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September 2010
Rs 60
Ready for 100 %
safe cargo flight?
LIKE THE US, WE TOO HAVE 100 PER CENT CARGO SCREENING ON OUR PASSENGER FLIGHTS BUT ARE OUR SECURITY SYSTEMS READY TO TACKLE CARGO TERRORISM?
DO YOU HAVE BAGGAGE TO HANDLE? www.vanderlande.com
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EDITOR-IN-CHIEF’S NOTE
A very good thing indeed…!
I
n October last year, when the Directorate General of Civil Aviation (DGCA) first issued a circular to streamline flight departure, there were howls of protest and airlines said that the stringent order, instead of helping decongest, would only add to the woes of the airlines and the passengers — particularly in Delhi and Mumbai. This circular or the civil aviation requirement (CAR) of October 2009, caused over 91 flights to be delayed on the first day it was implemented in Mumbai in late July this year. It fell dramatically to half that number the next day. All other metros were far better off, thanks to the enlarged facilities that they have on the ground. But that isn’t the only change that the circular has achieved. It has helped regulate the literally ‘Wild West’ syndrome that was afflicting the non-scheduled operators (NSOPs) who believed that simply because they had a private jet to ferry the big fella they could take off at any time of their choice. Not so any more. They will have to specify the time when they will take off from Mumbai and Delhi. The number of NSOPs per hour are clearly laid out (it is four an hour in Mumbai and, perhaps, double that number in Delhi) and no slots at peak time (between 8-10am) at Mumbai. So, what has been the consequence of the strict enforcement of the DGCA’s circular: an astonishing and significant improvement in the On Time Performances (OTP) of airlines? In Delhi, the OTP has risen from 15-20 per cent to 50-60 per cent. In Mumbai it has gone up from 40-50 per cent to 70-75 per cent, and in other airports, the OTP these days is
CRUISING HEIGHTS September 2010
between 90 to 92 per cent, according to the Ministry of Civil Aviation. Now, the DGCA has revived its plan of asking airlines to compensate flyers for wrongly denying boarding in overbooked flights and sudden cancellations. The DGCA has proposed three slabs to those who have confirmed tickets and who report to the airport in time, and sudden cancellations without prior information: up to Rs 2,000 for flights with an hour’s duration; up to Rs 3,000 for one to two hour-long flights and up to Rs 4,000 for longer flights. What this will do is stop the practice of airlines combining flights, juggling several flights together and generally flexing every muscle to improve their loads. So, are there any lessons to learn from these decisions of the DGCA? Foremost, that regulatory action in India follows years after the chain of events have been unleashed. However, thanks to Dr Nasim Zaidi and his team, it is at least happening now. Most recently, IndiGo put out a delightful TV commercial on the virtues of flying on time. In fact, they outlined the goodness of a nation being on time! It’s something that Amitabh Bachchan outlined with startling simplicity many years back. Congratulated time and again for being so punctual, the superstar said, “I wonder what is so special about being on time. Isn’t it the right thing to do?” Interestingly, on a recent trip to Bengaluru, I travelled Air India. It was bang on time. But the load on the flight was just about 50 per cent. The flight back was on IndiGo, bang on time and packed. I asked a couple of regulars why they picked that airline and one of them laughed and said, “To be on time is a very good thing”! Indeed, it is a very good thing. And makes good business sense too, as Rahul Bhatia or Aditya Ghosh will tell you.
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Safe flight
Wear practical shoes and appropriate clothing before boarding a plane. Try flatsoles for easier escape and go for long-sleeve shirts and pants to protect your skin. Pay attention to where the exits are. You need to be aware of all of them in case the one closest to you does not open after a crash. Be sure to count the number of rows between your seat and each exit because you can’t afford to waste crucial time going the wrong way. Putting carry-on bags underneath the seat in front of you actually might help protect your legs from flinging forward during a crash. If you sit in the exit row, you should not drink too much or sleep during takeoff and landing. Lastly, when exiting the plane via slide, remember to keep your arms up, so they won’t burn on the slide and rescuers are able to pick you up easily.
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contents Courtesy: www.blogs.star-telegram.com/sky_talk/cargo/
Any news about plane crashes sends fliers into a tizzy. Photos of crashes, comments the Economist, are “a stark reminder of the immense forces at work in moving a metal tube through the air at hundreds of miles an hour”. The comment ends with a few reassuring words: “air travel is very safe and most airplane accidents are survivable”. The ABC News site, for example, provides some tips to survive plane crashes. It states that in the event of a crash, “passengers might have only a few seconds to save their lives and with proper knowhow, they can increase the chances of surviving and limiting their injuries”.
9/2/2010
CARGO SCREENING A MUST
p36
According to the new law in US, every piece of cargo carried on passenger aircraft will require screening, prior to being loaded on any passenger aircraft. We have been screening cargo for years but does that make our systems terror-proof?
NEWS DIGEST
p8
Despite the praises on the opening of Delhi airport's T3, the issue concerning the way airport charges could be levied continue even today. Plus: Boeing has revised upwards in its latest current market outlook, while GVK and GMR are on the expansion mode. CRUISING HEIGHTS September 2010
FOCUS
p28
Where other manufacturing giants are installing fuel-efficient engines on their planes, Boeing and Airbus have ageing engines. A sneak peek at what these two giants are planning to do.
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contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST
CRUISING HEIGHTS Volume V No 5
Editor-in-Chief K SRINIVASAN Managing Editor
TIRTHANKAR GHOSH Consulting Editor
INTERVEIW
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As Finnair's India sector has done remarkably well, Kari Stolbow, Director, Indian Subcontinent for Finnair talks to CRUISING HEIGHTS on the airline's future plans and why fliers from India should fly Finnair.
R KRISHNAN
SPECIAL REPORT p44 The recent announcement that Delhi’s T3 will be a hub for the country’s national carrier Air India will not solve the carrier’s problems. A detailed look at the myriad obstacles the airline faces.
