Airways, Air France and Lufthansa who use their hubs to beef up their end-to-end traffic flows, consolidating traffic and distributing it to and from Canada. So, in reality, all Air Canada is doing here is protecting Lufthansa’s hub role.” Harbison added, “Further east, India might arguably be a market ‘at risk’ from competition from Emirates (and others). But despite Canada’s large Indian expatriate population, Air Canada doesn’t fly there. From Toronto, Air Canada only operates a one-stop daily service to Delhi, relying entirely on Lufthansa and Jet Airways to provide connections (and codeshares), over London, Zurich and Frankfurt. From Montreal, Calgary and Vancouver, service is so limited that Air Canada’s own schedule does not bother even to list connections. Yet, in 2008 there were around 350,000 passengers flying roundtrip between India and Canada — some 2,000 return passengers daily on average, meaning that in peak periods this could be a lucrative trade for airlines, given the limited capacity. Canada’s Indian origin inhabitants might see some reason to support additional service to the subcontinent — not to mention the potential for enhanced inbound tourism.” In fact, the Emirates-Air Canada story reminds one of all those arguments which Air India advanced when Singapore Airlines (SIA) wanted similar rights and frequencies into India and also beyond traffic. It is only the city-states that want so many frequencies and not big nations even if they are members of EU. In the last 10 years India has seen the tremendous increase in the presence of SIA, Emirates and, of late, CRUISING HEIGHTS April 2010
Etihad and Qatar Airways. Each one of them has been using their own clout with the right political connections or simply say, ‘We will not give you gas unless you give us traffic rights’. For instance, even Qatar got its extra rights on the issue of gas and not because it promised additional tourists and jobs. Yes, it is Qatar which got for itself additional tourists, if you can say so, and certainly more jobs in its aviation sector — be it the airline or the airport. Looked at that way it is perfectly right for Air Canada to argue that there will be no value addition to Canada as argued by Emirates. In the case of India it was gas and its associated benefits, whereas in the case of Canada it is a defence base. Even during the heydays of Air India divestment, the Planning Commission and the Ministry of External Affairs (MEA) ganged up to say that the Government of India should be more liberal in granting bilateral rights to foreign carriers and all such efforts were being stymied by MoCA (Ministry of Civil Aviation). In about seven years all of that changed as the people found right political connections to expand the reach of many city-state airlines to benefit from India’s growing middle class. Or else, why should they (Etihad, Emirates, Qatar) advertise even today that from their home hubs they can ferry passengers to virtually every part of Europe and the US. Look at Jet Airways today. It has been forced to dry lease three of its B 777-300 ERs again as it is not able to fill up its own planes and, therefore, face very poor yields. There are now some who argue: Why not ask the UAE why is it that only Emirates gets an added advantage of attracting Indian passengers by even giving them visas, which is not possible for any competing Indian carrier, when they are flown to UAE/Dubai? And, by the way, none of the promises made by city-state airlines like SIA, Emirates, Etihad etc have delivered anywhere near what they promised in terms of the thousands of tourists they would bring to India.
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IN THE LEARNING PROCESS: Pilots being trained on the simulator.
fly – in India
The country’s three premier flight training establishments have been preparing pilots from the country and abroad. The institute at Hyderabad has suggested that it should house the Boeing Dreamliner simulator well in advance of the aircraft’s induction into the Air India fleet. R Krishnan reports.
T
hough the public focus has been on the deteriorating fortunes of Air India, a quiet revolution is taking place behind the cockpits. Yes, we mean the flying training schools — especially the refurbished Indira Gandhi Rashtriya Uran Academy (IGRUA) at Rae Bareli in Uttar Pradesh and the less-thanthree-years-old Rajiv Gandhi National Flying Institute or the CAE Global Academy at Gondia and the Central Training Establishment of Air India at Hyderabad. These three Central Government-backed flying training schools are now embarking on an aggressive strategy to tap the market for would-be pilots as well as freshers. With the fees charged anywhere between
Two of the flying schools conducting advanced courses are the IGRUA, Rae Bareli and the CAE Global Academy, Gondia CRUISING HEIGHTS April 2010
Rs 22 lakh and Rs 25 lakh for a 18-month course in the case of freshers and up to nine months in the case of CPL holders wanting to graduate to big, narrow-body planes like the A320 family, it is “On your marks, Ready, Steady, Go”. While many flying training schools went through and are still going through a tough patch due to the economic slowdown, the revival of airline fortunes on the horizon seems to indicate that they can get some work back again — though not in the same measure as one witnessed during the 2005 to 2007 period. Viewed against this background, the smart action initiated by these flying schools to market and sell themselves early is a welcome change. Two of the flying schools not only
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Photo: H.C. Tiwari
provide basic training but advanced courses are the Indira Gandhi Rashtriya Uran Academy (IGRUA) at Rae Bareli and the CAE Global Academy, known as the Rajiv Gandhi National Flying Institute at Gondia near Nagpur in Maharashtra. The third is the Central Training Establishment (CTE) Hyderabad, under the erstwhile Indian Airlines and now part of NACIL. CTE provides advanced training in narrow-body jets like A320 family and B737-200. CTE has received DGCA approval as a Type Rating Training Organisation (TRTO) for A320 (ab initio)-type rating courses. The Ministry of Civil Aviation has invested substantially in modernising and augmenting the ageing fleet and infrastructure of IGRUA. After it formalised a management contract with well-known aviation giant CAE to bring in global standards and modern aviation training techniques to the quality of training given to pilots, it also upgraded the infrastructure. The idea was to make IGRUA an integral part of CAE Global Academy. Following these initiatives, IGRUA has increased its yearly intake from 45 to 100 students within a period of two years and also brought down the training time from over 24 months to 18 months which will be further cut to 15 months. The Ground Training Department of IGRUA has received ISO 9001 certification. IGRUA carries out Line Oriented Flying Training (LOFT) to contemporary international standards mainly conducting courses for ab initio undergraduate candidates to CPL standards with Instrument Rating (IR) and Multi-engine Endorsement. IGRUA is now India’s largest fullyintegrated aviation training academy and has the largest training fleet in India comprising 27 aircraft. Of these, 11 are high performance modern avionics equipped single engine aircraft and two are turboprop C-90 — a King Air aircraft. Besides, 14 DA40 aircraft with state-of-the-art Gramin 1000 glass cockpits have also been operationalised in December 2009 and two Diamond DA42 Twin Star aircraft are in the process of being inducted for expanding the multi-engine fleet. IGRUA already has its own airfield with modern navigational aids, three hangars, a fully equipped engineering section, wellequipped fire fighting station and a dedicated refuelling station. The academy has four cockpit procedure trainers, two with Gramin 1000 glass cockpits with panoramic 180 degree projections, a six axis motion C-90 simulator and a Hawker Sydley glass cockpit generic trainer modelled for seven different types of aircraft from single engine to advance jet liners.
At Hyderabad Air Show, Qatar Airways CEO Akbar al-Baker and CAE Group President Jeff Roberts signed an MoU for the provision and placement of commercial pilots from India at the airline as entry-level second officers. Civil Aviation Minister Praful Patel was also present.
IGRUA has increased its yearly intake from 45 to 100 students within a period of two years and also brought down the training time from over 24 months to 18 months which will be further cut to 15 months. CRUISING HEIGHTS April 2010
IGRUA has in its working panel a mix of highly experienced flying and ground instructors and an optimum student / instructor / aircraft ratio. A new hostel has been commissioned in 2009 with a capacity to accommodate 248 boys and 40 girl trainees. It has a 167-acre self-contained residential campus for both students and employees. The Rajiv Gandhi National Flying Institute (RGNFI) is a joint venture between the Airports Authority of India and CAE. The newest CAE Global Academy flight school, RGNFI is the most modern state-of-the-art flight training school in India with a brand new campus. Situated in Gondia, near Nagpur, RGNFI offers a 14-month training programme that uses advanced training methodologies. The institute offers an internationally-recognised hands-on flying training in India for which students do not have to spend hefty amounts in foreign exchange and, at the same time, also need not pay for conversion of a foreign licence. All the courses offered at the institute meet the International Civil Aviation Organisation (ICAO) standards. Upon completion of training, the students will receive a CPL with IR and Multi-Engine Rating. Four months of the total 14 months of training are dedicated to aviation theory including meteorology training, technical training, navigation training and air regulations. Approximately 40 hours of training are conducted with an instructor in a full flight simulator. Besides, the students also spend nearly 180 hours in flight in brand new aircraft including a DA40 CS and a DA42. Of the 180 hours flying training, 145 hours is on dual instruction and the remaining for solo flight. A novel way has been introduced by RGNFI under
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which the institute selects 10 qualified candidates per group each month and starts classes for them. The 14-month training programme costs Rs 28.30 lakh and this includes the cost of the course material, text books and uniforms. RGNFI allows an instalment payment plan. Besides, most nationalised banks in India, upon credit approval offer educational loans to aspiring pilots. At the recently-concluded Hyderabad Air Show, Qatar Airways and the Institute signed a MoU for the provision and placement of commercial pilots from India at the airline as entry-level second officers. The agreement was signed on March 3, 2010. It is designed to select successful candidates of the institute and place them with the rapidly expanding Qatar Airways in Doha. The agreement was signed for Qatar Airways by its CEO Akbar al-Baker and for the Institute by CAE Group President Jeff Roberts in the presence of Minister of Civil Aviation Praful Patel. Incidentally, Gondia falls in the Lok Sabha Parliamentary constitutency of Praful Patel. The third of the official flying training schools is the CTE in Hyderabad, adjacent to the Begumpet Airport. Spread out over 30 acres, CTE has become the first airline institute in India to obtain the approval of DGCA as a Type Rating Training Organisation for A320 (ab initio) type rating course. CTE has three simulators of which two are for A320 aircraft and one Boeing 737-200 to provide technical and operational training to pilots. The professional courses offered by CTE are pilot training, cabin crew, marketing, management, aircraft engineering, ground handling and aviation security courses. The CTE has five hostels with 96 rooms. Of these two hostels are for pilots and engineers and two hostels for cabin crew and one for
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The professional courses offered by CTE are pilot training, cabin crew, marketing, management, aircraft engineering, ground handling and aviation security courses
DEVELOPMENT MOVES: Former civil aviation Secretary Ashok Chawla witnessing the signing of the management contract between the Indira Gandhi Rashtriya Uran Academy and the CAE Canada and signing of Joint Venture Agreement between the Airports Authority of India and the CAE to develop the Rajiv Gandhi National Flying Training Institute, held in Delhi on February 7, 2008.
CRUISING HEIGHTS April 2010
General Manager level officers and above. The pilot training offered ranges from Turboprops to A320s. The two A320 simulators are of 1992 vintage and the Boeing 737-200 is even older. The Boeing 737200 simulator is now being used by pilots who are flying for the Indian Post. These simulators despite being so aged are still being used for 20 hours a day. Incidentally, the B737-200 simulator in CTE Hyderabad is the only one of its kind in the whole of Asia. Even now trainee pilots from Sharjah, Afghanistan, etc. come to CTE to take training in the B737-200 simulator. The few instructors are part of the set of pilots with Alliance Air who are flying the B737-200 that used to be in the fleet of Indian Airlines but now flying on behalf of Indian Post. In all, there are 17 P1 pilots and 17 P2 pilots flying the B737-200 (P1 pilots are Pilots-in-command while P2s are Co-Pilots). With the renewed emphasis being laid on training pilots for the A320 family aircraft that Indian acquired (and also the fact that the B737-200 simulator is old), in February 2010, NACIL opened the technical bids for its plan to acquire a brand new A320 simulator. Five parties bid for it among which are CAE, Thales, Mctronics, Flight Safety, etc. All of them have been reported to be technically sound and NACIL is now in the process of considering the financial bids that will be opened in a month or so. While the two older A 320 simulators are hydraulically jacked, the new one being acquired will be electronic. When Indian Airlines was the launch customer for the A320, the older simulators were supplied by CAE. In 2009, the two A320 simulator did 11,918 hours and 12,000 hours simulator training, respectively, the highest-ever achieved by IA and AI. As on date, the Indian part of NACIL have a grand total of 808 pilots. Of them, 27 are examiners of the A320 family aircraft, 33 are instructors and 97 are Chief Pilots. Besides there are 17 P1 pilots and 12 P2 pilots for the two A330s that are operated by Air India, 335 P1 pilots, 444 P2 pilots operating A319 and A320 aircraft with the stateowned airline. The total figure of 808 pilots also include 18 P1 women pilots for A 320 and 48 P2 pilots. In 2008-09, CTE trained 115 pilots as part of its in-house apprentice training. But with CTE now having idle capacity, it wants to use and make money. Accordingly, CTE has thrown open its doors for type rating training after it got TRTO approval from DGCA. Following this, the CTE has offered training in A320 (ab initio) type rating course for external candidates without any guarantee of job placement in Air
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Interior of the simulator.
India. Based on a minimum educational qualification equivalent of 10+2 with Mathematics and Physics and in possession of Indian current licence (CPL or ATPL, etc), candidates are being offered type rating course of between 22 weeks and 36 weeks. The course will be conducted in batches starting May 2010 with a fee fixed at Rs 22.50 lakh besides taxes. The CTE has impressed upon the NACIL management that these kind of courses being offered to outsiders for the first time should be made an annual feature in order to utilise the training establishment's capacity fully. The CTE has also sought installation of the new yet-to-come Boeing 787 Dreamliner Simulator at its premises in Hyderabad. Should this happen, then the Hyderabad based CTE will be one of the very few organisations offering training in both narrow-body and wide-body aircraft belonging to Airbus and Boeing versions. It remains to be seen if the counter-lobby in Air India would allow this to happen. But considering the land/space constraints in Mumbai, where the MIAL management has already asked Air India to vacate substantial ground space spread over 106 acres housing its five hangars and some parts of its flight training school, it remains to be seen if the CTE is successful in its bid to get the B787 simulator which is part of the Air India-Boeing deal. Asked for his views, the Executive Director of CTE, Captain Ashok Raj
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As on February 2010, NACIL-I had 808 pilots on its rolls managing a fleet of 39 A320s, 24 A319s, 20 A321s and 2 A330s. In all the 85 aircraft are being flown by these 808 pilots comprising commanders and second-incommand CRUISING HEIGHTS April 2010
said that when Air India signed its deal with Boeing for inducting Boeing 777s, the CTE had then offered to house the B777 simulator as part of the JV between Air India and Altheon, a Boeing company but the name has now changed. But this never took off. Is the training process not different for A320 family and that of B787s? According to Captain Ashok Raj, it will make eminent sense should the A320 commanders who have logged in more than 5,000 hours are trained to fly B787 well in advance and as such there would be no need to disturb the pilots flying the Boeing 777 which have also been acquired recently like the A320 family aircraft in the last two years. In fact, there is a surplus of A320 pilots while in the case of B777, the situation is a little different. Therefore, why reconvert a B777 pilot to fly the B787 when the A 320 pilots can be asked to step in. To support his argument, Captain Ashok Raj said in Singapore Airlines, pilots have been trained to fly A340 and A380 who were previously flying B777 and vice versa. It may be pointed out here that in the last two years there was a definite fall in aircraft utilisation even as older aircraft were being phased out. However, in the case of NACIL-I (Indian) there is no shortage of pilots as the domestic carrier had planned its requirement of pilots both P1 and P2 with CTE taking care of all training requirement well in advance. But the situation in NACIL-A (Air India) was different. It also needs to be mentioned here that to train a pilot, there is a need of trainers. But trainers cannot be made overnight and the process is long-drawn. Hence, there has to be motivation now so that the situation moves on without the shortage syndrome. NACIL-I, with no shortage of pilots, has no expat pilots on its roster unlike the private airlines. As on February 2010, NACIL-I had 808 pilots on its rolls managing a fleet of 39 A320s, 24 A319s, 20 A321s and 2 A330s. In all the 85 aircraft are being flown by these 808 pilots comprising commanders and second-in-command. Capt Ashok Raj said CTE was in a position to guarantee that it would expedite the training of pilots for Boeing 787s provided the Dreamliner Simulator was housed in the CTE. “We have enough space here to house the simulator and right from the word go we feel it should be handed over to CTE. We can guarantee that there will be no shortage of B787 pilots including P1 and P2 with optimum fleet utilisation at 14 to 16 hours a day.�
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COVER STORY
A CLOSE LOOK AT THE TRANSFORMATION OF AIR INDIA FROM THE ONCE-SUCCESSFUL STATE-OWNED ENTERPRISE TO A WHOPPING LOSS-MAKING AIRLINE. TO RUB SALT INTO ITS WOUNDS, THE RECENT REPORT OF THE COMMITTEE ON PUBLIC UNDERTAKINGS HAS MADE IT CLEAR THAT AIR INDIA IS “SLIPPING FURTHER INTO AN ABYSS”. A SPECIAL REPORT.
