Cruising_Heights_July_2010

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Rs 60

July 2010

G M Rao, Chairman, GMR Group, at T3

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EDITOR-IN-CHIEF’S NOTE

Delivery will make or break Delhi’s T3

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arring Mumbai, the woes of circling in the sky should be a thing of the past once Delhi’s T3 is dedicated to the nation. With Chennai and Kolkata also on course for modernisation, there is no doubt that the infrastructure woes of 2006 are now a thing of the past. But is that the end of the story?

Seasoned travellers will tell you that it’s just one part of the story. The real story from Incheon, Barcelona and Changi is not just in the huge edifice that they have built at their airports, but in the delivery of their services. They stand out for engulfing the passenger with a warmth that puts them consistently amongst the world’s great air hubs. And there is no loss of efficiency along the way. Will T3 be able to deliver the same range and scope of services with the same efficiency? That will be their real test.

By the time things settle down and it is business at T3, the airport should have close to 3,000 people working to keep ticking. For many of them, it will be a completely new ball game.

And at the end of the day they will be the makeor-break brigade. Being the first interface between the passenger and his flight, they will be the key drivers in how this airport is finally rated.

If that is one side of the story, the other would be the way our Customs and CISF personnel treat passengers. There have been sundry occasions in the past few years when the CISF have got into either passengers or others on duty. It is inevitable when you have someone guarding a factory transported to a completely different environment at the airport. Ditto for Customs and Immigration. Agreed you are looking for that one rotten apple, but in the process of searching for it, don’t create a stink.

CRUISING HEIGHTS July 2010

Incheon — that has been right there at the top for years — has been rated highly by passengers not just for its facilities and amenities, but also for the sheer class of its delivery to its people. Passengers transit into the retail area within minutes of their arrival in the terminal. That’s the quality of service that will take T3 to the top of the charts.

MAKING A MARK: A file photo of Civil Aviation Minister Praful Patel inspecting the construction of T3. Beside him is Kiran K Grandhi, Chairman, Airport Business, GMR.

In a way, the launch of T3 is also a personal milestone for Civil Aviation Minister Praful Patel. He has now presided over the launch and completion functions at Hyderabad, Bengaluru and T3 and laid the foundation stone at Chennai, Kolkata and Mumbai. The modernisation process is a large slice of his life as a minister for this department. It’s an irony that he is now better known for the woes at Air India rather than the rest of the work he undertook.

Hopefully it will be a new beginning for the Maharaja too at the new terminal.

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Off the cuff

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If looks could kill Is it possible to look a person in the eye and decide instantly that he is a terrorist? Well, according to around 3,000 officers of America's Transportation Security Administration (TSA), it is. These officers have been trained for the last four years to spot potential terrorists at airports. In a special programme known as SPOT or Screening Passengers by Observation Technique, airport security officers have been taught to use tiny facial cues to identify people who act suspiciously. A similar programme is underway at British airports as well.

While security agencies around the world grapple with ways to ferret out terrorists from airline passengers, the techniques used in SPOT or similar programmes have become controversial because researchers have found out that they do not have a basis in science. A recent report in Nature quoting a 2007 report pointed out: “Simply put, people (including professional lie-catchers with extensive experience of assessing veracity) would achieve similar hit rates if they flipped a coin.”

Adding more muscle to that was a 2008 report that mentioned that “no scientific evidence exists to support the detection or inference of future behaviour, including intent.”

Screening passengers by observation is a technique perfected by psychology professor Paul Ekman who believes that people can be trained to spot liars. But he is of the opinion that SPOT cannot be tried out scientifically. Anyone playing the part of a terrorist in a controlled study will not face the same pressures or stresses as an actual terrorist. Till the TSA does manage to find out a potential terrorist, SPOT will continue to remain in the twilight zone.

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contents

THE WONDER THAT IS T3

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Hyped as the eighth largest terminal building in the world, New Delhi’s Indira Gandhi International Airport’s T3 will not just be an airport terminal, but a destination in itself. Ready for the world from July, it promises to provide air travellers a whole new experience. A sneak preview.

NEWS DIGEST

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While Patna has emerged as number one in 2009-10 among 46 airports in the country in terms of passenger growth and domestic aircraft movement, passengers flying out of New Delhi may continue to pay more, plus a report on Air India’s Kanishka crash.

CRUISING HEIGHTS July 2010

AIR SHOW

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Recovering from the global recession, the biennial Berlin Air Show has proved to the world that the aviation industry around the world is on a comeback — and in a big way! Also how Emirates has created history with its order of 32 A380s.

BUSINESS IS GOING PLACES N

Planman Marcom / ACE / 07/ 2010

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contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST

CRUISING HEIGHTS Volume V No 3

Editor-in-Chief K SRINIVASAN Managing Editor

TIRTHANKAR GHOSH

IATA

Consulting Editor

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R KRISHNAN

GLOBAL EYE p28

The recent IATA Annual General Meeting at Berlin saw Giovanni Bisignani enumerating his Vision 2050, a legacy that he would like to leave behind to the world of aviation as he prepares to step down next year.

The French Concorde could see a revival for a flight during the opening of the 2012 Olympics in London. Also SriLankan wants India to liberalise its skies further.

Co-ordinator Editor

PRIYANKA SAXENA Special Correspondent (Mumbai)

ROOHI AHMAD Copy Editor

ASHOK KUMAR Reporters

JASLEEN KAUR PUNIT MISHRA Art Director

BHART BHARDWAJ Design

RUCHI SINHA, PRADEEP JHA, SHIV Photo Editor

H C TIWARI Director

RAVI SHARMA (Mob. 9650433900)

CARGO

CHOCKS OFF

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p30

The Civil Aviation Ministry has signed a number of bilaterals with many countries but Indian carriers have not been able to utilise these judiciously. And despite the noise made in the past over the liberal grant of bilateral, nothing much has happened.

Hyped, speculated and talked about over the years, the first phase of Dubai World Central-Al Maktoum International (DWC-AMI) opened with the launch of cargo facilities last month. Plus how airlines are managing ULDs.

Director (Admin & Corporate Affairs)

RAJIV SINGH Regional Sales Manager (South)

KARTHIK K. V. (Mob. 9880209405)

Senior Manager (Marketing)

VARUN MALHOTRA (Mob. 9871866651/9650433099)

Business Development Manager

PRANAV KHULLAR (Mob. 9650433088)

Subscription

JAYA SINGH (Mob. 9650433044)

Executive Director

RENU MITTAL Editorial & Marketing office: Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 , Tel: +91-11-41033381-82

BACK PAGE SNIPPETS

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A close look at the world of aviation where Kingfisher has joined a global alliance, Jet Airways and its ‘JetSpark — Shine On’, initiative for the airline’s young Jet Privilege members, IndiGo operates a flight on its Hyderabad-Chennai route with an all-women crew and much more.

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Pop diva Shakira’s private jet arrived late from Amsterdam and the German team had to jive with enthusiastic fans who were waiting to board the brand new Airbus A380 on its way to Johannesburg for the FIFA World Cup Campaign.

CRUISING HEIGHTS July 2010

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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Right strategy

PERISCOPE

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Since our international business is dependent on external factors, the domestic business is one of our biggest hedges.

ABHIK MITRA, Managing Director, TNT India, on expecting 20-25 per cent growth over the next few years, with its domestic operations slated to contribute the majority share to its total revenues.

LETTERS TO EDITOR

YOUR cover story (Death and Destruction on IX 812, June 2010) laid down some very interesting points about the Mangalore air crash. The accident of the Air India Express flight from Dubai was a result of pilot error, which was largely evident from the story. That calls for an independent air safety board and an independent regulator to look into air accidents. Several families lost their near-and-dear ones in the fatal incident. The government should try and learn from this terrible tragedy and make ‘safety-first’ the motto at all times and in all circumstances to ensure that such tragic incidents do not occur in future.

Reshma Kaur, Chandigarh

CRASH!!

THE MANGALORE CRASH HAS RAISED QUESTIONS ABOUT ‘CRITICAL’ AIRPORTS, AIR SAFETY AND THE STATE OF THE COUNTRY’S AVIATION SECTOR.

The cargo story (Dream Flights — Some Good, Some Not So Good, June 2010) analysed two air cargo operators.

The air cargo industry in India has gone full circle with the arrival of a number of air cargo operators on the scene.

While this augurs well for the industry, one has to wait and see whether it would be able to change the air cargo scenario in India largely. The entry of Mukesh Ambani in the air cargo industry might turn the tide for the ailing industry in India since he has massive wealth power to boost the industry.

Raghunath Shukla, Indore

Illustrations: Rajeev Kumar

This is the time for consolidation, not confrontation.

ARVIND JADHAV, Chairman and Managing Director, Air India, on an endeavour to call truce with AI employees and seek their input on turnaround.

High hopes!

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June 2010

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Reunion with unions

The special report (Ready For Launch: Terminal 3, June 2010) was interesting. Terminal 3 will surely be the ‘jewel in the crown’ of the Indira Gandhi International Airport. With features that will be the pride of place, the terminal will take the Indira Gandhi International Airport into the big leagues. It is also pleasing to read that the new Terminal 3 building will have the capacity to handle an additional 33 million passengers annually. On completion, the terminal will become the world’s third largest passenger terminal. Kudos to the authorities for putting up such a fantastic show!

Ashwini Dayal, Agra

The vision is to make Air India the ambassador of the world. That implies, joining capital to capital… maybe Australia, Africa… you have to go there.

I have a vision and I have broken them down into targets.

COO designate CAPT GUSTAV BALDAUF about his vision for the national carrier, Air India.

In harmony Goa will have two airports — one in the north and the other in south Goa. There is no change in the existing government policy on construction of airports.

AMBIKA SONI, Minister for Information and Broadcasting on the decision of Union Cabinet that the existing airport at Dabolim will continue to function even when the new comes up at Mopa.

Sun and sky — no match!

Any investor would be sinking his money in Indian low-fare carriers as they need to change their business models.

NAWAL TANEJA, Professor and Chairman at Department of Aviation, Ohio State University, on Maran’s business entity’s interest in SpiceJet.

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

CRUISING HEIGHTS July 2010

Optimistic signs The global economy is recovering from the depths of the financial crisis much more quickly than could have been anticipated.

GIOVANNI BISIGNANI, Director General and CEO, IATA, with raised forecasts for airline operators.

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Large drop in mishandled baggage

According to AirlineForecasts, airlines collected $2.47 billion in baggage fees globally in the 12-month period ending September 2009.

Checked baggage is now the major ancillary revenue associated with aircraft operations, generating much more revenue than

pre-reserved seating and early boarding.

The proportion of passengers checking baggage has dropped from 82 per cent in 2007 and 2008 to 76 per cent in 2009 (Passenger Self-Service Survey).

Some airlines and airports communicate via SMS messages to passengers whose bags have not arrived with their flight, and continue to provide regular SMS updates until their bags arrive on the passengers’ doorstep.

IATA’s Baggage Improvement Programme (BIP) proposes solutions that aim to cut baggage mishandling in half by 2012. This would generate savings to the ATI from $1 billion to $1.9 billion, approx.

COLD STATS

According to the recently released Baggage Report 2010 by SITA, mishandled bags were down 24 per cent globally in 2009, saving the air transport industry (ATI) $460 million compared to 2008. In 2009, the ATI reported just over 25 million mishandled bags globally. This is down 23.8 per cent (7.8 million bags) from 2008, and down by more than 40 per cent (17.4 million bags) from 2007.

LOOKING GLASS

...And Kalanidhi Maran said: “Let there be more sunshine on my spice garden.” And the sun shone brightly ever after…

Still talking We are still in talks with the airline.

DINESH A KESKAR, President, Boeing India, on the decision of AI either cancel or defer orders of Boeing aircraft due to massive losses the airline is facing.

Think again!

It is a retrograde step to cancel widebodied aircraft (order). This move would bring down the airline’s presence in the international market and benefit other private carriers.

HARSH VARDHAN, former Managing Director, Vayudoot, on AI’s decision to restructuring its international operations thereby cancelling or deferring the orders of Boeing.

CRUISING HEIGHTS July 2010

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Off the Record

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BALDAUF’S IN, MANJIRA’S OUT AND KSHAMATA IS GROUNDED!

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ne of the brightest and er chores. Baldauf shot of an email soon smartest of Air India’s Exec- after taking over stating that he would be utive Directors has finally operating from the 22nd floor of the decided that enough is iconic Air India House at Nariman Point enough and opted for the Maharaja’s and would move to a new office at the VRS (Voluntary Retirement Scheme). old airport once that is ready.

And with that Manjira’s three decade As we mentioned, Venkat will long career in the aviation business enlighten us, but the grapevine tells comes to an end. It’s unlikely that Man- us that that Baldauf had asked for jira will want to continue her associa- Euro 4, 00,000 per annum plus accomtion with the industry after modation/insurance and what she has gone through travel to be incorporated and it’s more than likely in a fixed and variable that Arvind Jadhav will be package. The Board had pleased at the turn of asked Jadhav to negotiate events. The two had got into and finalise to which Bala tangle a few months back dauf was open. If reports with Manjira accusing the are to be believed, the management of harassment COO has been given a Gustav Baldauf and Jadhav determined to monthly salary of Euro get her out of Delhi.

29,000, a house in Sterling There is no doubt that Apartment, group insurManjira has a razor sharp ance and an annual varitemper: she isn’t willing to able package of Euro suffer fools easily and 2,00,000 based on the sometimes she can be her achievement of various own worst enemy. But, at deliverables. Now, if one the end of the day, she was calculates, this package a hugely competent officer is actually more than Manjira Khurana who did excellent work what Baldauf had when she was handling the national asked for in the first instance. sales at the erstwhile Indian Airlines. Since this is from the grapevine, In fact, the airline won a PATA gold we will leave it to Venkat for his under her leadership for innovative clarification. marketing.

There are reports that a couple of tar Alliance CEO Jaan Albrecht senior officers who have either exited is reported to have sent a letter or on the cusp of leaving could well come under the Central Bureau of recently to AI Chief Arvind Jadhav Investigations (CBI) scanner. Why this complaining about the manner in is happening, what are the charges and which the national carrier was servwho has filed them is anybody’s guess. ing passengers in its First Class. No, it is not clear whether Albrecht was Watch this space for an update. on the flight (inbound from

New York), but his note is aptain Gustav Baldauf has taken believed to have given over as the Chief Operating Officer details about the at Air India. No one knows what the salary package at which he has come on board is (will Company Secretary Venkat throw some light on it?), but his key result areas (KRAs) have been finalised. They are: flight operations including flight safety, flight training, maintenance, commercial (network planning and revenue management), customer services apart from sundry oth-

manner in which the in-flight cabin crew and three pilots on board (not on duty) conducted themselves. Apparently, the cabin crew thumped several of the crates that are aboard in the pantry so hard and were chatting so loudly that it was a huge disturbance for passengers on board.

One of the three pilots, a lady on board, went up and asked the cabin crew to pipe down. It is believed that one of the pilots picked up one of the crates and joined the two other colleagues and started having the food as if in a langar in a highway dhaba. In fact, one of them was perched on the crate. Based on the complaint the AI management took action against the pilots. While two of them are back to flying, one of them, Kshamata Vajpyei, a A 310 commander, is still derostered.

But there has been no action against the cabin crew. Shiv Sena ka haath sar pe hai. It’s their union baba!!

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Arvind Jadhav

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THE LAST ROUND: IThe Cabinet Secretary K M Chandrasekhar along with members of the National Facilitation Committee at the T3.

FINAL MEETING

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o, there they were all in one bunch, some sort of a record indeed. Cabinet Secretary K M Chandrasekhar, Home Secretary Gopal Pillai, Urban Development Secretary Ramachandran, Civil Aviation Secretary Madhavan Nambiar and their colleagues from other ministries. It was a great PR coup by DIAL to get the top brass for an omnibus visit to see how T3 had finally shaped up.

BACK IN THE NEWS

Technically, the omnibus group is called the National Facilitation Committee (NFC) — set up by the government under the Chairmanship of the Cabinet Secretary to monitor and review the building of Terminal-T3. In a sense the meeting was its final meeting since the airport was ready for commissioning.

The NFC is a good idea that requires to be implemented in other heavy-duty infrastructure projects, too. It helps cut the red tape, get to the core of the issue and move things through the labyrinth that is called the sarkar. The Cab Sec literally used to meet every month to resolve turf fights, make sure permissions were granted and where politics was involved to get the

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K Verma is back in the news.

The dapper former Director (Commercial) at Air India who has been the Director General of the Organising Committee of the Commonwealth Games for the past two years has won a thumping unopposed election as the President of the Badminton Federation of India. A sports buff, who was at one time the head of the Railways Sports Control Board and later moved to Air India, Verma has handled badminton for years.

He was, perhaps, the best Managing Director that Air India never had. Why he did not become the CEO is a long story that we shall reserve for some other occasion. Suffice to say for the moment that he continues to deal with old colleagues in AI, considering the fact that the Maharaja is the official carrier of the Commonwealth Games. And dealing directly with him is Rohita Jaidka who worked closely as head of sales in the Northern Region when VK was the Commercial Director. As the saying goes, the world is a small place indeed!

V K Verma

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CRUISING HEIGHTS July 2010

politicians to pipe down. But that visit was not the only one. DIAL has organised a series of visits for various groups since then-several for the print and electronic media, visits for the CII and FICCI to see for themselves what was in store and even one for the airlines and their sundry subsidiaries top assess the property. Almost everyone had the same thing to say: We are great at putting together infrastructure.

How good will be our delivery? In fact, so worried is GMR at the huge and the high expectations that they are routinely telling everyone not to forget that a projects of this nature takes a few months to settle down and there could be a few initial hiccups and glitches.

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he famous smile, or should we say grin, the hallmark of Naresh Goyal, should be returning fast, considering the huge increase in passenger loads both in the domestic and in international operations of his Jet Airways. We can say with certainty that, perhaps, none of the full-service Indian carriers managed the recession better than Jet Airways. We may even say that Naresh Goyal managed the show better than even competing LCCs considering the size of his airline and the capacity it deployed.

In May 2010, Jet Airways seat factors rose to 82.5 per cent as against 69.1 per cent in May 2009, which represented a rise of 19.5 per cent. In terms of revenue passengers, it rose by 41.2 per cent from 615,885 a year ago to 869,355 in May 2010. Its international operations seat factor over the same time period rose by 6.5 per cent to 80.3 per cent. Jet Airways’ passenger numbers rose by 36.5 per cent from 272,709 to 372,232. Jet Airways LCC arm JetLite (formerly

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Air Sahara) saw its seat factors rising from 77.1 per cent in May 2009 to 85.3 per cent in May 2010 and revenue passengers for the same month from 311,380 to 402,347.

Jet is now fine-tuning its Business Class in the domestic sector that literally went down during the downturn. In fact, it has launched a Premier Class in its own LCC arm, Jet Konnect, which flies the 737-800s. The front end of the aircraft will have eight Business Class seats. The move comes on the heels of demand from Jet’s premium card holders — silver, gold and platinum — for more Business Class seating. In due course, we could even see Jet developing its own alternative product in Jet Konnect.

THE SMILE IS

BACK

Naresh Goyal

CRUISING HEIGHTS July 2010

The airline has proposed to lease two more Boeing 737 aircraft from leasing company BOC Aviation. These would be deployed on domestic and short-haul international routes. What this means is that even Business Class passengers are returning to the domestic sector and thus incentivising the airline to widen its customer appeal.

Further, Jet Airways code-share with JetLite helped the carrier further penetrate the travel market. According to Jet Airways CEO, Nikos Kardassis, a recordbreaking eight months of consecutive growth emphasised the fact that Jet Airways was able to capitalise on the upswing in the domestic and global air traffic. This he attributed largely to Jet’s effective network planning and strategic marketing initiatives implemented at the peak of the recession.

Even as Jet Airways withdrew capacity/slowed down deployment of new capacity, it simultaneously went in for strategic code-share that helped it deliver seamless travel to its foreigngoing customers. Though the airline is yet to make profits which it used to make before the onset of economic slowdown, it has nevertheless managed to sharply bring down its net losses and enter the reassuring area of operational profits.

In 2009-10, Jet Airways cut down losses by half to Rs 420 crore from Rs 960 crore in 2008-09. As mentioned earlier, Jet’s response to the recession was on many fronts: it postponed capacity addition; carved out of itself a LCC subsidiary; increased shortfall routes and managed to register a double-digit growth in passenger numbers. All of this was reflected in the sharp increase in the airlines EBIDTAR (operating profits not considering lease rentals) on a year-onyear basis for the quarter ended January-March 2010, by 24 per cent.

Its revenues grew by 12 per cent at Rs 2,870 crore while its net profit grew by 9.4 per cent at Rs 58 crore. Jet’s revenues from international operations grew by 13 per cent to Rs 1,621 crore during the quarter under review. Even for international operations, its EBIDTAR improved by 10 per cent to Rs 367 crore compared with the figures for March 2009. Taken together the last two quarters — Q3 and Q4 — have been profitable for Jet’s full service as well as low-cost arms.

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Overall, Jet’s domestic operations accounted for 44 per cent of its total revenues of Rs 12,555 crore.

According to Jet Airways COO Sudheer Raghavan, Jet is looking to explore

new destinations. The carrier will target routes that do not take the traditional gestation period of over 18 months to turn profitable. The carrier is likely to add routes like Delhi-Hong Kong, Singapore-Delhi, Bangkok, Gulf, etc. It will also increase its connectivity to cities in Europe in the coming months. Jet’s smart move by concluding a code-share agreement with United Airlines will offer it unmatched connectivity between India and the US: it will offer connections on United Airlines’ transatlantic flights from London to Chicago, Denver, LA, San Francisco and Washington DC. Jet will also offer connections on United’s flights from Hong Kong to Chicago and San Francisco. Beyond these UA hubs, Jet will offer onward connections to 38 American cities.

Signficantly, United Airlines is one of the founding members of Star Alliance. It is being speculated that Jet is also talking to bmi of UK for a codeshare agreement. This is really a well-conceived move by Naresh Goyal who feels if Jet Airways cannot join Star Alliance (Kingfisher Airlines has already joined oneworld of which BA is a leading member) for various reasons including the one that Air India is in the queue, then the next best is to conclude code-share agreements with its lead members and that is what Jet is doing.

In yet another move, Jet Airways CEO Nikos Kardassis wrote to 8,000 of his staff members stating that they will get title and salary hikes on a case-

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to-case basis. It may be recalled that Jet had capped the upper limit of salary hikes at 25 per cent. In a separate move, the carrier’s Senior VP Operations, Hassan Al Mousawi, wrote to pilots informing them of the hike which he admitted was half of what was declared for April 2009. They were also told that their annual overtime for the period April 1, 2008 to November 30, 2008 would be paid in four equal instalments from June 2010. The consecutive growth in loads, yields, etc. have given rise to optimism and it is likely that Jet Airways may break even in both domestic and international sectors beginning the first quarter of the current fiscal, 2010-11. The overall load factor is expected to go up by five per cent and yields by 10 to 15 per cent on select sectors. Jet has already broken even on its US routes.

As part of its strategy to fight recession, it dry-leased three Boeing 777-300 ERs to Thai Airways and four Boeing 777-300 ERs to Turkish Airways. As part of its strategy, Jet replaced the B777-300 ERs in select sectors by A330-200 and the A330-200

by Boeing 737-800/900. The dry leasing of seven B777-300 ERs is likely to fetch Rs 500 crore annually for three years, the period of the lease. It will also save on the expenses it will incur had it been forced to ground them but still maintain them. Overall, the dry leasing is expected to improve its existing fleet utilisation in international operations and result in cost savings of $27 million this fiscal.

In fact, the Head of Jet’s European Operations, Raja Segram, has stated that last year was difficult year for Jet but the worst seems to be behind.

From 2011, Jet is set to expand its operations in Europe. The Premium Class will also make a strong comeback. It recently started flights to South Africa with its Airbus A330-200 and they have proved to be a hit. The Mumbai-Johannesburg route offers 30 Business Class and 190 Economy Class seats. The seats in Business Class offer direct access to the aisle and flat beds with wraparound screens for privacy. They also have a laptop power point and facilities for

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sending emails, text messages and receiving live text messages. The seats in economy class have a 26.9 cm LCD touch screen TV with a choice of more than 100 films, 80 TV programmes, 11 audio channels and a library of 125 CDs. In a way, Jet has now begun to offer a great alternative to South African Airways that had till April 2010 been the only carrier between India and South Africa.