Co-ordinating 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 Publishing Director
ROHIT GOEL Director (Admin & Corporate Affairs)
RAJIV SINGH Subscription
CARGO
p51
With the improvement in the world economy, cargo capacity has changed the outlook for production of larger freighters — this is what two plane manufacturers, Airbus and Boeing, feel. Plus: A glance at the perturbing situation of air cargo at Mumbai airport and lots more.
JAYA SINGH
SPOTLIGHT
p32
The air stewardess uniforms today are made with a aim to make the crew look chic, attractive and ready to sweep passengers, literally, off their feet! Here’s a look at IndiGo and JetLite’s new look.
(Mob. 9650433044)
Executive Director
RENU MITTAL For advertising and sales enquiries, please contact:
ROHIT GOEL (Mob. 9999919071)
RAVI SHARMA (Mob. 9650433900)
BABITA SHARMA (Mob. 9650433066) Editorial & Marketing office: Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 , Tel: +91-11-41033381-82
BACK PAGE SNIPPETS
p66
Kingfisher is commencing operations from Ludhiana, IndiGo and GoAir are expanding their wings, Qatar is tagged as eco-friendly airline, Katrina is the new face of Etihad and much more.
4
p72
Who could have thought that a house can be made with the parts of an aircraft? Well, it’s true. Francie Rehwald of California, who bought a retired 747, is trading in her plain home for a plane home.
CRUISING HEIGHTS September 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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Explore the Canada Specialist Program and explore Canada. You could be our next visitor, and for free! Visit www.canada.travel/csp and become a Canada Specialist. You’ll get the inside track on promotions, trade shows, fam trips and in-depth training. Matching your clients to their dream experiences will be easy as you keep exploring Canada with CSP. New Delhi 72, Todar Mal Road, New Delhi - 110001 Tel +011 41669477 Mumbai 504, Marine Chambers, 43 Marine Lines, Mumbai - 400020 Tel +022 22000261
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It's not enough
PERISCOPE
“
Ten destinations in India is not really enough for any airline. There are huge opportunities for all airlines to operate more points in India. MAJID AL MUALLA, Senior Vice-President, West Asia and Indian Ocean, Emirates Airline, on expanding Indian operations and considering India a major hub for the airline.
High talks!
LETTERS TO EDITOR
This is with reference to the article “Race for the Indian skies”, in the August 2010 issue of CRUISING HEIGHTS. The article is about low-cost carriers which feature LCCs like SpiceJet, AirAsia X, JetLite, etc. Unfortunately, Dragonair has also been mentioned in the article. Though the article does mention Dragonair as a “not a low-cost carrier”, it’s logo has been clubbed with those of Tiger Airways, Air Arabia, Fly Dubai to illustrate the article. The first impression that one gets is that Dragonair is a low-cost carrier along with the other carriers mentioned. Rashmi Nakaskar, Senior Consultant, Sampark Public Relations Pvt Ltd, Mumbai August 2010
Rs 60
In India, the potential for future growth of air travel, both domestically and internationally is among the highest in the world and Boeing will continue its efforts to be India's preferred partner and aerospace provider. DINESH KESKAR, President, Boeing India on raising its aircraft sales forecast for India by 15 per cent. India would buy 1,150 planes by 2030 for $130 billion.
I am the best Over the years, Deccan has made breakthrough innovations that have redefined the paradigms of the aviation industry in our country.
Deccan Charters Chairman CAPTAIN GOPINATH while deal with Tata Group for charter air service.
Detect the right nerve With the rise in threat perception in India, we expect that our business will increase from $20 million to $100 million in next three to four years.
Editor-in-Chief replies: Oops! Sorry for the oversight. Please look at ‘News Digest’ for an update.
Illustrations: Rajeev Kumar
The cover story titled (Asia, according to Tony, August 2010) was an interesting story to read. As a matter of fact, the AirAsia success story can largely be attributed to Tony Fernandes. His vision and foresight is aweinspiring. Tony Fernandes has redefined the low-cost flying and established AirAsia as Asia's biggest budget airline. Under his stewardship, the airline took a big leap forward in no time, which is truly remarkable in its own way. Other budget airlines should take a cue from the success story of AirAsia. Ram Malhotra, Jaipur
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(Jadhav: All izz well! Banks: Izz all well? August 2010) presented some very poignant facts about the Air India turnaround plan. R Krishnan rightly pointed the flaws of the turnaround plan and its practical feasibility in the future. Air India has just been made a sitting duck by socalled custodians of the erstwhile carrier. From Minister to CEO, all have presented lame excuses about the turnaround plans. It's a shame that even today Maharaja's pitiable condition still remains unresurrected. Gyan Sahay, Gaya
STEPHEN PHIPSON, President of Smiths Detection expecting five-fold jump in Indian business as with increase in India's investment on the procurement of safety and security systems.
In my opinion… Dreamliners are ideal to replace A310s since it is midsize in the category of wide-body planes. If Air India uses Boeing 777s instead of A310s, the performance will be suboptimal. V THULASIDAS, Former Chairman and Managing Director, Air India on state-run carrier's plan to hire 10 midsize A330s and to lease out six Boeing 777s.
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 September 2010
This is not fare We have given them a notice to compensate us for the delays. We are their customers. Air India CMD ARVIND JADHAV on seeking Boeing for enhancing the compensation for delaying the delivery of B787 Dreamliner.
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Twittering about airports
passengers and cargo services, has 3,880 followers. London City Airport has 3,145 followers on Twitter. Alternatively,
London Gatwick Airport has 2,893. Los Angeles International Airport, popularly known as LAX, is
among the busiest airports in the world and a major transfer point for Trans-Pacific services, 2,601 people access to Twitter for Los Angeles. Having 2,456 followers on Twitter, Orlando International Airport is the second busiest airport in Florida; while Phoenix Sky Harbor International Airport is with 2,454 followers. Akron-Canton Airport is a commercial class C airport located in southern Summit County, Ohio, roughly 10 miles southeast of Akron, Ohio. 2,416 people use Twitter for Akron-Canton.