THE GOOD OLD TIMES: A view of Delhi airport three years back when the aviation boom was at its peak and everyone was scrambling to get into the airports and airline business.
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THE AIR INDIA SAGA
THE WOEFUL JOURNEY OF A
MAHARAJA WHO BECAME A PAUPER
A
ir India has become everybody’s favourite whipping boy: from ministers and politicians to parliamentary committees and even the common flyer. Let us look at the circumstances. If Air India was in the manufacturing space, it would have been referred to the Bureau for Industrial and Financial Restructuring (BIFR) and declared sick by now. Since the national carrier is in the service sector, the Maharaja has one more escaped embarrassment. Nevertheless, setting new records for accumulated losses is embarrassing enough for an airline that has a glorious past, but no future at this juncture. Success, it is said, has many fathers, but failures no one. Nowhere is the adage ‘more apt’ than Air India where nobody wants to own up for the mess it is in now. If Air India was an American company, the airline would have been declared bankrupt. If it was European, takeover by another carrier or a merger would have been on the cards. In the reality of Indian politics and policies, no such drastic action can be expected. Below-the-line tricks like asking public sector banks to provide more loans to the sick airline or asking government-owned oil companies to continue supplying aviation turbine fuel (ATF) and forcing government servants to travel only on Air India are the most eager steps of the government. There is reluctance when it comes to providing money directly and Rs 800 crore has been pumped grudgingly and that too after months of deliberations. How about a lockout? Or, drastic downsizing? In the age of inclusive growth and rampant vote-bank populism, such suggestions are summarily rejected. Simple steps like salary cuts also become so difficult, if not impossible, due to the Public Sector Units (PSU) work culture and trade unionism. That’s the reason why Air India’s accumulated losses are racing towards the Rs 20,000-crore mark. No privatelyowned airline would stay in the air with such a growing mountain of debt. Such is the turbulence and to make matters worse, the air pocket seems a huge one. What then is
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COVER STORY
“I SHOULD HAVE BEEN THERE TO COMPLETE In his long stint as Chairman and Managing Director of Air India — from December 2003 to March 2008 when he retired — Vasudevan Thulasidas saw the national carrier go through tough times, increased competition and the merger. In an exclusive interview he defends himself and elaborates on other issues.
What really happened to Air India? Two things. One, what happened to all airlines (economic downturn), happened to Air India also. Also, certain things were specific to Air India. Air India had to contend with huge tasks, which were peculiar to the airline. There was the merger. Then you also had to induct new aircraft, assimilate them, and chart out new routes and new connections. Air India, I think, ought to have implemented the merger much faster and more effectively. And then all the new aircraft really could have brought in real value to its network.
When the merger happened, the economy was booming. The recession came more than a year later. Economic recession is one aspect but the high cost and falling revenues happened even before that.
Much could have been done through route rationalisation…
Photo: H.C. Tiwari
Route rationalisation was tried. In fact, there was a directive from the government when they approved the aircraft purchase for both airlines that they should also try to rationalise routes and synergise operations. Efforts were made but it was seen that those efforts were not going to succeed because there was clearly a turf mentality in both airlines. Neither was willing to cede territory. They were not willing to work with the other.
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IA is basically short haul (a maximum of five hours), AI medium and long haul. Why don’t you stick to that? No, a medium haul or a long haul operation alone or an international operation alone cannot sustain an airline. That has been clearly proved by history where airlines like PanAm and TWA had to die. The airlines could survive, thereafter, only if you had a strong domestic network to feed your medium and long haul airlines. So, the synergy of route rationalisation was not merely about the direct routes but how the domestic network could help the international network and vice versa, which unfortunately is not happening even today.
So, is it politics or a legal procedure? No. It is because you have not implemented the merger even now. Let me put it this way: merger is not just completion of legal formalities. That was done at the end of August (2007). The company became one but that is only the first step. After that you have to integrate the two into one airline. What is the primary requirement for that? One, you are able to have a common reservation system where a passenger can come to one point — computer, travel agent, airline — and book any ticket on any flight. You can’t do it even today.
And you signed the Star Alliance and that has not happened for three years. Yes, it has not happened. The time frame required was roughly nine months. That was the understanding we had. For Star Alliance, a maximum of 18 months was required. And the Accenture recommended timeline for the merger as a whole was two years. So, by 2009 all of this should have happened. The fact is that it has not happened and now you must analyse the reasons. If the merger could really be completed effectively, by now, the airline would have been a different airline with a completely integrated network with an updated reservation system as a member of Star Alliance. We all used to say that we could get the benefit of at least five per cent increase in traffic by becoming a member of the Star
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THE MERGER” Alliance. We could get a similar five per cent increase by integrating the domestic and international networks. Today, Jet Airways flies overseas. They have an integrated domestic and international network. It is not like Air India. All the timelines required for completing the merger were drawn up even before my retirement. In drawing up these timelines, everybody, not only the airlines but even the present people were involved. Why could these timelines not be approved then? For example, when I retired, tenders for the IT integration had been invited and evaluation was done but was not complete. There was a Committee that was evaluating. And the timeline (given) by December was March. Why the delay? Obviously I can’t answer that because if I had been there, the timelines would have been honoured.
In hindsight, do you think Accenture made some mistakes? No. Accenture made no mistakes. Accenture has very knowledgeable people who worked very closely with us and the government and gave very clear and very specific recommendations and timelines. It is not that they invented something out of nowhere. They prepared this in consultation with not just me … down the line our executives were all involved in various working groups and all that.
Everyone is complaining about the large order of aircraft… First of all, the aircraft ordered were for both, Air India and Indian Airlines. Today, when we address one name called Air India; people tend to perceive that everything was Air India. No. We ordered a large number of aircraft for Indian Airlines. About 60 per cent or more — I don’t remember the exact number — were only to replace existing planes and not additional planes. There was only a much smaller percentage of additional planes and when we carried out this exercise — this was in 2004 — the market was booming. There was so much of demand for additional capacity, additional frequency, additional flights. We were unable to provide that because we didn’t have (aircraft). And what we
had was really ancient aircraft, which used to fail very frequently. We had technical faults, delays and disruptions. Now all that having been taken into account, in ordering the aircraft, the numbers were worked out, not by me, not by the Ministry, it was worked out by a group of officers in the airlines. They were professionals who had spent umpteen years in the airlines. They knew the business and they worked out the requirement. I’m sure this exercise was run similarly in Indian Airlines also. Now the downturn that happened subsequently… because of the cost revenue this thing as well as economic recession is something that could not be foreseen at that time. If we could foresee it then the whole world would have been a different world. All these aircraft will come in very handy to the airlines today when the market is peaking up. You have brand new aircraft, a good product, good seats, good in-flight entertainment. All that will be a great help to the airlines.
going to suffer. The other side’s PLI norms are different. Now you have to integrate, unify the two. Instead of doing that, they got worried about only lawsuits. Lawsuits were there for all airlines.
The point is if there is an efficient HR, it makes the airline efficient. I don’t think this has happened to the airline post-merger.
Nine out of ten civil servants — of the same class from which you have retired — say, “It is the mess created by Thulasidas, we are only trying to clean it.” They constantly say this.
First, let us deal with the discontentment of the two sets of people. Just like ‘I’ people feel that ‘A’ people are at an advantage, the ‘A’ people feel that ‘I’ people have got the better deal. The solution is for the management to ensure that the two sides are integrated. What does integration mean? You have different structures for remuneration even today — seniority and work. Unfortunately, I had to go back and say all this, we have drawn up timelines for integration of manpower, of trying to integrate remuneration, seniority and work. For example, I had only a few months at that time — after the legal merger I had five or six months or so. But even there if I put five ‘A’ people, I ensure there would be five ‘I’ people in similar (places) so that there is some parity. If the man heading it was ‘A’, the next man would be ‘I’ and vice versa. My PLI norms are different. If a flight operates, I get more PLI. If a flight is discontinued because it’s loss making, then they say, look my PLI is
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So, if you had to do something different today, you would have focused on revenue. Absolutely. Revenue, revenue, revenue. And costs certainly, wherever you can. There ought to be an effort to bring down, to rationalise costs wherever you can. Actually integration, merger could have helped you in closing down certain offices, in releasing some rented properties, avoiding duplication of staff and so on. For example, hotel accommodation for crew: that’s an area where some saving can be effected. You are not touching his salary but if he has to stay in a 5-star deluxe hotel and you bring it down to 4-star, you save some money and that fellow doesn’t have much of a problem.
That could be because I am not there to defend myself. If we sit down and discuss it, Thulasidas was the last CMD after the initial legal merger. So, the fact that Indian Airlines, for example, was headed by Vishwapati Trivedi for a long time and even after the legal merger, he was with me as Joint MD. So, my responsibility for most of this period was limited to Air India — the old Air India — and nothing to do with Indian Airlines. If you analyse the cash flow or the losses ‘A’ and ‘I’wise, since then, because it’s still two separate entities, it is possible to get the breakup of these figures. I will only say this much, it is not all AI. Just find out how much is IC? In any case, why didn’t you allow me to continue and complete the merger? Accenture had said, Cabinet had said it would take two years more, then I should have been there to complete it. And if I had continued there to complete it and failed, then...
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COVER STORY the way out? There are 30,000 employees of Air India who cannot suddenly be left jobless. To understand the possible solutions, one has to first go down memory lane and understand how the Maharaja home was messed up. The main culprit, of course, is the owner: the Government of India. From the kneejerk grounding of Indian Airlines Airbus A320s to after the Bengaluru crash to ordering of two sets of planes for two carriers only to merge them shortly, blunders have been inflicted on the airline over the decades. The merger of Vayudoot with Indian Airlines, two sister carriers competing with each other on key Gulf, South Asian routes, and indiscriminate overemployment are some other reasons. The list is endless. In recent memory, there has been no example of either of the two carriers having a board of capable professionals who can guide the airlines on profitable flight paths. Ministers and other political heavyweights often forced unprofitable routes on Air India and the erstwhile Indian Airlines without bothering about the consequences. The damage was not so glaring till the time the two carriers could pull along, thanks to the lack of competition. This was the case till foreign carriers did not have enough bilaterals to run daily, and in some cases twice daily, flights to global destinations along with off-loadings, common at most airports (indeed, strings had to be pulled to get reservations). The situation was worse in the domestic segment. Indian Airlines was a virtual monopoly and people not only coughed up the asking price, but also thanked the airline for taking them on board. It is no wonder that the staff of both carriers find it difficult to remember that the customer was the real Maharaja. The market has changed dramatically over the past three decades, but many Maharajas have not changed their attitude. The idea still has not sunk that their jobs will not last forever, thanks to the accumulated losses challenging Mt Everest. Jet, Kingfisher, IndiGo, SpiceJet and foreign carriers have sprinted away with most of the market while the merged Air India still looks to New Delhi for orders even though it is headquartered in Mumbai. Where the orders come differs from time to time sometimes it is Rajiv Gandhi Bhavan, at other times the PMO and yet others the Finance Ministry headed by Pranab Mukherjee who chairs the Group of Ministers entrusted with the task of pulling the Maharaja out of his sick bed. Who calls the shots is not clear at times, but there is no doubt that political direction is still guiding Air India. The recently-appointed independent directors like Anand Mahindra
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BRUTAL ASSESSEMENT
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he Committee on Public Undertakings (COPU) Chairman Kishore Chandra Deo has been blunt and unsparing in his criticism of the AI-IA merger. And he is clear that there be answerability as well as fixing of responsibility for what he mildly termed as ill-conceived. It is apparent that he has the support of a wide crosssection of politicians and in reality he reflects their combined perspective.
MERGER OBSERVATIONS
The root cause of the ills plaguing NACIL is the ‘merger’ which was flawed at its very inception and which never really took off. National Aviation Company of India Ltd (NACIL) formed with a view to drawing synergies out of the two erstwhile companies, is today fast slipping into an abyss. Multiplication of losses suggests something radically wrong either with the projections of the benefits of the merger or with the implementation of the merger. The so-called merger is a kind of marriage between two incompatible individuals having wide variances with hardly any meeting ground. The merger was an ill-conceived and erroneous decision neither arrived at by the two airlines on their own accord nor mutually considered by them to be in their best interests. Further, Indian Airlines, which had established unparalleled brand recall value across the country, was rebranded and ‘Indian’ suddenly appeared in the skies without any convincing rationale drawing humongous costs from the public exchequer. No justifiable explanation for this abrupt haste. The Committee would like to be apprised of the agencies/individuals responsible for taking such a whimsical decision and urge suitable action so that such decision leading to intangible loss to a PSU does not recur in future. Having imposed the merger of the two carriers, the ministry has shown little initiative in monitoring the progress. Failure of the government for not ensuring continuity of leadership.
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The Company is still struggling with the bulk of the integration processes although the initial projections for the merger schedule showed June 2009 as the time for, realisation of synergies. Failure to resolve issues pertaining to the integration of human resources reflects poorly on the performance of the managers of the merger process, and adversely affects the morale of the work force. Reject any attempts to shield the failure for executing the merger by the company’s management and the ministry’s attitude of shying away from responsibility.
RECOMMENDATIONS
Need for consistency in plans and policies. Credible leadership at the top which should be put on a mission mode and governed on the basis of performance and accountability with a mandate spelt out in unequivocal terms to turn around the company within a specified period. Making of NACIL into a holding company under which two separate wings, NACIL-Indian Airlines with its Headquarters at Delhi and NACILAir India with its Headquarters at Mumbai, each headed by a Managing Director who shall report to Chairman, NACIL, needs to be immediately worked out. A fresh, realistic and definite timeline for completion of pending processes of the ill-conceived merger may be worked out and put in place immediately. Reasons behind the undue haste in merger and lack of monitoring after the merger should be thoroughly probed to fix the responsibility for the same. All the loss attributable to merger of IA and AI should be recouped by the government as the decision of merger was a policy decision spearheaded by the ministry in charge. Mechanism for ensuring accountability in the implementation of the entire merger process is conspicuous by its absence. Responsibilities for managers put in charge of these pending matters should be properly defined and
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when NACIL is not in a position to carry out the job.