There was a time when Air India had launched this sector with great fanfare and when its fleet shrunk it also got out of the route. Today, when it has all the planes it wants, it has decided to skip the route.

From the financial point of view, Jet Airways is now looking to raise funds for short and medium terms through sale and lease back of its aircraft as it faces an outflow of Rs 1,000 crore of debt repayment every year for the next three years. Jet Airways has received proposals from three leasing companies for sale and lease back of its 10 Boeing 737s.

During an analysts’ conference, Jet Airways’ VP Commercial Strategy and Investor Relations, K G Vishwanath, had stated that Jet intended to sell and lease back 20 of its B737s soon.

Perhaps, the whole process will start

by July-August 2010. The airline is also proposing to raise $400 million for which it had received FIPB (Foreign Investment Promotion Board) approval months ago. However, it has sought clarification from FIPB if it could as part of this fund-raising exercise raised $150 million through QIP (Qualified Institutional Placement). At the end of March 31, 2010, Jet Airways had a total debt on its books of Rs 13,700 crore against Rs 15,000 crore at the end of March 31, 2009. It had cash reserves of Rs 770 crore. During the fiscal year 2009-10, Jet Airways managed to reduce employee expenses to Rs 1,226 crore from Rs 1,410 crore in the previous year and its fuel expenses over the same period came down to Rs 3,151 crore from Rs 4,915 crore. Thus, between fuel and employee costs, its savings were as much as Rs 2,000 crore which is real cost-cutting. That was packaged with deferment of fresh aircraft deliveries, leasing of existing one, code-sharing, employee discipline, etc. Jet Airways has also pre-paid its debt to IDFC (Infrastructure Development Finance Corporation).

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Dabolim airport

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he earlier rule that said there cannot be another airport within a 150km radius of an existing airport has been given a decent burial. In mid-June 2010, the Union Cabinet decided that a second brand new airport would come up in Mopa, Goa under a PPP (Public Private Partnership) arrangement.

Estimated to cost about $400 million, the new airport will be built on BOOT (Build-Own-Operate-Transfer) basis and soon global tenders will be invited to translate this dream into a reality. Had it been the older rule, then this second airport at Mopa would never have been permitted till the existing Dabolim airport near Panaji or 35km from the city centre was closed down.

It may be recalled that when the Government of India allowed, under PPP, the building of Greenfield airports in Hyderabad and Bengaluru, the earlier existing airports at Begumpet in Hyderabad and the HAL airport in Bengaluru had to be shut down for commercial operations. There was a lot of hue and cry when these ceased operations.

Unfortunately, the Government of India and the Ministry of Civil Aviation had entered into contractual obligations with the two new developers DIAL (Delhi International Airport Ltd) and BIAL (Bangalore International Airport Limited) that the existing airports would be closed down for commercial operations.

Incidentally, while Begumpet airport was owned and operated by the stateowned AAI (Airports Authority of India), the HAL airport belonged to the defence.

So, while it was easy to close the civilian airport under the AAI, it was not so for the defence-owned airport even if commercial

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MOPA VS

JHEVAR

Mayawati, Chief Minister, U P

operations were discontinued. At least in the case of HAL airport in Bengaluru, some charter and general aviation aircraft are allowed to operate from there on a selective basis.

When the government called for bids to hand over the existing airports at Delhi and Mumbai for expansion and modernisation and which it ultimately did by handing them over to the GMR and GVK groups, respectively, the OMDA (Operations, Management and Development Agreement) had a specific clause (as part of the official policy) that no new airports would be allowed to come up within the 150km radius of the existing airport.

CRUISING HEIGHTS July 2010

Now, it seems this was not a general rule in the strictest technical sense as the government has shown that the Dabolim airport can continue functioning even as it cleared the Mopa airport. The latest decision of the government has raised eyebrows. All this for political reasons rather than that based on any urgent need.

One may ask what about Navi Mumbai? It may be mentioned here that even while the government signed the OMDA with GVK of MIAL (Mumbai International Airport Ltd), there was a clear understanding that a new second airport would indeed come up at Navi Mumbai which is less than the 150 km radius as a crow flies from Mumbai airport. At that time, it was clarified that as and when Navi Mumbai was tendered, the existing MIAL would have the first right of refusal. As per this clause, if a tender was floated for Navi Mumbai and MIAL were to bid for it, then it would get the first chance to get the contract provided its bid was within the 10 per cent range of the winning bid and it would also be given the option to match the winning bid and take over the airport construction on the PPP mode.

Coming back to the Goa case, the existing Dabolim airport is owned by the Indian Navy whose aircraft carrier aircraft are often based at the airport. Even the newer versions of MIG-29 reportedly use the Dabolim airport. The AAI has a civilian enclave at the airport and has been operating it for many years. Quite some time ago, the early morning flights from Delhi to Kochi were operated via Goa’s Dabolim airport. When the talk of new Mopa airport — that has incidentally been cleared by the Union Cabinet as an “international airport” — was started way back in the year 2000, there was also a proposal to close down the Dabolim airport for commercial operations.

Unfortunately, the area near and around Dabolim has major hotels catering to tourists. Goa gets about 22 lakh domestic tourists and four lakh foreign tourists each year. After many protests and delays, the UPA government set up a new committee under the stewardship of Goa Chief Minister, whose other members included a BJP MP and former Minister of State for Civil Aviation Sripadh Naik and two Congress MPs, Fransisco Sardinha and Shantaram Naik. This committee considered a report submitted by ICAO and gave in-principal approval to the construction of the Mopa airport.

Thus the new Greenfield airport at Mopa under the PPP model will come up in Goa, which will be nearly 50km from the tourist city on the other side of the

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NEWS DIGEST flights to land at the new airport or the old one. The real fight, or should we say flight, is yet to begin. Yes there is always a possibility, howsoever remote it may be. The Navy and Air Force can always say at the appropriate time that they would need more space and civilians could go to Mopa.

NEWS

INFRASTRUCTURE

Photo: H.C. Tiwari

existing Dabolim airport. In fact, this was one of the fears of the hospitality industry and politicians backing them, who felt that should the government close down Dabolim for commercial activities, they would lose their business as the hotels would then be nearly 90km away from Mopa airport.

We only have to recall the criticism the new Bengaluru airport at Devanhalli evoked. The criticism was only related to the distance between the city and the airport. In the case of Mopa, the livelihood of a large number of people will come under question.

By deciding to continue with Dabolim airport and also go along with Mopa, the political sound and fury seems to have been suspended for the time being.

As per the Cabinet’s clearance, the Mopa airport will have a 33,000sq m passenger terminal and would have Code F or superjumbo (A380) capable runway. At the same time, the existing Dabolim civil enclave will also be expanded to meet the rising tourist traffic. During season, Goa gets about 600 chartered flights — all international. The building of the new airport, its critics point out, will encourage traffic to Maharashtra’s Konkan region.

Whichever way you look at, the second airport will benefit Goa immensely.

As we mentioned earlier, the peace bought now may be temporary as there will be more demands after the new airport is built to force international

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Rajeev Gandhi Bhawan

There is already political noise being raised in distant UP though near the seat of the Union Cabinet. Soon after Mayawati assumed power in UP, she went cracking with her Greater Noida Expressway to connect important points along the way to Agra. She also raised the demand for building a brand new Greater Noida airport, an international airport, at Jhevar which is about 65km from Delhi.

Mayawati’s BSP has twice supported the UPA government: once, on the nuclear deal voting in the Lok Sabha in July 2008 and now at the end of April 2010 to get the Finance Bill passed.

Thereafter, the Union government as a quid pro quo asked its group of ministers

PATNA IS NUMBER ONE

Patna airport

The tag of having one of the shortest and riskiest runways (barely 1,954m long) in the country notwithstanding, Patna’s Jayaprakash Narayan International Airport has emerged as number one in 2009-10 among 46 airports in the country in terms of percentage growth of domestic passengers as well as domestic aircraft movement.

According to Airports Authority of India (AAI)

to look into the UP government’s demand for a second international airport at Jhevar. The day the government cleared Mopa and also permitted the continuance of Dabolim, the UP Chief Secretary wrote to the Centre that with a new precedent being set by the Union government, there should be no double standards when it comes to UP. Accordingly, the Centre should clear the Greater Noida airport. What is not understandable is who will it cater to besides the near Delhi-Noida citizens? In fact, since the day talks about the Greater Noida airport acquired importance, the GMR airport executing the modernisaton and expansion of Delhi airport expressed serious reservations to the Centre as it legitimately felt its revenues would be seriously affected should a new airport come up within the 150km no-airport zone. There are any number of Parliament questions and answers where members of Parliament have been told that the closed Hyderabad and Bengaluru airports cannot be reopened due to violation of contractual obligations. Will this route of refusal be once again adopted in the case of Delhi which is handling over 25 million passengers today and which will go up to 100 million when DIAL is fully stretched in two decades. Thus, the real fight may happen nearer Delhi or just few kilometers from DIAL itself. With DIAL opening its T3 terminal on July 3, 2010, the promoters will indeed wear a very cautious smile on their faces.

figures, Patna airport handled 5.52 lakh domestic passengers in 2009-10, which was 60.4 per cent more than the corresponding figure of 3.44 lakh passengers for 2008-09. Amritsar airport with a domestic passenger growth rate of 51.8 per cent during this period stood second followed by Dibrugarh with a corresponding figure of 47.4 per cent growth. The percentage growth apart, Patna airport also fared well in terms of total number of passengers and overtook airports in Port Blair, Varanasi, Bagdogra, Vadodara, Jammu, Raipur, Agartala, Chandigarh and Madurai during the period.

On the domestic aircraft movement front too, Patna airport registered a 42.8 per cent growth rate in 200910, the highest in the country. The airport handled 7,456 flights compared to 5,220 flights in 2008-09. Amritsar airport with a growth rate of 33.9 per cent on this front stood second followed by Jammu and Srinagar airports, both of which recorded a growth of 21.88 per cent in domestic aircraft movement.

AIRPORT FEES AND EXTENSION

Passengers flying out of New Delhi’s Indira Gandhi International (IGI) airport may continue to pay more,

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BECAUSE

There are CBs accredited by bodies not members of IAF There are CBs accredited by bodies not members of IAF Multi-Lateral arrangement for mutual recognition There are CBs accredited by members of IAF arrangement but not accredited for technical areas of your operations

Save yourself from all headaches Rely on NABCB accredited certificates For any information, contact NATIONAL ACCREDITION BOARD FOR CERTIFICATION BODIES (NABCB) Quality Council of India

NABCB

2nd Floor, Institution of Engineers Building, 2, Bahadur Shah Zafar Marg, New Delhi-110002, India Tel: +91-11-2337-8056/57, 9321,9260, Fax: +91-11-23379621, Email: nabcb@qcin.org

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A SHOT IN THE ARM FOR

Photos: H.C. Tiwari

COPTERS

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Dr Naseem Zaidi

he national workshop on “Controlled Flight into Terrain — How to avoid it?” organised by the DGCA (Directorate General of Civil Aviation) with the support of AeSI (Aeronautical Society of India) and RWSI (The Rotary Wing Society) was interesting.

In his welcome address, R P Sahi, Joint Director General, DGCA noted that there were around 10 Controlled Flight into Terrain (CFIT) helicopter accidents in India during 1999-2009 due to adverse weather conditions prevailing in the area of helicopter operations. What was of great concern was the fact that most of these accidents were fatal which affected 17 pilots and 34 passengers. It was pertinent to

mention, he pointed out, that a number of pilots must have got into CFIT situation due to adverse weather conditions but were lucky to escape.

The accident of the Bell 430 belonging to the Andhra Pradesh Government and in which Chief Minister Y S R Reddy was killed along with the two-member crew and three other officials still remains fresh in everybody’s memory. Hence, it was very urgent to address various issues relating to CFIT and how to avoid it.

An analysis of accidents to civil registered helicopters since 1990 revealed that most of the CFIT accidents were due to pilots operating airworthy aircraft under VFR (visual flight rules) tried to negotiate through IMC and inadvertently flew into terrain, water or an obstacle with inadequate awareness of the impending disaster. As Sahi said, “When the human factors analysis and classification system (HFACS) had been applied to CFIT accidents, it was found that all of them were caused by human errors.”

All elements of human errors including decision errors, skill-based errors, perceptual errors and violation of safety norms were

as Delhi International Airport Ltd (DIAL) has applied for an extension of airport development fee (ADF) by 12 months.

DIAL operates IGI. The extension will help DIAL generate over Rs 2,500 crore from ADF. In March 2009, it was allowed to collect an estimated Rs 1,827 crore for 36 months. The operator of New Delhi’s IGI airport has submitted a project cost of Rs 12,700 crore, up 41 per cent over the earlier estimated cost of Rs 8,975 crore, for the first phase of modernisation. Each domestic passenger flying out of IGI is charged Rs 200 and international passenger, Rs 1,300. The Delhi airport caters to over 70,000 passengers every day. The Airport Economic Regulatory Authority (AERA), which has been entitled to decide on all the airports with capacity of above 1.5 million a year, will decide on DIAL’s proposal.

Meanwhile, Airports Authority of India (AAI) has appointed Engineers India and the Indian arm of global consulting firm KPMG to audit the technical and financial sides, respectively, of the project cost submitted by GMR Group-led Delhi International Airport Ltd (DIAL).The report to be submitted by the consultants to AERA, the airport sector regulator, would be the key to determine the tariff the airport operator levies on each departing passenger.

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R P Sahi

found and varied only in frequency in each of the ten accidents mentioned above. There was, therefore, in need to improve a pilot’s decision-making abilities.

In fact, the DGCA has been working at such programmes since 2004. The 27 special VFR courses conducted on “Restricted Visibility Helicopter Operations” for the benefit of 650 single-engine pilots since then have helped arrest CFIT accidents on singleengine helicopters. It is only now that DGCA has proposed to introduce similar courses for twin-engine helicopter pilots also.

Independent of these, Sahi said there was an urgent need to introduce tracking devices, information on obstacles on way and weather that should be provided to helicopter

FOLLOW PUNJAB MODEL FOR CHAKAN

Citing the smooth acquisition of land by the Punjab Government for the Chandigarh International Airport, Airport Authority of India (AAI), Pune Director, Captain Deepak Shastri said that the state government, including the local administration should emulate the same alacrity in acquiring land for the proposed Greenfield airport at Chakan.

What he was referring to was the recent move by the Greater Mohali Area Development Authority Pune airport (GMADA) to acquire land for the proposed Chandigarh airport from 4,000 farmers, who collectively owned some 771.34 acres without any controversy, Shastri told the media.

The authorities, besides purchasing the land from these farmers, also saw that they were made party to deliberations pertaining to the upcoming project, besides assuring them stakes in the future aerodrome, said Shastri adding, “The same approach

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pilots. In fact, this was the manner in which airlines provided information to their pilots.

Similar preparations for helicopter pilots would help them prepare or plan their trips properly. There should be proper flight dispatch, information from the met office, weather at the destination, route chart, height parameters, progress of flight to base, etc.

The base cannot and should not wind up once the helicopter “lifts up”, he said.

Speaking on the occasion, Air Vice Marshal Krishnaswamy Sridharan, the Founder and President, RWSI, said human factor was responsible for 73 per cent of civilian helicopter accidents and there was in need to provide far more simulator training facilities. Also, heliports were needed since there weren’t any heliports in India.

Helicopter operations in India are over 57 years old and between 1953 and 1986 there was not much commercial use of helicopters. It then began to rise slowly.

Since 2005, the helicopter registry has shown a double-digit growth. While Bell Helicopter has a major share in India, there are more than two dozen types of helicopters operating in India.

The CFIT meeting which took place a day after the meeting of the MoCA organised

by CASAC was also addressed by the DGCA Dr Naseem Zaidi. Describing the workshop as very timely, Dr Zaidi said while everyone was talking of safety, it was the duty of everyone to ensure it. A series of steps is being taken by the DGCA to control such incidents and accidents. In a poignant reminder of the recent air crash at Mangalore, he said there was in need to

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exercise caution.

It was stated that unfortunately 30 per cent of heli CFIT accidents concerned the state government operations. To ensure that there was no repeat of this, in early June 2010 a new CAR (Civil Aviation Requirements) had been notified by the DGCA that identifies the minimum requirement to be met by PSUs (Public Sector Undertakings) and State Government helicopter operations. Earlier, they were not under the regulatory framework. The new CAR will have to be fully complied with and a transition time of four months will be given. In this context, he said any PSU which holds a ‘No Objection Certificate’ for helicopter operations will be subject to 100 per cent audit by the DGCA. The RWSI will have a role and is expected to assist the state governments in these audits. “You can train us in these audit jobs,” the DGCA remarked.

The regulator has just introduced mandatory simulator training of six months with pilot community and operators. From one flight inspection unit as on date these will increase to four and further eight. In this connection, DGCA is seconding experts from the industry and Pawan Hans in the flight inspection jobs and also sought the help of RWSI. In a very significant comment, Dr Zaidi said: “I am telling the entire pilot community that you should have the courage to tell the operator that if the situation does not allow you to operate, then you don’t operate or fly. You can tell the VIPs or VVIPs that you will not fly if the conditions do not warrant it and if there is any problem, tell me. Never negotiate

should be adopted for the Chakan project to speed up land acquisition process.”

Capt Shastri said it was vital to expedite the Chakan project on a fast track basis as air and passenger traffic at the existing Lohegaon airport is bound to get saturated in the long run.

Besides any move to scout an alternate site in place of the existing site for the Chakan project would turn the clock back.

Apart from that, Lohegaon airport has seen rapid growth in passenger traffic, recording an estimated 6,000 passengers daily, which is expected to grow further, Capt Shastri outlined.

“The process of expediting the runway expansion is in the larger interest of the Air Force and civil aviation,” Capt Shastri told journalists.

CHANDIGARH IN FOUR PHASES

The Chandigarh International Airport in Mohali will be built in four phases and the first phase is likely to be completed by 2013.

The airport is being jointly built by Punjab, Haryana and the Airports Authority of India (AAI). According to the design of the airport, it will have a modular green building with a capacity of 1,500 passengers during peak hour. In addition to a cargo terminal, the airport will have three terminals. A metro station, shopping malls and restaurants will also be part of the airport.

bad weather.”

On the issue of safety management system and helicopter/general aviation operations, three CARs will be put up. “We want real hazard analysis to be done by pilots of helicopters. Many pilots are habituated to accomplishing a mission.

Please avoid this if conditions do not warrant it. A special Helicopter Working Group in the DGCA is looking into various issues,” said Dr Zaidi.

During the Q & A, a helicopter pilot, Col Dubey said the Met Department had a fixation for fixed wings and not helicopters.

Narrating his own experience while on sortie, this helicopter pilot said, “No change in weather was informed to me especially in areas that surround Hyderabad. In the entire hilly areas around it, nothing was provided to me. We were flying blind.”

Dr Zaidi was surprised to hear this. This was a major question of integrating Met with Aviation. There is a move afoot and the Ministry of Civil Aviation has taken up with the PMO (Prime Minister’s Office) where AAI will be asked to have dedicated Met staff. Dr Zaidi said he would take up the issue with the Met department and find out why there was a discrimination between fixed wing and helicopter operations by the Met department.

In this connection, he said AAI paid Rs 20 crore annually to the Met department or the IMD (India Meteorological Department). It is the responsibility of AAI as it recovered its money by way of RNFC (Route Navigation Facility Charges)/landing charges, etc.

The JVC, Chandigarh International Airport Ltd, is likely to approve the plan with some modifications in its next meeting — some suggestions were made by the members recently.

According to the draft plan, the airport structure will be a ‘green building’ with solar lighting and other energy conservation devices.

In the first phase, one terminal will be constructed.

It is estimated that annually 15 lakh passengers will use the airport till 2013.

At present, six lakh passengers use the Chandigarh airport every year, according to Chandigarh airport an AAI survey. After completion of the first phase, the airport will be able to accommodate 26 aircraft and the building will have four aerobridges. Also, there will be car parking for 700 vehicles — two parking lots of 350 vehicles each opposite the main building. The airport will have three entrances — from Mohali, Zirakpur and Chandigarh.

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Sanjay Aggarwal

he deal to buy SpiceJet was sealed by media baron Kalanidhi Maran, who owns over 20 TV channels under the brand name of “Sun” besides a few publications/dailies/FM radio in Tamil Nadu, amid some tense moments. It was a relentless pursuit of more than three months by Kalanidhi Maran, elder brother of Union Textiles Minister Dayanidhi Maran and son of former Union Minister the late Murasoli Maran, that finally saw the original promoter of SpiceJet Bulu Kansagra, a UK-based NRI and his Royal Holdings besides a July 2008 entrant into the airline and well known profit-seeking investor W L Ross of the US selling out.

The deal that was finalised in midJune 2010 was not without its share of some anxious moments. The Maran brothers flew into Delhi on the afternoon of Saturday, June 12, 2010 in their Global Express from Chennai and reached Leela Kempinski hotel in Gurgaon. Their representative was already in London to take the letter from W L Ross detailing his divestment in favour of Kalanidhi Maran and his wife Kaveri Maran besides their Kal Airways Private Limited set up as a non-scheduled carrier a year ago.

Ross who was in London had agreed to fax his acceptance of the deal. But for some reason, he dilly-dallied and finally faxed the same letter signed by afternoon bringing much relief to Maran, who was advised by Ernst and Young on the takeover of SpiceJet. And the person who was in London collected the letter from

Wilbur Ross

MARAN AND THE SPICEJET

TAKEOVER Ajay Singh

Kalanidhi Maran

Bulu Kansagra

CHENNAI TO GET MORE PARKING

Chennai airport is soon going to be a favourite place for airlines to park their aircraft at night as Airports Authority of India (AAI) will be constructing more parking stands in the coming months.

This expansion will be a boon to airlines as parking stands at all major airports are full. Improvements to ground infrastructure at airports have not kept pace with fleet expansion announced by airlines. This mismatch is expected to work in favour of Chennai.

Besides, parking an aircraft at the Chennai airport is much cheaper than the rates charged by private airports at Mumbai and Delhi. The airport currently has 65 bays and eight more would be constructed in the space between the secondary runway and the main runway. Four parking bays have already been built. But, they are yet to be commissioned.

Seven more are coming up near the linkway that connects both the runways. These are remote parking stands because they are not near the terminal.

Chennai airport Aircraft will have to taxi

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through taxiway and the linkway to reach these stands. These parking stands would be used primarily for night parking.

There are also plans to build 10 to 15 parking stands when the ongoing expansion works are completed. AAI has asked for permission to build the bays. These bays will be required to meet the increased need for parking space when the airport will handle more aircraft movement after the expansion by next year end.

These additional parking stands are included in the masterplan prepared for expansion of the airport.

Airports Economic Regulatory Authority (AERA) is studying the tariffs charged by different airports. The body will soon be rationalising the rates across all airports. However, it will take some time. “Till then Chennai airport will be the best bet for airlines to park their flights as this kind of addition of parking space is not happening anywhere else,” an official said.

Also, as the stretch of the metro rail between the Officers Training Academy (OTA) and airport cannot be re-aligned underground, Chennai Metro Rail is considering other options.

The present alignment of the elevated corridor cuts across the approach flight path of the airport’s secondary runway and the metro rail has submitted a revised proposal stating that it could reduce the height of the elevated corridor on GST road from 27 metres to 6.5 metres. The plan is to have the elevated corridor on

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NEWS DIGEST Ross soon after a signed copy of it was faxed to the room where Maran was waiting to seal the deal.

It was only after the receipt of the fax that the news was formally broken by Kalanidhi Maran to the waiting media outside the hotel. Present on the occasion were at least two of the original promoters of SpiceJet: Bulo Kansagra and Ajay Singh. The former sold off his 11.85 per cent stake to Maran for Rs 47.70 per share along with Ross his 26 per cent held earlier in the form of FCCBs and later converted into shares.

Ajay Singh who is supposed to be holding 4.85 per cent in his own name and along with his friends a total of 10 per cent, did not sell and even disclosed to some that the price offered by Maran was very low.