COLD STATS
AirGate Solutions has come out with its latest survey on social media and the aviation industry. It has listed a number of airports — 115 of them, including the 30 top international ones, as listed by Airports Council International (ACI) — that use social media to keep passengers updated with information such as real-time flight information for arrivals and departures. The top ten are: London Heathrow Airport, one of the world’s biggest and busiest airports, Heathrow has 12,755 followers on Twitter. Manchester Airport — the main international gateway to northern England has around 8,862 people access to Twitter. Richmond International Airport has 5,884 followers on Twitter; while Boston Logan International Airport, hosting domestic and international
LOOKING GLASS “Ah... so, this is the airline that has been considering ways to get more passengers onto its planes, including offering the middle-seat in economy class at a discounted rate. Smart move, that!”
Jetnama! One way of improving our revenues is to add more capacity on routes where we have already established our presence as opposed to opening brand new routes. SUDHEER RAGHAVAN, Chief Commercial Officer, Jet Airways on planning a consistent growth strategy, instead expanding at the same rate as it did a couple of years ago.
We now are a wiser company. On expansion plans that instead of spiking expansion the airline will grow steadily.
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T
he GMR group-promoted Delhi International Airport Limited (DIAL) has been encountering one issue after another. Till the Airports Economic Regulatory Authority (AERA) was in place, there were differing views on why and how airport charges would be levied. Once AERA was in place, it floated its own consultation paper to which it got response from various stakeholders. By the end of the day, it was becoming clear that AERA would opt for Single Till revenue stream even though, DIAL preferred Dual Till or a Hybrid Dual Till. The Single Till model is premised on a
symbiotic relationship between aeronautical and non-aeronautical revenues. Under the Single Till model, earnings from commercial activities are deducted from the permissible aeronautical charges thus effectively subsidising them. It is but natural that airlines prefer this model as it keeps costs of providing airport services low. In the case of Double Till revenue streams from both aeronautical and nonaeronautical streams are tapped while there is also subsidisation of the former by the latter but not to the extent of the Single Till model.
At a recent meeting, AERA Chief Yashwant Bhave stated that the Authority had not taken a final call and was waiting for the Ministry of Civil Aviation to make its views known. Meanwhile, DIAL buffeted by various forces managed to get the Prime Minister to inaugurate its T3 terminal at Delhi airport. It was believed that after the formal opening of the T3 to international flights, it would be opened to the domestic full service carriers to ensure seamless transfer of passengers from domestic to international flights and vice versa. But this did not happen as the Ministry review of T3 showed that it was
A ‘HYBRID’ QUESTION
THAT IS VEXING!
PROBLEMS ARE MANY: Despite the positive remarks on the opening of T3 at Delhi airport, the issue concerning the way airport charges could be levied continue even today.
Photo : H.C.Tiwari
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HIGH TALKS: Sidharath Kapur, CFO, DIAL and AERA Chief Yashwant Bhave at the Indo-American Chambers of Commerce meeting to discuss why and how airport charges would be levied.
NEWS
INFRASTRUCTURE
still not ready for the transfer of domestic operations and accordingly decided to wait till the Commonwealth Games are over in mid-October 2010. This was notwithstanding the remarks made by the Prime Minister from the ramparts of the Red Fort while delivering his Independence Day address on August 15, 2010. Prime Minister Dr Manmohan Singh said, “I dedicate a new terminal of the Delhi airport to the nation and this is an excellent terminal which has been completed in record time.” Despite such compliments, the issue concerning the way airport charges could be levied continue to haunt GMR, the promoter. Recently, in a presentation to the
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Ministry of Civil Aviation, DIAL management said the airport lost nearly Rs 500 crore in fiscal 2009-10 and should AERA continue and insist with the Single Till model, DIAL would sustain serious financial losses. Ministry officials indicate that the government was strongly in favour of a Hybrid Dual Till if not a complete Dual Till. The CFO of DIAL Sidharath Kapur had stated in a presentation at the IndoAmerican Chambers of Commerce meeting with AERA that GMR sought a flexible and positive attitude from the authorities to encourage private investment. To achieve various objectives, it was necessary to maximise non-
AAI TO BUILD AIRPORTS OVERSEAS
Spurred by the success of private infrastructure companies and also by the need to expand its footprint, the AAI is looking to build airports overseas. State-owned AAI is the largest owner and operator of airports within India but now, it has expressed interest in modernising a V P Agrawal small airport at Palali in Sri Lanka and plans to identify other similar projects in neighbouring countries. Though AAI’s member (finance), Satish C Chhatwal, said about 30 years back, AAI had executed airport projects as far away as Libya and Yemen, the airport body has not ventured outside India in all these years. He said the Palali airport project would be a contract worth Rs 400-500 crore but bidding has not begun as yet. AAI chairman V P Agrawal said that the Authority has already completed feasibility study of an airport in Sri Lanka and is aggressively looking to bid for other countries for opportunities to build airports.