CORPORATE WORK CULTURE
Photo: H.C. Tiwari A LIST OF WHAT WENT WRONG: Kishore Chandra Deo (second from left, in white shirt and glasses), Chairman, Committee on Public Undertakings (COPU), announcing the placing of the report in Parliament.
stringent accountability procedures put in place.
ROUTE RATIONALISATION AND ROUTE ALLOCATION OBSERVATIONS
Public carriers being disadvantaged by the allocation of prime commercial routes to private airlines such as Jet Airways, Kingfisher Airlines and the Emirates. NACIL should have lucrative air routes as these are required for its profitability and for its very sustenance. Ministry of Civil Aviation should conduct a transparent review of the entire route and slot allocations to ensure that NACIL is neither put at any disadvantage nor appear to be placed in any disadvantageous position. Necessary amendments be carried out in the Route Dispersal Guidelines of the DGCA, and a mechanism may be evolved to make the said guidelines mandatory for all private airlines and for punitive action against violators. A mandatory energy audit by an external energy auditor to assess the avoidable fuel-losses and fix fuel consumption norm for aircrafts in use.
FLEET ACQUISITION AND MANAGEMENT OBSERVATIONS
No presentation of project financial closure for acquisition projects of the erstwhile Indian and Air India, which were finalised before merger of the two
airlines was even mooted, reveal an underlying lack of sense of ownership and public responsibility. Utilisation of aircraft in the company is at a low of nine hours per day while the benchmark is at 16 hours per day. Optimal utilisation of the available manpower who otherwise have necessary skill and experience to maintain airworthiness of aircraft. Capital infusion into the ailing public airline to make the company credit worthy for its operational credit requirements has become imperative to salvage the remnants of the legendary airlines. Strict compliance to defined performance benchmarks should be made a precondition to a phased capital infusion. NACIL should develop its own maintenance, repair and overhaul (MRO) service as a separate and professional business unit catering to the aviation industry as a whole. Steps necessary to increase the utilisation of aircrafts should be expedited without delay to bring up the average utilisation to 16 hours per day per aircraft.
GROUND HANDLING
NACIL whose two subsidiaries have decades of expertise and experienced workforce with respect to international operations should be assigned the Ground Handling activity exclusively and other avenues may be sought only
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Management of NACIL should effectively carry out training plan so as to cultivate attitudinal changes amongst employees to enable them to compete with corporate competitors. Training infrastructure and manpower inherited by NACIL from its premerged entities be galvanised into an independent subsidiary of NACIL with improved capacities to cater to professional trainings as required by the airline industry in general, and to be operated as a separate unit of business capable of competing internationally.
PROTECTION OF INTERESTS OF EMPLOYEES OBSERVATIONS
Employees of any organisation and their welfare are the key to the success of any organisation. Governance, both of countries and of organisations, is an art and one that respects the human factor. Amongst the employees there is a high level of disenchantment and discontentment with the process of merger. The question/issue that arises is of fairness of treatment for employees who had been loyal and stayed on and are now being forced to accept cuts. Basic incentives for employees to be reviewed. Steps be taken to protect the interests of the employees by giving them advance training in their respective area of work and introducing a corporate regimen. On issues relating to service matters, no unilateral decision should be forced upon and a consensual approach should prevail when in discussion with employees’ representatives. NACIL should ensure that the genuine aspirations of the officers in each cadre are judiciously addressed and promotion exercises which have already become due should be first completed before merging the cadres on the basis of seniority. To merge the two sets of employees with reference to the scales of pay and not based on their designations. Any cut or advancement should be proportionate to the scale of pay as it otherwise will be against the assurance “No employee would be placed at a disadvantage at any stage” which was communicated to the employees before merger of the two organisations.
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COVER STORY and Amit Mitra can do very little if the powers-that-be push the airline in a different direction. In addition to the mess already created, a new power centre is being built up in the form of a Chief Operating Officer (COO) who is likely to be appointed soon. Arvind Jadhav, the Chairman and Managing Director of Air India, is an IAS officer — like many others who headed the two airlines in the past — and is unlikely to get along with any airline professional who could be selected by the government as the COO. Insiders assert that Jadhav has the support of only a small minority of Air India employees while the vast majority hates him. As a result, morale is at an all-time low and most Air India employees are at a loss for words when the crisis faced by their company is discussed. The way in which the government merged Air India and Indian has also come in for strong criticism. Leave alone the employees and aviation analysts, Parliamentarians have also bashed the government over the grand merger which has created the largest and most unprofitable airline in the country. Take for example, the recent report of the Committee on Public Undertakings (COPU) headed by V Kishore Chandra S Deo, which has minced no words to say that Air India is “slipping further into an abyss”. The merger was flawed at its very inception and it never really took off, is the Committee’s view. Many of the findings of the COPU are shocking. “The Committee notes with concern that the merger of the erstwhile Indian Airlines and Air India was an illconceived and erroneous decision: neither arrived at by the two airlines on their own accord nor mutually considered by them to be in their best interests. On the contrary, in the years preceding the merger, the two airlines had finalised grandiloquent plans for acquisition of new fleet and had even placed orders in their efforts to revive their respective businesses were at that point of time grappling with the changed market scenario brought about by increasing private competition ushered in by the Open Sky Policy,” says the report which has also criticised the Civil Aviation Ministry of showing “little initiative in monitoring the progress” of the merger. Of course, the ministry may argue that sky-rocketing fuel prices and the global slowdown were to blame and the ball was, in any case, in the court of the Group of Ministers. Passing the buck is not going to solve the problem. As the COPU report points out, a mechanism for ensuring accountability in the implementation of the entire
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merger process is conspicuous by its absence. It is not just the merger; there has been no attempt to fix responsibility for the entire mess. At one point of time in the recent past, efforts were made to get the two airlines to work in sync. The Chairman and Managing Director of Indian Airlines, Sunil Arora, was given charge of Air India too, so that the two carriers could pool their resources for mutual benefit. Political considerations, however, prevailed over business sense and a full time chief was appointed for Air India. If it was
1985 THE GOOD OLD DAYS: An all-women Indian Airlines crew poses for a photo after a flight from Silchar to Kolkata
2003 CELEBRATING 50 YEARS: The Indian Airlines brand was strong
The situation was worse in the domestic segment. Indian Airlines was a virtual monopoly and people not only coughed up the asking price, but also thanked the airline for taking them on board CRUISING HEIGHTS April 2010
a private carrier, the people concerned would have had to explain the logic. Heads would have rolled for dilly-dallying with business strategy and creating an ocean of red ink that is now drowning the airline. The COPU report has also questioned why the social responsibilities are thrust upon Air India only and not shared equally by private sector players. The national carrier has been flying nearly 18.4 per cent of its services on non-trunk routes though the mandatory limit is 10 per cent. Even today, Air India spends more energy in promoting the cause of sports, Hindi or Women’s Day when compared to private airlines. If there is a crisis, Air India is pressed into action, losses notwithstanding, rather than directing private airlines to do the needful. It is no wonder that COPU feels that punitive action should be taken against private airlines if mandatory social sector obligations are not met. Earlier, a Standing Committee on Transport and Tourism headed by CPI(M) MP Sitaram Yechury had also criticised the manner in which the Air India merger had been handled, especially on HR issues. Of course, employees of the airline have been expressing their doubts about
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the merger, but the government probably did not understand that things would go from bad to worse. In hindsight, views have been expressed that the merger should be undone. In the short-term at least, that would lead to chaos and more trauma. And the government is not known for being nimble-footed as far as major decisions are concerned. Then, there is the uneasy alliance between the Congress and the NCP (Civil Aviation Minister Praful Patel is a member of the party), highlighted by the recent episode involving a Congress spokesperson. And this is not the first time that the Capital has been abuzz with Congress heavyweights trying to blame Sharad Pawar for high food inflation. In the current circumstances, the most important need is to lay out a clear roadmap for the revival of Air India within a prescribed time-frame. Let it be three years or five years, but the people in charge should be clearly told that they will pay the price if they do not deliver. Second, the AI management should be inspiring enough to carry employees along and
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Employees of the airline have been expressing their doubts about the merger, but the government probably did not understand that things would go from bad to worse
2005 WELL DONE: Civil Aviation Minister Praful Patel congratulates the then Air India CMD V Thulasidas at the Birmingham airport soon after the first Air India 777 landed after its flight from Amritsar convince them to swallow the bitter pill. Pay cuts should be seen as a sacrifice that will prevent the company from folding up. If the Maharaja sinks, employees lose all. It is in their interest to work at the lowest possible salaries so that jobs can be saved. When the situation improves, pay cuts can be restored. If the employees have faith in the management and the owners (government), they will definitely co-operate. A
2007 NEW TREASURES: Praful Patel shows off the new A320 to Prime Minister Manmohan Singh after the AI-Indian merger was announced
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successful VRS plan should also be put on the table as soon as possible. Multi-tasking, like private airlines do, should be made the norm; only then can the pauper prince regain his royal glory. Services on routes which are not profitable should be scrapped without mercy. There is no point in operating services and running hubs if they do not bring in money. This, undoubtedly, will lead to overcapacity and a swift decision should be taken to sell aircraft or lease them out to avoid overcapacity. If there is a delay, as in the case of Boeing B787, why not insist on maximum damages? Private airlines would not only do that but also use the delay as a good excuse to cancel orders. The futility of having similar aircraft like A320s and B737s in the fleet should also be studied in detail. The national carrier now operates more than half-a-dozen types of planes — hardly a recipe for efficiency. On ATF, the airline should improve tinkering and minimize costs by hedging. Responsibilities should be fixed and pilots should be questioned on fuel efficiency. What prevents Air India from getting prime slots and clearances that would avoid waste of fuel? If there is a delay, questions should be asked and the reasons identified. Negligence should be discouraged through serious action. As the owner of the airline, the government needs to swing into action rather than get into long-winding discussions. Why should the government insist on keeping it a PSU even after such mismanagement? Why not let it be run by corporate players? Many in the know still regret the failed attempt to make the Tatas and Singapore Airlines strategic partners for the airline. If the UPA is so adamant on not privatising Air India, how about letting government-owned banks and financial institutions pick up stake in the airline? That could get the Maharaja out of the clutches of Rajiv Gandhi Bhavan, the Prime Minister’s Office, the Central Vigilance Commission and the Comptroller and Auditor General of India (CAG). An airline owned, say 20 per cent each by Life Insurance Corporation of India (LIC), State Bank of India (SBI), Punjab National Bank (PNB), General Insurance Corporation of India (GIC) and Bank of India, would still be a ‘national carrier’ willing to serve national interests at times of crisis, but stay away from the suffering of day-to-day interventions by the government in terms of advertisements, routes, hiring, posting and participation in social obligations which are eminently avoidable for a loss-making company.
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The second edition of the India Aviation show organised jointly by the Ministry of Civil Aviation and FICCI at Hyderabad proved to the world that the country's aviation sector had weathered the recession. The presence of as many as 190 companies, including 115 from abroad was ample evidence that India would be the centre of aviation action. Vignettes from the show.
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INDIA, GET READY FOR
TAKE-OFF
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(CLOCKWISE FROM LEFT): A section of the crowd at the inauguration of the India Aviation Show 2010; Praful Patel waves out to mediapersons and photographers after receiving the new A320 for AI; and Andhra Chief Minister K Rosaiah lights the ceremonial lamp as Praful Patel and US Ambassador Roemer watch on.
T
CRUISING HEIGHTS April 2010
All Photos: H.C. Tiwari
he second edition of the India Aviation show was marked by an air of optimism and Civil Aviation Minister Praful Patel exuded that confidence. Speaking during the inauguration, the minister said that the trends in the last quarter of 2009 and early 2010 were indicative enough that the country had weathered the storm. He then reeled out figures: the country would need 400 more airports in addition to the present 90 operational ones. And as for aircraft, we should be seeing at least 2,300 of them in our skies in the next ten years along with 500-odd helicopters. Adding to the optimism was Andhra Chief Minister K Rosaiah who pointed out that commercial production at the a cabin manufacturing facility in the joint venture set up by Tata Advanced Systems and
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FOCUS Sikorsky Aircraft Corporation, near the Rajiv Gandhi International Airport, would start from April 2010 and the first commercial helicopter from the plant would be ready by November 2010. The Chief Minister also said that the state government had come up with fiscal and non-fiscal incentives for the private sector in the airport segment and new airports had been proposed at Kurnool, Tadepalligudem, Nizamabad and other towns in public-private partnership mode.
The Navy’s Sagar Pawan aerobatics team in one of its manoeuvres minutes before one of the planes crashed.
The child in the candy store
U
S Ambassador Timothy J Roemer could not help but recount a story from his childhood during the inauguration ceremony. An aviation enthusiast, Ambassador Roemer wanted to go back to his childhood favourite book, The Spirit of St Louis by Charles A Lindbergh who had captured the world's attention when he completed his famous nonstop flight from New York to Paris in 1927. Pointing to the numerous aircraft lined up on the tarmac at the Begumpet airport, the ambassador said that he felt like a child in a candy store. The grand display apart, the ambassador was deeply pained at the accident that occurred at the air show and saw the death of Commander S K Maurya and Lt Commander Rahul Nair who were flying in a HJT-16 Kiran Mk2 trainer as part of the Sagar Pawan aerobatics display team. He wrote in his official blog, Roaming Roemer, “I travelled to Hyderabad to lead an American delegation to India Aviation 2010. After an exhilarating morning meeting US and Indian businesses at the air show, the day turned in a tragic direction
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when we saw the column of black smoke. Sadly, one of the Indian flight demonstration jets crashed during the show. It began as such a promising day, with large companies like Boeing, Honeywell, Bell and United Technologies on the ground in force and over 35 US companies in all, including 12 new small and medium sized businesses, at the air show to partner with Indian counterparts. Sadly, it ended so tragically. As the full extent of this is still becoming known, all of our thoughts and prayers are with those who lost their lives or were injured, and with their families. These heart breaking losses have even more piercing impact when you are part of the event.”
The country would need 400 more airports in addition to the present 90 operational ones. And as for aircraft, we should be seeing at least 2,300 of them in our skies in the next ten years along with 500odd helicopters
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Tie up to share ideas
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t must have been an exhilarating outing for the US Ambassador. The United States was the focus country in the five-day aviation event, while France was a partner country. Upbeat about the resurgence of the country's aviation sector, Timothy J Roemer declared during his address at the inauguration of the India Aviation 2010 conference that the “USA will work with Indian public and private sector partners to create economic opportunities and jobs in both the countries”. Among the opportunities he mentioned was the public-private partnership US-India Aviation Programme, which has seen the DGCA's (Director General of Civil Aviation) involvement in the work on helicopter aviation security. The US companies participating in the show, said the Ambassador, were ready to partner with India on its goal of modernising and upgrading airports, improv-
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ing air traffic flow and “making it a regional aviation hub”. In fact, the Ambassador told the visiting American businesspersons at the show to grab every opportunity to facilitate greater cooperation between the two counties in the aviation sector. “I would encourage American and Indian business leaders and policymakers to take this opportunity to share ideas on how our countries can work together better,” Roemer said.