It may be recalled during the April 2010 attempt Maran offered Ross and Kansagra around Rs 36 per share that they thought was too little. Maran had to walk a few steps forward and offer a further 22 per cent increase in his offer price before everything fell in its place.

Irrespective of whether Ajay Singh will sell or not, the purchase of over 37 per cent share in SpiceJet under the SEBI takeover norms had triggered the clause that would compel Maran to go in for a public offer to acquire 20 per cent share.

Maran has done that through a public announcement with Enam Securities as his main advisor. Interestingly when Maran bought out Ross and Kansagra, the price he gave them was Rs 47.25 per share. On that day, June 12, the prevailing

market price in the Bombay Stock Exchange (BSE) was higher at Rs 56.05.

To acquire the 37.85 per cent, Maran had to shell out Rs 750 crore and his public offer to buy 20 per cent more at Rs 57.76 per share based on previous month's average price would entail another outflow of Rs 480 crore. Thus taking the buy-off of the promoters at Rs 750 crore and public offer another Rs 480 crore, the total investment for 57 per cent was Rs 1,230 crore and based on the pro-rata price, the remaining 43 per cent would be nearly Rs 1,170 crore. That means Spicejet is valued at Rs 2,400 crore.

The public offer will open on August 6 and close on August 25, 2010. The public offer said that the move was to “acquire 8,29,80,161 equity shares of the face value of Rs 10 each representing a 20 per cent of the share and voting capital of the Target Company at a price of Rs 57.76 per fully paid-up equity share”.

Just after the take-over, Kalanidhi Maran said there would be no change in the brand SpiceJet after its acquisition by KAL airlines owned by him and his wife.

“There will be no change in the brand SpiceJet for now. I am happy with the existing management and the airline has done well even during the recession. The EBIDTDAR will increase by 25 per cent to 30 per cent.”

What is interesting to note is that for the past one year, Sanjay Aggarwal, CEO, SpiceJet and a nominee of W L Ross had been saying that if a good opportunity came, SpiceJet would like to take over another LCC. In fact, even last

the OTA-airport stretch dip at the point where the corridor cuts the flight path, and then rises again to its regular height.

AAI officials and metro rail engineers met recently to discuss the design and alignment of the metro station inside the airport.

As the station will come up inside the airport, AAI has agreed to construct it. Metro rail has already deposited the money required for its construction with AAI, said a senior metro rail official.

24

have been identified as critical to be inspected on priority basis are: Leh, Kullu, Shimla, Port Blair, Agartala, Lengpui, Calicut, Mangalore, Jammu, Patna and Latur.

CELEBI COMMENCES GH IN DELHI Çelebi has started ground handling (GH) services in addition to the cargo warehousing services in Delhi parallel to its operations for almost two years

LENGPUI AIRPORT ON SAFETY LIST

As part of the reassurance drive after the Mangalore air crash, the Directorate General of Civil Aviation (DGCA) has instructed its officials will carry out inspections of critical airports across the country. And among those airports is Lengpui airport in Aizawl.

“DGCA will thoroughly review the systems and facilities at the aerodromes, including runway conditions and availability of SOP on operational restrictions,” declared a statement released by the DGCA. Lengpui airport The aerodromes that

year Sanjay Aggarwal commented similarly. First, it was GoAir then there was some other speculation but all of them died the way they began. Besides, Sanjay Aggarwal often said his airline would raise $75 million to meet urgent capital expenditure (read aircraft acquisition). Three weeks before the takeover, the SpiceJet Board had informed the BSE on May 26, 2010, that it had passed an enabling resolution subject to approval from the Company's shareholders and such further regulatory consents as may be required to raise

now in Mumbai DIAL ground handling services license has been awarded to Ç S (Çelebi) by the managing company Çelebi Hava Servisi A.?.

Delhi International Airport Private Ltd. (DIAL). Celebi, with its successful investments and achievements in the international aviation arena, and as the leading representative of Turkish Aviation Sector has been a primary candidate in Delhi International Airport tender.

After winning the tender, Çelebi has completed all the necessary preparations and requirements in a very short period of time and got ready to offer ground handling services in Delhi Indira Gandhi International Airport. With the ongoing successful operations and provision of high quality, customised ground handling services in Mumbai Chhatrapati Shivaji

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funds not exceeding $75 million through any combination of instruments either locally or abroad.

Even before the Board was looking at ways to raise money to pay at least the initial commitment charges to Boeing for acquiring the remaining 10 of the 30 aircraft order it had placed more than five years ago, Sanjay Aggarwal had discussions with the President and CEO of US EXIM Bank and its officials during their visit to Delhi in May 2010. (It is a different matter that all the aircraft B737800s and a few 900s were bought, sold

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and leased back to generate cash). On the other hand, his de facto boss W L Ross was keen to sell out but was waiting for an even bigger price. This was because during the fiscal ending March 31, 2010 SpiceJet made a profit of Rs 67 crore after incurring losses in the previous years.

Besides, it also has an unsettled income tax demand of Rs 200 crore. In any case nothing of that sort Ross expected happened and he had to sell out and said — “It was a very fair price.”

The very first impact of the takeover of SpiceJet by Maran is that the airline may not explore the kind of option it had in mind to raise $75 million. Incidentally, a very cash rich Maran (Sun Network made a net profit of Rs 537 crore in 200910) wants to do things in a different way and has already said he may bring six of his own representatives into the SpiceJet Board. One thing is for sure. Bulo Kansagra will remain on the Board during the immediate and medium term and help Maran in his new airline business. There is already talk that Maran may not go in for widebody planes but instead place orders for 20 more Boeing 737 NGs to meet his need to transport people between India and South East Asia if not the Gulf in the immediate future. As of now SpiceJet already has the approval to fly to Maldives, Dakha and Kathmandu.

A month before the take over, SpiceJet's application to fly to Colombo was rejected by the Ministry of Civil Aviation on the plea that Air India and Jet were flying from Chennai to Colombo and induction of one more carrier would

International Airport since July 2009 and now with Delhi Indira Gandhi International Airport, Çelebi Ground Handling will be the major service supplier at the two of the most significant airports of India.

Mumbai International Airport and Delhi Indira Gandhi International Airport have the busiest passenger traffic in India.

Delhi airport offers services for 23 million passengers and sustains 220 thousand take offs annually. As a result of the new investments and infrastructure modernisation scheme those figures are expected to increase to 37 million in 2012, 50 million in 2016, and 66 million passengers in 2021.

With the inauguration of ground handling services in Delhi, Çelebi will be providing services at a total of 27 international airports, including Mumbai Chhatrapati Shivaji in India and Budapest Ferihegy in Hungary.

PERMANENT HELIPAD IN GURUVAYUR

Ten acres of land owned by the Guruvayur Devaswom on Dwaraka beach would be used for constructing a helipad.

Pawan Hans will operate helicopter services between Guruvayur and Nedumbassery. The services will be useful for thousands of devotees from different parts of the country who want to visit the Guruvayur Sreekrishna Temple.

fragment the market further. At that time the Ministry's babus did not know that Kalanidhi Maran was on the prowl. Now that he has formally taken over, it is only a question of days before the mandarins in Rajiv Gandhi Bahawan convey their okay to SpiceJet to fly to Colombo from Chennai.

Perhaps, this decision might have been taken before Maran took over as SpiceJet had prominently displayed its sign boards all round the stadium in Sri Lanka where the Asia Cup was played suggesting SpiceJet would soon fly into the island nation. Besides, being from Chennai and Tamil-centric, it is only to be expected that the new owner of Spicejet will look seriously at the ethnic Tamil market in Malaysia and Singapore. He may even use his political clout to seek bilaterals to connect points other than KL in Malaysia and also an overall increase.

In any case, as far as Malaysia and Singapore are concerned, induction of SpiceJet which completes the mandatory five-year rule in August 2010 would mean fresh negotiation of additional bilaterals. This would mean further wailing by Air India and the Indian private carriers which are already flying to Singapore. What can be said with certainty is that in the foreseeable future, Kalanidhi Maran may rechristen SpiceJet as Sun Airways and as already indicated by him, the registered office of SpiceJet will be shifted from Gurgaon near Delhi to Chennai even though it may be retained as the operational headquarters for some more time.

The contruction of a full-fledged airport near Guruvayur has also been proposed. A team of experts from the Airports Authority of India (AAI) will visit Guruvayur shortly to conduct a feasibility study. The Guruvayur Devaswom owns 400 acres of land at Kandanassery, near Guruvayur. The possibility of getting this land for construction of an airport is being looked into.

SECURITY UPGRADE FOR 50 AIRPORTS

Security mechanisms at over 50 major airports across the country are in for an upgrade with the Ministry of Home Affairs (MHA) directing the Bureau of Civil Aviation Security (BCAS), Airports Authority of India (AAI) and the Central Industrial Security Force (CISF) to strengthen the security systems in a time-bound manner. Union Home Secretary G K Pillai recently chaired a meeting to review various security issues concerning airports in the country. “Steps relating to biometric access, construction of watch towers, raising of perimeter walls, provision of adequate security staff, installation of CCTV cameras, provision of dog squads and bomb disposal squads, etc. were discussed at the meeting. A time-bound action plan was drawn up to enhance security at the airports,” an MHA statement said.

CRUISING HEIGHTS July 2010

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NEWS DIGEST

June 23, 1985

Photo courtesy: Aaron Lynett, National Post

Air India Flight 182 leaves Toronto and explodes near Ireland, killing 329 people 278 of whom Canadians. Less than one hour before the blast, two baggage handlers at Tokyo’s Narita airport are killed when a bag explodes as it was being transferred to an Air India flight.

November 8, 1985 Talwinder Singh Parmar and Inderjit Singh Reyat arrested by the Canadian police in connection with bombings.

Charges are dropped against Parmar.

Reyat is fined for a minor, unrelated charge.

January 22, 1986 Canadian Aviation Safety Board concludes a bomb brought down the jet.

February 1988 Reyat is arrested by police in Coventry, England, where he moved with his wife and children in 1986.

December 8, 1989 British authorities sign an extradition order for Reyat following a lengthy court battle.

May 10, 1991 Reyat is sentenced to 10 years in prison on manslaughter and explosives charges related to the Narita bombing.

May 1995 Canadian police offer a $1-million reward for help to catch Kanishka bombers.

March 7, 1998 National Parole Board panel denies Reyat early release.

October 27, 2000 Ajaib Singh Bagri and Ripudaman Singh Malik are arrested and charged with first-degree murder, attempted murder and conspiracy.

June 4, 2001 British government grants permission for Reyat to be charged in Air India blast.

June 6, 2001 Reyat is charged in Air India Flight 182 bombing just days before his 10-year sentence for his role in the Narita bombing is up. He remains in custody.

26

Jagada Venkateswaran placing flowers on photographs of her niece and sister-in-law, both who were killed in the Air India bombing, at a memorial ceremony took place on June 23, 2009 on the south lawn at Queen's Park, Toronto

BITTER TRUTH ABOUT THE KANISHKA

BOMBING Air India’s Boeing 747 ‘Kanishka’, named inquiry on the tragedy and submitted his after Emperor Kanishka who ruled in the damning report. Retired Supreme Court second century, cruised over the Atlantic at Justice John Major has gone on record to 31,000ft as it flew towards say: “I stress that this is a London, Heathrow. The Canadian atrocity. For too aircraft, registration VT-EFO, long, the greatest loss of was operating Flight 182 on Canadian lives at the hands of the east-bound journey on a terrorists has been somehow trip between India and relegated outside the Canadian Canada. Flight 181 from consciousness.”

India had transited Frankfurt The report has when travelling westbound to recommended ex-gratia Toronto, then had doubled payment to the families of the back to Montreal. There the victims, mostly of Indian flight number had changed to origin, as it blamed the Justice John Major Flight AI 182 for the return Canadian government for its trip to London, New Delhi and Bombay. failure to prevent the country’s worst On Flight 181’s Toronto to Montreal terrorist attack. Justice Major’s report sector, therefore, some passengers were shows the manifold errors that made the inbound to Montreal from India while bombings possible and that led to the others were outbound from Toronto on the mostly futile investigations afterwards. way to India…

According to him, the terror attack on an Air India flight over Ireland a quarter of a anadians never really had an century ago should serve as a wake-up call understanding of the to Canada, whose defences against investigations that were required terrorism were woeful in 1985, and they are to be undertaken with regard to still weak. There is a welter of sickening the June 23, 1985 bombing of an Air India detail in the 3,200-page report of the Air flight over Ireland, perhaps because most of India Commission, which probed the Sikh the victims belonged to ethnic minorities, terrorist bombings of June 23, 1985, that claimed the retired judged who headed an killed 329 people.

C

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“A cascading series of errors contributed to our police and security forces” failing to stop the bombing, Justice John Major recommended. Canadian authorities should have known that Air India Flight 182 was a terrorist target, Major said, adding that the failure of the Royal Canadian Mounted Police (RCMP) and Canada’s spy agency, Canadian Security and Intelligence Services (CSIS), to prevent the tragedy was “inexcusable”.

The government needs to take responsibility to avoid further failure and to prevent a return to a culture of complacency, said Major in his report.

“This was the largest mass-murder in Canadian history,” said Major, adding that the “finest tribute” that could be paid to the victims of the bombing is to create a rigorous aviation security system. Air India’s Flight 182 on June 23, 1985, which was travelling from Canada to India, crashed into the Atlantic killing all 329 on board. The report also recommended the appointment of a powerful security czar to resolve disputes between conflicting interests among security agencies.

Canada’s national security adviser should be given sweeping new powers to resolve disputes between the RCMP and CSIS, Major told a press conference in Ottawa.

In the much-awaited final report from the commission that investigated the bombing of Air India’s plane, he observed that national security continues to be badly organised between the RCMP and Canada’s spy agency. He also said that there should be radical transformation in prosecution. The national security adviser, who currently provides advice to the Canadian Prime Minister on security and

A memorial for victims of Kanishka bombing in Toronto.

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intelligence issues, should also be the final arbiter where the two agencies disagree, Major said.

The report tells Canadians that the authorities they put their trust in to protect them from, and investigate, terrorism did not even understand the importance of their task.

Not only were the security authorities unforgivably second rate in everything pertaining to Air India, but also, even now, according to Justice Major, there is little reason to believe they are up to the task.

He rejected the government’s “that was then, this is now” argument. Almost as the debris of Flight 182 began to fall over the coast of Ireland, Ottawa was saying the problems revealed by the attack had been resolved. Not so.

“There remains a failure to recognise what went wrong, why and what should be done today.”

Major’s conclusion about the RCMP and the CSIS could not be more damning: “Despite its aspirations to be an intelligence-gathering agency, the RCMP showed a surprising lack of understanding of the nature or purpose of intelligence gathering.”

Canadian security authorities had enough specific and credible information to prevent the bombing, Major concludes. But they didn’t, because of complacency, incompetence and turf wars.

It called for an independent body to be created to recommend an appropriate ex-gratia payment and to oversee its distribution, though it offered little relief to the families of those who were killed in the tragedy.

It is to Canadian Prime Minister Stephen Harper’s credit that he created the inquiry. Soon after the report’s release, Harper met the families and termed the document a “damning indictment of many things that occurred before and after the tragedy. Our government launched this inquiry to ensure that measures are taken to prevent such a tragedy in the future. We extend our deepest sympathies to the families and friends for the loved ones they lost,” he said.

The damning indictment of the Canadian police for its failure to avert an avoidable mid-air disintegration of Air India’s Emperor Kanishka aircraft by a bomb planted by terrorists will allow the airline to seek appropriate damages from Ottawa, feel legal experts here. What was clinching, experts feel, was the clear finding of the Justice John Major Commission clearly laying the blame at the door of the police agencies of Canada.

CRUISING HEIGHTS July 2010

February 10, 2003 Reyat pleads guilty to one count of manslaughter and is sentenced to five years.

April 28, 2003 Bagri and Malik are set to go on trial before a judge alone in BC Supreme Court.

November 2003 Star witness against Malik testifies the accused confessed his involvement in the bombing on at least two occasions.

December 3, 2004 Crown and defence rest in what’s come to be called the bloodiest terror case in Canadian history. The trial ranks among the longest and most expensive Canada has ever seen.

March 16, 2005 British Columbia Supreme Court Justice Ian Josephson acquits Malik and Bagri, saying he found the main witnesses in the case not credible.

May 1, 2006 Prime Minister Stephen Harper calls for a public inquiry into the Air India bombing, overruling the previous government’s decision.

September 25, 2006 Former Supreme Court Justice John Major begins hearing evidence in public inquiry.

February 15, 2008 Major concludes hearings in Air India public inquiry.

July 9, 2008 British Columbia court of appeal grants bail to Reyat, clearing the way for his release from prison.

March 8 Comments from one juror in Reyat’s perjury trial raise concerns with the presiding judge, who dismisses the entire jury on the first day of the trial.

June 11 Reyat’s perjury trial deferred to September.

June 17 Kanishka Bombing releases report.

Commission

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GLOBAL EYE

Airbus A350 timing ‘tense’

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UROPEAN AERONAUTIC, Defence & Space Co (EADS) needs to be “very cautious” in order to keep the schedule for its A350 wide-body jet and avoid delays that hobbled Boeing with a similar model, its chief executive officer said.

“For the time being we’re sticking to our delivery schedule, but it’s tense, and we have eaten most of the buffer we had,” Louis Gallois, CEO of the Paris- and Munich-based EADS said in an interview, adding, “Boeing is a very good company with a good technical background and when we see the difficulties they have, we have to be very cautious.”Airbus is spending more than 10 billion Euros ($12 billion) on the long-range plane seating 300 to 350 passengers to challenge Boeing’s 787 Dreamliner as well as the larger, 15-year-old 777. Both new jets include advanced components from carbon fibre, a technology that risks causing delays as Airbus and Boeing stray from proven materials such as aluminium.

Airbus wants to undertake the first test flight of the A350 in 2012 and deliver the twin-engine jet from 2013. Gallois said he was hopeful Airbus could meet that deadline, in part because the company took fewer risks with suppliers. “We’ve outsourced 50 per cent of the work, compared with Boeing relying on partners for 80 per cent of the work,” Gallois said in the interview in London. Qatar Airways will become the first customer of the A350 for which there are 530 orders from 33 customers.

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REVIVING THE CONCORDE I

N LITTLE MORE THAN A generation, French Concorde, the first supersonic passenger jet, has gone from the next big thing to a vintage aircraft, advocates say. Two groups of Concorde buffs are working at Le Bourget Air and Space Museum to determine if the Concorde can be flown again. ‘Save the Concorde’ group from Britain and ‘Olympus 593’ from France hope an airborne Concorde will be part of the show at the opening of the 2012 Olympics in London. Concorde, a joint French-British project, began flying commercially in 1976. In 2000, an Air France Concorde crashed shortly after takeoff from Paris, killing all 109 people on the plane and four on the ground. The crash and the sharp decline in air traffic that followed the terrorist attacks on September 11, 2001, led to the plane

being retired in 2003. The trial over the incident is now wrapping up in Paris, but the Concorde may not be grounded forever.

The joint team of engineers is preparing for initial tests on the RollsRoyce engines that could lead to the Concorde being cleared for flight once again. The target is to have the jet fly over the opening ceremonies for the 2012 Olympic Games in London. “This is just the beginning, but we are delighted and privileged to be working with a team of skilled Concorde engineers who worked on the aircraft at both British Airways and Air France,” said Ben Lord, ViceChairman, British group. However, the goal is to have it operational in a “heritage capacity”, indicating that while it may fly for demonstration purposes, it will never return to commercial aviation.

ANA plans first 787 overseas flight B

OEING'S FIRST CUSTOMER FOR the new 787 Dreamliner, All Nippon Airways, plans to start flying the jet overseas in March next year. Bloomberg reports that the airline, also known as ANA, will increase international operations while rival Japan Airlines cuts routes. ANA expects to receive its first 787 in November. The Japanese carrier is

CRUISING HEIGHTS July 2010

considering flights to Los Angeles, San Francisco, London, Paris as well as China, according to Bloomberg. ANA is Boeing’s biggest customer for the 787, with 55 planes on order.

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Singapore goes green

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NEW “GREEN” PREMIUM lounge is to open at Singapore’s Changi airport for executive travellers who care about the environment. It promises to start travellers’ journey with the concept of “Go Green, Go Natural”. The 2,200-square-foot (204-square-metre) space, designed by Hong Kong designer Kinney Chan, uses a “green terrace” as its centerpiece, with earth-tone colours and “greenery” in the lights. Air filtration is provided by eco-friendly Oxyvital system, a purification system which manufacturers say cleans the air at a molecular level to make passengers “healthier, happier and more productive”. The Green Market is operated by Plaza Premium Lounge Management, which allows guests to pay for access regardless of airline or class of travel and currently operates the world’s largest “pay-in” lounge and spa at Hong Kong International Airport. Singapore Changi, voted the world’s best airport in a recent Skytrax survey, is already implementing other ecofriendly measures across the airport as part of its “Changi Goes Green” programme. However, the Centre for Asia Pacific Aviation last year picked India’s GMR Hyderabad International Airport as the greenest airport in the Asia Pacific region, saying that it had set “a benchmark for other airports in the region to follow”.

SRI LANKA FOR FULLY LIBERAL SKIES S

RI LANKA AND INDIA SHOULD fully liberalise air services within the two countries, further strengthen links between them and set an example to South Asia, SriLankan Airlines chairman Nishanta Wickremasinghe told a business forum held with the India International Film Awards in Colombo. “The time has come to a fully liberalise aviation in the region, which will be an example in the pursuit of true intra-regional trade,” he said and added, “From the airline’s point of view I would unhesitatingly urge India to take that opportunity to fully liberalise air services to serve as a regional model.”

Wickremasinghe said Sri Lanka had an aviation policy of liberalising on the basis of reciprocity.

“Far-reaching and timely decisions

by Sri Lanka and India to liberalise (are needed). It could well serve as a model for other SAARC (South Asian Association for Regional Cooperation) countries.”

SriLankan Airlines even now flies 50 times more than a week to India down from 100 before the economic downturn, and is the top foreign carrier to the country.

Wickremasinghe said India’s land

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mass was more than 50 times that of Sri Lanka. India had a population of over a billion people compared to 20 million in the case of Sri Lanka which showed that “asymmetry of land has no bearing” on what could be achieved.

India is now the top source of visitors to Sri Lanka and Sri Lanka is among the top ten to India, he said. Sri Lanka is hoping to attract more than 2.5 million tourists by 2016 with 500,000 from India.

“Hence Sri Lanka and India are in the final stages of negotiations on a Comprehensive Economic Partnership Agreement (CEPA) which will encompass services.”

He said further liberalisation of air services would enhance capacity for more trade and tourist traffic.

Wickremasinghe is President Mahinda Rajapaksa’s brotherin-law.

Wickremasinghe said he was watching with keen interest the upgrading of Indian airport infrastructure. Sri Lanka wanted to transform the island into a shipping, aviation and knowledge hub serving as a link between the East and the West and it was modernising and expanding its main airport to increase the capacity.

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COLUMN/CHOCKS OFF

The case of

one-sided ASAs R Krishnan

The Civil Aviation Ministry has signed a number of bilaterals with many countries but Indian carriers have not been able to utilise these judiciously, comments R Krishnan.

T As on April 1, 2010, 7,11,356 seats per week were available as capacity entitlements to Indian carriers on a reciprocal basis. In reality, Indian and foreign carriers were utilising 1,70,914 and 3,26,705 seats per week, respectively.

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he Air Services Agreements (ASAs) or what is commonly called the bilateral agreements India has signed with foreign countries make for interesting reading. They clearly bring out the utter helplessness of Indian carriers — both state and privatelyowned — in exploiting them to their fullest — at least on select sectors where it matters most. Even though a lot of noise was made in the recent past over the liberal ASAs or bilateral rights granted by the Ministry of Civil Aviation with the approval of the Government of India to foreign carriers, there was indeed some truth in it; witness the who’s who of global airlines that got the cream. It can, of course, also be said that by giving bilateral rights, the Indian carriers also got the same opportunity to fly to those lands.