aeronautical revenues, ensure regulatory certainty mixed with pragmatism, which meant a Hybrid Dual Till, which at the end of the day ensured a reasonable rate of return. All this also had to be encouraged by development of hubs and real estate. Kapur said globally, in 2008-09, there was a 56-44 ratio with aero revenues accounting for $52 billion and non-aero $44 billion. The aero revenues accounted for only four per cent of airline costs. In India, however, the ratio of aero to nonaero revenue stream of airports was 70:30, thus enabling a huge scope for increasing revenues from nonaeronautical or commercial sources. DIAL stated that there was an urgent need to diversify revenue sources in order to de-risk the business. Hence, the regulatory approach will have to play a key role in ensuring viability and result in attracting largescale lending and investment to the airport sector. DIAL’s CFO said a Dual Till approach, therefore, would increase the incentive to invest in the airport sector. Moreover, a Single Till distorted the market and incentives for investment in new facilities since the cost of such facilities is not adequately built in aeronautical charges. DIAL said Single Till dis-incentivised development of non-aero revenues. Arranging funding from financial institutions and other investors became difficult under a Single Till, which ultimately also made it difficult to privatise airports and attract private capital. Globally, there has not been any
AI’S CONSUMER ADVISORY FORUM
Air India has announced that it has formed a three-level Consumer Advisory Forum to provide a platform for structured interaction with its prime customers. The forum, which will be an upgrade of the existing feedback mechanism, will pro-actively seek customer involvement and also act as a think tank for generating ideas to improve the airline’s products and services as well as the volume of business, an Air India press release said. According to it, the Forum will operate at three levels: An apex-level forum to be headed by Arvind Jadhav, Chairman and Managing Director, will cover entire Air India. A regional-level forum — to cover all regions and a station/country-level forum to cover all domestic and international stations. The release said the forum would commission customer satisfaction surveys and undertake analysis of complaints to generate ideas for improvement and identify projects for implementation. The apex-level will submit a periodic report to the strategic committee of the Air India board. The secretary to the apex forum will be a retired Air India official. The
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airport privatisation under Single Till barring UK airports, mainly BAA in Heathrow. In the long run, Single Till does not invariably give lower prices than Dual Till. It was pointed out that the most expensive airport in the world is Toronto, which operated under Single Till. On the other hand, Mexico and Cancun are the lowest-priced Dual Till regulated airports. Paris airport currently under Single Till is more expensive than Amsterdam, which is under Dual Till. Sidharath Kapur noted that prices of airports were determined more by their characteristics, ownership structure and the way they are managed than by charging methodology. He said, “The cost of equity for Indian airport operators as on March 31, 2010, is estimated to be in the region of 20 per cent and 28 per cent.” Four years after taking over Delhi airport, the CFO and representative of GMR said that the Concession Agreement was based on revenue share and in the case of Delhi and Mumbai, the revenue share percentages were 46 per cent and 37 per cent, respectively, which were so high that the airport operator had to recover the cost from the balance 50 to 60 per cent income. Now, the most important question to be asked of GMR is why it promised such a high revenue share when it had no clue of what it meant to run an airport. There is a parallel in telecom where the new entrants promised thousands of crores of rupees to the Government of India in licence fees. As a result they began to charge the early mobile phone subscribers
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Rs 16 per minute for both making and receiving calls. This led most of us to think that mobile phones were meant only for the very rich. When the telecom companies flopped and begged the government for a revenue share, the call tariffs began to fall and there was a massive increase in new subscribers. Nearly 15 years after the first mobile telephone bell rang in India, the country has got 500 million mobile connections. This is because the revenue share is between five and six per cent depending on the city or town where mobile services are provided. This cannot happen in the
airport business, as it is by its very nature a monopoly unlike mobile telephony. Now, should the slowly but surely upwardly mobile Indian want to fly, can the airport operator be seen to ground them? This is precisely here that the great promise of 46 per cent revenue share to corner the business assumes importance. If we contrast the revenue share in the Greenfield airports of Hyderabad and Bengaluru, it is interesting to find that it is just four per cent notwithstanding the state governments of Andhra Pradesh and Karnataka holding 13 per cent equity each in the airports besides 13 per cent held separately by the state-owned Airports Authority of India. Sidharath Kapur on behalf of GMR and DIAL, stated that to
forums will be represented by two members from each of the following categories: most-travelled frequent flyers for the last two years; corporate houses that have contributed maximum business in the last two years; industry associations, travel agents, media, eminent persons and retired personnel from Air India, Indian Airlines and Ministry of Civil Aviation.
DGCA TO CONDUCT RT EXAMINATION
In a meeting on Radio Telephony (RT), the Wireless Wing of the Ministry of Communications & IT and the Directorate General of Civil Aviation (DGCA) have agreed that DGCA will take over the examinations from Wireless Wing and will furnish the result of each examination to them in order to enable Wireless Wing to issue RT licence. It has also been agreed that DGCA will examine the existing RT Rules and suggest if more modifications are required. The Ministry of Civil Aviation and the DGCA, for the past few years, have been pursuing the issue of transferring the examinations relating to Radio Telephony to the DGCA with the Ministry of Communications. The present process of examination by the Ministry of Communications & IT has been raising a lot of problems for pilot candidates besides complaints of harassment, etc.
generate enough traffic there was need for an effective return on the massive investment that a metro airport needed in order to become a hub. Also more open sky agreements with foreign countries/carriers would increase their business. There has to be a greater focus on non-aero revenues. It was stated that in spite of the growth in non-aeronautical revenues in recent years, its potential remained largely untapped. But AERA is of the view that airports are essentially monopolistic assets in the Indian context. This monopoly can be abused and hence the need for strong oversight and regulation. Airports can earn higher returns from commercial revenues and hence Single Till regulation will help reduce the aeronautical charges. So, the charges borne by the end-users would be lower. The Centre for Asia Pacific Aviation (CAPA) has provided the right perspective to the whole issue. It has stated in a paper on airport regulation that unlike the airline industry where deregulation has become the preferred regulatory mechanism and where competition is strong, airports have high entry barriers and near monopolies in many cases. This has been more or less institutionalised with the “no second airport within the 150-kilometre radius of the existing airport”. Consequently, regulation has been considered essential as airports pass over to private hands. A balance, therefore, needs to be struck between ensuring suitable returns to airport developers’ investment and protecting the interest of the airlines and consumers.