A message of trust
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he Ambassador of France to India, Jerome Bonnafont, won the hearts of the huge audience at the inauguration. His Namaste was applauded by all. But more than his greetings, he said he had come to Hyderabad to respond to the message of trust that the show had sent out by making France the partner country. France wanted to be a partner in the development of the aviation sector. Bonnafont
The stalls of Airbus and Boeing at the show.
The day one began as a promising day, with over 35 US companies present at the air show to partner with Indian counterparts. Sadly, it ended so tragically
went on to say that India and France had a lot of opportunities in public private partnerships in safety, training, maintenance and industrial production.
Business as usual
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ir shows around the world are often turned into stages for announcements of big orders. While Hyderabad did not see any such deal, the sheer presence of as many as 190 companies — among them were the big daddies Boeing, Airbus, Cessna, Beechcraft and Bell — was indication enough that the India Aviation show had come of age in the second edition. The A380 — a major attraction of the 2008 show — was not on the runway but there were others like the Boeing 777-300, a number of small-sized business jets and helicopters. An excited Boeing India President Dr Dinesh Keskar was heard saying that
(From extreme left) Charming Kingfisher’s staff at their stall; R K Tyagi and AERA chief Yashwant Bhave can be seen talking at the inauguration ceremony and facing the camera are M Madhavan Nambiar, V P Agrawal and a foreign delegate; M Thiagarajan, CEO, Paramount Airways and Vijay Mallya, CEO, in conversation with V P Agrawal, Chairman, AAI; and, dignitaries on the dais at the inauguration.
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FOCUS Globe Aviation Pvt. Ltd that runs IndiGo, and GoAirlines (India) Pvt. Ltd. Also present were the heads of the DGCA, the Airports Authority of India and the Airport Economic Regulatory Authority. Incidentally, the only foreign airline at the show, Qatar Airways, was represented by its CEO Akbar Al Baker, who managed to snatch Civil Aviation Minister Praful Patel soon after the inauguration and take him to the Qatar jet parked on the tarmac.
A Taj in the sky
T (Above)The static displays of different aircraft at the India Aviation Show; and (left) Akbar Al Baker, CEO, Qatar Airways shows his plane to Praful Patel.
“Asia Pacific is the biggest market with 8,960 airplanes. Within Asia Pacific, India is the fastest growing market with a projected requirement of over 1,000 airplanes worth $100 billion by 2028 thanks to its strong GDP growth rate, huge middle class and increasing disposable incomes”. European aircraft maker Airbus too saw hopes from India. Its Executive Vice President (Marketing and Contracts) Kiran Rao had a busy time handing over two planes: one to Air India and the other to Indigo. An upbeat Rao said, “We have 19 deliveries of A320s lined up for 2010 to Indian carriers like IndiGo, Go Air and Air India and another 20 deliveries of A330s. We expect to improve our market share from 70 per cent to 80 per cent over the next few years in India.” What was more important was the presence of the CEOs of all Indian carriers. Among them were heads of the National Aviation Co of India, Kingfisher Airlines Ltd, Jet Airways (India) Ltd, Paramount Airways, SpiceJet Ltd, Inter-
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Akbar Al Baker, CEO, Qatar Airways, which was the only foreign airline at the show managed to snatch Praful Patel soon after the inauguration and take him to the Qatar jet parked on the tarmac CRUISING HEIGHTS April 2010
his edition of the air show saw for the first time Taj Air, an exclusive charter service that provides travellers higher levels of safety, efficiency and reliability in the comfort of their very own aircraft, showcasing new additions to its fleet of jet aircraft — a brand new Falcon 2000LX jet and P180 Avanti II turbo-prop aircraft. Run by Taj Hotels Resorts and Palaces, Taj Air has expanded its existing fleet to enhance its offering of efficient and highly personalised travel experience. Not many people know that Taj Air is the exclusive distributor of Piaggio Aero's P180 Avanti II in India, Nepal, Bhutan, Sri Lanka, Pakistan, Maldives and Mauritius. It also has the first Piaggio Aero authorised service centre in India. Speaking about the fleet expansion, Mehernosh Kapadia, Chairman, Taj Air, said that flying with Taj Air was akin to staying in at a suite at the Taj. “While you take care of business, Taj takes care of everything else. Be it for business or pleasure, Taj Air ensures that every journey is an enjoyable, luxurious experience.”
A Falcon for India
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long with Taj, Religare Voyages, an integrated aviation and travel solutions company, also showcased its new and Asia's first Falcon 7X. The Falcon 7X aircraft, manufactured by French aircraft manufacturer Dassault, is the best selling model of the Falcon series with over 200 orders from 42 countries. Religare Voyages has a Falcon 2000 in its fleet as well as several smaller jets and turboprops. A beaming Religare Voyages CEO and Managing Director Sanjay Godhwani said that his company was proud to own the country's first Falcon 7X. The Falcon 7X addition to the Religare fleet would help the company catapult to the next level and add value to our long-term growth plans.
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AIR CARGO & LOGISTICS
Chennai Courier Terminal at AAI’s Common User
Chennai gets an
air freight station The city gets its first fully air-conditioned air freight station and puts India on the way to developing and modernising its cargo industry.
FREIGHTER FIGHTS p60
GREEN VISION
Boeing is ready to launch its 747-8 freighters and Airbus is not lagging behind.
Lufthansa has completed a series of tests of lightweight eco-friendly containers.
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LAST IN/FIRST OUT
TRENDS
Air cargo indicates a bounc-back AIR CARGO industry is recovering fast from the global downturn as air cargo companies have started enjoying a flow in traffic on routes from Asia to Europe and North America — a clear signal that world trade is beginning to bounce back from last year’s slump. FedEx reported an 18 per cent increase in package volumes on routes out of Asia in the three months to the end of February. Lufthansa reported that cargo volumes had risen by nine per cent year-on-year last month, continuing the trend of January, when volumes rose by 19 per cent against the same month in 2009. Furthermore, both carriers said that they would be adding aircraft to their fleets. FedEx said that it was raising its capital budget by $327.6 million in its third quarter
with the addition of three Boeing 777 aircraft. Carsten Spohr, Chief Executive of Lufthansa Cargo, was equally upbeat, predicting a return to operating profit for the business this year after a loss of $253 million in 2009. Spohr said, “The crisis has bottomed out and demand is rising steeply. We are experiencing a market upswing, especially in Asia.” Air cargo is widely viewed as an early indicator of trends in global trade. A third of world trade, by value, is moved by air. Most of the traffic is good for “just-in-time” delivery, higher-value consumer items or components. These are more subject to rapid swings in demand from manufacturers and retailers and a surge in air cargo is a signal of a change in demand and of increasing confidence.
Two to tango THE recovery in the logistics sector, albeit slow, has spawned new JVs and agreements. Lufthansa Cargo and Austrian Airlines, for example, are going to step up cooperation between their two companies in the airfreight sector. The agreement will take effect on July 1, 2010. Under the new agreement, the flow of cargo traffic through the hubs at Frankfurt, Munich and Vienna will be optimised and the global distribution activities of both the companies will be merged and harmonised. Carsten Spohr, CEO and Chairman, Lufthansa Cargo, commented,“Vienna Schwechat will become a central European hub for Lufthansa Cargo comparable to our German hubs at Frankfurt and Munich.Thanks to Austrian’s excellent route network, Lufthansa Cargo customers will also be able to take advantage of direct flights to destinations in all corners of the globe.” In future, the two companies will jointly route their cargo traffic through the Vienna hub and boost freight flows. Dr Andreas Bierwirth, Chief Commercial Officer, Austrian Airlines, noted,“This marks a further step in the reorganisation of Austrian Airlines. Our cargo business will benefit from the new structure.”
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The pie is big enough for each one to find a niche to develop an individual expertise. It is inevitable that future models would evolve to cater to this diverse demand, models that would entail more collaboration and consultation, and one that will increasingly be more conscious of the environment.
Tulsi N Mirchandaney
Managing Director, Blue Dart Aviation Limited, on whether air cargo will make any major breakthroughs in the years ahead.
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GOOD news! Cargo is no more a bulky subject now — after approximately 1,20,000 trial runs on Lufthansa flights with special lightweight containers. Six months of materials tests with the “Süddeutsches KunststoffZentrum Würzburg”, Lufthansa Cargo and Jettainer have successfully concluded a pilot scheme on the use of lightweight containers. These new containers are made of glass fibre, Kevlar fibre or Dyneema sourced from different manufacturers. Construction of the containers from innovative and lighter composites instead of aluminium has reduced the weight by 20 per cent, lowering fuel burn and CO2 emissions appreciably. Carsten Spohr, CEO and Chairman, Lufthansa Cargo, on the successful completion of the test, said, “Lufthansa Cargo stands by its ecological commitment. By 2020, we aim to reduce our specific fuel consumption by 25 per cent. The successful tests with lightweight containers constitute a significant step in that direction.” The container tests were designed to transform an innovative idea into an industry standard. Another object of the trials was also to assess the handling quality characteristics and costs of lightweight containers. Lufthansa Cargo is trying to fulfill its ecological commitments in more ways than one.Taking another step towards making the environment green, it continues the expansion of its “eFreight” operations. It launched the first paperless airfreight shipment from Frankfurt in autumn 2008. The cargo carrier and its partners have already established e-freight in airfreight business routine at the airports of Frankfurt, Munich, Hamburg and Dusseldorf.
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CARGO
Towards a bright future The world’s cargo sector was addressed by Giovanni Bisignani at the International Air Transport Association’s World Cargo Symposium, held in Vancouver, Canada in the beginning of March 2010. The symposium focused on service improvement, efficiency upgradation and security enhancement. e are starting to see some signs of optimism on the horizon. But we cannot rebuild on the old foundations. This recession has changed global business. To remain competitive, air cargo must improve its quality and reduce its costs, said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA) during his addressing at the IATA World Cargo Symposium. The symposium was attended by 750 industry
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experts including airlines, shippers, freight forwarders, ground handling agents, and customs authorities. In the symposium, the entire air cargo value chain was asked by the IATA to drive efficiencies and improve competitiveness by supporting IATA’s e-freight initiative. There was also an urge by IATA for a renewed focus on quality via Cargo 2000 and a more effective and cost efficient approach to security with IATA’s Secure Freight programme. The global recession continues to challenge the global air cargo industry.
Cargo revenues were down by one quarter in 2009 compared to the previous year — the steepest drop ever. The end of 2009 and the beginning of 2010, however, saw a strong upturn in cargo volumes to a level, 28 per cent higher than the low point seen in late 2008, according to the new IATA Cargo e-chart book. This is still 3-4 per cent below the early 2008 peak level. IATA is now predicting that cargo demand, which fell by 11 per cent in 2009, is expected to grow by 12 per cent in 2010, five per cent more than the previously forecast seven per cent. That would wipe out the effects of the crisis and still give the industry a one per cent growth. In 2009, the wide-body fleet saw utilisation fall by seven per cent and the freighter fleet specifically is down by 160 aircraft. The industry is expected to take delivery of 50 freighters in 2010 and the wide-body fleet overall looks to expand by 4-5 per cent. On the issue of recession and recovery after recession, Bisignani said, “The recession has hit the industry hard. We have lost two to three years of growth. We are starting to see some encouraging signs with traffic volumes improving. Volumes don’t automatically translate to profits. The challenges are many, including low yields, volatile fuel prices and matching capacity to demand.” Highlighting the work on e-freight agenda as a means to accelerate the recovery and improve prospects for
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future profitability, “e-freight has the potential,” said Bisignani, highlighting the work on e-freight agenda as a means to accelerate the recovery and improve prospects for future profitability, “to eliminate $4.9 billion in costs across the air cargo supply chain. In 12 months, e-freight volumes increased five fold.” The electronic airway bill (e-AWB) is one of the 20 documents planned for conversion with e-freight. “This year will be critical for e-freight. This will give us the capability to remove 64 per cent of the paper from the system and cover 80 per cent of international shipments. With this capability, now is the time for customers, customs and governments to insist on e-freight as the standard way to do business,” added Bisignani. Putting together, the Cargo 2000 and e-freight Bisignani asserted, “IATA efreight can only be successful in the quality-controlled environment that Cargo 2000 is building. We need the whole supply chain to embrace Cargo 2000 as the quality standard for the entire industry.” Security will also be a critical factor this year as Bisignani declared. He said, “Our Secure Freight strategy focuses on a data-driven, risk-based approach with shared responsibility throughout the supply chain. IATA’s target is $468 million in cost savings with enhanced security through consistent standards and procedures.”
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CARGO
“THY to start freighter service from Mumbai” Atilla Lise, Senior Vice President, Cargo, Turkish Airlines, is a familiar figure to the Indian Air Cargo community. He was in Mumbai sometime ago, after his last trip to Delhi in April 2009. Vinod Kaul caught up with him to find out the secret formula of Turkish’s success. During your last visit to India in April ‘09, you were upbeat about the prospects of Turkish Airlines (THY) despite the global recession. What were the final results for the year ’09? We are the fastest growing airline in Europe. We operate four Airbus freighters in 22 countries; our network covers 157 cities in 76 countries, except Australia and New Zealand. These are excellent results by any
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standards. Turkish Cargo is currently operating scheduled flights to Frankfurt, Maastricht, Cologne, Zurich, Milan, London, Paris, Tel-Aviv, Dubai, Almaty, Tbilisi, Algiers, New Delhi, Damascus, Amman, Madrid, Casablanca, Beirut, Cairo, Pristina, Tirana, and Tripoli by its freighters.
What is the mantra behind your success? How is Turkish Airlines able to grow when most other comparable airlines are showing a decline? Turkey is located very strategically in Europe and is also a bridge between the Middle East, North Africa and CIS (Commonwealth of Independent States) countries; we thus have the advantage of Turkey’s location. We also have the advantage of Istanbul as a natural hub. Turkish Airlines’ cost management is also very well organised and hence we are able to offer very reasonable and competitive rates. Owing to the location of Turkey in general and Istanbul in particular, we are able to work out a good balance and right freighter schedules to create a good synergy for offering products and also to plan an optimum fleet mix of wide and narrow body passenger aircraft. What are your year 2010 prospects and strategies? The year 2010 will obviously be a very difficult year. Customer focus will grow in importance. We are cautiously optimistic. We will keep faith in growth; of course, the strategy would be effective growth. We will extend our fleet by inducting a new A330 freighter by
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September 2010, which will enable us to increase reach and improve our network. We will then start a Far East freighter service. The second such freighter will come in April 2011. Apart from freighter enhancement, belly capacity will also grow with five B777 passenger and four A330 passenger planes. This means that freighter and belly capacity will increase very significantly. Additionally, for cargo operation optimisation purposes, Cargo 2000 will be fully implemented. Also, the e-freight project requirements will be finalised. Last but not the least, the Cargo Revenue Management System integration will take place (half by the end of this year and half in 2011). This is also indicative of the support and trust to Turkish Airlines from the Indian freight forwarder community. We are very ably represented in India by Ascent Air. In Mumbai, we currently have only belly capacity available, but we are targeting to start freighter service from the second half of 2010.