While India has a total of 104 bilateral ASAs with foreign countries, in the past six years India signed 12 ASAs with foreign countries that made most of the difference to Indian carriers in the same period. It was the policy of December 2004 that allowed private Indian carriers to fly foreign routes — subject to certain conditions that included non-stop domestic operations for five years continuously. This saw Jet Airways and Air Sahara qualifying initially. Everyone is aware of what happened when Kingfisher took over Air Deccan for this very reason. What progressively happened was that (even as Air India continued to hold on to its past of being miserly in sharing bilaterals because it had a legitimate fear — fewer and older planes, no network, bad product — of being drowned by big foreign carriers) the new policy went against this philosophy. Since the new players had to be accommodated, ASAs had to be expanded so that Jet, Kingfisher — and now SpiceJet — could fly abroad.

Let us look at the figures as of April 1, 2010, when India had a total of 104 bilateral agreements with foreign countries. As on that date, 72 foreign airlines operate to and from various destinations in India providing 1,356 services a week and 3,26,705 seats. Indian carriers are also eligible to operate to and from the very same destinations under the ASAs. However, in sharp contrast, the four Indian carriers — Air India/Indian, Jet Airways, JetLite and Kingfisher Airlines — are operating on international sectors to 25 foreign CRUISING HEIGHTS July 2010

countries operating 990 frequencies per week to 35 destinations. The seat-capacity utilisation per week by the Indian carriers during the past six years was 77,097 seats per week in 2004 (when only Air India and Indian were the Indian carriers); 1,14,664 seats per week when Jet Airways and Air Sahara joined the race; 1,16,465 seats per week in 2006; 1,33,650 seats per week in 2007; and, 1,70,053 seats in 2008 by when Jet had taken over Air Sahara and rechristened it as JetLite, retaining it as a separate entity with its own bilateral entitlements that was given to Air Sahara earlier to fly SAARC (South Asian Association for Regional Cooperation) countries and South East Asia, besides Kingfisher, which had taken over Air Deccan and merged the entities to fly to foreign destination like UK in September 2008, etc. That was also the year when Air India-Indian flights operated under AI banner besides Air India Express, which in fact had been launched two years earlier.

The recession saw the seat-capacity utilisation per week falling to 1,59,846 seats in 2009 even as the four operators, including Air India (now merged with Indian) remained in the fleet. Even as there was a contraction of flight operations by Indian carriers after the new highs they reached in terms of acquiring brand new wide-body aircraft like the B777s and A330-200s, the onslaught of foreign carriers, especially those from the Gulf like the Emirates, Qatar, Etihad and those from the South East and Far East Asia like SIA, Thai, Malaysian and Cathay besides European carriers like British Airways, Lufthansa, Air France, SAS, Finnair and others continued. The smaller foreign carriers are not being counted but they too are providing enough competition to Indian carriers.

As on April 1, 2010, in all 7,11,356 seats per week were available as capacity entitlements to Indian carriers on a reciprocal basis. In reality, Indian carriers and foreign carriers were utilising 1,70,914 and 3,26,705 seats per week, respectively. What this meant was that Indian carriers were utilising only 52 per cent of what the foreign carriers were using in terms of their seat entitlements under the relevant ASAs. Even if we were to look at the big traffic and revenue markets (after all, who will be interested in flying on an Indian carrier to Scandinavia, for instance, or whether at all an Indian carrier would fly to Scandinavia in the

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absence of loads), the Indian carriers are using much less and even lesser load factors compared to the biggies like BA and Lufthansa, which use Boeing 747s from their hubs in London and Frankfurt to Indian destinations. Sometimes, these carriers use B777s and sometimes even the A340s. As for the two US carriers, American and Continental, they use B777-200 ER on non-stop flights to New York and Chicago, respectively.

The Gulf-based carriers like Emirates, Qatar and Etihad largely use the B777s and also A330s.

In the case of South East Asia and Far East carriers, they largely use the B777 and to a lesser extent the A330s. Normally, in the morning flights where the airlines operate two frequencies out of Mumbai or Delhi, they use the A330s that reach their hubs back home in the latter part of the morning. However, for most night flights, they operate the bigger B777s because when it reaches their home hubs early in the morning, the same airlines or their code share partners offer quick connections to beyond say the West Coast of US, Japan, Australia, etc.

There are number of cases where Indians fly out of Delhi or Mumbai to Singapore and then take a SIA direct flight to European destinations on the A380. One of the problems of Indian carriers — be it Air India or Jet Airways — has been the wrong seat configuration. In the case of Jet, its emphasis has been on a great product and it uses up more space for first class, business class, storage, galleys, etc. while eating into the bread-winning Economy Class space impacted its yields. It is only now that the higher classes of Jet are attracting passengers. But during the recession, it lost out largely because it did not offer as many economy seats which could have earned it some money. It is not that people do not want to fly Jet Airways’ Business and First Class. They do not do so simply because there are no onward connections out of Europe and US they can take once they fly Jet or, for that matter, even Air India.

It is in this context that the importance of Star Alliance or similar groupings assumes importance.

After all, why would a passenger pay a huge fare and fly by Indian carriers First or Business Class when he cannot use his FFP (Frequent Flyer Programs) mileage in Europe or the US or even get decent onward connections to the city of his choice. It is only very recently that Jet signed a code-share agreement with United Airlines for onward connections to more than 38 destinations in the US. As for Air India, it is still hibernating before it will become part of Star Alliance both in letter and spirit. In contrast, even the Boeing 747s of Lufthansa or for that matter the B777s of SIA are full as their timings are fine and the connections they offer to Indian travellers so varied that these carriers never have the problem of filling up their seats.

One of our readers informed me that on his recent flight to Frankfurt from Delhi by Lufthansa he noticed that the Economy Class seats did not have TVs though on the onward flight to Vancouver from Frankfurt, each seat had personal TVs.

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DEVELOPMENT MOVE: Civil Aviation Minister Praful Patel and Trevor Mallard, Economic Development Minister, New Zealand, exchanging signed documents of Air Services Agreement between India and New Zealand.

What this means is that even if Lufthansa offers a bad product compared with either Jet or Air India, the Indian traveller will grudgingly accept it because of the excellent onward connections, thanks to the carrier’s vast network. So, in the absence of no network, no FFP and wrong seat configuration, Indian carriers flying to foreign destinations have been hurt.

Should we blame the Ministry of Civil Aviation for the bilaterals it granted or the Indian carriers that have failed to take advantage of the situation? In any case, let me recount what a little bird that often flies between Rajiv Gandhi Bhawan and the PMO (Prime Minister’s Office) told me.

Recently, Lufthansa met with officials of the Civil Aviation Ministry seeking permission to deploy the A380 on the Germany-India route. The request was rejected. In reality, the PMO — struggling very hard to rebuild the fortunes of Air India — rejected the request. It was also indication enough that, perhaps, the last word on bilaterals would no longer be from Rajiv Gandhi Bhawan but from South Block that houses the PMO. This is not surprising considering the fact that informal approaches made by Emirates to fly in its A380 were also not encouraged by the PMO though the Ministry of Civil Aviation and the airport operators in Delhi and Mumbai thought otherwise for their own reasons.

When our carriers are unable to use B777s with 300 seats, how will they compete with an aircraft that can dump and evacuate 555 passengers in a three-class configuration — and if it is only going to be all-economy, then 800 passengers at one time? The rejection of Emirates’ request was not surprising because even China refused permission to Singapore Airlines to fly in the A380 to China from Singapore. Perhaps, we will have to wait a little longer when nine per cent or even 10 per cent GDP growth becomes a habit in India and when the pinch for more capacity will begin to be felt. By that time, we could see much smaller aircraft that will fly much longer distances carrying 250 odd passengers in full comfort. When Indian carriers have dumped their own Jumbos (Boeing 747-400s), why allow foreign carriers to bring in

the Super Jumbo (Airbus A380)?

(Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.)

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Lufthansa’s request to deploy the A380 on the Germany-India route was rejected by the PMO, struggling very hard to rebuild the fortunes of Air India. It was indication that the last word on bilaterals would no longer be from Rajiv Gandhi Bhawan.

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TRAFFIC DATA PASSENGER GROWTH

CAPACITY VS DEMAND

Passengers carried by domestic airlines from January to May, 2010 have been 211.38 lakh as against 173.34 lakhs in the corresponding period of year 2009 thereby registering a growth of 21.95 per cent.

Analysis of Capacity (ASKM) and Demand (RPKM) data on year-to-year basis indicates that trend of increase in both the capacity and demand continued in the month of May 2010 also.

VARIOUS REASONS OF CANCELLATIONS ON-TIME PERFORMANCE (SCHEDULED DOMESTIC AIRLINES) The overall On-Time Performance (OTP) of scheduled domestic airlines for the month of May 2010 has been 81.4 per cent. The airline-wise details of OTP are as follows:

ON-TIME PERFORMANCE (FOREIGN AIRLINES) There are 70 foreign carriers operating to/from India. At the time of compilation of this report, OTP data of 47 carriers was received. Other carriers are being advised to furnish the OTP data every month latest by 7th of every month.

The overall On-Time Performance (OTP) of these 47 carriers for the month of May 2010 has been 75.6 per cent in departures and 74.1 per cent in arrivals.

MARKET SHARE Airline-wise details of market share of scheduled domestic airlines for the month of May 2010 is as follows:

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n analysis of capacity (ASKM) and demand (RPKM) data on year-to-year basis indicates that the trend of increase in both capacity and demand continued in the month of May 2010 as well. The total number of domestic passengers carried by the scheduled airlines of India in the month of May 2010 was 47.85 lakh, a definite increase from 41.88 lakh passengers carried in the month of April.

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Departure

Arrival

CAPACITY & DEMAND The break-up for the month of May 2010 is as follows: Air India (domestic) —8.47 lakh, Jet Airways — 8.69 lakh, JetLite — 3.84 lakh, Kingfisher — 10.00 lakh, SpiceJet — 6.32 lakh, Paramount — 0.19 lakh, GoAir — 2.81 lakh, IndiGo — 7.53 lakh.

The percentage share of the carriers in the month of May 2010 was: Air India CRUISING HEIGHTS July 2010

(domestic) — 17.7 per cent, Jet Airways — 18.2 per cent, JetLite — 8.0 per cent, Kingfisher —20.9 per cent, SpiceJet — 13.2 per cent, Paramount — 0.4 per cent, GoAir — 5.9 per cent and IndiGo — 15.7 per cent.

The seat factors of the domestic airlines in the month of May 2010 was: Air India (Domestic) — 77.8 per cent, Jet Airways —

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PASSENGER COMPLAINTS DURING THE MONTH

FIVE AIRLINES HAVING HIGHEST OTP (DEPARTURES)

During May 2010, a total of 1,549 passenger-related complaints were received by the scheduled domestic airlines. The number of complaints per 10,000 passengers carried for the month of May 2010 has been 3.3 per 10,000 passengers carried. The airline-wise details are as follows:

SEAT FACTOR

FIVE AIRLINES HAVING HIGHEST OTP (ARRIVALS)

The seat factors of various scheduled domestic airlines in May 2010 are as follows:

The month of May 2010 observed higher seat factor primarily due to the tourist season.

THREE AIRLINES HAVING LOWEST OTP (DEPARTURES)

CANCELLATIONS The overall cancellation rate of scheduled domestic airlines for the month of May 2010 has been 1.9 per cent. Airline-wise details of cancellations are as follows:

CONTINUES TO GROW 82.5 per cent, JetLite — 85.4 per cent, Kingfisher — 83.2 per cent, SpiceJet — 90.4 per cent, Paramount — 86.6 per cent, GoAir — 86.0 per cent and IndiGo — 92.3 per cent.

May 2010 observed higher seat factor primarily due to beginning of tourist season. The overall cancellation rate of

scheduled domestic airlines for May 2010 was 1.9 per cent. The number of passenger-related complaints of scheduled domestic airlines for May 2010 has been 3.3 per 10,000 passengers carried.

On-Time Performance The overall On-Time Performance (OTP) CRUISING HEIGHTS July 2010

of scheduled domestic airlines for May 2010 was 81.4 per cent. As for the OnTime Performance of foreign airlines, the figures are shown in the chart. There are 70 foreign carriers operating to/from India. At the time of compilation of this report, OTP data of 47 carriers was received.

The overall On-Time Performance (OTP) of these 47 carriers for May 2010 has been 75.6 per cent in departures and 74.1 per cent in arrivals.

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Sanjay Aggarwal CEO, SpiceJet

WARRING OVER

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THE TURNAROUND COMETH? Arvind Jadhav CMD, Air India

DASHED

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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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Rs 60

May 2010

Praful Patel Minister, Civil Aviation Wilbur Ross, Head, WL Ross & Co.

Sanjay Aggarwal CEO, SpiceJet

WARRING OVER

SPICEJET

AIR INDIA

THE TURNAROUND COMETH? Arvind Jadhav CMD, Air India

DASHED

TO THE GROUND RARELY HAS NATURE REACTED SO RUTHLESSLY AS EYJAFJALLAJOKULL DID BRINGING INTERNATIONAL AVIATION TO ITS KNEES. HAVE WE LEARNT ANYTHING FROM THE DISRUPTION?

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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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COVER STORY

ANIL DHAWAN ROY SEBASTIAN CHAI TECH PHUA

L RAVI

KOH MIAW LING

M P NAIDU SUJIT KUMAR NAG I PRABHAKARA RAO

CEO - Airport Development, DIAL

36

CRUISING HEIGHTS July 2010

P S NAIR

CEO - DIAL

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Page 37

THE VISION CREATORS

K KANNAN

T3 CERTAINLY DID NOT COME IN A DAY. IT TOOK 37 MONTHS OF CONCERTED EFFORT ON THE PART OF A DEDICATED FEW. AND WHAT THEY HAVE ACCOMPLISHED IS A FEAT THAT THE COUNTRY CAN BE JUSTIFIABLY PROUD OF AS K SRINIVASAN DISCOVERED FOR HIMSELF WHILE PIECING TOGETHER THE MAKING OF TERMINAL 3 AND ITS DRAMATIS PERSONAE.

I

t’s a brilliant view and Kiran Kumar Grandhi often gazes wistfully from his corner office on the third floor of New Udaan Bhawan at the magnificent T3, that’s just been completed, a few hundred metres across the road. Just as he is about to say something, he goes back to his characteristic, unstated low profile. But you can sense the excitement in his voice as he breaks into staccato Telegu on his Blackberry, English on the intercom and tells you that it’s been a long day. Actually, three long eventful years. He took over as Chairman of the gargantuan GMR Group’s Airport Business just around the time the construction of the T3 was beginning and since then it’s been like a yo yo-Hyderabad-Delhi-Hyderabad-Bangalore (where the group is headquartered)-Delhi. And, eventful in more ways than one. His second son was born during this time, Turkey’s Sabiha Gokcen Airport (that GMR runs in partnership with that country’s Limak group) was

CRUISING HEIGHTS July 2010

Photo: H.C. Tiwari

THOSE WHO MADE T3: I Prabhakara Rao (CEO- Airport Development, DIAL), P S Nair (CEO-DIAL), K Kannan (Deputy Project Director, L & T), Koh Miaw Ling (HeadFinishes & Interiors), L Ravi (Chief & VP - Project Engineering and Development), M P Naidu (Project Director-L & T), Sujit Kumar Nag (AVP-MEP, Maintenance and Engineering, Roy Sebastian (AVP-Airport Systems), Anil Dhawan (VP-Construction) and Chai Tech Phua (VP-Airport Planning).

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COVER STORY

commissioned in a record 18 months and now as T3 is dedicated to the nation comes the news that Male airport is in the bag.

Many believe they are rushing too soon and too fast. But insiders believe that patriarch 61-year-old Grandhi Mallikarjun Rao is making up for lost time. What began almost 30 years ago as a single jute mill in the village of Rajam is now an infrastructure giant with interests in power, roads highways and airports. Along the way, they dabbled in banks, insurance and breweries, but that’s all behind them with the brewery being the last to go to Vijay Mallya and UB, whose airline, Kingfisher, is one of the big birds in the Indian aviation sky. “Our journey to today’s GMR happened just accidentally. Whatever opportunity came up, we took it,” Rao does not tire of saying time and again, but he concedes that the Delhi airport project is in the make-or-break mould. It will catapult them into a different orbit and he is conscious of the weight of expectations.

“We have set high benchmarks and I know big things are expected of GMR-DIAL (Delhi International Airport Ltd — the consortium that will operate the Indira Gandhi International Airport).”

It’s a dream that the close lieutenant and CEO (Airport Development), DIAL, Indana Prabhakara Rao has diligently

WORLD CLASS: Views of the interiors and exteriors of DIAL’s Terminal 3.

There was plenty to learn from Incheon, Suvarnabhumi, Heathrow, Madrid, Frankfurt, Dubai and Hong Kong

THE TOP 10 >>

Dubai

Beijing

Hong Kong

International Airport

Capital International

International Airport

Terminal 3

Terminal 3

Terminal 3

1,500,000 m² 38

986,000 m²

570,000 m² CRUISING HEIGHTS July 2010

executed these past three-and-a-half years.

A GMR veteran who has spent a lifetime executing big ticket power projects, Rao, who was an Executive Assistant to the Chairman some ten years back, was second to the group’s biggest project because of his fearsome reputation for getting things done on time. No wonder the terminal has been completed in 37 months (Singapore’s Changi Airport’s T3 took 76 months and Heathrow’s new Terminal 5 took 60 months). He laughs when you ask him if his core team used to meet daily to map strategy: “We had daily sunrise meetings and sunset meetings of all key personnel to take stock of the progress. That was the only way forward.”

There is a childlike enthusiasm in the manner in which Rao outlines the project and how they went about executing it: “We had nearly 200 contractors and subcontractors to deal with. We had to teach them best practices and if they had a problem we intervened to help resolve it. With over 30,000 workers, it was like a mini Bharat and we had to look after them.”

There is a 12-bed hospital on the site and the group organised a weekly mela for the workers to get their shopping done. “The only thing we didn’t have was a school since there were no families on the site.”

It’s an enthusiasm that’s shared by M P Naidu, Larsen and Toubro (L&T)’s man on the spot. This is the single- biggest

Bangkok

Mexico

Suvarnabhumi Airport City International Airport Terminal 1

563,000 m²

548,000 m²

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contract in the L&T portfolio with a value of close to Rs 8,000 crore. They are the old GMR hands having also done the Greenfield Hyderabad project. That apart, they are involved with Mumbai airport’s renovation and own a piece of the action at Bengaluru. But Naidu believes, the Delhi project takes the cake for the ‘unique manner’ in which it has been structured.

“Both the design and the construction went on side-by-side. Usually it takes close to two years for the design to be frozen. But in this case once the basic concept was frozen, the construction and the design happened simultaneously.”

To help iron out issues, they had an executive committee meeting that included G M Rao, Kiran Grandhi, S M Naik as well as Naidu and Prabhakara Rao. “If there were differences in perception, this committee usually gave a direction one way or the other to proceed ahead. It helped smooth things greatly,” said Naidu who was categorical that the 37-month deadline could never have been met but for the almost complete sync between the two teams in their objective. L&T had over 250 design engineers on the site for most times of the project and over 30 expats were closely involved during the brick-and-mortar stage till the project was ready for the interiors.

While the expats arrived in droves to set up base at Udaan Bhawan, GMR and

Page 39

DIAL had their best and brightest travel the world and come back with a perspective and how it could be tweaked it to make it the best. So, there was plenty to learn from Incheon, Suvarnabhumi, Heathrow, Madrid, Frankfurt, Dubai and Hong Kong. They wanted the elegance of Changi, the smoothness of Incheon, the buzz of Hong Kong and the business like professionalism of Barcelona.

To achieve this incredible mix, DIAL hired global consultants across the board.

Designed by Mott MacDonald (their aviation division provided the masterplan, concept and preliminary designs as well as environmental impact management, traffic forecasting and tender assistance) and HOK architects and consultants (this terminal will more than double the airport’s passenger capacity. The team also designed 1.3 million square feet (120,000 square metres) of renovation projects to refurbish and extend existing terminals) and is being constructed by Larsen and Toubro (L&T), Meinhardt Engineering and Airbiz of Australia (an independent international specialist aviation consultancy) with project management by Parsons Brinckerhoff International Inc (which provides strategic consulting, planning, engineering, and programme and construction management services). DIAL has engaged Munich Airport International (MUC), the experts in Operational Readiness and

T3 has the elegance of Changi, the smoothness of Incheon, the buzz of Hong Kong and the business-like professionalism of Barcelona

Barcelona

Dubai

Delhi

Seoul

Madrid

Airport

International Airport

IGI Airport

Barajas Airport

Terminal 1

Terminal 1

Terminal 3

Incheon International Airport

Terminal 4 main building

544,066 m²

515,000 m²

502,000 m²

496,000 m²

470,000 m²

CRUISING HEIGHTS July 2010

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40

Suredj Autar, Chief of Commercial & Airport Strategic Development at DIAL, is a retail badshah in the travel business.

He was handpicked by Kiran Grandhi to head the commercial operations at T3.

Highly regarded in his previous job as Managing Director of HMSHost Asia, where he was responsible for the operations and business expansion in Asia and Pacific, Autar drove their business and entry into India at Bengaluru and Mumbai. Prior to that, he was Director of Consumer Products and Concessions at Amsterdam Airport Schiphol. Excerpts from an exclusive interview:

On the vision Our vision is to explore the future of retail excitement and retail development in travel retail. In T3, you have a very interesting combination. You have a completely different target audience, which you don’t see at other airports. If

you look at international, you have the business traveller and you have the international worker (blue collar). At the same time, you have the domestic traveller with the kind of spending power that is growing very fast—but with an Indian mentality where value for money is still the most important thing. This is a real different type of passenger because in travel retail, everything is about impulse and impulse is not always value for money. And in India you have to target an audience with impulse in combination with the value for money.

On the buzz The buzz is huge. In all categories, even today people are calling us, (but) everything is sold out and everything is closed.

So, global retailers who were sceptical to come in and have lost out are regretting it now. I was in Macau last September and gave the presentation there of the power

“EXPLORE

WILL BE AN

EXPERIENCE !”

Photos: H.C. Tiwari

Airport Transfer (ORAT). If anyone visits the T3 these days, one can see the ORAT in full swing: bags being dispatched, check is being effected, passengers being moved through security. A complete dry run, day in and day out for over three months!

Or, take Wipro, which is responsible for complete IT management in T3 and will deliver seamless and highly available airport IT operations. The scope includes airport-specific applications, data centre, networks, security and surveillance systems and end-user systems. Additionally, Wipro will be responsible for managing a host of intelligent systems, including building management systems, access control, public address and telephony. For passengers, this engagement will deliver superior customer experience; for airlines, it will deliver fast efficient systems which enable quicker turnaround times.

But it’s not been an easy haul. The original project cost was around Rs 8,975 crore. But estimates say that the project will now cost around Rs 12,700 crore (see Infrastructure News), up 41 per cent over the earlier estimated cost. DIAL expected that it would be able to raise over Rs 2,500 crore as refundable security deposits from real estate and hotel companies that bid for the project in the hospitality sector of the airport. But there was a huge controversy surrounding the effort to raise the deposits and by the time the issue was resolved, the red-hot sector had gone into a deep slump. Instead of Rs 2,500 crore, DIAL managed to raise Rs 900 crore. Add to that an overall nationwide fall of around five per cent in domestic traffic and DIAL’s revenues were affected. Projects like additional taxiways and so on had also escalated the project costs.

AAI projections had visualised a 20 million traffic flow by 2012, but who had reckoned with a 20 per cent year-onyear growth for a straight three years?

The estimate was later revised by Mott MacDonald to close to 38 million. What that meant was some more time at the drawing board and a terminal that would now be close to double the original planned 2, 50,000 sq metres.

At present, DIAL has a revenue break-up of roughly 60:40 from aeronautical and non-aeronautical sources. Globally, the non-aero revenue is generally 45-60 per cent of their revenue — this retail and commercial revenue is used to subsidise the airside operations that include landing and parking fees from airlines. Perhaps, DIAL’s greatest advantage is the huge land bank at Delhi airport. The general assessment

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SHOPPING, FOOD AND MORE

A

CTM, The Design Solution, THEY and Redesign Interior Architecture will be widely known in the retail space once they are through with T3. Innovative Singaporebased Consultancy Company ACTM (Airport Commerce & Talent Management Pte Ltd) has played a hugely influential role in shaping T3’s commercial offer. The Design Solution worked to recast T1D to create more retail and has been on board through the conception and design of T3 working to have the retail in the departure level with the mezzanine floor dedicated for lounges and F&B. The Dutch agency — THEY came up with the Explore concept while Redesign Interior Architecture, put together the F&B beverage offer at T3.

of India — a new India — and I explained to them that you as retailer of airport or manager or commercial manager should take the leadership especially in emerging countries. Only with leadership you can change it, but if you change it, it’s good.