CISF LOCATES YOUR STUFF
Forgot your mobile phone or laptop or pouch at an airport? Don’t worry. Just log on to www.cisf.gov.in, the website of the Central Industrial Security Force (CISF), and you can find details of misplaced items on it. “This is a service recently started by CISF to facilitate air passengers in locating items they forget or lose at airports. Details of the recovered goods are uploaded on the website in 24 hours. Passengers can contact the airport officials and get back their goods,” said an official. According to officials, more than 55 airports manned by CISF have been covered under the service. The items recovered from the airport by CISF personnel are deposited with Airports Authority of India (AAI), and all its details, including make, colour and other information are uploaded on CISF website within a day. Recently, CISF personnel found a pouch containing cash of more than Rs 21,400, a mobile phone and seven ATM cards from Ahmedabad airport. The details were uploaded on the CISF website, enabling the owner to contact the airport officials and reclaim the items.”Earlier number of passengers being able to retrieve their lost or misplaced items was quite low, but this has gone up to 40 per cent with the launch of this service. With greater awareness about this facility, this number can go further up,” said an official at Ahmedabad airport.
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NEWS DIGEST AERA is currently developing a non-aero and aeronautical activities means framework for regulation and airport that there is uneconomic pricing of both pricing. When the tender for Delhi and activities and possible misallocation of Mumbai airports was floated over six resources. Further, the lower return on years ago, the share of LCC was less than aeronautical activities may lead the investor 10 per cent. Today, it is inching closer to to develop infrastructure below the required 70 per cent. The economic profile and the level. This could result in increasing infrastructure needs of an congestion, greater LCC are totally different inefficiency and falling from that of a full-service passenger experience. carrier. LCCs the world The challenge in the over prefer to use simpler case of Dual Till is that and lower-cost facilities. airport charges may likely So, when the master plan increase while airports was developed the concept maximise their revenues of the LCC had not been from commercial activities, factored into by the which will either serve to officials. Looking back, it is reduce airline margins or now an article of faith to increase fares for have dedicated terminals passengers. There can be for LCCs or budget carriers. difficulties in defining the Kapil Kaul, Perhaps, the delay in “Tills” and the allocation CEO-South Asia, CAPA shifting the operations of the and valuation of assets two leading LCCs — IndiGo and SpiceJet applied to each. This could increase the cost — to T3 at Delhi airport could have been at and complexity of regulation. Moreover, the back of the mind. In any case it now the ability to earn unconstrained returns seems that all the domestic carriers will be may result in the investor focussing more waiting for the Commonwealth Games to be on commercial activities as opposed to over before at least full-service carriers focussing equally on aeronautical services. along with the LCC versions shift to T3. To According to CAPA, a majority of a passenger travelling by the LCC or a full- global airports operate under a Single Till service carrier, reaching T3 terminal will model although it is not explicitly stated. itself mean spending at least Rs 200 more by This may be because most airports around taxi than reaching terminals 1A and the world are government-owned or 1D where at present most domestic owned by local governments/ carriers operate. municipalties. But as private sector As per CAPA, there are certain participation rises, there has been a move challenges in Single Till. For instance, the towards the Dual Till system. This has cross-subsidisation between commercial or been the case in Australia, New Zealand,
SRIPERUMBUDUR DRAMA
Tamil Nadu Chief Minister M Karunanidhi termed as “politically motivated” the opposition by AIADMK and PMK to land acquisition for the proposed Greenfield airport at Sriperumbudur and said any stir against the project would only hinder the state’s economic growth. The government had not taken any unilateral decision on the site for the airport near Sriperumbudur, which was decided at an all-party meeting on May 22, 2007. For the growth of a country or city, expansion of airport is an M Karunanidhi absolute necessity, the DMK chief said, adding any agitation against the proposed airport will only be politically motivated.
FAST TRACK ON TAKEOVER
A consortium of India’s GMR Infrastructure and Malaysia Airports Holdings Berhad (MAHB) that won the Male International Airport bid will take over the airport’s management earlier than planned. Employees have been informed of the change and they will be transferred to the company to be formed by GMR and MAHB. GMR earlier said the company would start
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Germany, Denmark, Budapest and Netherlands. Brussels currently has a Single Till but has drawn up a road map for moving to a Dual Till progressively. Aeroports De Paris is also shifting to a Dual Till. Away from all this is the experience of Singapore’s Changi airport, which after its corporatisation has shifted to a Hybrid Till. At Changi, a portion of nonaeronautical revenues is used to establish the yield cap on aeronautical charges. This is a model which DIAL feels could be appropriate for India if not a complete Dual Till. Whatever the Till model, the key issue is what constitutes a fair return to the investor. This is of particular interest in airports where the private sector has a majority stake. As per CAPA, India’s domestic traffic will rise from the estimated 50 million at the end of 2010 to 200 million by the end of 2020. The Indian aviation market has changed drastically in the last five years and will do so in the next five and ten years. Airports will become very important. Should the private airport developers fleece the airlines and passengers, there will be a definite hike in fares, which will depress passenger traffic growth. Alternatively, if the airport operators are constrained to raise revenues, then no investor will even look at the sector. Therefore, the issue is what kind of Hybrid will the Ministry of Civil Aviation aim for so that AERA, airport operators, airlines and consumer groups fall in line or fall out separately?
managing the airport in March 2011, but now they will take over in November 2011. MACL would only consist of air traffic controllers and security officers. Security officers will be transferred to Maldives National Defence Force (MNDF) next year. The government signed an agreement to lease Male International Airport for 25 years on June 28 this year. MAHB announced that the construction cost for the airport would be about $373 million.