What is your experience with Cargo 2000 that you implemented early last year? Our feedback regarding
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Cargo 2000 is that it makes your system transparent and makes it easy for Freight Forwarders to track and trace consignments without contacting THY. It also, prevents mishandling before any problem starts. Cargo 2000 enables us to achieve improved efficiency eliminating errors in the process and reduce the cycle time of the outcome. Therefore, our first goal is to meet customer needs and expectations. We are targeting a real commitment to the standards and maintain quality and to provide continuous improvement by working together in a joint quality environment of Cargo 2000 group members. We want to build a system infrastructure that helps us not only meet the standards but exceed them by enabling us to speed up our network and develop new solutions for our customers. We will work in coordination with other airlines and our major freight forwarding customers to attain joint success and to provide total service quality.
Any message to the Indian freight forwarding community? I sincerely thank the airfreight communities in India for their support and trust to Turkish Cargo.
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CARGO
Air cargo gets a booster Almost all stakeholders in the air cargo community rant about the infrastructure — or rather the lack of it — available at our international airports. Though cargo villages are still a far cry, a move has been made in Chennai with the establishment of the first air freight station (AFS) in the country, reports Tirthankar Ghosh.
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n a first of its kind move for the country, a new air freight station (AFS) has to start fullfledged operations in Chennai, South India, and end the demand of the freight forwarding community. The lack of adequate facilities had hampered air cargo operations. Almost four years ago, the congestion at the Chennai air cargo complex had prompted freight forwarders and other stakeholders to suggest the establishment of air freight stations around the city. These
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stations, they said, would help transship imported goods. Among those who had raised the congestion issue was Nokia, which has a factory near Chennai. Around that time, it used to take Nokia — used to just-in-time schedules — around a week to get its material from the airport to its factory. Esquire Express India is all set to become the ‘Handling and Transport’ contractor for the country’s first air freight station, being established by the government-owned Central
Although the AFS has been established, a few notifications and circulars governing it need to be amended pragmatically. Warehousing Corporation (CWC), that has been providing logistics support to the agricultural sector and is one of the biggest public warehouse operators in the country. According to S Sakthivadivel, Managing
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Director, Esquire Express India, “Our endeavour will be to facilitate and serve the trade.” The CWC facility at Virugambakkam — around 12 km from the airport — was given a status as air freight station “to cater to the needs of the trade for providing facilities of import and export cargo from and to Chennai International Airport,” said Sakthivadivel. Although the AFS has been established, a few notifications and circulars governing it need to be amended pragmatically for its full-fledged utility. As of today, the AFS has only been completing transhipments. Importing goods from Chennai Airport will start at AFS, once the rules are amended appropriately. Domestic cargo traffic of the nation, has recorded a growth of around 30 per cent over the last year but the facilities available to domestic shippers deserves to be enhanced. In Chennai, domestic cargo has to be provided with a Common User Facility Domestic Terminal, with adequate infrastructure and state-of-the-art facilities. In addition, freight forwarders have been demanding better connectivity and consolidation to other airports.” Esquire has the necessary expertise and experience to handle the functions of the AFS. Since its beginning in 1991, it has grown to become one of the major service providers of wholesale consolidation for courier and cargo. In fact, it is the only private enterprise which is the Custodian and terminal operator for the Common User Facility Courier Terminal
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CARGO
CONCOR plans to revolutionise air freight hile the Central Warehousing Corporation has taken a lead to set up the Air Frieght Station in Chennai, the Container Corporation of India Limited (CONCOR), entered the field of air cargo in 1999. Set up in 1988, the Government of India enterprise, operating inland transport services, clearance, and cargo handling facilities throughout the country has plans to go global. Its plans to set up airfreight stations at 15-20 of its inland container depots or ICDs is underway. Work has started in a number of them. CONCOR undertakes various air cargo activities like road feeder services, establishment of air cargo complexes and centres for perishable cargo (CPC) and warehousing services. It moves export /
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STARTING A NEW VENTURE: Along with providing inland transport services CONCOR has plans to establish air freight stations at many of its ICDs.
Chennai Airport. “In recognition of our quality of service and the trust gained over decades, we have also been assigned as the agency o of Airlines Operating Committee (AOC) in Chennai Airport for handling the mishandled baggage and other services,” said Sakthivadivel. The Courier Terminal in Chennai Airport being handled by Esquire for the last three years provides services to all the major courier companies operating thorough Chennai: DHL, UPS, TNT, Aramex, First Flight, etc. The establishment of the AFS at Chennai has come at the right time for enhanced growth of the trade and business of the nation. Chennai’s monthly cargo import touched around 12,000 tonnes compared to the 4,000 tonnes per month five years ago. With the
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import cargo at major international airports and 58 ICDs spread across the country. Besides, CONCOR has opened a Greenfield Cargo Complex at Ozhar Airport, Nasik, jointly with Hindustan Aeronautics Limited (HAL) and another CPC at Goa Airport. The proposed air freight stations would be slightly smaller in scale than the air cargo complexes set up at Nasik and Bengaluru airports. These air freight stations would provide a host of services such as bonded warehousing, palletisation and customs clearance, trucking, transportation of cargo to the airport and completion of other formalities for air freight. In addition, CONCOR has signed a memorandum of understanding (MoU) with the government of Gujarat, to set up a multimodal freight logistics park. This park will fulfil the expectations of manufacturers, distributors, retailers, exporters and importers to reduce costs and obstacles in their supply chain. The park will be of world class standard with various trade zones for mass warehousing, distribution, processing, packaging, trading, freight forwarding, express cargo delivery, ICD/CFS operations, air freight station, domestic container services, break bulk railway movement, cold storages, etc, with specialised cargo handling equipment and warehouse automation.
growing demand, the Chennai air cargo complex has been handling cargo well beyond its capacity. According to the Airports Authority of India (AAI), the share of international cargo from Chennai in the country’s total international cargo was 19.1 per cent. With its volume of cargo traffic, Chennai Air Cargo Terminal was the third busiest air cargo terminal in
India during 2008-09. The Compound Growth Rate over the past five years indicates that loaded and unloaded cargo from the airport has been increasing at the rate of 9.1 per cent and 17.4 per cent, respectively which accounts for 12.9 per cent compound growth rate for total international cargo traffic. According to J Krishnan, President of the Air Cargo
SECURITY CHECK: Security measures will be one of the prime concerns at the newly established AFS.
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S Sakthivadivel Managing Director, Esquire Express India
“Our endeavour will be to facilitate and serve the trade.” Agents Association of India, and one of the prime movers for the AFS facility, the Chennai air cargo complex is unable to handle large parcels. While pallets used to be less than 100kg a few years ago, today pallets weigh around 800kg and even the smaller parcels contain more than 100kg. Once the AFS starts functioning fully, imported cargo can be sent to the facility where break bulk and delivery could take place. Also cargo could be repacked for export and sent to the airport for onward transportation. Additionally, there would be fewer occasions for the cargo to get damaged, thanks to the covered storage within the facility. Today, for example, one airline operates out of containers in the cargo terminal. The AFS would also help to raise manufacturing. Meanwhile, AAI has plans to augment the 24,335 sq m storage space available at Chennai to enable it to handle 2, 58,000 MT of cargo annually as against the demand of 2, 31,600 MT. It is envisaged that by the end of 2009-2010, the total cargo area available at Chennai would be 60,000 sq m to accommodate 4, 61,000 MT annually.
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Operators demand government intervention In its first convention in Mumbai, the Domestic Air Cargo Agents Association of India urged the government to take steps that would make the domestic cargo industry stronger, reports Roohi Ahmed. umbai witnessed the first national convention of the Domestic Air Cargo Agents Association of India (DACAAI) recently. The association has been established recently to cater to the various issues in the growing air cargo business in the country. Present at the meet were more than 40 members from the major airports in India. Addressed by all scheduled domestic airlines representatives, the convention saw all stakeholders — management companies, cargo terminal operators, airlines, handling agents, air cargo agents, etc. from all across the country. Arvind Nayak, President of the body said, “DACAAI will be a forum for interaction of all stakeholders of air cargo industry, contributing to the overall growth of the economy. The domestic air cargo industry is highly unorganised even though it accounted for about 40 per cent of all air cargo in the country and is growing at the rate of 20 per cent every year.” In a special announcement to DACAAI on the sidelines of the conference, Praful Patel, Minister, Civil Aviation, said, “In a large country like India, which is well connected through an extensive network of air capacity offered by several airlines, there is a scope for
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TOGETHER WE WIN: DACAAI members at the first convention held in Mumbai.
increased transportation of domestic cargo by air. I am sure that DACAAI will take suitable initiatives through interaction with its members, domestic airlines, terminal operators and others, to nurture and further develop the domestic air cargo industry.” Nearly 30,000 tonnes of air cargo is moved every month on all domestic carriers. The industry is approximately around Rs 1, 000 crore and employs 5, 000 people directly and 10, 000 indirectly. Speaking about the convention, Suraj Agrawal, Secretary, DACAAI, said “The conference is a path breaking exercise to foster unity amongst all stakeholders in the business and find amicable solutions to expand and sustain the high growth rate and
potential in the domestic cargo industry which is still plagued by various issues. Among the factors that would foster growth in India’s domestic air cargo would be its vast geographic expanse, large population and potential for consolidation in its current fragmented transport sector,
The domestic air cargo industry is unorganised even though it accounted for 40 per cent of all air cargo in the country.
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especially trucking industry.” Domestic air cargo traffic has been growing at Compound Annual Growth Rate (CAGR) of 12.80 per cent from 2001-02 to 200607, whereas international air cargo traffic has been moving at CAGR of 13 per cent during the same period. During 2006-07, total air cargo traffic is estimated to be over 1.56 million tonnes against 1.4 million tonnes during 2005-06, registering a growth rate of 14.65 per cent. According to the Planning Commission, India's air cargo movements would grow at over CAGR of 11.5 per cent from 2007-08 to 2011-12. Riding high on export of gems and jewellery, special chemicals and highvalue pharmaceuticals, domestic air cargo traffic at all Indian airports has been growing rapidly. It is responsible for faster movement of cargo including life saving drugs etc. which is a crucial aspect of better health care to the country. DACAAI, in the convention, laid down some of its issues that it wants the government to address. It seeks more privatisation for the domestic air cargo industry. The industry is burdened by Octroi and sales taxes. The association demands uniform taxation norms, especially VAT and lesser sales tax in West Bengal and Karnataka. They also seek rationalisation of taxes and clarity in service tax, as there is no service tax for the international cargo industry but is mandatory for the domestic air cargo agents. The DACAAI members also mentioned that 30 per cent of their cost is incurred while paying the fuel surcharges. One of the grievances was the lack of space in the blueprint of the air cargo industry in India. Overall, they are witnessing improvement in the domestic air cargo industry, albeit slowly.
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Do not wait for market maturity While the country's express sector has seen impressive growth, a lot more needs to happen if the logistics industry has to keep pace with the expectations of customers in service levels, writes Subhasis Chakraborty. he express industry was no exception to the economic slowdown and the industry saw a dip in revenues during the latter part of 2008 and up to first half of 2009-10. The severe pressure on pricing and competition only made matters worse. Companies faced cash flow issues with customers sitting on bills for two to three credit cycles. But it must be pointed out that the industry did extremely well to support customers by being flexible about all these issues and continued to render services without a dip in the quality of deliveries. This really helped companies not only to hold on to their large accounts but also forge longstanding relationships which can weather the ups and downs in business. This is a seachange in the Indian business context as service providers are now aligned to their customers more than ever. These service providers have understood that they have to make their customers successful first if they want to do well in their business. The best part is that this understanding is not limited to the top echelons of the business but has aggressively gone down to the operating team so that all the stakeholders in the value chain seek a common objective and share the same vision. This means a lot of synergy for the business. It was August 2009 when the Indian economy and — specifically — the express industry (especially air cargo) started showing a positive growth. The prime movers for growth in the express industry have been telecom, IT, pharmaceuticals and specialised agro business. The markets are maturing and so is this industry. In a mature market, time to deliver the right product at the right time becomes a key differentiator. Or else, even the best products or services will not survive if they are not available on the shelf at the time when a buyer is making the crucial decision to have them. The time is
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There is a sea-change in the Indian business context: service providers are now aligned to their customers more than ever.
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shrinking fast and customers are squeezing their inventory turns to the last drop to be able to come out lean and mean at the market place which can give them an extra advantage. All this will only mean that the express companies have to gear up in their infrastructure and resources to meet the needs of their customers. While the express industry has been observing investments in infrastructure and technology it is left with issues of everexpanding cities, the traffic conditions, statutory clearances and ad hoc checks in transit which reduces, in turn, the time which is constantly shrunk by the customer. Growing cities and traffic conditions are the issues faced by express companies that challenge them to maintain their service levels and the SLA (Service Level Agreement) they draw up with their customers. This is partly answered by spreading the number of spokes in the hub-and-spoke model the industry practices and having a mix and match of connectivity between hub-and-spoke and direct connectivity to spokes which take care of last-mile delivery. While one can appreciate that the regulatory authority has been very responsive in the recent past, there is a lot more which
READY TO SURVIVE: As customers’ expectations are rising, express companies have to gear up their infrastructure and resources.
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TIME IS CRITICAL: In a mature market, time to deliver the right product at the right time becomes a key diffrentiator.
needs to happen if we have to keep pace with the expectations of the customer in service levels. Statutory clearances hold back the delivery efficiency to a greater extent still. In the domestic market, passenger aircraft continue to provide over 50 per cent of the bellyspace to commercial movement while we have more of cargo aircraft space for international cargo. One can acknowledge IT has been the backbone of express business transactions and we will continue to see more value-additions coming from this space. Customers are extensively using real time information for more accurate planning of their business processes. The e-commerce segment holds great hopes for the express industry. While the penetration of this business is still very small (less than one per cent of the people in India use internet-based transactions and payment gateways) but the speed at which India is growing and embracing new technology will only mean that there is great potential in this sector and the express segment has got good scope to tap this market with the right IT integration and delivery
mechanisms. The country’s greatest advantage is the average age of the population which is quite young and tech-savvy. This generation wants to use technology-based solutions for their requirements. Another advantage that the e-commerce business provides is the wealth of information about any product or service that facilitates a buyer’s decision. The information is standard and complete in all respects. The only disadvantage one can see is the physical touch and feel of the product but again here companies are addressing this issue by providing product demonstrations at user-interface centres. We can say that companies that invest now will reap the benefits when the market matures in the next few years and they will be ready with solutions and resources on the required scale. Overall 2010 has started well and as they say ‘Well begun is half done’. The industry can expect a growth rate anywhere in the 20 per cent bracket and that’s really an impressive number when it comes to reality. (The columnist is Chairman and Managing Director, DTDC)
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E-commerce holds hopes for the express industry and as India is embracing new technology that means that there is great potential in this sector.