People have started realising that now.

If they have made their mark, there is Technopak that has collaborated with DIAL on T1D and are closely associated with the Mumbai airport retail venture.

A major draw amongst Indian operators will be Travel Food Services (TFS).

The company was founded by entrepreneurs Sunil Kapur and Amit Thacker.

Kapur is the founder of Blue Foods and restaurant chain Copper Chimney.

Thacker has a huge presence in hospitality. The company will be running the F&B at Delhi airport and has already signed a master concession with Mumbai airport covering F&B space at its domestic terminals and some international outlets.

Aer Rianta will run the ambitious

On the difference It is different from a retail experience point of view, different from a retail operating model point of view and different from the concept’s point of view. We are going to create the retail experience that means a brand for our shopping that’s not like a normal downtown shopping centre and for an audience (for whom) value for money is very important. Impulse is actually difficult to create, (so) we created the brand ‘Explore’. So we start to build up the excitement level up to the moment that they enter the Explore area. And in our Explore concept, everything should be in explore (mode). That means the menus should change: 60 per cent of the menus are standard and 40 per cent should change. People will explore everything and come back. When people come back here, they will never see the same, especially for frequent fliers.

On uniformity Now, this brand should be maintained across the board so we have guidelines about what should be the ambience, about communication, about customer interaction. All staff members should interact in an ‘Explore’ way with the customer. We also have one more policy — the pricing

A total of 30,000-square-metres of commercial space includes 4,000-squaremetres of a walkthrough duty free area, 800-square-metres of luxury retail, 6,300-square-metres of speciality retail, 5,500-square-metres of mass and premium F&B, a games zone, a spa and a transit hotel.

A 600-square-metre ‘Dilli Bazaar’, retailing handicrafts and souvenirs that are quintessentially ‘Dilli’ at both the domestic and international departures.

All retailers and concessionaires will use the standard Explore carry bags with the names of all the concessionaires on the inside.

The retail space at T3 will stock some 20,000 kinds of products and nearly 1,000 brands. It will have stores by fashion and jewellery companies such as Versace Group, Marks and Spencer Group Plc, WH Smith Plc and Swarovski Group.

There are plans for an Explore India theme park on the lines of Butterflies Garden at Singapore’s Changi International Airport and Rijksmuseum at Amsterdam’s Schipol Airport.

The airport operator expects sales at T3 to be around Rs 1,000 crore in the first year of operations and to treble over the next three years.

A passenger currently spends less than $3 (Rs138) on an average while shopping at Indian airports, according to retail industry estimates. The global average is $15.

CRUISING HEIGHTS July 2010

duty-free offer being created together with local company IDFS (Indian Duty Free Services). The alliance will operate the duty-free in a joint venture with the airport. Working directly with Suredj Autar is Romy Juneja with separate heads for F&B/Retail/other commercial (like parking) and ecommerce reporting to them: “History too will be created when Terminal 3 is built — and we will all be part of that,” Juneja told a conference when Explore was launched. And the promise: Business Class passengers will have a queuing time of no more than five minutes; Economy Class travellers no more than 20 minutes. The aim of that is not just to clip waiting time and upgrade customer experience; the idea is for them to spend as much time as possible in the fantastic retail and F&B areas. part. As a shopping centre, we are guaranteeing a couple of things: I am not saying high or low, but it should be a brand that stands for values. It should stand for quality. If people come here they are coming to share and explore the shopping centre.

Making it work To get there, the operating model is different. That’s why we as an airport are more involved in the process. We have almost 6-7 ventures. We see the ventures not as a separate entity but as a business partner.

Here, we are in the same retail process. We are going to look for the topline and they are going to look for the operation model.

We are going to increase the overall topline of our brand and they are going to increase the margins.

On the communication We get a whole new way of communication with blogs, internet. We have just launched our new internet site. Retail offerings will be there. There will be blogs, Twitter, Facebook. We will work across the medium.

On the overall outlook I’m certainly happy because we have made the choice ourselves. Every airport changes after a while. I don’t know what we are going to change but change we will.

On training the staff A proper training they already have — of selling. The standard required for airport training we are doing will actually take 6-7 months to get everything done.

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COVER STORY

T3

FACTS

5.4

168

34

95

9

20

78

60

97

20,000

118

8

6,400

4,300

5

800

6.7

3,000

300

28

million sq ft area where the terminal is spread

million passengers per annum capacity

level terminal building and 2 piers 1.2km long each

passenger boarding bridges

automatic walkways alongwith 63 elevators and 34 escalators

metre longest walkway inside T3

metre of conveyor belt capacitated to handle 12,800 bags per hour

level In-line Baggage Handling System

million sq ft of apron area

metre-long “meet-and-greet” area at the entrance

42

check-in counters

immigration counters for international passengers

common use passenger processing system (CUPPS) counters

room transit hotel for passengers

sq m of retail area offering duty-free stores

lane approach road to terminal

cars can be parked at multi-level car parking

Flight Information Display Systems

security cameras monitoring every corner of the airport premises

screens to display information inputs through live camera feeds

CRUISING HEIGHTS July 2010

“

We are already at the number nine position globally.

Going by the current projections, India should break into the league of the top five global aviation countries in the next five-to-seven years. ” — PRAFUL PATEL Minister, Civil Aviation

is that this is the cash cow that will really steamroll the project in the years ahead with non-aeronautical turnover as high as 70 per cent of all revenue. Of this, 46 per cent (gross) has to go to AAI which is a stakeholder with a 26 per cent shareholding in DIAL. They have now applied for an extension of airport development fee (ADF) by 12 months. It was allowed to collect an estimated Rs 1,827 crore for around 36 months.

Observers have in the last three years viewed GMR’s ability to tweak the system to do its bidding as one of its greatest assets. But insiders say that is unfair and that they have literally worked their soles off in lobbying with the government and “convincing them about every issue that we have raised over the years”.

It was a chore that was handled by Subbah Rao in the early days (he has now moved to the power and urban infrastructure division headed by Srinivas Bomidilla) and it is now Narayan Rao who handles that job. As Director (External Relations), Rao is literally the group’s minister for external affairs in the capital!

On any afternoon, you can spot him in the corridors of the Ministry of Civil Aviation at Rajiv Gandhi Bhawan or at the AAI or at the Delhi State Secretariat or in the labyrinth corridors of North or South Block. “Perhaps, more secretaries know

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Photos: H.C. Tiwari

him than they know anyone else in the group,” said one insider. His crowning moment of glory came last month when over 40 secretaries visited the airport (see Off the Record) along with the Cabinet Secretary for a final meeting of the NFC (National Facilitation Committee) — and gave a thumbs-up to the airport.

But the setting-up of the NFC itself was reflective of the drive and zeal that Civil Aviation Minister Praful Patel exhibited in the first five years of his tenure. He literally talked the Prime Minister into creating this committee of super secretaries to streamline the con-

STRATEGIES: GMR Chief G M Rao (right, top)in conversation with Director (External Relations) Narayan Rao. In the foreground is M Madhavan Nambiar, Secretary, Civil Aviation.

The T3 project takes the cake for the ‘unique manner’ in which it has been structured: both the design and the construction went on side-by-side CRUISING HEIGHTS July 2010

struction of the airport at a fast clip and clear the bottlenecks along the way. One major achievement was to get the village of Nangal Dewat cleared. At another level, it took some persuasion to get several temples moved to one omnibus site that is visible as one moves on the Gurgaon highway with Runway 28 in the horizon.

Narayan Rao is sanguine: “We want to give a world-class product to Delhi. We had to do it in three years. Without the support of the government, this would have been impossible. If the system had not encouraged and responded, how could we have done it in 37 months?”

If Rao was sorting out the external atmospherics, the internal business was tended by AAI veteran, P S Nair. A member of the AAI Board before he left the public sector some years back to join GMR, initially, there was much rancour in AAI at his “hitching up with the enemy” so to speak. In fact, so angry was the then leadership at AAI that they moved heaven and earth to deny Nair permission to work in GMR. It was in a sense a silver lining. He moved to Hyderabad, kept a low profile and later took charge as CEO of the Greenfield Rajiv Gandhi International Airport. Close to a year back, he moved to Delhi to head all operations. “T3 is much, much bigger, but we are ready.

We have done it successfully at Hyderabad as well as T1D,” said Nair in a matter-of-fact tone. His own remarkable ascendancy is a reflection of the capacity of public sector managers caught in the crossfire of red tape, vigilance and CBI inquiries when they set about executing projects.

Believe it or not a Rs 12,000-plus crore project—6, 00,000 cubic m of concrete, 1, 00,000 tonnes of steel, 100,000 sq m of glass walls— has been done without it getting under the scanner.

That’s probably why it’s come up in 37 months. As G M Rao says: “We had a vision and everyone helped implement it.” Jai ho!

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AIR SHOW

T

he ILA 2010 (or the International Aerospace Exhibition as the Berlin Air Show is popularly known) will go down in the history of aviation for one simple reason. Despite the recession — the six-day trade fair was held at a time when some European countries like Greece were going through an acute financial crisis — Europe was audacious enough to hold an airshow, and to top it all, a successful one at that.

Organised by the German Aerospace Industries Association and Messe Berlin GmbH, the biennial event — incidentally the world’s oldest airshow, and held at Berlin-Schonefeld airport’s security zone, adjacent to the upcoming Berlin Brandenburg International Airport (BBI), with the expo and the static display area spread over 250,000 square metres — had many things going for it:

Flying high, and strong FIRST APPEARANCE: Airbus A400m aircraft (Airbus military) makes its debut at ILA 2010.

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CRUISING HEIGHTS July 2010

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The largest participation in the 100-year history of the ILA: 1,153 exhibitors from 47 countries (in 2008, there were 1,127 exhibitors from 37 nations) presented an impressive range of products and services from every area of the aerospace industry.

Approximately 235,000 visitors (2008: 241,000) attended the fair.

Compared to the previous ILA, the number of trade visitors increased to 125,000 (2008: 120.000).

Contracts and business agreements with a total value of at least $16.5 bn were signed during the show with the biggest single order coming from Emirates (see box).

For European plane manufacturer Airbus, the show turned out to be the best ever: 67 aircraft were ordered, according to Airbus CEO Dr Thomas Enders.

The German aviation industry echoed the success. Dietmar Schrick, President

During the fair, the industry presented many innovative new developments, especially in the field of “The Environment and Eco-Efficient Flight”

of the BDLI (the German Aerospace Industries Association or the Bundesverband der Deutschen Luft- und Raumfahrtindustrie e.V.) said that ILA was in a stronger position than ever in 2010. “On the basis of the business conducted during this year’s show, the ILA has again established itself as a top-ranking international aerospace event. In 2010, we have been able to record the singlebiggest order ever achieved at any aerospace anywhere in the world. The enormous growth in almost all sections of this event confirms the strength of the underlying concept, and the ILA 2010 has set new standards.”

Officially inaugurated by Dr Angela Merkel, Chancellor, Federal Republic of Germany, ILA 2010 saw a number of high-ranking guests among whom were the Swiss Federal President Doris Leuthard, Rainer Brüderle, Germany’s Federal Minister of Economics and Technology, Dr Peter Ramsauer, Federal

THE BIENNIAL BERLIN AIR SHOW TURNED OUT TO BE A SUCCESS, EVEN THOUGH IT WAS HELD AGAINST THE BACKDROP OF THE RECEDING RECESSION. THE GREAT SHOWING BY ALL STAKEHOLDERS PROVED THAT THE AVIATION INDUSTRY WORLDWIDE IS ON A COMEBACK — AND IN A BIG WAY! NEW KID ON THE BLOCK: Another newcomer at the ILA 2010 was Dornier 228 NG.

ON DISPLAY: Eurocopter being displayed its latestgeneration product range at the airshow.

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AIR SHOW

SIGNED AND SEALED: The Berlin Air Show saw the signing of the agreement for the order of 32 A380s by Sheikh Ahmed Bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airlines and Group, and Tom Enders, President and CEO, Airbus. Witnessing the ceremony were Angela Merkel, German Chancellor and other dignitaries.

EMIRATES SENDS AIRBUS’ A380 FLYING

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he 100th edition of the Berlin Air Show will be remembered for a long time. Not simply because it took place as news filtered in about the recovery of the aviation sector after the world recession, but more importantly because of the whopping order that Emirates Airlines placed for 32 Airbus A380s.

The order for the A380 took Emirates tally to 90 super-jumbos. “The latest order, adding to 58 A380s previously ordered, affirms Emirates’ strategy to become a world leading carrier and to further establish Dubai as a central gateway to worldwide air travel,” said Sheikh Ahmed Bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airlines and Group, adding, “Our latest commitment signals Emirates’ confidence in the growth to come in a thriving aviation sector as we build our fleet for tomorrow.”

For Airbus, the largest-ever order was a much-needed shot in the arm. It will not only ensure that Airbus’ production lines will be working till the end of 2017 but also pointed to the fact that all the technical kinks have been sorted out.

However, there are many who do not see much in the order from Emirates. That is simply because Emirates is, till today, the only major customer for the A380.

Airbus has orders for 234 planes and these are only from 17 customers with Emirates taking credit for 40 per cent of the orders. In fact, it is surprising that the aircraft has not found any supporters in the US. That has prompted many to raise a question: Can Airbus continue with just one major customer? Also, does the A380 have long-term prospects? The

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plane with only 230 on order has yet to recover the billions spent on the design.

Airline analysts believe that till Airbus gets 300-odd on its order books, the A380 project would turn out to be a big drag on the manufacturer’s finances.

The A380 is a popular plane with fliers. Among the other carriers that are using the A380 is Qantas. It has six in operation at the moment and will have another 10 by next March. Singapore Airlines was the first to fly the A380 on one of its two daily services from Singapore to Tokyo. The other airline that has found many of its passengers opting to fly in the A380 is Lufthansa, which has begun flying the plane from Frankfurt to Tokyo.

For the moment, Airbus is savouring the order. Tom Enders, President and CEO, Airbus, said, “Emirates supported the development of the A380 from the earliest days, a project employing tens of thousands of Europe’s best people and today’s increased order is the best endorsement I can imagine. On behalf of all of us at Airbus, we thank Emirates for their support.”

Emirates, the second largest airline in the world in available seat km, is on track to become one of the largest airlines in the world. In addition to the new orders, Emirates has 10 Airbus 380s, 29 Airbus 330s, 12 Boeing 777-300s and seven Boeing air freighters on order, totalling 140 wide-body aircraft, worth more than $48bn. In a year, in which the aviation industry was rocked by the economic downturn, Emirates Airline recently reported its 22nd year of profit, up 416 per cent to close at $964 mn over its 2008-09 profits of $187 mn.

CRUISING HEIGHTS July 2010

Minister of Transport, Construction and Urban Development, Klaus Wowereit, Governing Mayor of Berlin, Matthias Platzeck and many others. The presence of more than 130 high-ranking delegations from all over the world ensured that the show was an effective meeting place for business and science, politics and the military. They included 285 participants on Parliamentarians’ Day, who came from all over Europe, 65 representatives of embassies in Germany, and around 250 delegates on the ILA Space Day, which was also attended by leading representatives of space agencies from the USA, Russia, Ukraine and Kazakhstan.

Just under 300 aircraft, considerably more than at any other of the world’s airshows, were on display on the ground and in the air. Aircraft making their world, European or ILA debuts included the new A400M military transporter, the CH-53GA (German Advanced) transport helicopter, which is equipped with the latest avionics, and the DLR-H2 Antares, the world’s first manned aircraft that uses a fuel cell system to eliminate all CO2 emissions.

During the fair, the industry presented many innovative new developments, especially in the field of “The Environment and Eco-Efficient Flight”. For example, the “Path of Innovation” at ILA 2010 included aircraft from EADS that are powered by biofuels made from algae, the “Claire” (Clean air engine) concept from MTU, the Engine 3E high compressor from Rolls-Royce, which substantially reduces CO2 emissions and aircraft noise, and the satellite-based earth observation system from DLR, which is capable of producing rapid images of natural disasters.

As in most such air shows, ILA 2010 showcased breathtaking flying displays with veteran test and aerobatic pilots taking part. And on the ground, along with the A380, there were a host of the latest European military aircraft like the Eurofighter Typhoon of EADS (European Aeronautic Defence and Space Company N.V.) and Gripen of Saab, both are in the race for the 126 medium multirole combat aircraft order from the Indian Air Force (IAF). In addition, there was the US-based Lockheed Martin’s F-16 and Boeing’s F/A-18, French D’Assault’s Rafale and Russian MiG-35 — all of them keen to get the IAF order.

Boeing had been missed at previous ILAs but this time around, the US plane manufacturer was there along with other American aerospace majors like Lockheed Martin, Northrop Grumman

and Raytheon.

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MOVING TO BRIGHTER

SKIES CAUTIOUSLY

The recent IATA Annual General Meeting in Berlin — unlike the ones held over the last nine years — did not see Giovanni Bisignani the pugilist at his fighting best with his trademark “Basta” peppering his speech. Instead, the highlight of this year’s AGM was IATA chief’s Vision 2050, that sounded more like the legacy he would leave behind to the world of aviation as he prepares to step down next year.

Giovanni Bisignani, IATA’s Director General and CEO and Dr Assad Kotaite, Chairman of the Eagle Awards Panel, unveiling the Eagle Award trophy.

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he International Air Transport Association (IATA) expects airlines to post a global profit of $2.5 billion in 2010. This is a major improvement compared with IATA’s previous forecast released in March of a $2.8 billion loss.

Industry revenues are forecast to be $545 billion in 2010. This is up from $483 billion in 2009, but still below $564 billion achieved in 2008. “The global economy is recovering from the depths of the financial crisis much more quickly than could have been anticipated. Airlines are benefiting from a strong traffic rebound that is pushing the industry into the black. We thought that it would take at least three years to recover the $81 billion (14.3 per cent) drop in revenues in 2009. But the $62 billion topline improvement this year puts us about 75 per cent on the way to pre-crisis levels,” said Giovanni Bisignani, IATA’s Director General and CEO to a buoyant and excited gathering of world aviation CEOs at the 66th IATA Annual General Meeting and World Air Transport Summit in Berlin.

While passenger traffic is forecast to grow by 7.1 per cent in 2010, cargo traffic will expand by 18.5 per cent. This is significantly better than the previous forecast growth. Over the first quarter, the industry was growing at an annualised rate of nine per cent for passenger and 26 per cent for cargo. Yields are now forecast to grow by 4.5 per cent for both the cargo and passenger businesses.

READY FOR THE BIG SHOW MARCH FORECAST JUNE FORECAST

Revenues Passenger demand growth Cargo demand growth Passenger yields Cargo yields Oil Fuel cost Net profit Net percentage margin

$522 billion 5.6 per cent 12.0 per cent +2.0 per cent +3.1 per cent $79/barrel $132 billion -$2.8 billion -0.5 per cent

$545 billion 7.1 per cent 18.5 per cent +4.5 per cent +4.5 per cent $79/barrel $140 billion +$2.5 billion +0.5 per cent Source: IATA

At one point in his speech, the IATA chief mentioned that there would be only around a dozen global aviation brands supported by regional players (see box). Commenting on that Qatar Airways CEO Akbar Al Baker said weaker carriers in the region would “simply disappear”. He added in jest that there would be only two dominant carriers left and “you can guess which ones (they are)”. To that our Civil Aviation Minister Praful Patel, who was at the AGM with a large contingent of Indian aviation CEOs and others, responded: “And of (Bisignani’s vision of) a dozen airlines, three will be from India and three from

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IATA CEO Giovanni Bisignani presents the Baggage Improvement Program’s 2009 Best Airline and Best Airport Award to Lufthansa and Fraport at the Berlin AGM.

“I have been privileged to spend my career of investigating the problems and challenges of flight.

And I have enjoyed every moment ... I have had the opportunity to circle the globe many times — occasionally leisurely, sometime relatively quickly, and other times very rapidly” — NEIL ARMSTRONG Aerospace engineer, astronaut and aviation pioneer CRUISING HEIGHTS July 2010

China. And I leave my Gulf friends to fight it out to be some of the rest.”

The sharpest rebuke came to the announcement made by the German government of a EUR one billion annual burden on aviation with a new departure tax in Germany. The tax is branded as an environmental initiative. “This is the worst kind of short-sighted policy irresponsibility. It’s a cash-grab by a cash-strapped government. Painting it green adds insult to injury. There will be no environmental benefit from the economic damage caused,” said Giovanni Bisignani. His remarks were made in front of industry leaders gathered in Berlin.

IATA also announced that FedEx Express President and CEO David Bronczek started a one-year term as the Chairman of the IATA Board of Governors. Bronczek succeeds Tony Tyler, CEO of Cathay Pacific Airways, who served as Chairman from June 2009. A 34-year veteran of the cargo and air transport industry, Bronczek has been FedEx Express CEO since 2000. FedEx is the world’s largest express transportation company and Bronczek also serves on the strategic management committee for FedEx Corp. “I will also bring a cargo perspective to my duties as chairman. I will place a special emphasis on IATA’s two flagship cargo programmes of Cargo 2000 and Simplifying the Business. We must improve quality through the Cargo 2000 programme and focus our efforts on achieving the cost savings that IATA e-freight can deliver to the cargo value chain as part of Simplifying the Business,” said Bronczek. IATA also announced that the Board of Governors agreed to appoint Peter Hartman, CEO of KLM, to serve as Chairman following Bronczek’s term.

The times have indeed been tough for the airline sector. While a number of CEOs

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“My future vision places the customer in the centre of our thinking” IATA CHIEF GIOVANNI BISIGNANI’S VISION FOR AVIATION IN 2050

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he time has come to think big. My vision for aviation in 2050 begins with safety. We will be very near zero accidents. We will use technology to drive change in the air and on the ground. We will emit half the carbon flying very different aircraft and using biofuels. We will have eliminated queues with integrated systems ensuring security as we process passengers. We will operate with almost no delays in globally united skies. We will share costs and profits equitably across the value chain.

We will be a consolidated industry of a dozen global brands supported by regional and niche players. And we will deliver value to investors.

In just over a decade, I can see $100 billion in profits on revenues of $1 trillion.

My future vision places the customer in the centre of our thinking. By 2050, we will have 16 billion passengers and 400 million tonnes of cargo. In just a couple of decades, the demographics of our customer base will change dramatically. The middle class will nearly triple from 1.3 to 3.5 billion people. India and China will account for a quarter of these potential travellers.

billion in profit. North American carriers will move into the black at $1.9 billion.

Latin American airlines will return $900 million, the only region with two consecutive profitable years. Middle Eastern and African carriers will each deliver profits of $100 million. But not all regions are recovering equally. Europe with its weak economy will be the only region in the red, with a $2.8 billion loss.

THE FORECAST We are upgrading our global industry forecast to a full-year profit of $2.5 billion.

This is the first global profit since 2007. It is a reason to celebrate. But with a margin of 0.5 per cent it will be a modest party.

2.4 billion passengers 43 million tonnes of cargo 32 million jobs Just one accident for every 1.4 million flights 2 per cent of global carbon emissions $545 billion in revenue $54 billion in charges from monopoly providers. $217 billion in debt The worst economic recession in 80 years saw revenues drop by $81(9) billion and losses of almost $10 billion in 2009

THE RISKS

THE FUTURE Today, there is some cautious optimism.

Global traffic is back to pre-recession levels with load factors nearing 80 per cent and the bottom line is improving. AsiaPacific is powering the upturn with $2.2

Excess capacity is one. The upturn will bring temptation. 1,340 aircraft will be delivered this year and only 500 are for replacement. The discipline of chasing profits, not market share, is the only way to protect the bottom line.

Labour, out of touch with reality, is the next risk. We cannot pay salary increases with our $47 billion in losses. Pilots and crew must come down to earth and strikes at this time are shortsighted nonsense. Labour needs to stop picketing and cooperate. Labour is not the only one with hands in our empty pockets.

(There) are still happy monopolies. The $2.1 billion in cost savings that IATA achieved in 2009 disappeared with increases of $2.6 billion.