AAI TO DEVELOP JHARSUGUDA AIRPORT
Orissa Chief Minister Naveen Patnaik said that the AAI has already agreed to develop Jharsuguda Airport to a full-fledged one and for which the latter has also asked for 815 acres of land free of cost. The CM said two airports in the state — one at Bhubaneswar and another at Jharsuguda — are under the control of management of the AAI. A maximum of 734 acres is available and AAI has been requested to scale down its requirement of land through a reasonable estimate. It has also been asked to intimate a firm commitment to complete Naveen Patnaik the expansion project of the airport within a
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NEWS DIGEST these two Greenfield airports is a mere four per cent each. It is no wonder that at least the Swiss (Flughafen Zuerich AG to be precise) and the Indian shareholder L&T were able to sell their shares to GVK in Bengaluru for a decent profit that catapulted GVK to a 29 per cent equity holder of this airport. With GVK bosses now occupying the top positions in the Bengaluru International Airport Limited (BIAL) board, it is only a question of time before they buy off Siemens, which still holds 40 per cent equity in BIAL but has no management role. As per the original concession agreement, Siemens cannot sell its entire holdings before 2015. However, it can dilute its stake by 14 per cent in June 2011 and 26 per cent by 2015. GVK paid Rs 1,172 crore to buy off Swiss and L&T to reach 29 per cent equity holding mark. The ON EXPANSION MODE: (Left to right) Sanjay Narayan, GVK Director; Marcel Hungerbuehler, BIAL President; Sanjay Reddy, Managing Director BIAL; and Dr. G. V. Krishna Reddy, Vice Chairman, BIAL watch on with pride as the terminal expansion plans are revealed.
WHO WILL PAY
THE MOOLAH?
W
hat is perplexing is the neversay-die attitude of the homegrown airport developers like GMR and GVK who now have two big airports each. While GMR has Hyderabad and Delhi, GVK has Mumbai and is inching towards the single-largest
holding in Bengaluru from its current single-largest management equity holder status. Despite their high revenue share commitment of 46 per cent and 37 per cent in Delhi and Mumbai, respectively, the two are breathing rather freely in Hyderabad and Bengaluru because the revenue share in
period of two years from the date of receipt of the additional land. Regarding the Biju Patnaik Airport (Bhubaneswar), the CM said the state government was considering a proposal of the AAI for providing additional land measuring about 23 acres for construction of a parallel taxi track and development of a 300 metres basic strip.
HCL SCORES WITH AOCC DELHI
HCL has announced the successful deployment of the largest Airport Operation Control Centre (AOCC) in India for the new Terminal (T3) at Delhi. The IT system architecture of the AOCC has been seamlessly integrated to facilitate the highest level of Airside Operations, Resources Planning and Allocation, Terminal Operations and Security, allowing various agencies/ departments to collaborate real time. DIAL T3-AOCC is one of the largest ‘Airport Operation Control Centres’ in Asia and HCL Chief centrally oversees and monitors compreShiv Nadar hensive airport operations through 3,200 cameras across the terminal and monitors 50,000-plus sensor points for real time inputs and collaborative viewing at the control centre.
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G M Rao, Chairman and MD, GMR Group
TATA, DECCAN CHARTERS IN PACT
Tata Steel has announced the signing of an agreement with Deccan Charters to start three daily charter flights between Jamshedpur and Kolkata. Deccan Charters is India’s leading general aviation services company offering aircraft maintenance, charter services and management. Deccan’s service was launched on August 16 with daily non-scheduled flight service, using a 19-seater turbo-prop aircraft, between Kolkata and Jamshedpur. The service puts Jamshedpur back on the national air network, by connecting it Capt. Gopinath directly to Kolkata. Capt G R Gopinath, Chairman of Deccan Charters Ltd, said, “This is another first from Deccan. Over the years, Deccan has made breakthrough innovations that have redefined paradigms of the aviation industry in India. These innovations have been fuelled by the vision of making the aspirations of the common man a reality and fostering all-inclusive growth of the country.”
AIRLINES NOT TO DISCLOSE FINANCIALS
Airlines, especially unlisted ones, can now have a sigh of relief. The Directorate General of Civil Aviation (DGCA) has clarified
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NEWS DIGEST shares were bought at Rs 105 per scrip. At Delhi and Mumbai. The traffic handled the same price, GVK is ready to buy the first figures already show that Bengaluru will tranche of 14 per cent from Siemens as cater to volumes higher than Hyderabad. So, GVK has the first right of refusal. Even if GVK has already spent Rs 1,172 crore to we assume that should GVK buy the entire acquire 29 per cent stake in BIAL and may 40 per cent holding, then based on what it spend another Rs 2,000 crore to buy the paid Swiss and L&T, GVK may have to Siemens stake progressively. We can add shell out close to Rs 2,000 crore adjusting another Rs 1,000 crore for the current plan for inflation. However, this may not happen for terminal expansion. Reddy said his because of the contractual obligations of company planned to invest Rs 4,500 crore to Siemens. Therefore, it could be a little further modernise and expand BIAL which longer haul for GVK. could include entirely new terminal This will not be a dampener for buildings, runway, etc. In a way BIAL GVK as it has already drawn up new plans seems to have followed a step-by-step to expand Bengaluru airport. GVK approach, which gave its original promoters is planning to invest Rs 1,000 handsome profits when they divested part of crore in expanding and “modernising” the their holdings. existing facilities in BIAL. Instead of So between Mumbai and Bengaluru, building a new terminal, it is proposed to the total revenue to be shared is just about expand the existing Terminal 1 41 per cent considering GVK to accommodate and handle 17 has to pay 37 per cent of its million passengers by 2015 gross revenue to the from the existing capacity of government as revenue share 10.5 million passengers. Since and which is the first charge building a new terminal would before any rupee can be spent take three to four years, GVK on anything. GVK’s move is decided to expand the existing smart in the sense it is aware terminal to meet the immediate of the problems involved in rising needs. According to G V expanding Mumbai airport, K Reddy, who is the Chairman which in any case will GVK Reddy, of the group that is into power, Chairman, GVK Group saturate in less than two to infrastructure etc, he is keen to three years from now when increase his stakes in Mumbai and its passenger-handling capacity reaches Bengaluru airports where it already has peak 40 million annually. management control. Already, BIAL is refusing to allow new After the present phase one expansion, international flights and slots available are which will sustain the airport for three years, also at unearthly hours for airlines. It was in it will have to undertake another major this context that the plans for Navi Mumbai expansion to bring BIAL nearly at par with assumed importance but have got entangled that it has no intention of seeking airlines’ balance sheets as part of a civil aviation requirement (CAR) issued recently seeking detailed financial information from all airlines. According to this CAR, extensive financial details are to be submitted by all airlines to DGCA. The regulator has also made it clear, any further expansion of fleet and operations, including grant of ‘air operator’s permit’ for all airlines shall be subject to mitigation of potential risk factors identified by the operator during the financial surveillance, to the satisfaction of DGCA. DGCA Director Lalit Gupta said to a daily, “There is no clause in the CAR wherein airlines are required to disclose their financial status, i.e balance sheet, to DGCA.” As per the CAR, airlines must submit financial details such as instances of sale of assets, deferment of discretionary spending-capital expenditure, training, advertising, also if an airline has lost valuable suppliers within 12 months. It also wants a record of every airline’s accident rate per one lakh hours, if there has been any sudden or significant reduction in fleet, if the operator is continuously taking delivery of new aircraft besides details on training schedules and regularity. If flights are getting delayed due to crew availability or due to significant or sudden fleet reduction, then too DGCA wants to be apprised.