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CARGO
A faster and bigger
freighter for the world
Boeing's new 747-8F comes on the heels of the world's recovery from the recession, the high oil prices and an acute sense of preserving the environment. It is no wonder that the freighter has found 20 firm customers. A report. hen Boeing’s 747-8 freighter took off on its maiden flight on February 8, 2010, the air cargo community around the world sat up and took note. That was simply because at a length of 76.3 metres, the new generation 747 is 5.6 metres longer than the 747400 Freighter. This ‘stretch’ — just before and just aft of the wing — provides customers with 16 per cent more revenue cargo volume compared with its predecessor, for a maximum structural payload capacity of 140 tonnes. Simply put, that translates to an additional four main-deck pallets and three lower-hold pallets for a potential cargo gain of 20 tonnes, over a distance of 1,000 nautical miles. The freighter’s maximum range is 4,390 nautical miles (8,130
km). With the same nosedoor loading capability as the 747-400, the -8F can handle industry-standard threemetre high pallets and cargo density capability at 159 kg/m3. To top it all, the new design, say its creators, will be quieter, more economical, and more environmentally
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Courtesy: Boeing
W
friendly than previous versions of the 747. The jet has a list price of more than $301 million. Much before its first flight, 108 Boeing 747-8 were on order: of these 76 were the freighter version. The first 747-8 freighter is due to be delivered in the fourth
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quarter of 2010. Cargolux, Nippon Cargo Airlines, AirBridgeCargo Airlines, Atlas Air, Cathay Pacific, Dubai Aerospace Enterprise, Emirates SkyCargo, Guggenheim and Korean Air all have ordered the 747-8F. The aircraft comes at a crucial juncture: the world is coming out of the recession and is in an oil-price sensitive, green-conscious environment. Both Boeing and Airbus, in their yearly 20-year forecasts have pointed out that the air cargo sector around the world would need a number of freighters. Boeing, for example, has said that there would be a demand for 830 large freighters (above 80 tonnes capacity), of which 490 will be new production models, such as the 747-8. The large number of freighter would also include the 777 freighters. However, it must be said that with the air
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CARGO to the expansion of an express market, as companies and individuals would increasingly need to ship urgent goods and documents. International freight would grow slightly faster than the world average, but tremendous growth would come from the rapid expansion of those domestic express freight operations, which should increase on average 16.5 per cent per annum over the next two decades. It was generally assumed that Airbus had not attached importance to developing its freighters. For years, the DC10s, the MD11s and B747s have been the warhorses of the cargo fraternity. Airbus’ A300-600 freighter was a popular offering but when
Cargo, which has ordered three of the aircraft. The A330-200F is a modified version of Airbus’ A330-200 passenger jet, and has a list price of around $180 million. Since the programme was announced in January, 2007, Airbus has received 67 firm
The world is coming out of the recession. Both Boeing and Airbus forecasts point out that the air cargo sector around the world would need a number of freighters. that was discontinued, the European plane manufacturer concentrated on conversions. Today, however, the situation has changed with the new A330-200F: the aircraft is aimed to counter the B747s. The first A 330-200F will be delivered to Etihad Crystal
orders from nine airlines for its freighter. The market conditions and the orders led Airbus Chief Operating Officer - Customers, John Leahy to say that the “A330-200F is the right aircraft at the right time. We are at the eve of a market recovery, and now is
Courtesy: Airbus
cargo industry in the very first stages of a recovery, new orders were not expected to come flooding in. In its Current Market Outlook 2009-2028, Boeing has pointed out that there is a “shift toward larger freighters and new, more efficient airplanes will help keep air cargo transport affordable”. The airplane manufacturer has pointed out that the “tonne-kilometer cost and range advantages of large freighters will enable air carriers to meet demand on high-growth trade lanes, particularly links to Asia. As world air cargo nearly triples over the next 20 years, the number of freighters in the world fleet will grow by more than two-thirds. Replacement airplanes will generally be larger, increasing the fleet share of large freighters from 26 per cent to 33 per cent by 2028”. Airbus, on its part, stated that business on the Indian subcontinent was developing quickly thanks to the size of the country and the pace of its economic development, both domestically and internationally. With a current fleet limited to only 12 freighters, there was very high potential for traffic and fleet development. Airbus said that 164 cargo aircraft would fly within and from India by 2028. Part of this development would be linked
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the time for airlines to prepare for future freight growth”. With a higher payload than initially anticipated, the A330-200F offers two operational configurations. The aircraft can carry up to 64 metric tonnes over 4,000 nautical miles/7,400 km, or more than 69 metric tonnes up to 3,200 nautical miles/5,930 km non-stop. An optimised fuselage cross-section provide the A330-200F interior flexibility to carry a wide variety of pallet and container sizes, 30 per cent more volume than any freighter in its class. At one point of time, Airbus had planned an A380 version and had even taken a few orders. But when express majors FedEx and UPS cancelled their orders in 2005, Airbus stopped work on the plane. Boeing’s 747 family has been in the freighter business for a long time. Lufthansa, for example, was the first to order the 747200F. The carrier was, in fact, the only operator of the 747-200F for around two years. According to aviation pundits, Boeing has continued with the 747 family. From the 747-200Fs, it went ahead with the 747400F and later the 747-8F. In fact, the 8F is stronger than the -400F and is touted as the acme of airfreight excellence. Along with the 777F, both are supposed to be the freighters of the future.
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BDP starts JV innings in India US forwarder BDP International has established a new company in India. Its new subsidiary company — BDP Global Logistics (India) Private Limited — is a joint venture between BDP and local logistics company Unique Global Logistics Private Limited (UGL) with BDP as the majority partner. Mumbai will be the headquarter of the company. Richard J Bolte, Jr, President and CEO of BDP, said, “As more of the world’s largest manufacturers and retailers BDP International, announced the setting up of its joint-venture Indian subestablish their operations in India, BDP sees an sidiary along with local partner Unique Global Logistics (UGL). Present at the opportunity to contribute to the growing need for launch of the Indian JV were [l-r] Pavithran M Kallada, MD, UGL; Richard J Bolte, President and CEO, BDP International; and Michael Andaloro, MD, specialised logistics services.he urther added, “India Asia-Pacific, BDP. is a key focus for BDP over the next decade as the nation emerges as a true economic powerhouse. ensure the JV’s success. “UGL understands the needs of local Indian companies, while BDP offers global reach and BDP has a track record of working with the largest chemical and petrochemical companies in the world, and experience. By joining under BDP’s banner, we expect to successfully target the growing number of Indian the company expects to benefit from the sector’s growth over the next 10 years. Pavithran M Kallada, Managing companies doing business overseas as well as the multinationals coming to India to do business.” Director, UGL, said BDP’s globally recognised brand will
A joint bid to strengthen operations IN the league of signing agreements, developing new joint ventures, Air China Limited and Cathay Pacific Airways Limited signed a Framework Agreement in Beijing to establish a jointly owned cargo airline. Air China Cargo Co Ltd (ACC), a wholly owned subsidiary of Air China will be used as the platform for this joint venture. Upon completion of the transaction, ACC will continue to be a subsidiary of Air China. Air China will hold 51 per cent equity in ACC while the Cathay Pacific Group will acquire a 25 per cent equity interest directly in ACC and fund an offshore trust, in the form of a loan, to hold another 24 per cent economic interest in ACC. The total value of the Cathay Pacific Group’s investment in the joint venture will be RMB 1,669 million. Cathay Pacific will also sell four freighters and two spare engines to ACC. Subject to the approval of the relevant authorities and the respective shareholders of Air China and Cathay Pacific, ACC plans to commence operations as a joint venture airline in the summer of 2010, with Beijing and Shanghai remaining as its principal operating bases. The make-up of the board and the management team is designed to take full advantage of the complementary strengths of the two companies in terms of experience and expertise that would prepare ACC for broader international growth
NIIT and SATS join hands GLOBAL IT solutions provider NIIT Technologies and Singapore Airport Terminal Services (SATS) recently announced a strategic partnership to jointly market and implement its state-of-art COSYS Intelligent Solutions (COSYS IS) to help air cargo ground handling agents improve their cargo handling capabilities. Said Yacoob Piperdi, Senior Vice President (Cargo Services), SATS, “We first developed COSYS IS to manage our cargo customers’ handling
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requirements as well as our extensive hub operations in Singapore. Subsequently, COSYS IS was deployed at our overseas operations as part of our value-adding contribution. It has proven to be a valuable operating tool.” As part of the partnership agreement, NIIT Technologies will use its global presence to market this solution to other ground handlers and airlines across the globe. COSYS IS has been deployed in Singapore Changi Airport since 2000. Besides Singapore, COSYS IS has also been implemented at SATS’ joint ventures in Beijing, Hong Kong, Taiwan, India, and most recently in Indonesia. In Indonesia, the system will be deployed in three airports, namely Jakarta, Denpasar and Surabaya.
Entrepreneurs see Surat as a cargo hub ISRAELI government and its entrepreneurs have great interest in Surat as a cargo hub of Gujarat. According to Orna Sagiv, Consul General of Israel, “Surat has great potential with its Rs 30,000 crore textile industry and over Rs 50,000 crore diamond industry... Our cargo operators would find a large market here as the region has huge potential,” she added. As per the officials, Surat airport is well-equipped and can handle more than 200 domestic flights per day and the air cargo services. There are many private players who are interested in setting up cargo complex at the airport in order to facilitate easy transport of vegetables, textile goods, heavy machinery and chemical products to various destinations in India and abroad.
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India tops the logistics index
DHL and AA cargo train pharma shippers
IN a recent emerging logistics market research by Transport Intelligence (Ti), India has got the top rank with 7.51 points. Ti is a research and analysis provider, dedicated to the global logistics industry. Ti has created an index which seeks to compare the major emerging markets on a number of different metrics, identifying the key attributes which will make the market attractive from the point of view of logistics, air cargo, shipping lines and freight forwarders. The overall index has been built up through three sub-indices: ‘Market size and growth attractiveness’; ‘Market compatibility’; and ‘Connectedness’. Two of the largest economies in the survey led the rankings as the most attractive investment markets for logistics companies: India and Brazil. India holds the number one position largely as a result of its size and growth prospects: it scores below average on the both market compatibility and connectedness sub-indices. Brazil, however, shows a much more consistent set of scores. Although its market attractiveness is lower than that of India in terms of size and growth, it displays high levels of market compatibility and has good domestic and international connections.
AS the new US screening mandates are going into effect from August 1, DHL, in partnership with American Airlines (AA) Cargo has started joint trainings to educate pharmaceutical customers on how best to comply with the Transportation Security Administration's (TSA) Certified Cargo Screening Programme (CCSP). The training includes discussion on the required process for becoming a Certified Cargo Screening Facility (CCSF). Facilities that volunteer to participate in the CCSP will be able to tender cargo directly to a passenger air carrier or freight forwarder. “DHL’s partnership with American Airlines and the TSA is designed to provide important information to customers regarding the most efficient way to screen freight to meet the new mandates, while also meeting critical delivery deadlines,” said Gary Schultheis, Senior Vice President Airfreight, DHL Global Forwarding, Americas.
TNT introduces express import system TNT Express has launched its new worldwide express import system which gives customers complete control over their import shipments. This web-based tool allow companies order the collection of import shipments from around 170 countries with quotations and billing in their local currency to better control shipping costs. This system enhances its current express import services and is available to all customers regardless of the type or size of their business, and whether they are sourcing finished goods or spare parts from multiple suppliers around the world.
Aryan Cargo to fly overseas ARYAN Cargo Express Pvt Ltd, a subsidiary of Aryan Cargo Express and Logistics Pvt. Ltd, is planning to launch international air cargo operations by April. After the official launch, Aryan Cargo will be the second private Indian logistics firm to start international freighter operations. The company intends to be a non-integrated carrier of goods providing airport-to-airport freight transportation services and has been granted bilateral rights of India with Japan, Korea, china, Hong Kong, Thailand, UAE, Kenya, Italy, Belgium and UK to operate scheduled air cargo services.
Emirates Takes Gold in Air Cargo Excellence Survey IN the recent Annual Air Cargo Excellence Awards ceremony at the IATA World Cargo Symposium in Vancouver, Canada, Emirates won the Gold Award. The winners in the cermony were elected by a survey determined by freight forwarders around the globe, who rated airlines on customer service, performance, value and information technology. Other carrier winners included: Southwest Airlines, FedEx Express, Virgin Atlantic and Nippon Cargo Airlines. Upon receiving the news of the award, Ram Menen,’ Divisional Senior Vice President,
Cargo, Emirates said he was simply “delighted and very honoured that Emirates was considered for such an exquisite award. The results of the ACE Survey are important to cargo airlines because it is our customers who rate our performance. We strive for excellence in all areas of our business and are thrilled that our customers rate us so highly”. In 2010 Emirates SkyCargo has also been awarded “International Cargo Airline of the Year” at Air Cargo India in Mumbai and the Gold award in ATW Ad Award Cargo Services category in Singapore.
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This attendant had a great fall
Silence, please
A Qantas flight air hostess fell from a plane and hit the tarmac while shutting the doors before takeoff at an airport near Uluru (Australia). The air hostess was trying to close the doors of the plane when she stumbled and fell. “The air hostess was shutting the aircraft doors ready for take-off when the
A New Zealand Labour Party MP denies he overstepped the mark by saying “I wish those kids would shut up” about a noisy two-year-old on an Air New Zealand flight. A blogger said Charles Chauvel had said three times, increasingly loudly, during a Sunday night flight to Wellington that he wished the child sitting in front of him would “shut up”. The blogger, who called himself “boomtownprat” and wrote on the website of “Clint Heine and friends”, said after the
ground staff pulled the ramp out — the stairway ramp — and unfortunately the attendant lost her footing, falling head first from the aircraft around about three metres to the ground below,” according to ABC Radio The air hostess was taken to the local medical centre and then flown to Alice Springs with minor injuries.
You are trespassing IN a battle of David and Goliath proportions, a couple in their 70s is mounting a legal challenge against the Commonwealth Government and Melbourne Airport that could overturn the airport's master plan. Keith and Norma McLaughlin are challenging the airport's monopoly on parking. They are challenging its long-term expansion plans at the Administrative Appeals Tribunal. At the centre of the dispute are 13 hectares the McLaughlins have owned since the mid-1980s that adjoin
Oooooh la la!
P
op phenomenon Lady Gaga took her pledge never to be seen in normal clothes to a dangerous new level when her legs began to swell on a flight from London to the US due to another odd outfit. The US singer boarded a longhaul flight at Heathrow Airport wearing black and yellow tape and giant blue shoes designed by her friend, the late Alexander McQueen, and needed to be undressed by cabin crew later on, The best selling UK tabloid The Sun reported. Her crazy garb was so uncomfortable it brought on the early stages of the potentially deadly deep vein thrombosis (DVT).The experienced flight crew told
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Gaga she should get the outfit off quickly or there was risk of long-term damage. Boasting to British television talk show, Gaga host Jonathan Ross of the lengths she would go to avoid wearing comfy clothes. “I would rather die than have my fans not see me in a pair of high heels. I'd never give up my wigs and hats for anything,” she said.”Gaga was at high-risk DVT case so she was advised to change her clothes,” an airline source said. “But the outfit was so cumbersome she needed help changing out of it. She was particularly miffed about ditching her heels. She was wearing them in memory of her friend Alexander,” the source added. CRUISING HEIGHTS April 2010
the airport boundary. The land is just 350 metres from the main terminal building, but the approved airport master plan shows no right of access to it. The McLaughlins want to develop the land by building extra car parking - in competition to the existing airport car parks - and erecting office buildings. The Australian Competition and Consumer Commission found Melbourne Airport earned $94.8 million from parking last year - the highest figure of any airport in the country. The McLaughlins say the airport master plan limits their right of access to the land and affects their quest to develop it. They want the tribunal to overturn federal Transport Minister Anthony Albanese's approval.
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Locked and grounded!