The fourth risk is taxation. Any tax increases should be directed at the banks starting with their billion-dollar bonus pots.

The last risk is oil price volatility. From $40 per barrel in 2009, crude almost hit $90 per barrel earlier this year. Hedg-

ing is critical for our business, but speculators are making huge profits.

Governments must protect the economy from irresponsible profiteering.

A STRUCTURE FOR THE FUTURE Today’s industry structure will not deliver the profits we need. In a decade when airlines lost $5 billion a year, 574 airlines started operations and less than 200 disappeared. Barriers to exit are too high and barriers to entry are low. With 1,061 airlines, we are the world’s most fragmented industry. Even with the recent round of mergers, the top 20 carriers only account for half the global industry. Efficiency gains never make it to the bottom line because we are deprived of the commercial freedom to operate like a normal business. And poor profitability makes every shock a fight for survival. The restrictions of the bilateral system are a dam that holds us back. It’s time for that dam to burst.

Excerpts from Giovanni Bisignani’s speech at the IATA Berlin AGM

is global air transport today. Our resilience “ This has been tested by disease, war, terrorism,

“

spiking oil prices and even a volcano.

— GIOVANNI BISIGNANI

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IATA CEO Giovanni Bisignani presents Bar Coded Boarding Pass (BCBP) Platinum certificates to CEOs and senior representatives of 10 member airlines, and Berlin Tegel Airport, at the 2010 AGM.

continue to pilot their respective carriers, there have been sizeable movements among executives tasked with steering airlines out of troubled waters.

Among the changes was that of former Jet Airways executive Wolfgang ProckSchauer who has taken over carrier bmi.

Other than that there is Antonio Vazquez who replaced Fernando Conte at Iberia; telecom executive Mika Vehvilainen took over from Jukka Heinonen at Finnair; former TUI airline head Christoph Mueller replaced Dermot Mannion at Aer Lingus; easyJet’s Andy Harrison stepped down for publishing executive Carolyn McCall and chief financial officer Azmil Zahruddin stepped up to replace Idris Jala as chief executive of Malaysia Airlines; former Thai energy minister Piyasvasti Amranand has started his turnaround plans for Thai Airways while Japan Airlines got veteran industrialist but aviation newcomer Kazuo Inamori as chairman to lead the troubled carrier out of the woods. In Africa, Siza Mzimela, former boss at SAA regional partner South African Express, took over as chief executive of SAA and in Australia former Qantas executive John Borghetti took over as chief executive and managing director of Virgin Blue from Brett Godfrey.

Gulf Air appointed a former IATA chairman, Samer Majali to head the carrier while Maher Salman Al Musallam, after a 35-year career in the Royal Bahrain Air Force, was appointed deputy chief executive. At EgyptAir, Hussein Massoud became Egyptair group chairman and president and in Brazil, Marco Antonio Bologna, who served as TAM chief executive between 2003 and 2007, will return to the

Eagle Awards, presented by Dr Assad Kotaite, honour air navigation service providers and airports for outstanding performance

Charlotte Douglas International Airport,Charlotte, North Carolina, USA was adjudged as best airport in the IATA’s Eagle Awards, 2010.

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CRUISING HEIGHTS July 2010

company to head a newly established holding company.

The annual GALA honoured aerospace engineer, astronaut and aviation pioneer Neil Armstrong. Armstrong received the award in recognition of the contributions of the space programme to making aviation safer and more efficient. The IATA GALA was established in 2002 to commemorate the 100th anniversary of the Wright Brothers’ first flight. It is given to outstanding individuals for exceptional contributions that have helped shape air transport. The award was presented at the 66th IATA Annual General Meeting and World Air Transport Summit in Berlin.

Meanwhile, the Eagle awards recognised the outstanding achievements of ISAVIA (Iceland), Air Traffic Control the Netherlands (LVNL), Nav Canada, Greater Toronto Airports Authority, and Charlotte Douglas International Airport (North Carolina, USA) with IATA’s prestigious Eagle Awards. Eagle Awards honour air navigation service providers (ANSPs) and airports for outstanding performance in customer satisfaction, cost efficiency, and continuous improvement. They are based on the recommendations of the independent Eagle Awards Panel. The awards were presented by Dr Assad Kotaite, Chairman of the Eagle Awards Panel.

IATA also decided to host next year’s AGM in Cairo. In 1949, Egypt hosted the fifth annual general meeting of the IATA, with the national carrier EgyptAir, the first Arab airline to join IATA and the seventh all over the world, hosting the event. “We are going to Egypt not only because it is such a unique and wonderful country. We consider the fact that EgyptAir has achieved a remarkable growth rate which encouraged our board to take the request seriously,” commented IATA’s

boss Giovanni Bisignani.

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AIR CARGO & LOGISTICS

Problems of

Plenty Freight rates are shooting to the sky leaving forwarders, exporters and others a worried lot.

To the top with cargo p54

Managing ULDs post-recession p56

The first phase of the world’s largest airport at Dubai opens.

A sneak peek.

A close look at how IT is helping to keep track of the 40-yearold essentials for the cargo industry.

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TRENDS

India in the cargo hotspot IATA RELEASED its cargo e-chartbook for Q2 2010. The financial situation for the air cargo business appears to be improving significantly with US cargo airline profitability back to prerecession levels in 2009 Q4. However, risks and geographical differences remain, but the overall situation for the air cargo business looks better than it has done for two years.

The ‘emerging’ economies of Asia, China and India in particular, continue to be the world’s growth hotspots in 2010. But other regions such as South America and the Middle East are expected to generate 4-5 per cent growth. Prospects for the US economy have been improving. Europe is forecast to be the weakest region in 2010.

The importance of cargo markets in Asia

meant strong economic growth in that region and helped generate rapid freight growth in Q1, interrupted by the ash plume. However, most regions are now showing fast growth.

All regions except Africa saw 20 per cent+ growth in freight volumes in the first quarter.

However, these average inbound/outbound figures disguise a lot of difference in directional markets.

Asia-Pacific remains the fastest growing region, driven by rapid regional economic growth. The 30 per cent+ growth of air freight in Europe contrasts with the 11.7 per cent growth in FTKs carried by European airlines suggesting most of the market growth is in the Asia to Europe direction, and carried by AsiaPacific airlines.

FTWZs to rule logistics sector THE WORLD’S focus on India’s manufacturing capabilities has raised the expectations of the logistics sector and the next few years will see a change in the logistics scenario of the country. Industry sources forecast that while India will witness an investment of $1 trillion in the development of the sector, there will also be a number of joint ventures, mergers and acquisitions.

A number of free trade warehousing zones (FTWZs) have not only been planned in the country but are being readied for commissioning.The first-of-its-kind in Mumbai, being put up by Arshiya International, will start operations from the end of July this year.The company, with its varied interests in strategic verticals — FTWZ, rail, 3PL, 4PL, distripark and IT — has plans to turn into a one-stop shop for integrated supply chain and logistics infrastructure solutions in India and the Middle East.

The company’s entrance into the logistics sector was prompted by the fact that most of the top manufacturing setups used Singapore and Dubai as FTWZ hubs for product movements in India.What these setups have been doing is assembling or packaging their products either at the Singapore or Dubai FTWZs and then sending them to India.

As soon as these assembled and packed products entered the country, duties had to be paid on the packed goods.

Arshiya is setting up its own FTWZs, which would lessen the time and costs.

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“The International Air Cargo Association is filled with energised, committed people that want to improve our industry… TIACA has clear missionstatements that involve our organisation with the most pressing issues confronting air cargo.”

Uli Ogiermann

President of TIACA and CEO, Cargolux, about the recent TIACA AGM at Leipzig

CRUISING HEIGHTS July 2010

UNISYS CORPORATION recently announced that its web-based airline cargo management solution celebrated its seventh year in a cloud computing environment.

Launched in 1996 and web-enabled in 2003, the Unisys hosted Logistics Management System is used by leading airlines worldwide to manage their air cargo business via a shared “software-as-a-service” model.

Airline clients, which include Delta Cargo,Air Canada Cargo, SAS Cargo, and GOLLOG, pay on a per-shipment basis, providing significant savings and increased flexibility over inhouse purchased systems.

The system is multi-tenant, which means that all clients always have the latest version.

As the solution is web-based, enhancements can be applied immediately for all clients using the system. According to Christopher Shawdon,Vice President, Logistics Solutions, Unisys, from the early days of the Internet, Unisys has been leveraging the power of the web to allow its clients to book, manage and control air cargo transactions securely and reliably in a cloud-based, software-as-a-service model.“In a very real sense, Unisys has been doing cloud computing before the cloud became ‘cool.’

Today, our LMS solution is an integral part of a broader cloud computing strategy at Unisys, and we will continue to make use of leading-edge cloud technologies to help our clients increase their cost competitiveness, responsiveness and flexibility.”

Over the past decade and a half, the flexibility and ease of use of the Unisys LMS solution has helped air cargo organisations deal with rapid change in the airline industry.

A recent example was when Unisys helped its first client, Delta Cargo, quickly integrate the cargo operations of Northwest Cargo onto the Unisys hosted LMS solution following the merger of the two airlines.

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Rates climb to the roof Freight forwarders, exporters and those involved in the air cargo business are a troubled lot. First there was the backlog due to volcanic ash and then came the high freight rates.

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he boom, followed by the bang. As exports rose to an astounding 36.2 per cent to $16.9 billion from $12.4 billion a year earlier (the April 2010 figure was the sixth straight month of growth in exports after 13 consecutive months of decline), freight forwarders have been having a hard time as cargo fares continue mounting skywards. Many exporters, who had resigned themselves to the rising rates, were floored in May this year when fares touched an alltime high.

President, ACAAI, echoed the same sentiments. Talking to CRUISING HEIGHTS, he pointed out that aircargo rates had been the highest in May. “What is more damaging is that many carriers had been levying express rates for ordinary cargo. We feel that this situation will continue for a month more — till the high demand peters off following the monsoon in the country.

In fact, the pressure still exists in Mumbai, Delhi and Chennai,” he added.

The highest freight rates, according to ACAAI, were those to Europe. The rates

Bharat Thakkar

J Krishnan

The chorus against airlines charging more has risen to a crescendo.

According to J Krishnan, President of the country's apex body of freight forwarders, Air Cargo Agents Association of India (ACAAI), and one of the top forwarders based in the south Indian city of Chennai, the rise has been continuous. “The aircargo rates started rising some months ago, and though everything else seems to have stabilised, the rates have not come down,” he said.

His colleague in Mumbai, Bharat Thakkar, Vice

from Chennai, for example, were around 30 per cent higher. While on one hand, airlines and forwarders were still trying to recover from the “ash” backlash, demand, on the other, was high. This had led most European carriers to fly with full loads. Many freight forwarders said that a number of shipments were being dispatched to southern Europe for onward movement to central and northern Europe by rail or road.

Perhaps, the worst hit has been the perishable exporters.

The country sends out around 300 tonnes of fruits and

CRUISING HEIGHTS July 2010

vegetables daily, of which, 150 tonnes are sent by air. Exports to Europe, for example, are worth around $10 billion a year. To add to their problems, most carriers look at perishable goods as low margin cargo and often do not even lift them. According to Ajai Sahai, Director General, Federation of Indian Export Organisations, the airlines should desist from exploiting the situation by increasing freight costs to recover the losses.

Airline operators, however, maintain that the rates are not high. When the recession had started, many carriers had lowered capacity.

Even so, there was excess space leading to low cargo rates. Now, even though the demand is high, rates have remained more or less at the same levels they were five years ago, according to Jay Shelat, Vice President, Cargo, Jet Airways. Shelat believes that if at all there has been a rise it is due to the fuel hike — $30 a barrel five years ago but it is now $85. He also pointed out that despite the rising demand, export shipments were 15 per cent lower than that in 2007-08.

The rates notwithstanding, the Civil Aviation Ministry has estimated the growth of the air cargo business in India during 2011-2012 to be at 11.8 per cent. In a recent statement issued by Praful Patel, Minister of Civil Aviation, in Parliament, the growth in air cargo was approximately five per cent in 2008-09. Barring any unfortunate incidents, the future promises to be good for air cargo from India.

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B-I-G...

BEYOND COMPARE rust Dubai to outdo everyone else. The global recession might have slowed down construction activity in the UAE — just a bit — but the sign that the situation is back to normal was evident on June 27, when the first phase of the mother of all airports — Dubai World Central-Al Maktoum International (DWC-AMI) — launched cargo operations.

Indeed, that’s a shot in the arm for cargo!

The DWC is a multiphase development of six clustered zones: Dubai Logistics City (DLC), Commercial City, Residential City, Aviation City and Golf City, with what will one day be the world’s largest airport — Dubai World Central-Al Maktoum International (DWC-AMI) — at its heart. The 140 sq km development will not only house the world’s largest airport but will also be home to the region’s first integrated, multi-modal transportation platform connecting air, sea, and land.

T

Hyped, speculated and talked much about over the years, the first phase of Dubai World Central - Al Maktoum International (DWCAMI) opened with the launch of cargo facilities last month.

Here’s a look at the facilities.

TOPPING IT UP: The DWC-AMI ATC tower has an imposing presence.

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Making the most of its unique geographical position — Dubai is located just four hours flying time from one-third of the world’s population and 12 hours from 80 per cent of rest of the population — the Dubai International airport was one of the fastest growing major airports for international passenger traffic in 2009 and is the fourth busiest airport worldwide for international freight traffic.

Freight volumes at Dubai are expected to balloon 48 per cent over the next five years, according to a forecast released a month ago for cargo traffic at Dubai International (DXB) and DWC. Cargo tonnage, which totalled 1.9 million in 2009, would exceed three million tonnes by the end of 2015.

In 2010 alone, freight volumes are expected to rise 12.2 per cent (today, Dubai International has a capacity for 2.5 million tonnes per annum) of freight per annum. Among the reasons for the increase are improving economic

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Photo courtesy: DWC-AMI

BOOST FOR CARGO: (Left) A view of the DWC cargo facility; and (right) heavy-duty trucks at work.

conditions, anticipated capacity increases by the locally-based Emirates Airline and other cargo airlines.

The first phase of Dubai World Central-Al Maktoum International, which opened recently for cargo airlines, features a single A380 compatible runway, 64 remote stands, a cargo terminal building capable of handling 250,000 tonnes per annum (expandable to 600,000 tonnes per annum) and a dedicated road link to the region’s largest port in Jebel Ali. Plans are in place to optimise DWC and DXB cargo capability to handle the anticipated traffic growth by 2015 and beyond.

Sheikh Ahmed Bin Saeed Al Maktoum, President, Dubai Civil Aviation Authority and Chairman, Dubai Airports, believes that while Dubai International will remain the main hub, the “forecast, combined with our projections for 98

Aviation accounts for about 25 per cent of Dubai’s GDP and the strategy is to have capacity lead demand BUILDING FOR THE FUTURE: (Right) Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai

million passengers by 2020, clearly shows the need for a new airport. Aviation accounts for about 25 per cent of Dubai’s GDP and our strategy is to have capacity lead demand so we never constrain growth. Aviation is too important to Dubai’s economy to fall prey to shortterm thinking that has led to costly capacity constraints and congestion at so many airports around the world.”

S P E E D FACT S

Cost of the DWC development (all clusters) has been estimated in excess of $32 bn Phase 1 of DWC-AMI includes a single A380 compatible runway; a cargo terminal building with a capacity of 250,000 tonnes per annum (expandable to 600,000); a passenger terminal with capacity of five million passengers per annum (expandable to 7 mppa); and a 92metre air traffic control tower Once completed, DWC-AMI will have up to four passenger terminals and will accommodate up to 160 mppa (compared to the world’s busiest passenger airport in 2008 Atlanta at 90 mppa, followed by Chicago O’Hare at 69 mppa and London Heathrow at 67 mppa) DWC-AMI will have a final cargo capacity of 12 mn tonnes per annum (compared to Dubai’s 2009 traffic figures of 1.9 mn tonnes per annum (2009), and world’s current largest cargo airport Memphis International at 3.7 mtpa) The airport will have a total of five parallel runways, 4.5km long, each separated by a minimum of 800m Located in the vicinity of the Jebel Ali Port and Free Zone, DWC-AMI will make air-sea connectivity achievable in less than four hours The 35,000 sq m Dubai Airports’ cargo facility was built at a cost of $75 mn in 1991 with a capacity of 150,000 tonnes. The opening of the Cargo Mega Terminal in 2008 increased the capacity to 2.5 million tonnes The facility enables a turnaround of 90 minutes and rapid transfer time of as little as six hours for full container load movement between the quayside at Port Rashid or Jebel Ali and the apron at the airport Dubai Airports is serviced by over 130 airlines flying to more than 220 destinations across six continents; More than 35 cargo airlines have offices at the Dubai Airports Cargo Dubai International currently serves 19 dedicated cargo airlines (June 2010)

Paul Griffiths, CEO, Dubai Airports, pointed out that the DWC was clearly a long-term project. “Phase 1 will provide much-needed freight capacity in the near to mid-term. The vision is to eventually develop Dubai

CRUISING HEIGHTS July 2010

World Central-Al Maktoum International into a multimodal logistics hub which capitalises on its ideal location next to Jebel Ali Port as well as its connectivity by air to major consumer markets worldwide.”

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Managing ULDs in t It is 40 years old and was launched around the same time as the first commercial flight of the 747. Yes, it is the humble ULD (unit load device), which despite its many years of existence is an important element of air transport. Tirthankar Ghosh reports on how airlines around the world are managing ULD assets. n all these years, the ULDs have become an inextricable part of commercial wide-body air transport. Often referred

I 56

to as ‘ship spares’, these sturdy units have progressed over the years to comprise a whole range of special purpose devices. And even

though they do look humble, they are subject to the same regulations that govern aircraft.

Not many of us have seen

CRUISING HEIGHTS July 2010

the new 4×4 inch handling label that has been developed for the transportation of temperature-controlled timesensitive goods. These would

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tough times be put by the shipper and are intended to signal to handlers the need to maintain such packages at between 15°C and 25°C ambient temperature (this applies to the packages and not the contents). Though the use of the label has not yet become mandatory, airlines and freight forwarders are becoming increasingly aware that transporting such goods is

treading a thin line and constitutes the whole gamut of risk management.

The global recession and consequently the low-cargo volumes prompted ULD owners/manufacturers — today there are only around a dozen-odd and not 60 as is believed — to cut down costs and one area that was looked into in detail was the judicious use of assets.

According to James

Fernandez, RVP Sales & Marketing, CHAMPS Cargosystems, the new generation ULD manager the company has put into operation provides effective control and improved utilisation of ULD equipment, reducing costs and the need for capital investment. “For CHAMPS, 2009 was a good year, in spite of the (gloomy) market (conditions),” said

CRUISING HEIGHTS July 2010

Fernandez. He pointed out that in the “good, strong year” CHAMPS got 17 new customers, the last of which was Finnair, the flag carrier of Finland. Widely recognised as an industry leader in the use of IT, Finnair had been a CHAMP customer for six years and migrated to the new generation cargospot portfolio to manage the transformation of its cargo business. With the new system in place, the carrier hopes to improve yields across the airline’s €200 million division.

Management of ULDs has been one of the top priorities of carriers. Way back in 2005, US Airways was the first US international carrier to outsource its ULD management to Jettainer for five years. At that time, the move was expected to save US Airways nearly $2 million on ULD-related costs of ownership over the duration of a five-year contract through focussed management services and dedicated technologies.

While airline cargo bosses remain divided on whether to outsource ULD management to professional outfits like CHAMPS, Unitpool or Jettainer, James Fernandez believes that the “choice to outsource should rest with the airline”. He said, “My view is to understand and measure the savings one would gain before going for outsourcing.” Indeed, outsourcing has now become an accepted fact. While the cargo market shrank on one hand, price of oil was galloping on the other. The twin enemies forced air carriers to develop strategies to keep their noses above water with the help of flexible outsourcers. Such moves, naturally gave rise to new opportunities in outsourced ULD management.

Take the case of

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iCargo boasts of a strong customer service and has the ability to help cargo carriers in significantly increasing operational and cost efficiency.

Unitpool. The company has around 22,000-odd ULDs on its roster and it not only manages but tracks and traces and even carries out repairs of the units used by its more than 20-odd customer airlines. Unitpool starts off by buying an airline’s inventory of ULDs. It then meshes the ULDs into the Unitpool fleet after which it allots the ULDs needed to the airline under a contract.

The system provides carriers to cut down sufficiently on the number of ULDs required for freight operations. Also it enables customers to get rid of the headaches of repairs of ULDs and their procurement.

On the other hand, there is Jettainer. It provides

IBS' iCargo

Airline Airline Cargo Sales & Operations

CTO Air Cargo Terminal Operations

ULD ULD Management

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airlines its own brand of ULDs, which once bought from the airlines becomes the property of Jettainer.

These are provided to carriers on a sale and leaseback approach. In addition, the carrier does not have to carry out any repairs or maintenance of ULDs, which is passed over by Jettainer to a ULD maintenance company.

Apparently, the method reduces an airline’s ULD costs by 20 per cent through the effective asset management techniques.

Other than Unitpool, Jettainer or CHAMPS, among the leading IT solutions providers are the India-based IBS Software.

The company’s cargo management solution, iCargo, was developed four years ago in collaboration with six leading international airlines. Since then, more than 20 global cargo carriers, from industry leaders to start-ups, have contracted for the solution. iCargo boasts of a strong customer service and has the ability to help cargo carriers in significantly increasing operational and cost efficiency. iCargo is the prime product in the IBS Cargo Management suite of products (the others being iCargoLite+, iCargoLite and iCargoNet — an ASP version of iCargo). An integrated system, which CRA Cargo Revenue Accounting

RM Cargo Revenue Management

Mail Air Mail Management

IATA’s guiding hand s the air cargo business picks up momentum, unit load devices (ULDs) will continue to be the focus of attention simply because these devices will be the key to faster and efficient movement of goods.

The IATA set up the ULD Control Centre in 1971 in Geneva. The centre, a self-supporting, not-for-profit basis facility for IATA members, maintains a central control over the interline movement of ULDs. The control ensures that a unit is not only returned to its owner but is also compensated for the use of the unit by “crediting him with a daily demurrage”.

The Control Centre with its accounting system keeps track of where a unit is. According to IATA, “Whenever a unit is interchanged, a control receipt is made out, and carriers report the transaction directly to the Control Centre, which then matches the transactions making debits and credits of demurrage charges to the carriers concerned. The information received is processed into a series of listings, which reflects details of each ULD handled, together with demurrage amounts, both payable and receivable.

These lists are mailed or available on the internet to 60 participants every week. If a unit is not returned within 180 days, a non-return penalty is assessed (approximately equal to the replacement value of the unit).”

IATA also has a special body — the ULD Panel — that has been entrusted with developing specifications, recommendations, and guidelines on the manufacture, registration, handling, maintenance and control of ULDs. These include specifications and other technical material related to the construction and maintenance of ULDs, guidelines and recommended practices of handling ULDs and associated equipment and specifications and other technical material relating to the fabrication, use and maintenance of cargo restraint equipment.

The panel has also drawn up parameters and interlining requirements for ULD operations in its ULD Technical Manual (ULDTM), the only comprehensive publication covering all important and relevant aspects of ULDs and ULD operations providing the industry with a single point of reference for all ULD matters. The guidelines form the industry reference for all ULD operations. Based on the experience of the IATA, member airlines, IATA's partners and other industry stakeholders, the manual covers ULD handling guidelines, ULD marking specifications, ULD loading guidelines, construction requirements for containers, pallets, nets and tie-down straps, etc.

A

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comprehensively addresses cargo reservations, capacity control, ULD management, load planning, cargo terminal operations, ground handling, revenue accounting and yield management requirements of cargo-carrying airlines, iCargo was developed after stakeholders gave in their inputs so “we could understand their true business requirements”.

Today, according to Akshay Shrivastava, Global Head of IBS Airline Cargo Business, iCargo is fast emerging as an industry leader in new generation solution. Preferred by the likes of Nippon Cargo Airlines (NCA), All Nippon Airlines (ANA), Qantas, Austrian, Air Astana and Aryan Cargo, “it is the only solution in the industry that addresses all automation needs of a cargo-carrying airline in one single homogeneous system, be it airport air cargo management, cargo and mail handling, cargo terminal operation, ULD management, cargo and mail, revenue accounting or cargo revenue management”.