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in the environmental battle between Environment and Forests Minister Jairam Ramesh on the one hand and Civil Aviation Minister Praful Patel as also the Maharashtra government on the other. As per the original concession agreement, it was known that a second airport could come up within 150 kilometres, subject to the promoter of the existing airport, and in this case Mumbai International Airport Limited (MIAL), the first right of refusal. In fact, GVK had undertaken to spend Rs 9,802 crore to build a new terminal at the existing Mumbai airport, expansion of the Terminal 2, a new domestic terminal, an international cargo terminal, a parallel taxiway, apron, etc. All this would allow it to handle 40 million passengers annually. After this it has to be necessarily the second airport nearby or Navi Mumbai airport, whichever gets the clearance first. So if you look at the expenses being incurred by GVK since it got Mumbai airport, the total already comes to Rs 9,802 crore plus Rs 1,172 crore plus Rs 2,000 crore plus Rs 1,000 crore and plus another Rs 4,500 crore. This is notwithstanding the 37 per cent revenue share for MIAL itself. Should the Navi Mumbai airport come up and GVK as mandatory under the first right of refusal has to match the highest bidder who may offer a revenue share of 40 per cent just to corner the business as the two Andhra Pradesh promoters did to win Delhi and Mumbai. How will GVK manage its finances and still make a profit after all the revenue share? Yes GVK is waiting to unlock nearly Rs 1,000 crore from the real estate that may
THUMBS DOWN ON UK TAXING AIRLINES
The UK government’s move to charge airlines even on empty seats has come in for strong criticism from the Indian civil aviation ministry. The UK authorities have proposed that every airline from across the world flying there should be taxed on the number of seats instead of passengers carried by them. This means, even if the load factor is below flying capacity of its aircraft, the airline will have to fork out for vacant seats. The aviation ministry is opposing the idea as it may cost heavily to the airlines and so the passengers. The UK levy is christened as London departure tax that varies between Rs 4,500 and Rs 7,500 per passenger, depending on Economy or Business Class.
RUNWAY-TUNNEL ROAD WOES AT T3
The cost of zipping to IGI airport’s new terminal T3 through India’s first runway-tunnel road has shot up by almost 50 per cent. The crucial 1.5-km-long road with a 343-metre-long tunnel under the main runway was initially projected to cost Rs 67 crore. But now the six-lane road’s cost has shot up to almost Rs 100 crore. The airport authorities had made it clear from the beginning that the job of providing connectivity to T3 was of the state government. But when that job seemed to
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become available once part of the slums in only revenue share, then should the winner the airport area is relocated. That is the part promoters seek government help in asking of the deal with HDIL. In the case of GMR, the AERA or regulator to go easy on Single it is supposed to spend Rs 12,000 crore for Till and adopt a Hybrid Till if not a total DIAL’s (Delhi International Airport Double Till? To add further confusion to the Limited) expansion and modernisation. airports drama, we learn that Reliance While this process is on, it also is planning Airport Developers Pvt Limited has made a to spend more on Hyderabad airport pitch to get general aviation aircraft to fly particularly its Aeropark venture in the out of its regional airports of which it has designated SEZ. More recently, five in Maharashtra, according the GMR group offered a very to Vidya Basarkod, CEO, high revenue share for Male Reliance Airports. airport expansion and Metro airports should only modernisation which was much focus on civil aviation. This higher than its offer for Delhi. would ensure that traffic will GMR won the bid in the face of move away from the expensive competition from GVK as also congested airports towards the Airport De Paris. no-frills, inexpensive and The issue that is uncongested airports. This will confronting all stake- holders as free up precious land for metro Vidya Basarkod, also the regulator besides the CEO, Reliance Airports airports. For example, she said, passengers who may be Mumbai airport can move all expected ultimately to bear the brunt is, the general aviation operations to Baramati should the bidders have indeed offered such airport and free up land in Mumbai for a a sky-high revenue share? Hypothetically, “close parallel runway”, which will give it what happens if GVK is forced to offer and the much-needed flexibility and improve match high revenue share, should Navi highly-constrained capacity. The Anil Mumbai airport come up as it may have a Ambani group, which operates these five genuine fear of how traffic will get regional airports, has also desired that for distributed between the existing MIAL and the vast geographical and demographical yet to come up Navi Mumbai airport if contours of India, a parallel network of air indeed it takes shape? This is true of GMR, routes should be developed and ATC which is already shuddering at the prospect charges should be moderate and not like of the Greater Noida airport coming up as a what are being charged by AAI now. Group of Ministers is already in the Further, regional airports should be made advanced stage of consideration. bases for no-frills airlines. In the fourth week of August, it asked This should be a deliberate act in order for traffic studies for Greater Noida airport to develop a nationwide system of services. to be carried out. If all the money goes for Integrated outlook for total market rather have been delayed by years, the government asked airport land to be used for a new link and agreed that the cost would be borne by the state. The road is scheduled to be completed by September 30, just two days before the Commonwealth Games begin on October 3. The cabinet secretariat reviewed this new development of steep cost escalation and it has been decided that DDA will bear the additional burden because this link simply can’t be allowed to get delayed for any reason like a fund crunch. The AAI is getting the tunnel road built by Delhi Metro, India’s biggest expert in drilling, who in turn has asked L&T to execute the project. The initial projected cost was just the contractor expense, say sources. A number of other expenses have come up that have led to cost escalation. These include laying of road, building a foot-over bridge, security equipment inside the tunnel that will pass below the main runway, and CCTVs for monitoring and tunnel lighting.