No slogans please! LONDON'S Gatwick Airport has apologised after a Briton wearing a T-shirt with the slogan “Freedom or Die” was asked to turn it inside-out because it could be threatening, a spokesman said. “When I went through the metal detector, first they told me to take my trainers off and then they took my wallet off me. Then the guy who checked me told me to turn my T-shirt inside out,” he quoted in The Daily Telegraph newspaper. “I thought he was joking at first. It is turquoise and white, it is just a T-shirt; it is not gothic or in your face and the slogan is quite small. “I asked if I could cover it up with my cardigan and he said that would be OK,” added the Briton, who was travelling with his partner, Donna, 38, and children Callum, six, and Kaydee, four. Gatwick apologised for the incident, stressing that the airport “does not apply a policy relating to appropriate / inappropriate T-shirt slogans worn by passengers passing through airport security. It was done with the best intention.” But he added, “We thought it was a little bit overzealous.”
Kids on duty, father draws salary THE air traffic controller who let his seven-year-old son give five pilots at New York’s JFK Airport radio instructions also let his daughter have a go. The controller, identified as Glenn Duffy, 48, of Stony Brook, New York, and his supervisor, were placed on administrative leave after a media storm began to brew over this incident, the New York Post reported. The child, whose age and name were unknown, took her turn at the helm the day after Duffy’s son talked to three pilots, ably mimicking a controller's fast-paced slang, according to a transcript. “Aeromexico 403, contact departure. Adios!” he said, prompting the pilot to respond,
VIRGIN America has offered refunds to US Dancing With the Stars (a TV series) judge Carrie Ann Inaba and other passengers who were stranded for hours on a grounded plane bound for New York from Los Angeles. The Flight left Los Angeles Inter-
national Airport, but fierce winds forced it to land at Stewart Airport in Newburgh, north of New York.The airline says people were kept on the ground for over four hours — although they were allowed to leave the plane — then bused to New York’s JFK Airport, where they arrived at 2 am.
Illustrations by Rajeev Kumar
second audible admonishment, he had become annoyed. “At this point I got angry and sarcastically told my kids to be quiet as there were very important men behind us who needed their peace,” the blogger wrote. However, Chauvel defended himself and said, “I certainly was on a flight with some pretty badly behaved kids and I did turn to my partner and say, ‘gee, I wish those kids would shut up’.” “I didn’t realise that an Act Party blogger was their parent. So I guess if you want to make a story of it, there you go.”
“Contact departure Aeromexico 403. Adios!” The pilots did not seem to mind taking orders from gradeschoolers. One chuc -kled, and another said, “Wish I could bring my kid to work.” “Awesome job,” a Sacramentobound JetBlue pilot told the young radioman in an encouraging tone. Duffy and the supervisor would continue to draw their salaries while they were on administrative leave, said Federal Aviation Administration spokeswoman Laura Brown. Further investigations could lead to their suspension without pay or dismissal.
Fight on, flight cancelled A fight between two air hostesses forced the cancellation of a flight. The story begains as — a Delta flight was set to fly out of New York to Atlanta. But the argument erupted as Delta Connection Flight 887 returned to the gate after a passenger became sick, according to media reports. It’s believed it was a verbal disagreement that erupted and no physical altercation tool place. One of the passengers, Corey Minton told cable television news station YNN that everyone on the plane was asked to disembark because the air hostesses were fighting. The women were removed from duty.
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DOMESTIC AIRLINES Pawan Hans and Eurocopter announce two new JVs HELICOPTER manufacturer, Eurocopter, and the civil helicopter operator in India, Pawan Hans Helicopters, announced the formation of two joint-ventures (JV) for maintenance, repair and overhaul (MRO) and training, through the signatures of MoUs. Both JVs will be fully created by the end of 2010. Under the terms of the first joint venture, Eurocopter and Pawan Hans will set up an MRO facility in a key Indian metro to better serve the huge Dauphin fleet being operated in India. Through the second JV, Eurocopter will set up pilot training facilities that will help India meet its need for pilots. Speaking on the occasion, R K Tyagi, Chairman and Managing Director, Pawan Hans, said, “As the Indian helicopter market expands, we see tremendous opportunity for Pawan Hans
DIAL commences rehabilitation of IGI runway 10/28 FOR an ensured and improved reliability and availability of the runway for operations, Delhi International Airport (P) Limited (DIAL) is going to perform extensive rehabilitation works at Indira Gandhi International Airport’s (IGIA) runway 10/28. These works would result in an upgrade of the runway surface quality as well as support systems such as the runway lighting equipment. Since each runway has a service life which depends on its design and construction material, the need to upgrade runway 10/28 was being felt for a long time as it was last resurfaced in 1999 and is now due for major rehabilitation. During the closure of Runway 10/28, air traffic movement will be managed by simultaneous use of Runways 11/29 and 09/27 in such a manner that both the runways are optimally used. This would ensure that aircraft taxiing time is also minimised to the possible extent. DIAL will be working closely with all stakeholders such as ATC, Airlines, AAI and DGCA among others, to minimise the effect of the modernisation works on traffic. DIAL will be carrying out these rehabilitation works starting April 2, 2010 in a phased manner and will also ensure that connectivity between the domestic and international aprons and the two operational runways 11/29 and 09/27 is available at all times. The rehabilitation works of Runway 10/28 are expected to be completed by September 2010.
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in the oil and gas, tourism and corporate travel segments. It is a significant asset to have Eurocopter as a reliable partner offering the best-in-class products and services to help us meet our goal of providing the best services to our customers.” Pawan Hans is the biggest customer of Eurocopter in India and Eurocopter’s approved Dauphin Maintenance Centre. “We have shared a very special relationship with Pawan Hans for the past 24 years, and are very happy to further strengthen this association…We will now be able to provide better support, service and fleet safety solutions to the Indian market. Also, seeing the need for trained helicopter pilots in India, we look forward to supporting the country in meeting this need”, added Marie-Agnes Veve, Head of Eurocopter activities in India.
Air India becomes service provider for GEnx GE Aviation and India’s national carrier, Air India have signed a GE Branded Services Agreement (GBSA) under which GE Aviation will provide technical support as Air India offers maintenance, repair and overhaul (MRO) services for the GEnx1B engine and further advances its plans to become a global MRO service provider. Under the GBSA, Air India will be licensed to perform maintenance and overhaul work on the GEnx-1B engine. The GEnx-1B engine will power Boeing’s 787 aircraft. Air India has been overhauling jet engines for more than four decades. During this time, Air India has handled various jet engine models and has acquired expertise in overhauling jet engines at low cost while maintaining high standards of quality. “Air India envisages state-of-the-art facility catering to GE90 and GEnx engines, including a new engine test facility. Our strong collaboration with GE will enhance the visibility of the facility in the world and will result in India becoming one of the major engine MRO players. Further, advanced repair technology will also come to the country by way of this agreement,” said Arvind Jadhav, Chairman and Managing Director, Air India. Tom Gentile, president and chief executive officer of GE Aviation Services, said “GE Aviation is excited to work with Air India as it expands its MRO capabilities to the GEnx-1B engine.” Based on the proven architecture of the GE90, the GEnx engine will succeed GE’s CF6 engine. The GEnx’s innovative twinannular pre-swirl (TAPS) combustor will dramatically reduce NOx gases as much as 60 per cent below today’s regulatory limits and other regulated gases as much as 90 per cent.
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Pilots in pink — Women’s day celebrations in the air AIRLINES in India, on March 8, 2010 when the whole world was celebrating International Women’s Day, were no different from them. Air India, Kingfisher, Jet and Paramount all have celebrated the women’s day but in their own special ways. Air India created history when at a little past midnight of March 8, the first all-women crew ultra long-haul B777-200LR non-stop flight from Mumbai to New York was flagged off by Madhavan Nambiar, Secretary, Ministry of Civil Aviation. Flight AI 141 was the first of the 22 all-women crew flights operated by Air India across its domestic and international network, to mark International Women’s Day. Capt Rashmi Miranda and Capt Sunita Narula were the Commanders on AI 141, along with Capt Swati Rawal and Capt Neha Kulkarni as First Officers Harpreet A De Singh, Head- Quality Management System (QMS) carried out a line observation safety audit. The flight was despatched by Nandita Deshpande and the load and trim sheet was prepared by Ferzin Kuruvilla. Similarly, the airline’s Northern Region had as many as 10 allwomen crew flights. Not only had the national carriers, private carriers too celebrated the international women’s day with extraordinarily surprising packages. Paramount Airways offered scratch cards to its women passengers to buy fabulous products at Rs 600. All women passengers were welcomed on board with jasmine flowers wrapped in banana leaves and traditional kumkum. And the treat was not yet over, Paramount arranged ‘Paramount Experience’ that included personal valet service to special gourmet food to pamper the women passengers. On the occasion, M Thiagarajan, Managing Director, Paramount Airways said, “Women all over the world continue to contribute towards global economy and the aviation sector in particular. India also has seen a rising curve with the number of women joining the industry.” “The Aviation sector is a lucrative career option, as India requires an alarming need of pilots, engineers, mechanics and technicians opening more avenues for women. We hope to see the day when there will be equal representative from women technocrats.” added M Thiagarajan. At the other end, Jet Airways offered special fares throughout the month of March for its women passengers. The special fares
were available till the month end to every group with at least one woman traveller that made bookings on the airline’s website. The airline has also chosen to support five women specific NGO’s through a unique in-flight fundraising collection drive to benefit women’s issues as part of its International Women’s Day celebrations. India’s premier airline has committed to a two-week long in-flight collection drive and will contribute the proceeds from this drive to benefit five NGOs namely - Nanhi Kali, Apne Aap Women Worldwide, Navjeet Community Centre, Mijwan Welfare Society and Rajiv Gandhi Mahila Vikas Pariyojana. According to Nikos Kardassis, CEO, Jet Airways, “Jet Airways’ women travellers, besides being a prominent and growing customer demographic, have also been among the airline’s most loyal customers. As a token of appreciation for their support, we would like to offer them substantial savings on their travel through our Special Fares. We are also launching an In-flight Collection Drive on the occasion of International Women’s Day with a view to contributing to poverty alleviation and empowering women through these NGOs. We are confident that the two initiatives would prove extremely popular among all our guests.” According to Nikos Kardassis, CEO, Jet Airways, “Jet Airways’ women travellers, besides being a prominent and growing customer demographic, have also been among the airline’s most loyal customers. As a token of appreciation for their support, we would like to offer them substantial savings on their travel through our Special Fares. We are also launching an In-flight Collection Drive on the occasion of International Women’s Day with a view to contributing to poverty alleviation and empowering women through these NGOs. We are confident that the two initiatives would prove extremely popular among all our guests.” Kingfisher, celebrated the women’s day by featuring an all women crew, including flying crew on select flights across its nationwide network. Captain Payal Pasricha and Captain Priya Prabhu kicked-off the celebrations on International Women`s Day as they flew Kingfisher Airlines Flight IT 101 from Mumbai to Bangalore. As the aircraft was cleared for push-back, the captain’s welcome address on the flight was greeted with a spontaneous applause from all guests on board the flight when she finished announcing the commencement of the celebrations.
STARTING AN ODYSSEY: Madhavan Nambiar, Secretary, Civil Aviation, with the Air India women crew that operated NonStop long-haul flight AI 141 from Mumbai to New York on March 8, 2010.
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SNIPPETS SpiceJet to offer complete tour package SPICEJET is planning to offer a complete tour package to tourist hotspots in states such as Goa, Kerala, Jammu and Kashmir and Karnataka. This will be a complete package with air travel, hotel bookings and trip planning. Anish Srikrishna, Senior VicePresident, Marketing, SpiceJet said, “The company is in talks with hotel chains and various tourism boards. The company has already tied-up with the Trident chain of hotels and Ista Hotels. Currently, only Full Service Carriers (FSCs) offer similar packages to destinations in Kerala.
Jet Airways Konnect adds to domestic network JET Airways, will enhance its domestic network, with the introduction of new services, as well as the enhancement of services on existing Konnect services on certain domestic routes. Jet Airways’ Konnect service has introduced daily flights on the Kochi-Bengaluru-Ahmedabad sectors. Another daily service is between Mumbai and Nagpur, enhancing the frequency of services from the current four flights / week on the sector, as well as it has introduced its third service on the Mumbai-Indore sector.
Kingfisher is in oneworld league AFTER signing a memorandum of understanding , Kingfisher Airlines, is lining up to join the world’s airline alliance, oneworld. The agreement was concluded at a meeting between Vijay Mallya, Chairman, Kingfisher Airlines and Chief Executives from oneworld’s 11 existing member airlines. Kingfisher Airlines has applied to India’s Ministry of Civil Aviation for authority to proceed with its membership of oneworld. The Airlines’ addition will add 58 cities to the oneworld map — all of them in India. This will expand oneworld’s network to 800 destinations in almost 150 countries, served by a combined fleet of 2,350 aircraft operating some 9,000 flights a day, carrying some 340 million passengers a year. “Kingfisher Airlines is proud to be lining up to join the world’s leading quality global airline alliance. Becoming part of oneworld would be one of our most significant steps so far — and is right in line with our vision to become one of the world’s top airlines. It will enable us to offer our guests a truly global network served by partners who include some of the best known and most admired airlines in the world, with frequent flyer benefits extended throughout this network,” said Mallya. John McCulloch, Managing Partner, oneworld added, “Last February oneworld celebrated its tenth birthday… and now we are welcoming Kingfisher Airlines on board. Kingfisher Airlines will fill one of oneworld’s few remaining membership spaces with a carrier that matches our alliance’s demanding requirements, benefiting customers by expanding our global reach and helping us ensure oneworld remains the preeminent global alliance KING IS KING: Vijay Mallya, Chairman and CEO, Kingfisher Airlines with Edward Plaisted, CEO, Skytrax in the award ceremony.
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The other service is on Hyderabad-Chennai-Port Blair sectors, where it operates five flights weekly (Monday, Wednesday, Thursday, Friday and Sunday). According to Nikos Kardassis, CEO, Jet Airways, “Jet Airways’ Konnect services continue to remain extremely popular with guests, consistently registering high network-wide load factors. There has also been a demand for an enhancement of/ introduction of new Konnect services on some domestic routes, and the introduction of these flights is in keeping with the same.” All these services are in effect from March 28, 2010. with members unmatched in brand and service quality.” Kingfisher wears the crown again: Kingfisher Airlines has been conferred the coveted fie star airline status for the third year in a row. Skytrax, an independent travel forum and air travel information organisation awarded this ranking. The organisation recognises Kingfisher Airlines’ product and service quality excellence for both, domestic and international travel in Kingfisher First and Kingfisher Class. Commenting on the decision to confer Kingfisher Airlines with the five star ranking, Edward Plaisted, CEO Skytrax, said, “The renewal of the five star ranking to Kingfisher Airlines reaffirms its standing as the only airline in India — and one of only six airlines in the world which has been awarded this status.” This ranking is assessed by Skytrax after detailed product and service standards analysis for each featured airline. Dr Vijay Mallya, Chairman and CEO, Kingfisher Airlines, commented, “Being recognised by Skytrax is an honor and we would like to thank our valued guests who chose to fly with Kingfisher Airlines.” Kingfisher introduces ground training course: Kingfisher Airlines has offered Joint Aviation Authorities Airline Transport Pilot License (JAA ATPL) Pilot ground training course for pilots. The course, the first of its kind in India outside Europe and the USA, has been made possible by a technical arrangement with Aviation Pacific Europe. For Indian personnel this would mean completing the course at a reduced cost. The JAA ATPL has become a defacto standard recruitment for employment opportunities in airlines in Europe and even some Middle East countries. The JAA ATP ground theory courses, comprises 14 aeronautical subjects covering 650 hours of study time, conducted in a classroom or through a distance learning program.