The versatility of the iCargo solution has helped in the “transition from legacy systems to next generation systems,” said V K Mathews, Chairman and CEO, IBS Group. “Establishing a single robust cross-departmental IT solution across all cargo business functions can play a significant role in reducing the cost of operations,” he added.

Most carriers are coming around to the view that outsourced asset management not only saves costs but also ensures availability of capable ULDs at low costs. But, air freight industry experts predict that it will be quite a while before all airlines give up their ULD inventories and outsource the allotment to those who know the business.

If there is one cargo that

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is solely dependent on ULDs, it is the perishable — and obviously the fast-moving (read pharma) — variety. As an expert put it, the difference between a perishable-loaded ULD arriving on time or late could mean life or death and the potential for growth, immense. Ram Menen, Emirates’ Divisional Senior Vice President, Cargo, points out that perishables’ handling has grown “by leaps and bounds in the last five years”.

In short, perishables are important for the aircargo business. Forecasts by IMS Health Incorporated, a provider of market intelligence to the pharmaceutical and healthcare industries covering more than 100 countries, point out that the global market value of pharma products could exceed $975 billion by 2013.

The importance, therefore, of the ‘perishable’ goods industry to air cargo was more than evident at the recent 20th Annual IATA Cargo Network Services at Miami in the USA. A session entitled, “Time & Temperature Logistics for Healthcare Products” outlined how the products had grown and the kind of work that IATA’s Time & Temperature Task Force

(Top and bottom) ULDs of different varieties — while the one at the top is a simple one, the other one is the refrigerated kind for perishables.

Sullivan, the global pharmaceutical logistics market recorded revenues of about $90.3 bn in 2008.

That included services such as freight, warehousing, and express logistics. Freight forwarders estimate that

If there is one cargo that is solely dependent on ULDs, it is the perishable — and obviously the fast-moving (read pharma) — variety.

(TTTF), a body in its Live Animals and Perishables Board (LAPB), was doing.

The perishable industry has been growing steadily over the years. According to a study by Bibhuti Bhusan Kar, Program Manager, Pharmaceuticals and Biotechnology, South Asia & Middle East, Frost &

logistics comprises 45-55 per cent of the costs in the pharmaceutical value chain.

From the air cargo business point of view, a single perishable pharmaceutical unit could cost anywhere between $5,000 and $7,000 and a full ULD would contain more than $30 mn of goods. A

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close look at how critical the business is, according to LifeConEx — the only industry-specific Lead Logistics Provider (LLP) of end-to-end temperaturecontrolled transportation solutions for the life sciences industry worldwide — shows: 20 per cent of the world’s best selling pharmaceuticals are temperature sensitive. $130 bn of the total pharmaceutical market (about $650 bn) is represented by temperature-sensitive products.

Nearly 100 per cent of all vaccines and 68 per cent of all products sold by biotech companies have to be stored and transported between +2°C and +8°C. The transportation of healthcare and life-saving goods is governed by the IATA’s TTTF. Mandated to develop and maintain

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standards for the procedures, documentation, cargo handling, packaging and acceptance of goods from the healthcare sector in order to facilitate, improve or maintain the logistics, the TTTF acts as the liaison with all stakeholders from the healthcare industry or their intermediaries. TTTF members include pharmaceutical industry companies, forwarders, airlines and temperaturecontrolled container manufacturers.

On their part, air carriers, forwarders and container manufacturers are keen to develop a wide variety of new products and services that would facilitate transportation. Ram Menen, Emirates, said, “Our perishable business has been quite steady even during the recessionary period and postrecession is on the growth path. We carried good loads of fruits and vegetables and pharma throughout 2009.”

Emirates, for example, offers special cool chain solutions that are designed for the movement of temperaturesensitive goods. The airline also offers specially-designed temperature-controlled air cargo containers that maintain stable interior

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KEEPING THEM FRESH: A sequence of photos shows the kind of packing carried out for fruits and vegetables before putting them in ULDs.

temperatures throughout the journey. These feature active temperature control systems that range from -2°C to +2°C. In addition, Emirates SkyCargo joined hands with a US research institute to develop a low-cost, light weight, breathable and reusable protective ‘White Cover’ designed to shield temperature-sensitive shipments from heat during airport-to-airport transportation.

Similarly, American Airlines has teamed up with

Envirotainer to develop an active temperaturecontrolled air transportation solutions including the RKN e1 unit, which is the latest.

The RKN e1 has been designed in collaboration with ThermoKing for requirements of the life sciences industry capable of maintaining temperatures in the +2 to +8°C range as well as in room temperature.

FedEx Custom Critical also uses the Envirotainer technologies. Continental Airlines also has an

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agreement with CSafe, a maker of active cooling units that recently received the licenses from the FAA for its technology. CSafe’s compressor-based units have both cooling and heating capabilities and can sustain consistent interior temperatures in ambient extremes from -30 to +50 degree Celsius.

On the other side of the spectrum are other perishable items like flowers, fruits, fish and meat products and vegetables. All require the same “cool” treatment and are big businesses.

Carriers like Emirates go through an intricate process that boosts the life of perishable commodities by ‘preserving the cool chain’ throughout the journey. Even so, most carriers maintained that respective governments could help by facilitating the necessary infrastructure at airports in the form of temperature-controlled facilities required to clear and store such cargo. To top it all, custom authorities could also assist in facilitating the movement of such ULDs into and out of the bonded facility so that cool chain integrity could be maintained during the entire supply chain.

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CARGO JOTTINGS DHL invests to enhance Service Logistics market DHL is focused on growing its share of the €3 bn outsourced Service Logistics market in Asia Pacific. DHL’s Supply Chain division recently announced plans to invest €50 mn over the next five years to grow its technical services offering, part of its overall Service Logistics solution, and mapped out expansion plans for China, India, Japan and Singapore.

DHL has also appointed an IT industry veteran to head this sector and officiated its first technical services competency centre in Asia. Co-located at its 200,000 sq ft Penang Logistics Hub in Malaysia, DHL’s first technical services competency centre in Asia provides an advanced level of technical solutions for customers. According to Paul Graham, CEO, DHL Supply Chain, Asia Pacific, the market is growing at about 25 per cent per annum. Of that, Service Logistics services, especially technical services and repairs account for up to 60 per cent of the overall spend. “Our focus on this sector will be an industry game-changer. Harnessing the size and scale of our extensive footprint spanning 42 countries and territories in Asia Pacific, we have a unique opportunity to bridge the market gap between companies offering technical repairs and logistics providers,” said Graham.

For geographically expansive markets like China and India, the focus is on growing DHL’s Service Logistics footprint. “DHL operates from 400 sites in China and 470 locations in India. Of these, 15 per cent of our sites in China and 40 per cent of our facilities in India support Service Logistics. We expect to double the number and increase our Service Logistics footprint in China and India within the next

Round-the-world freighter flight by Cathay HAVING spent months developing the new route, Cathay Pacific, from July 9, this year, will be introducing its first round-the-world freighter service. Flying from Hong Kong to Chicago, the route will initially be serviced twice a week, i.e., every Friday and Sunday, using a Boeing 747-400 freighter. The flight will leave Hong Kong and fly via Anchorage to Chicago and from there it will fly onward to Amsterdam and Dubai before returning back to Hong Kong.

Sharing his views on the launch, Rupert Hogg, Director Cargo, Cathay

3-5 years. We are currently the market leader with the widest network in tier 1 and tier 2 markets, and we intend to further penetrate into tier 3 to tier 5 cities,” said Paul Graham.

Qantas goes for IBS’ iCargo AUSTRALIA’S national carrier Qantas has implemented IBS’ Cargo Management Solution in its international air freight division, Qantas Freight. Through this deployment, the airline has successfully migrated its global cargo sales, reservations and capacity management functions to IBS’ iCargo platform.

The migration to iCargo is a key milestone for Qantas in its multi-million dollar freight futures business transformation programme, aimed at differentiating itself from other cargo carriers by delivering improved services to its customers. iCargo will be completely integrated across the Qantas freight network when the terminal operation system is also cut over and will manage the entire freight movements of the carrier. iCargo is designed to meet the requirements of full freighter carriers, passenger and cargo combination carriers, ground handling agents and customs authorities. Since its launch four years ago, iCargo has signed up 21 customers.

According to V K Mathews, Chairman and CEO, IBS Group, Qantas’ choice of iCargo for Freight Futures was an endorsement of “the joint vision to create the most definitive cargo management system for the air transport industry. We expect to bring further business value to Qantas Freight through the implementation of the ground handling and terminal operations modules in the coming year.”

Pacific, said, “We are very excited about the launch of this new freighter service, which will further strengthen our cargo network and also help in the continued development of Hong Kong's airfreight hub role — something to which our airline is deeply committed.”

The round-the-world flight is an extension of Cathay Pacific's existing service to Chicago — the airline currently serves the city with eight flights per week. The flight from the United States to Amsterdam marks the first time for Cathay Pacific to ever operate a trans-Atlantic service. In total, the round-the-world flight will take 44.5 hours to operate, including ground time to uplift freight.

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CARGO JOTTINGS Lufthansa ties up with Austrian LUFTHANSA Cargo AG and Austrian Airlines have formed a joint company, Austrian Lufthansa Cargo GmbH, which will be headquartered in Vienna. As part of the close cooperation agreed between the two airlines, the new company will be responsible for marketing the entire freight capacity of aircraft operated by Austrian Airlines and Lufthansa Cargo in the Austrian market. All freight handling activities in Austria and expansion of the Vienna airport into a further hub for Lufthansa Cargo will be managed by Austrian Lufthansa Cargo GmbH. Lufthansa Cargo will hold a 74 per cent stake in the new company, while Austrian will have a share of 26 per cent.

Franz Zöchbauer and Hasso Schmidt will assume management of the company, which will have a staff of about 120.

Zöchbauer, who formerly headed the Austrian cargo division at Austrian Airlines, will be responsible, among other things, for expanding the Vienna hub.

Hasso Schmidt holds the post of Director, Austria, Eastern and South Eastern Europe, Turkey and Israel at Lufthansa Cargo, and is based in Vienna. He will also assume responsibility for sales for Austrian Lufthansa Cargo.

In February, Lufthansa Cargo and Austrian Cargo announced that they would begin cooperating closely from

Emirates flies on to the ramp DUBAI-based Emirates SkyCargo has started playing a key role by bringing cutting-edge designs to high streets and malls across the Middle East and Asia in time for every new season.

On August 1, Emirates will launch the only scheduled passenger service between Dubai and Spain with its inaugural

flight to Madrid, building on the successful freight service it has been operating since 2006. Every month, more than 600 tonnes arrive from Zaragoza on two weekly Boeing 747 freighter flights, meaning that Emirates SkyCargo has been delivering an average of 7,200 tonnes of garments to Dubai every year since launching flights into Spain.

According to Ram Menen, Divisional Senior Vice President, Emirates Cargo, “Dubai has built a strong reputation as the shopping capital of the region and we are delighted to have contributed to that success by ensuring the latest styles are always available. However, our role is not confined to just bringing all the top labels to the UAE. We also transport a similar volume of textiles from the Far East to the Spanish clothing

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July this year. Integrating Austrian Airlines’ capacities into Lufthansa Cargo’s product portfolio will give the two companies’ joint customers access to an even more extensive range of services. Processes will be standardised with the aim of achieving cost synergies.

Lufthansa Cargo leads the way in Europe, again LUFTHANSA’S cargo division was voted as the the top European cargo carrier in Asia by logistics magazine Cargonews Asia. The company accepted the “Best Air Cargo Carrier Europe” award at the Asian Freight & Supply Chain Awards (AFSCAs) in Shanghai recently.

Lufthansa Cargo outperformed its closest rivals Air France-KLM Cargo and Cargolux to secure the top ranking for the fourth year in succession. The honour came close on the heels of a similar honour that Lufthansa Cargo received a few weeks ago as the “Best European Cargo Airline” at the Cargo Airline of the Year Awards in London.

Helge Krüger-Lorenzen, Vice President, Asia-Pacific, Lufthansa Cargo, stressed that winning the latest accolade would also provide motivation for the future. “The award underscores the strong position that Lufthansa Cargo holds in Asia. Following the introduction of our new service to Tianjin in China, we can now provide an even denser freighter network to Europe,” he said.

manufacturers every week.”

Among the Spanish labels that SkyCargo services are Mango, Zara, Manolo Blahnik, Massimo Dutti, Pull & Bear, Pepe Jeans, Bershka, Stradivarius, Oysho, 13 Búho Street, Pablosky and Camper, Loewe, Carrera y Carrera, Cortefiel, Pedro del Hierro, Tuc Tuc, Women’s Secret. Together, these labels export to the UAE through Emirates, and in 2008 the goods had a combined value of $116 mn.

Meanwhile, Emirates and DHL have signed a Memorandum of Understanding (MoU) to establish a strategic security partnership to enhance air cargo security in the region. Through this partnership, Emirates Group Security and DHL Express will strengthen their collaboration in air cargo security, share best practices and information on security threats, and promote joint training and educational activities.

The alliance was acknowledged when the jointly signed MoU was presented to Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group.

The MoU will enable Emirates Group Security and DHL Express to work more closely together in areas of security training and education, threat mitigation and reduction of company risk, towards a more secure and stable environment for employees, customers and the logistics industry.

Jade Cargo goes for AHM JADE Cargo has signed an Airplane Health Management (AHM) deal with Boeing that will cover its fleet of six 747-400 freighters.

AHM is an information-driven system that helps airlines improve the management of unscheduled maintenance events. Jade Cargo will incorporate all three AHM modules into its operation: Real-Time Fault Management, Performance Monitoring and Custom Alerting and Analysis.

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Qatar’s B777 freighter starts operations QATAR Airways has begun using its brand new Boeing B777 freighter. The new cargo freighter was recently delivered to the airline’s hub at Doha International Airport from the Boeing Everett factory in Seattle, Washington.

The Real-Time Fault Management module communicates in-flight information to ground stations for diagnosis and real-time operational decisions to initiate any needed maintenance operations and deploy the necessary people, parts and equipment.

Performance Monitoring will allow Jade Cargo to analyze airplane performance data to improve airplane fuel efficiency and flight planning.

Custom Alerting and Analysis enables the airline to address developing airplane system issues by automatically monitoring, collecting, and transmitting service level information including tire pressure, oxygen pressure, hydraulic fluid, auxiliary power unit and engine oil levels. Consumption trends are then used to facilitate maintenance planning and optimise service intervals.

FedEx fast forwards CSR FEDEX has extended its commitment to social responsibility by releasing its 2009 Citizenship Report and unveiled the next evolution of FedEx sustainability: EarthSmart.

According to Mitch Jackson, Vice President, Environmental Affairs and Sustainability, EarthSmart is a natural progression of FedEx’s long-term, strategic approach to sustainability. “FedEx has long practised practical environmentalism, using innovation, collaboration and leadership to create environmental benefits that also have business benefits. EarthSmart will offer a more formal structure that will allow us to engage team members, customers, shareowners and community stakeholders to help us achieve our environmental goals,” he said.

The world is facing complex environmental challenges, but FedEx believes that collective, sustained efforts across regions can help drive the commercial development of new, clean technologies for industry. Through EarthSmart, FedEx seeks to extend the depth and breadth of how sustainability is woven throughout the company. EarthSmart covers three pillars — business solutions, workplace culture and community outreach.

The B777F is the latest addition to the Qatar Airways fleet, now numbering 83 aircraft, and adds significant capacity to the airline’s burgeoning freighter network. The new aircraft has a payload capacity of 102 metric tons, almost double the capability of the airline’s Airbus A300-600 freighters.

Over the coming weeks, the new freighter is set to operate to several of Qatar Airways Cargo’s dedicated freighter network points, including Amsterdam, Lahore, Dubai, Karachi, Chennai, Sialkot, Frankfurt, Amman and Hong Kong.

The new freighter will be used primarily on long haul routes connecting East and West transportation lanes, extending from Hong Kong in the Far East to the United States in the West.

Akbar Al Baker, Chief Executive Officer, Qatar Airways said that the delivery of the new freighter, signalled a dramatic shift in the airline’s cargo business.

“It’s an opportune time to be introducing more cargo capacity to our fleet as the State of Qatar is growing at a phenomenal pace, as are other parts of the Gulf region, and we are primed to take advantage of this growth. With a total of three new 777 freighters joining the fleet in a little over 12 months, the airline’s dedicated cargo capacity will effectively quadruple in size,” said Al Baker.

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Vertannes is IATA cargo chief DES Vertannes, former cargo chief at Etihad, has taken over as Global Head of Cargo at IATA. Vertannes will be the first in the post to bring along the experience and credentials of an airline head of cargo.

One of the issues the industry is struggling with and which Vertannes will have an opportunity to impact will be the agency concept.

IATA has been pushing CASS relentlessly, and more recently CASS-import, while gradually dismantling the traditional national airline/forwarder committees and replacing them with IATA personnel. IATA has been striving to command a broader supply chain industry role beyond its air transport mandate. The question is to what degree has this push been reflected in accommodating nonairline participants and giving them a voice and a vote.

FedEx’s new regional president FEDEX Express recently announced the appointment of Gerald P Leary as regional president, FedEx Express, Europe, Middle East, Indian Subcontinent and Africa (EMEA). Leary will be based at the company’s European headquarters in Brussels, Belgium, and will succeed Robert W Elliott, who is retiring.

A seasoned leader, Leary joined the Federal Express Corporation in 1974, and has served in a number of key management roles at both FedEx Express and FedEx Trade Networks. In his current position at FedEx Express, Leary serves as senior vice president, European operations. In his new role, Leary will be responsible for the leadership and strategic direction of FedEx Express EMEA.

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Electric man PAKISTANI OFFICERS have arrested a man at Karachi airport after an electrical circuit and some batteries were found in his shoes as he tried to board a plane for the Middle East.

The 30-year-old civil engineer allegedly told interrogators that he had come from Pakistan’s northwestern province and had been scheduled to travel to Muscat by Thai Airways.

Mohammad Munir, spokesman, Airport

Burqa affair Security Force, said the bearded man, whom he named as Faiz Mohammad, was arrested when a scanner sounded an alarm.

“He was on the way to board flight… After the machine gave the alarm, we checked him manually and we recovered four live batteries and a circuit, with a button to switch it on and off,” said the spokesman.

AN INDIAN plane made an emergency landing in Kolkata after two Russian passengers, including a woman in a burqa, behaved “suspiciously” on board.

The pilot was given a priority landing after passengers reported the couple to air crew and the woman refused to take off her burqa for identification, Kolkata airport director R Srinivasan said.

“The two Russian passengers, one wearing a burqa, had boarded the flight from New Delhi,” Srinivasan said. “Some

No, please!

AIR NEW Zealand's decision to sack a long-serving employee, who sent a company manager a nasty email by mistake, has been described as harsh by the Employment Relations Authority.

Flight attendant Grant Fife is fighting to get his job back and while a final decision hasn’t been made yet, his application for interim reinstatement has been turned down.

The case revolves around what is

An alien on plane

O

NLY SOME weeks ago renowned physicist Stephen Hawking warned about the existence of extra terrestrials, but it’s unlikely he had Matthew Kleindorfer in mind.

A SkyWest flight had to be diverted from its routine route after Kleindorfer allegedly began banging on the cockpit door, saying he was a space alien and that he wanted to fly the plane. A flight attendant along with passengers restrained Kleindorfer, 32, of Las Vegas until the plane landed.

Another passenger, Keith Millburn was on his way home to California after visiting his family in Helena (US). “I’ve never seen anything like it,” he said in a phone interview. Kleindorfer talked with the flight attendant about 20 minutes into the flight and then pushed him to the side, Millburn said.

“He was trying to force his way in,”

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he added.

The flight attendant then yelled at the passengers for help. Millburn said before he was able to undo his seatbelt, another man had controlled the situation.

“The big cowboy came up and grabbed him,” Millburn said. “That cowboy saved the day for sure.”

The cowboy, Clay Cooper, a seventime world champion in professional rodeo, said he grabbed Kleindorfer, put him in an empty seat and told him to stay put.

“I could tell something didn’t look quite right. I was getting a little bit concerned,” Cooper said.

“It was kind of a different flight,” added Cooper, who was flying to his home.

Kleindorfer, who was loud and disruptive as police took him into custody, kicked an officer twice, Grimes said. He faces a felony charge of battery on an officer in addition to misdemeanor counts of disturbing the peace and resisting arrest.

CRUISING HEIGHTS July 2010

described as a vitriolic, highly derogatory and offensive email about the manager, which Fife accidently sent to the man himself.

The attendant is arguing his 21 years of service and his apology, should have carried more weight when the decision was made to fire him.

A plane on streets CITY DRIVERS can now add airplanes to the other traffic hazards they face.

The pilot of a single-engine, kitbuilt airplane brought it down on a city street after an emergency in the air.

The plane, a 1990 kit model known as Cozy, ran over street signs and struck an automobile as it made an

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Was she mad?

A 51-YEAR-OLD woman, Laura Huser, was yanked off a Southwest Airlines flight at Indianapolis International Airport, United States and arrested for allegedly interrupting the pre-flight instructions.

Police said the lady Laura Huser, who was drunk, with blood-shot eyes and slurred speech, was forced to

return to the gate because of unwanted activities.

According to a police report, the attendant described Huser as “loud and disruptive”. Police said it took three officers to place Huser in handcuffs. The report said the officers were pulled from checkpoints at other concourses to assist with the arrest.

Illustrations by Rajeev Kumar

of the co-passengers found their movements suspicious and drew the attention of the crew members.”

The plane was taken to an isolation bay at the airport for a search and the two Russians were detained and questioned by police before being released without charge.

“The two Russians have now taken another flight to Dhaka,” said Srinivasan.

Yellow fellow

emergency landing on East Harding Avenue, London.

Lynn Lunsford, spokesman, Federal Aviation Administration, said the airplane was flying over the city, when its canopy opened and some debris flew back to strike the plane’s rear-mounted propeller. Lunsford said the airplane sustained substantial damage, but no one was injured.

Argumentative woman A DELHI-bound flight with Union Home Minister P Chidambaram on board was delayed by an hour after a woman, allegedly in an inebriated state, created a ruckus, airport officials said.

The woman did not board the flight despite the final call and was refused entry at the step ladder as she was found to be drunk, they said.

She entered into a heated argument with airport and airline officials, demanding that she be allowed to board the aircraft, they said.

However, the woman was not allowed to board the flight and due to the ruckus created by her, the Indian Airlines flight, which was scheduled for departure, left one hour later, the officials said.

A MAN will appear in the Bellville Magistrate’s Court, South Africa, for having caused chaos and delay en route to Cape Town on board a Kulula.com flight.

The man ended up being handcuffed to a seat after verbally abusing a crew member on a flight from Johannesburg to Cape Town.

Nadine Damen, Manager, Marketing, Kulula, said the man was sitting quietly until 50 minutes into the flight when he started swearing randomly at the crew members.

“On board, we have a yellow and red card system where if passengers get out of hand they get issued with one of these.

Once the passenger becomes uncontrollably abusive he is issued with a yellow card, which acts as a warning.”

Damen explained that he refused to take the card and when one of the crew members went to report him to the captain, he got out of his seat still swearing and charged to the cockpit saying he wanted to talk to the captain himself.

“One of the crew members stopped him and that was when he raised his fist, but the crew member managed to grab hold of him and pushed him away,” said Damen.

While on the floor passengers helped pick him up and he was handcuffed to a seat at the front of the aircraft where he could not bother anyone.

“The captain radioed quite a few times for the police but there was no response. They (police) only showed up 12 minutes after the plane had landed. Passengers had to be let out through the back to avoid the man, and other passengers had to wait before they could board,” said Damen.

National police spokesman Vish Naidoo said the man would appear on charges of violating Section 13 of the Aviation Act 2009 for alleged misbehaviour, drunkenness and assault on crew members.

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DOMESTIC AIRLINES of the Boeing 777 and 787 fleet by NACIL (National Aviation Company of India) as well as service third party operations.

The agreement was signed by Dr R C Sinha, Vice Chairman and Managing Director, MADC and K M Unni, SBU Head and Board Member, Air India, in the presence of Boeing’s Suvendoo Ray. “This project is an important move in realising the potential of MRO business in India and meeting the future requirements,” Unni said. Dr Sinha expressed his happiness in welcoming the Air India project to Nagpur and extended all the co-operation.

AI expands to Australia: Expanding its global network, Air India has signed a deal with the Australian government to launch daily flights on Delhi-Melbourne route from November 1, 2010.

GETTING GLOBAL: A landmark step of Kingfisher towards flying as part of global alliance.

Kingfisher joins a global alliance KINGFISHER Airlines has become a member-elect of oneworld after completing a formal membership agreement with the alliance. The airline received approval from the Ministry of Civil Aviation to become a part of the alliance, just weeks after it had filed its request with the authority to proceed with the alliance. Kingfisher’s addition to the alliance will link oneworld’s unrivalled alliance network with India’s most extensive domestic network. It will bring 56 Indian cities on the map of oneworld alliance.

The contract was signed between Vijay Mallya, Chairman and CEO, Kingfisher, and his counterparts from the alliance.

Meanwhile, oneworld members have started working on bilateral agreements with the airline.

“By becoming part of oneworld, we will be able to offer our guests travel to more than 800 destinations in 150 countries, on a network that offers the best coverage of the routes and places that really count, flying with the highest quality airline partners,” said Mallya.

With this alliance, Oneworld’s global coverage will cover 800 destinations in almost 150 countries, served by a combined fleet of 2,350 aircraft operating some 9,000 flights a day. The alliance will carry 340 million passengers a year.

AI signs lease agreement for Nagpur base AIR India and Maharashtra Airport Development Company Ltd. (MADC) have signed a Land Lease Agreement for 50 acres of land in the SEZ area near Nagpur airport. This is an important step in setting up an aircraft maintenance base at Nagpur in which investments to the tune of Rs 500 crore will be made in the next three years.

This new facility, the construction and equipping of the facility which will be facilitated by Boeing, would be used for maintenance

AGREEMENT: AI in pact with MADC for setting up an aircraft maintenance base at Nagpur airport.

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The agreement was signed between Arvind Jadhav, CMD, Air India; John Brumby, Premier of Victoria and Jacinta Allan, Minister for Industry and Trade.

Commenting on the agreement, John Brumby said Air India's decision to select Melbourne for its first direct international flight to Australia was a “recognition of Victoria being Australia’s premier destination for Indian tourists and businesses”.

Jet’s young members on an educative journey JET Airways, as part of its initiative, christened ‘JetSpark — Shine On’, conducted an educational excursion of its aircraft maintenance hangar, near the Chhatrapati Shivaji International Airport, Santa Cruz, for the airline’s young Jet Privilege members aged between 12 and 18 years.

At the hangar, the young travellers were explained, the many facets of airline maintenance and operations. Around 60 invited children spent more than three hours in awe of the Boeing 737-800, learning and understanding the working of the aircraft. The young guests were also shown the interior of

STAR ATTRACTION: Film personality Prachi Desai and choreographer Sandip Soparrkar presenting prizes to children who attended the educative journey organised by Jet.

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Observing that Indians and Australians shared common interest in cricket, education, film and trade, Brumby said, “With a growing Indian community living in Victoria, we are also seeing more relatives and friends visit Victoria which is great for local jobs and the economy as tourism grows.” While Jacinta Allan said, “Air India’s arrival in Victoria highlighted the competitive strengths of Melbourne airport compared to its inter-state equivalents like Sydney.”

In addition, Air India would be setting up its regional headquarters in Melbourne.

Bird Academy training volunteers for CWG AS India gears up for the Commonwealth Games (CWG), besides putting together the infrastructure involving stadiums and transportation, a critical element is the training of on-ground volunteers on diverse aspects of rich cultural heritage and tradition of hospitality.

Bird Academy, the educational arm of the Bird Group and member of CII National Committee on tourism, has been entrusted

by CII with the task of training volunteers under the scheme of Capacity Building for Service Providers on the topics related to CWG, soft skills, guest relations, effective communication and cross-cultural communication, first aid, situation handling, tourism concepts and life skills.

Thanking the Ministry of Tourism, Government of India and CII for choosing Bird Academy, Radha Bhatia, Chairperson, Bird Group, said, “We are honoured that they have selected us to assist them in training volunteers for a significant event like CWG. We will channelise every possible resource available with us to impart best of the training to the volunteers for the forthcoming CWG 2010. We are sure that our well-trained volunteers would create tremendous global goodwill, which in due course of time will promote travel and the aircraft, cockpit, the cargo hold and the landing gear operations.

Sudheer Raghavan, Chief Commercial Officer, Jet Airways, said, “At Jet Airways, we are continually focused on creating a strong bond with all our guests. The JetSpark initiative is an attempt to connect with the young flyers of the future by being an integral part of their formative years.”

Moreover, children also enjoyed the sights and sounds of aircraft taking off and landing and were presented with Jet Airways merchandise and mementos. Adding to the fanfare was the presence of film personality Prachi Desai and choreographer Sandip Soparrkar, who interacted with the children. A quiz competition was also organised and the winners were given prizes.

Benefit for Jet Privilege members: Jet Airways has introduced a travel benefit “Cash N Miles”, exclusively designed for its Jet Privilege members.

With the introduction of the offer, the Jet Privilege members will be able to use a part of their accumulated JPMiles to pay less for revenue tickets booked online.

They will also have an option to pay a part of the ticket in cash and a part with JPMiles accumulated in their JetPrivilege membership account.

Availing this offer, JetPrivilege members will get an opportunity to qualify for JP Miles earning, Tier

All-women crew onboard IndiGo TAKING a cue from Air India, IndiGo has too operated a flight on its Hyderabad-Chennai route with an all-women crew. The flight, comprising an all-women cockpit and cabin-crew, flew badminton champion Saina Nehwal amongst other tournament players, from Hyderabad to Chennai a day prior to the Yonex Sunrise India Open Grand Prix Gold 2010.

Air India, in March this year, had operated its MumbaiNew York flight with an all-women crew to celebrate International Women’s Day. Aditya Ghosh, President, Indigo Airline, said, “At IndiGo, we believe that women have the power to change any industry. It is our privilege to be part of this initiative.”

Ghosh said that women today comprise about 40 per cent of the total workforce in IndiGo. “We ensure that we are able to provide the best work environment to address their needs,” he added.

Points and Tier JP Miles as per the earning structure. And also 500 Bonus JP Miles for web bookings and 250 Bonus JP Miles for Web, SMS and IVR check-in.

“Cash N Miles” is valid on select domestic routes and is available on Jet Airways, Jet Airways Konnect and Jet Airways code share flights with JetLite and can be booked online at www.jetairways.com JetLite in affiliate programme with Shoogloo: JetLite, a wholly-owned subsidiary of Jet Airways, has introduced an affiliate marketing programme in collaboration with Shoogloo. Affiliate marketing is a pay for performance marketing practice in which a business rewards one or more website owners for the transactions that are carried out as a result of the websites’ effort.

Industry experts believe that JetLite Affiliate Programme is a significant step forward for e-commerce in the country.

The aviation industry has started showing definite signs of revival, domestic passenger traffic has increased when compared to last year and a significant portion of ticket sales has come from online transactions.

According to Belson Coutinho, General Manager, eCommerce & Innovations, Jet Airways, the success of Jet’s initial collaboration with Shoogloo made them replicate the model with JetLite.

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SNIPPETS OneStopShop’s preferred GDS partner is Galileo

CAPACITY BUILDING: Bird Academy imparting skills to the volunteers for the CWG 2010.

tourism to India. We wish good luck to all the participants.”

The Bird Academy has been designed on a pattern to help young entrants in not only specialising in chosen areas of the industry, but also acquiring comprehensive knowledge in all segments of civil aviation, hospitality, travel and tourism.

SITA unveils its India webpage

OneStopShop (www.onsestopshop.in) has selected Galileo — officially distributed by InterGlobe Technology Quotient (ITQ) in India and Sri Lanka — as its preferred GDS provider. The tie-up will provide onestopshop.in a large offering of travel products and back-office solutions to boost its growth in the B2C domain of segregated consumer services. OneStopShop has selected Galileo Web Services 2.0 solution, part of a suite of professional web development products that are easy to use and cost effective.

Marco Gorin, Chief Commercial Officer, ITQ, said, “OneStopShop has a business-friendly and value-added and truly innovative approach to consumer services, which is the need of the hour in Indian urban centres. We are confident that Galileo’s robust technology and unparalleled resource base will be the right platform for OneStopShop’s travel offerings.”

Galileo Web Services provides direct access to Galileo travel content and functionality. Its distribution solutions offer more than 429 airlines, of which some 75 are lowcost carriers (LCCs), 87,000 hotel properties and 25 car rental firm and integrate shopping, pricing, booking and ticketing used by online travel agents.

Travel schools initiative: Going forward to give its travel school programme 2004 an impetus, Galileo has founded a separate entity — ITQ Consultancy — to focus on travel training institutes across India. ITQ comprises 13 training centres across the country, which offers close to 30,000 man-hours of training each year to travel agencies and travel schools. To supplement its training efforts, ITQ provides the CRS training through a CD-ROM-based self-learning tool with a webbased evaluation service.

Furthermore, ITQ has tied up with over 100 travel schools across India. Some of the wellknown schools associated with ITQ are: Frankfinn, Trade Wings, Flying Cats, Kuoni Academy, Speedwings.

WE CARE: SITA’s new webpage has come up with innovative technologies to entice its customers.

SITA, world leader in managing business solutions for airline, airport, GDS, government and other customers, has unveiled its new webpage focusing on India for the first time. The new webpage aims to give a better insight about SITA’s customers, the kind of services and solutions that SITA has pioneered in, how SITA has been supporting the Indian aviation for the past 50+ years and much more. This webpage promises to provide you a clear idea on the role of IT in aviation industry and how SITA’s new and innovative technologies would enable its customers to provide valueadded services to their customers.

Meanwhile, in another initiative, SITA has pioneered airport IT system automation in India thereby introducing check-in systems for multi-airline use, a Baggage Reconciliation System at Bengaluru airport, Airport Management System at Mumbai airport and supporting the country’s border management by providing Advance Passenger Information System (APIS) services to more than 50 airlines.

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RIGHT SELECTION: Marco Gorin, Chief Commercial Officer, ITQ, believes that selection of web services of Galileo, will be the right platform for OneStopShop travel offerings

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INTERNATIONAL AIRLINES Austrian increases capacity to India

expanding the frequency of flights on its existing route from New Delhi to Vienna from five to six next winter. The Vienna arrivals will also be coordinated with connections to Austrian destinations throughout Western, Central and Eastern Europe.

Emirates names its first cricket stadium EMIRATES has stepped up to the crease to name its first cricket stadium — Durham County Cricket Club’s home in the UK has been named Emirates Durham International Cricket Ground. The renaming of the venue in Chester-le-Street — near Newcastle in the North East of England — followed a ground-breaking competition. Fans were invited to submit their suggestions based on the values of both the club and the airline.

AUSTRIAN Airlines is all set to expand its long haul capacity from India to 11 from the existing five, with two additional services, one from Mumbai and another from New Delhi, from October 31, 2010.

The airline will fly from Mumbai to Vienna, offering tailormade connections to Europe and beyond. Besides, it will also have an additional flight per week from New Delhi. The flight time from Mumbai to Vienna is eight hours and 40 minutes.

Austrian operates the largest European destination network. In Vienna, passengers have access to Austrian’s 104 destinations across Europe. In addition, the airline offers a long haul network with flights to the major markets in North America. Austrian’s network covered more than 130 destinations worldwide.

Now, Indian customers of Austrian in Mumbai have the choice of tailor-made services to the leading hubs in Europe, Vienna, Frankfurt, Munich and Zurich. Austrian Airlines is also

AirAsia CEO honoured TONY Fernandes, Group CEO, AirAsia has been awarded Nikkei Asia Prize in Tokyo for his contributions to the growth of Asia. The prize, given by a Japanese newspaper publisher Nikkei Inc., recognises Tony’s role in democratising travel in Asia. The awarding body also recognised Tony’s achievements in remaking the company into one of the most successful international airlines in Southeast Asia despite the recent economic slowdown of the airline industry.

“We look forward to providing more links between the

THE MAN OF HONOUR: Tony Fernandes, Group CEO, AirAsia receives Nikkei Asia Prize in Tokyo for his contribution to the growth of Asia.

FOURS AND SIXES AT THE SEVENS: Emirates' cabin crew with Maurice Flanagan, Executive Vice Chairman, Emirates Airline & Group, along with Clive Leach, Chairman, Durham County Cricket Club, at the unveiling of Emirates Durham International Cricket Ground.

ASEAN region and the rest of Asia, including Japan. Links between countries play an integral part in strengthening Asia economically, socially and politically, and we are committed to help achieve this,” said Tony.

Tony is the only airline executive to have received the award. He is also the first Malaysian individual to be given the award since the launch of the annual Nikkei Asia Prizes in 1996.

Prince Andrew flies AirAsia: Prince Andrew, the Duke of York, flew with AirAsia. The Duke took AirAsia flight from Kuala Lumpur to Singapore with Tony Fernandes. The Duke also visited the AirAsia Academy, the airline’s stateof-the-art training centre, and the AirAsia offices at the lowcost carrier terminal.

Recognised for excellence in technology: AirAsia has been honoured with the global award for its outstanding use of information and communication technology (ICT) to advance its business. The award was presented in the World Information Technology and Service Alliance’s 17th World Congress in Information Technology, in Amsterdam, which attracted some 2,000 delegates from 80 countries.

Of the seven winners, AirAsia is the only one from the ASEAN region.

On the occasion, Tony said, “AirAsia has always believed in the power of technology and communication to drive business. Our services are technology-backed — from booking and payment to check-in. This year, we’ll get even more aggressive in our use of technology to improve our guests’ experience with AirAsia.”

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‘INDIAN MARKET GETS BETTER, NOW THAT THE TIMES ARE GOOD’ Orhan Abbas Vice President, India & Nepal, Emirates, on the special summer packages for Indian travellers.

What is it that makes Emirates popular with fliers from India? Your carrier introduced a number of flights when others had shied away — especially during the recession...

We have a commercial business model that has been working for years. And we have been constantly updating our products, innovating, complying to market trends, looking at the future, having long-term plans. Of course, the product makes the big difference. You don’t want to spend money on something that you do not have value for. It should have value for money. In addition to that, the Indian market is so strong.

In fact, when the times were bad, it (the Indian market) was strong and when the times are good, it gets even better.

I would like to say that the Indian market has supported us in all our services. That is a very important factor. The force, diversity of the market, the economy that it has today have been helping everyone across all industries. I should say that the fantastic government policies — everything has been well received by all kinds of businesses around the world.

Emirates has worked out some packages to woo travellers from India during summer. What was the reason behind the move?

Indian travellers have evolved and we have witnessed this over a period of time. With the numerous world class attractions, Dubai is now a complete family destination and we are delighted to facilitate not only the travel but even the pre-travel procedures to make it even convenient for our Indian customers. Over the years, Emirates has enjoyed an overwhelming response to all our special offers and, continuing the tradition, we are happy to provide a range of summer specials for Indian families, irrespective of the class of travel.

The renaming of the ground was an integral part of a six-year sponsorship agreement with the club, which also includes branding on the team’s Twenty20 shirts. Winner of the competition — a 65-year-old farmer, Robin Harker, from North Yorkshire, won a trip-of-a-lifetime to Australia later this year to watch an Ashes Test. His return flights and match tickets are courtesy Emirates.

According to Maurice Flanagan, Executive Vice Chairman, Emirates Airline and Group, who attended the unveiling, the renaming of the ground will further cement their presence in the North-East where the airline already flies daily from Newcastle to Dubai and beyond.

Emirates Durham International Cricket Ground becomes the second sports stadium in the UK to be named by Emirates after Emirates Stadium, the home of Arsenal. The airline’s third stadium asset, 7he Sevens, is a multi-sports facility in Dubai.

Cathay Pacific honours agents from India THE 2009 All India Agents’ Award Function was hosted by Cathay Pacific and Dragonair, in Manila and Boracay (Philippines), where over 40 travel agents were honoured for their contribution to the success of the airlines for 2009. This rich and diverse group spent two nights in Manila where the award function was held and one night in the beach resort of Boracay.

The awards were presented by Tom Wright, GM — India, M.E, Africa and Pakistan, Cathay Pacific and Rakesh Raicar, Sales and Marketing Manager, India, Nepal, Bangladesh and Bhutan, Cathay Pacific, who along with the sales managers felicitated the top performing agents from India. It was a colourful evening with a variety of entertainment shows and foot-tapping numbers, which enthralled the audience.

Dragonair is ‘World’s Best Regional Airline’

What kind of profits does the Indian market give to Emirates?

I can comment on the West Asian and Indian Ocean region. It contributes 12.6 per cent of the airline’s revenue.

Photo: H C Tiwari

The new airport at Jebel Ali is going to start operations — though only for cargo — from the end of June. How is Emirates preparing itself for the new airport when it starts passenger operations?

Nothing has been decided yet. When the time comes, we will take a decision.

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GREAT HONOUR: Dragonair Chief Executive Officer James Tong receiving the ‘World’s Best Regional Airline’ award from Edward Plaisted, Chairman, Skytrax.

DRAGONAIR has been named the winner of the ‘World’s Best Regional Airline’ award at the 2010 World Airline Awards — the passengers’ choice awards. The Skytrax award winners are selected by the airline industry’s most important audience, its customers. More than 17.9 million air travellers from over 100 different nationalities took part in the 10-month survey, between July 2009 and April 2010.

James Tong, Chief Executive Officer, Dragonair, received the award on behalf of the carrier at the presentation ceremony held at Hamburg, Germany, on May 20, 2010.

On receiving the award, James Tong said, “It is a great honour for Dragonair to receive the World’s Best Regional Airline Award as it represents direct recognition from millions of customers and travellers from around the globe. This award reflects Dragonair’s

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continuous commitment to the pursuit of service excellence, by always putting our customers first.”

“This year, we celebrate the airline’s 25th anniversary and this recognition from Skytrax is the most special gift Dragonair could have received. I would like to thank Skytrax and all the travellers who voted for us and assure them that we will continue to provide the renowned service Dragonair is known for,” he further added.

Jordan to get its first low-cost carrier AIR Arabia, the leading LCC in the Middle East and North Africa, and Tantash Group, an Amman-based diversified investment company active in the travel sector, have announced the signing of a joint venture to launch a new low-cost carrier based in Amman, ‘Jordan’.

Air Arabia ‘Jordan,’ the first LCC based in the Hashemite Kingdom, will provide direct service to a range of destinations across the Europe, Middle East and North Africa region from Queen Alia International Airport.

This announcement follows the recent launch of operations of Air Arabia’s third hub in Alexandria. Following the launch of Air Arabia ‘Jordan,’ the carrier will provide service from four hubs spanning the Middle East and North Africa region, including its primary hub in Sharjah, UAE, and its Moroccan hub at Mohamed V Airport in Casablanca, which introduced service in April 2009.

“We thank the Jordanian Ministry of Transport for granting all the support to launch this new project. The signing of our joint venture agreement with Tantash Group, one of Jordan’s leading investment companies, represents yet another milestone in the ongoing evolution of Air Arabia,” said Adel Ali, Group Chief Executive Officer, Air Arabia, adding, “At a time when the global and regional economies continue to demonstrate strong signs of sustained recovery, we are confident of the long-term growth opportunities for the first low-cost carrier in the Kingdom, which will provide the high level of service, operational reliability and value-for-money fares that have become hallmarks of the Air Arabia brand.”

Qatar touches down in Barcelona QATAR Airways, one of world’s fastest-growing airlines, achieved yet another milestone recently as it launched daily flights between Doha and Barcelona — its 90th destination. With the touchdown of flight QR067 in Barcelona, where the aircraft was welcomed by a dramatic water salute and met by senior airport officials and local dignitaries, the airline reinforced its position as the only Gulf carrier flying to Spain.

Barcelona is Qatar Airways’ second city served in Spain, after Madrid, and is expected to receive great response from leisure and

APPOINTMENT S Anand gets new position in Cathay Pacific Anand Yedery, appointed as Cathay Pacific’s Area Sales Manager, Western India, will oversee passenger sales and revenue for the airline and will also be responsible for the development and execution of sales strategy for Western India. Born and educated in Mumbai, Anand Yedery has been working with Cathay Pacific since 2004. He joined the airline in the customer services department at Mumbai airport. Shortly after, he moved to Chennai to oversee sales for the airline in Southern India. However, he started his career with Jet Airways in the year 2000 at Mumbai airport.

Emirates bolsters senior management Emirates has strengthened its commitment to the development of its network with the appointment of Sheikh Majid Al Mulla as a new Senior Vice President in its commercial operations team. Sheikh Al Mualla, who started working with the airline in 1996, has been promoted to Senior Vice President, West Asia and Indian Ocean, after an impressive 12 months as Vice President.

Commenting on Sheikh Al Mualla’s promotion, Tim Clark, President, Emirates, said, “Majid is a tremendous asset to the company, showing great dedication and talent during a long and distinguished career at Emirates. Majid has already contributed greatly to the success of our West Asia and Indian Ocean operation and I am confident he will continue to help grow our business in what is a key market for Emirates.”

business travellers alike. The new route underscores a growing commitment by the airline to the Spanish market following earlier capacity increases to the country’s capital city of Madrid last year.

Akbar Al Baker, Chief Executive Officer, Qatar Airways, said that as a result of Spain’s escalating demand for air travel combined with the great popularity of the country among travellers from the Middle East and Asia, the Doha-based airline has steadily built up its presence in Spain.

Etihad among the top three global airlines

GRAND WELCOME: Qatar’s inaugural flight from Doha to Barcelona being welcomed by a dramatic water salute.

ETIHAD Airways has been ranked among the best three airlines in the world by leading Swiss business publication, BILANZ. The ranking comes following a survey of frequent flyers in Switzerland and after comparisons of different airlines undertaken by BILANZ journalists themselves.

Apart from being ranked the third best airline in the world, Etihad was also ranked number one in the ‘Onboard Service’ category and second in the ‘Business Class’ category.

Peter Baumgartner, Chief Commercial Officer, Etihad Airways, said, “I am very proud that in less than seven years, Etihad Airways has risen to be among the top three airlines operating to Switzerland. We are committed to providing the highest levels of service to our customers in Switzerland and we are thrilled to be recognised in this way.”

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Luf thansa, Shakira and Waka Waka!

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Photo courtesy: indianewz.com

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t was Waka Waka at the great hub of Europe, Frankfurt, when pop diva Shakira’s private jet arrived late from Amsterdam and the German team had to jive with enthusiastic fans — all waiting to board the brand new Airbus A380 on its way to Johannesburg for the FIFA World Cup Campaign.

Shakira was there to perform the official FIFA song and the Germans, who reached the semis last time, to begin their 2010 campaign.

Well, the on time was pushed back by a few minutes to accommodate the lady with the silken smooth voice who’s done it ‘this time for Africa’. And while they waited for her they signed autographs for fans — 150 of whom travelled on the same flight along with a huge contingent of German media.

The youngest German team in 70 years travelled on the upper deck in Business Class comfort and taught a few German words to the Columbian superstar who was in the First Class section of the aircraft. Presumably one of them was Waka Waka!

Even the crew was into the football fever and leading the charge was Captain Jürgen Raps, Member of the

STAR STUDDED: (Clockwise) German team with Shakira on its way to Johannesburg for the FIFA World Cup; Shakira in the first class section of Lufthansa A380; and, Lufthansa crew in full spirit with dual happiness of brand new A380 and FIFA. (Below) Pop diva performing Waka Waka at the opening ceremony of 2010 FIFA World Cup.

Lufthansa German Airlines Board and Chief Pilot, was pilot in command of the special flight. Supporting him on the flight deck were Captain Raimund Müller and Captain Werner Knorr. All three of them had a painted German flag on their faces, like all the real fans usually do.

All passengers on board received an exclusive Lufthansa World Cup fan kit full of items the supporters will need to cheer their team.

For the record, the aircraft arrived bang on time at Johannesburg’s Oliver Tambo International Airport at half past seven in the morning. It was an all-night flight that literally cut a swathe through the African continent to reach the southernmost tip of the country. This is the second A380 route that Lufthansa operates. The first one flies to Tokyo. And we hear that this is the time Shakira was on the big bird. Waka Waka indeed!

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