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INTERNATIONAL AIRLINES Kings XI Punjab rocks at the Sevens THERE were sixes at the Sevens as Kings XI Punjab stars Yuvraj Singh, Brett Lee, Irfan Pathan and Yusuf Abdulla tested out the sporting venue’s first new cricket pitch. Australian fast bowler Lee had the honour of delivering the first ball which India’s Singh smashed towards the pavilion which is destined to become a focal point of the UAE cricket community. Once complete, six pitches will be available for use at Emirates’ dedicated sporting facility, which is expected to be a hub for the thousands of cricket lovers in Dubai who have not had a major meeting point since seven pitches in Al Jadaf made way for construction projects in 2006. On the occasion Yuvraj Singh said, “I know how popular the game is here, so, to bat the first ball on a wicket that will be at the centre of Dubai cricket for years to come is very special. The pitch
WE ARE A TEAM: Kings XI Punjab stars Yusuf Abdulla (left), Irfan Pathan, Brett Lee and Yuvraj Singh with Gary Chapman, President Emirates Group Services and Dnata — on the opening day of the cricket facilities at the Sevens.
looks great and I have no doubt it will host many thrilling matches.” Gary Chapman, President, Emirates Group Services and Data said, “It is a great pleasure to have Yuvraj, Brett, Irfan and Yusuf, as well as Kings XI Punjab CEO Anil Srivastava here to help us celebrate the latest stage in the development of the Sevens.” The construction of the six pitches — two with full grass outfields and four with an all-weather sabka surface — is being coordinated by the Dubai Cricket Council, which has enlisted the services of a leading curator. As Anil Srivatava, CEO, Kings XI Punjab said, “It is with great pleasure that we support our title sponsor in this exciting new venture. Kings XI Punjab shares Emirates’ vision to develop grassroots cricket and we are delighted to help launch a facility which will unearth new talent for generations to come.” Emirates’ welcomes aboard Senegal: Emirates launches services to Dakar, Senegal from September, 2010. It will be Emirates’ 106th international destination. Emirates passengers can look forward to a warm welcome on and off the aircraft after the airline unveiled plans to launch direct services to the land of ‘Teranga’ or hospitality — Senegal. Dakar is the airline’s third new African destination in less than 12 months, after Durban and Luanda joined the network in late 2009. Emirates will fly nonstop to Dakar five times a week on every Tuesday, Wednesday,
Friday, Saturday and Sunday. The service will be operated by an Airbus A340-300 aircraft, offering a three-class configuration of 12 first class, 42 business and 213 economy class seats. Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said, “We are delighted… this new route further underlines our commitment to Africa, as we GO TO SENEGAL: Emirates seek to continuously strengthen our includes Senegal as its 106th services across the continent. It is a international destination. significant next step in further strengthening ties between the United Arab Emirates and Senegal, as the two nations continue to collaborate on many significant projects.” Emirates offers kids a lot of fun: Families are at the forefront of Emirates Airline’s global “Kids Go Free” campaign this summer. The offer gives families an unrivalled integrated destination experience, whereby two children up to the age of 16 can basically enjoy free flights on Emirates, tourist visa, accommodation, meals, rides on the Dubai metro, airport transfers, and access to numerous attractions in Dubai when accompanied by two paying adults. Families also get an attractive discount booklet at The Dubai Mall, the world’s largest. Richard Vaughan, Divisional Senior Vice President, Commercial Operations worldwide, Emirates, said, “Our ‘Kids Go Free’ offer was immensely successful last year, attracting over 20,000 passengers from 70 countries to Dubai. This year, we are delighted to be able to expand on the offering by partnering with DTCM (Dubai Tourism and Commerce Marketing) and bringing more Dubai travel and hospitality partners onboard.” Emirates doubles up on Heathrow double-decker: Emirates is going to add another A380 to its London Heathrow route from July1, 2010 this year. The airline brought its own brand of double-decker, equipped with an on board lounge and shower spas, to the British capital in December 2008. In addition to the daily EK 001 from Dubai, the A380 will also be deployed on EK 003, which departs Dubai at 1415 hrs and arrives in London Heathrow at 1840 hrs. Salem Obaidalla, Emirates’ Senior Vice President, Commercial Operations, Europe and Russian Federation, said, “This is an important development for Emirates as this is the first route where we have made a long term commitment to double up on the double-decker.” Passengers in all classes can enjoy the in-flight entertainment. There are more than 1,000 channels of on-demand entertainment including 200 movies from around the world, 100 TV channels, more than 500 audio channels, 100 video games and BBC news, sports and business headlines.
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SNIPPETS British Airways introduces luxurious cabin
BRITISH Airways’ new £100 million luxurious First cabin lands in Mumbai on March 4, 2010 at Mumbai’s CST at 11:10 on BA 199 before departing on the return flight the same day at 13:40 (local time) for the airline’s Terminal 5 London Heathrow airport. Judy Jarvis, Regional Commercial Manager for South Asia, said, “The arrival of new First on the London Heathrow to Mumbai route demonstrates the enduring importance of the Indian market to the British Airways. We are giving our local customers a taste of our flagship product and I am sure they will find that every aspect of the cabin has been designed to provide a seamless end-to-end experience that is dedicated to exclusivity.” New key features of the cabin include a 60 per cent wider bed at the shoulders, personal wardrobe, personal electronic blinds, a 15” in-flight entertainment screen, USB port, RCA jack and noise-cancelling headsets, fully integrated ambient and mood lighting. Each individual suite has its own personal wardrobe, a leather-bound writing desk that converts into a dining table, a new 15” in-flight entertainment screen and a buddy seat to enable customers to dine together. The lighting and electronic blinds can be modified to reflect mood and time of day. A seat control unit replaces the switches to activate the bed and give the customer precision control over the seat position and pneumatic panels to support the head and lumbar positions.
Air China launches direct operations CHINA’S national carrier Air China, started its direct operations between Bengaluru, Shanghai via the IT hub of India, Chengdu. The inaugural flight saw a grand welcome reception organised by Air India, Karnataka tourism and STIC Travel Group at the Bengaluru International airport for the Air China dignitaries. To celebrate this joyful moment of the inaugural flight, Air
China hosted a grand welcome party at ITC Royal Gardenia, Bangalore on February 28, 2010 evening, exclusively for the Indian Travel Trade and visiting dignitaries from China. The launch of this flight is the airlines’ step forward to enhance mutual trade relations between India and China and to connect the two major IT hubs of the world — Bengaluru and Chengdu. This new flight service will offer seamless connectivity options for a large number of passengers not only to China but also beyond to West Coast USA, Korea, Japan, Australia.
Qatar has many reasons to celebrate QATAR Airways has inducted its 15th Boeing 777 into the fleet and maintained a delivery schedule of more than one new aircraft a month. The newest Boeing 777-300 Extended Range aircraft will serve long haul routes from the airline’s operational hub of Doha, capital of the State of Qatar. The aircraft is part of a larger order for more than 220 different aircraft worth over $40 billion placed in recent years. With the fleet set to grow to 120 aircraft by 2013 and current global network of 86 destinations also expected to rise to 120 by 2013, Qatar Airways is continuing its expansion strategy with vigour. “Yet again, Qatar Airways is demonstrating its continued commitment to growth, a strategy set in 1997 when the airline was launched…,” said Akbar Al Baker, Chief Executive Officer, Qatar Airways.
SIA and Marina Bay Sands sign MoU SINGAPORE Airlines (SIA) and Marina Bay Sands have signed a memorandum of understanding (MoU) to promote the Integrated Resort as a destination for customers travelling to Singapore. In addition, Marina Bay Sands joins the list of hotels available under SIA’s Singapore Stopover Holiday programme, bringing the number of partner hotels to 40, bringing the number of partner hotels to 40. Singapore Stopover Holidays offers overseas customers special accommodation rates during their stay at Marina Bay Sands, complimentary airport-hotel transfers, as well as discounts on shopping, dining and selected attractions in Singapore. To add value to loyal SIA and Marina Bay Sands customers, Marina Bay Sands Premier Advantage members will earn PROMOTING TOURISM:(Left) Thomas Arasi, President and Chief Executive KrisFlyer miles for each qualifying stay at Marina Officer, Marina Bay Sands, and (right) Huang Cheng Eng, Vice President, Marketing and the Regions, Singapore Airlines at the MOU signing. Bay Sands. “With its central location, extensive entertainment offerings and state-of-the-art facilities, Marina convention and tourist destination, and Singapore Airlines as Bay Sands is set to become an iconic landmark and attraction the carrier of choice for overseas visitors,” said Huang Cheng for tourists visiting Singapore. We are pleased to be working Eng, Executive Vice President Marketing and the Regions, with this integrated resort to promote Singapore as a major Singapore Airlines.
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Bahrain Air presents complimentary meals BAHRAIN Air, the first privately owned national carrier of Bahrain with affordable fares in both premium Business and Economy classes, has introduced a range of in-flight complimentary meals for passengers. The menu will comprise hot meals freshly prepared each day and will range from Arabic to Indian to continental, appealing everyone’s palate. These meals will be offered inclusive of the price of the flight. These meals will be available on all the sectors connecting to Bahrain from India The complimentary meals will be available for both premium business and economy class. The elaborate menu includes breakfast, hot meals, and hot / cold snacks. The economy class and premium Business class menu will offer assortment of Arabic delicacies like Chicken Kabsa, Egg Shakssoka, and grilled Haloomi Cheese sandwich. Those who want to opt for continental cuisines will also have a wide array of choices like plain egg omelet, cream grilled sandwiches, chicken mayonnaise sandwich etc. It will also offer Chicken Biryani, Vegetarian Kofta, Rava Upma and Chicken Tandoori Sandwiches to allure the Indian travellers.
Airlines SBU said “High transaction volumes and absence of a proper contract management system, makes it difficult for airlines to verify vendor invoices against services delivered... This leads to leakages in the space of direct operating costs. Kale’s DoC Payables audit helps cash-strapped airlines to identify recoveries and prevent future cost leakages.
Asiana Airlines implements Amadeus’ solution ASIANA Airlines and Amadeus announced the signing of a Memorandum of Understanding (MoU) to commence detailed evaluation of the Amadeus Altéa Customer Management System (CMS). Under this MoU, Asiana will set the timelines for their assessment and planning for the future implementation of Altéa. Once implemented, the Altéa solution will manage all reservation, inventory and departure control processes for Asiana, delivering a fully integrated Customer Management System. Speaking at the occasion, Rakesh Bansal, CEO, Amadeus India said, “Amadeus Altéa CMS is the technological base for the Star Alliance common IT platform. We are delighted with Asiana's decision to evaluate this new age solution as, once implemented, it will assist them in adopting the Star Alliance with much ease. Once evaluated and implemented, Asiana Airlines will join many of the world's leading carriers who have already adopted Altéa solution, recognised as an industry-standard for airline customer management. Altéa implementation will significantly benefit Asiana in increasing their efficiency and customer service consistency.”
LOT Polish Airlines selects Kale’s solution KALE Consultants, the solutions provider to the airline, logistics and travel industry, announced that LOT Polish Airlines will deploy Kale’s passenger revenue accounting solution Revera. The solution will provide the opportunity to control on costs and access to best practice data center capabilities. Speaking on the occasion, Barbara Gorska, Director, Revenue Accounting, LOT Polish Airlines said, “LOT Polish Airlines aim to be one of the foremost airlines in the European region in terms of service. We understand that harnessing the right technology will help us take better and faster decisions - a critical need for the airline of tomorrow. We evaluated many Revenue Accounting systems before selecting Kale’s Revera. Features like daily revenue reporting, ancillary revenue accounting and inbuilt dashboard make it one of the most advanced revenue accounting systems available in the market.” The new generation passenger revenue accounting solution — Revera, helps airlines to implement industry best practices to proactively adapt to dynamic market conditions. “We are delighted that LOT has chosen Kale Consultants’ Revera to fulfill their passenger revenue accounting requirements. We are confident of exceeding their expectations and we are sure that this is just the beginning of a long and fruitful relationship,” said Ravi Chakravarty, Sales Head, EMEA and Asia-Pacific, Kale Consultants Ltd. Kale announces state-of-the-art audit service: Kale Consultants Ltd made another announcement of its Direct Operating Costs (DoC) Payables Audit service as a part of its Airlines Financial Management Solutions portfolio. In an overall cost structure, DoC forms around 50-60 per cent of this and, is crucial for airlines to audit and exercise control on these payables. Kale claims that its service helps airlines recover up to two per cent of their Direct Operating Costs. Commenting on the new service Neela Bhattacherjee, Head,
APPOINTMENTS New faces at Air China, Bengaluru AFTER the launch of direct operations from Bengaluru and Shanghai via Chengdu, Air China announced some new appointments for STIC Travel Group which represents Air China in West and South India. Syed Muzakkir joins as Assistant Manager, Sales and Sarmila Das joins as Assistant Manager, Reservation and Ticketing. Rashmi B R joins as Executive Reservation and Ticketing and Lakshmi Prasanna joins as Senior Sales Executive.
Syed Muzakkir
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Sarmila Das
Rashmi B R
Lakshmi Prasanna
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BUSY IN THE AIR: Carriers have started providing in-flight telephony
Help! There’s a mobile on my plane… I
t won’t be long before we will hear shouts of “Hello! I’m on the plane!”. And, again, it won’t be long before mobile phone conversations will top the list of in-flight irritations along with babies crying and ‘Where do you think I will put my feet”. The cell phone took nearly a year to ratch up a hundred thousand passengers, but in the next 10 months it climbed to one million. Such has been the acceptance of the mobile on the air revolution. There must be something about calling at 36,000 feet. Mary Kirby of Flight Global had a few interesting facts to report after chatting with AeroMobile — world leaders in this segment who installed their equipment on board Emirates.
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The longest call made from an aircraft was 65 min on a Dubai-Accra flight on October 11, 2009.
The highest number of calls made from an aircraft was 82 on a Mumbai-
Dubai flight on September 20, 2009.
One of the top passengers (in terms of usage) generated on average over 2.5 hours of voice traffic on each of seven flights flown over the past six months!!!
Africa and Europe have higher usage (SMS and voice combined) than share of flights.
Africa, for example, generates 17 per cent of usage but only accounts for 11 per cent of flights. Key routes in north Africa such as Tripoli, Casablanca, Cairo and Khartoum contribute to this.
The highest number of SMS messages sent to / from an aircraft was 477 on a Casablanca-Dubai flight on February 13, 2010 according to AeroMobile.
Europe, meanwhile, generates 29 per cent of usage but only accounts for 19 per cent of flights. Key routes such as CRUISING HEIGHTS April 2010
London-Heathrow and Munich contribute to this. “Even so, tomorrow you might be able to use your Blackberry and start e-mailing in the plane. Maybe SMS will be the killer application. Do people want to do e-mailing in the plane or do they want to sleep? Do they want to watch a movie or do they want to talk on the phone? Will they let people have phones going off all the time or not? There are a lot of questions surrounding the service and these are early days,” said one expert. Passengers using the service are learning “in-flight etiquette”. And etiquette is still an issue for telephony on board flights. The guidelines for passengers are to put their phones on silent for incoming calls. Some airlines simply turn off the service on night flights. When the mobiles do take over the flights, the airlines could then charge a premium on tickets for “No mobiles on board” flights. Just a thought!
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