than just for major airport will avoid premature over-investment in metro airports, Vidya Baraskod argued. Metro airports need to be decongested and secondary level activities should be re-distributed. If this plea is truly and honestly pursued it will surely kill the metro airports considering the kind of revenue share they have committed in Mumbai and Delhi. In any case, maybe one need not take the regional airports being operated by ADAG seriously, as AERA will regulate only those airports that handle annual passenger capacity in excess of 1.5 million — a far cry for those five regional airports.
DRAGONAIR - CLARIFICATION In our story on AirAsia in the August HEIGHTS, issue of CRUISING Dragonair’s logo was featured prominently with the logo of other LCC operators creating the impression that it too is an LCC (although the written word did specify that it was not so). Also a few other corrections: Dragonair does not operate A320 aircraft to Bengaluru as mentioned. Dragonair has always operated A330 aircraft since the start of operations to Bengaluru. Dragonair reinstated its daily flights from March 2010 onwards — more than four months ago. For the record, Dragonair has no immediate plans to add more destinations in India as mentioned in the piece.
PAWAN HANS SIGNS MOU WITH BRO
Pawan Hans Helicopters Limited (PHHL) has signed a contract with the Border Roads Organisation (BRO) for airlifting of personnel, equipment, cargo etc. to the distant locations of BRO in the North East. This contract is expected to help PHHL explore the possibility of providing helicopter support services to BRO in other areas/projects across the country and support BRO projects in farflung and inaccessible areas of the north-eastern region. PHHL also signed another MoU with the Indian Meteorological Department (IMD) for better synergy between PHHL and IMD for enhanced safety of helicopter operations in India. This MoU was signed by R K Tyagi, Chairman and Managing Director, PHHL and Air Vice Marshal Ajit Tyagi, VSM, Director General, Indian Meteorological Department recently. IMD would provide support to the helicopter services of the PHHL at all the airports and would install and operationalise Automatic Weather Stations (AWS) for provision of meteorological data at remote locations or helipads. In addition, IMD would provide briefing to all the pilots of helicopters operated by PHHL.
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NEWS DIGEST
POSITIVE
OUTLOOK
T
he Indian aviation industry is on an upswing. Back in July 2009, Boeing unveiled its then market outlook which indicated that India may require in the next two decades 1,000 planes of various types worth $100 billion. With India emerging faster out of the economic recession, the US-based aircraft manufacturer has revised upwards in its latest current market outlook released to the media on August 3, 2010, the number of
THE NUMBERS
aircraft required to 1,150 valued at $130 billion. This is more than Airbus estimates for the next two decades ending 2029-2030 at 1,030 new planes worth $138 billion. According to Boeing India President, Dr Dinesh Keskar, Most of these aircraft will be twin aisle or the Boeing 787-8 type which will be able to fly point-to-point destinations in the EU and the US to and from India. In 2000, for example there were only two carriers — Air India and British Airways — that served the India-UK market with 24 frequencies a week. Today there are six airlines with 104
GAME >>
PRIVATE INDIAN CARRIERS OWE AAI RS 304 CR
The private sector airlines owe Airports Authority of India (AAI) Rs 304.65 crore till the end of June this year, the Minister for Civil Aviation, Praful Patel, informed the Lok Sabha The losses suffered by Air India and other airlines due to strikes were around Rs 127 crore The estimated loss suffered by National Aviation Company of India Ltd (NACIL), the company created through the merger of Air India and Indian, due to these strikes was around Rs 77 crore
AIRLINES CAN TAKE SERVICES OF EXPAT PILOTS TILL JULY 2011 There are a total of 384 expatriate pilots employed with various domestic airlines, which have been allowed to avail of their services till July 31 next year, Civil Aviation Minister Praful Patel told Parliament. There was no shortage of trained pilots in the country. However, there is shortage of type-rated commanders (a senior pilot who has been trained to fly a particular type of aircraft) with airline operators. To overcome this shortage, airline operators have been permitted to utilise expa-
18
frequencies. It is no longer a fashion to fly the big bird like Boeing 747-400s, which used to be the only choice then. This is because the average seats per flight on these routes have declined from 412 in 2000 to 297 in 2010. This is one of the main reasons for replacing the Jumbo 747 by Boeing 777 and then by B787 or Airbus A330-200. Since Boeing 787 Dreamliner is still not available for commercial operation as its deliveries to Air India have been delayed by nearly two years till now (September 2010), Air India has felt the pressure for inducting during the interim with comparable Airbus A330-200. Incidentally, there are a number of carriers which are using A330-200 like Jet and Kingfisher besides foreign carriers. When competition and the slowdown took away air passengers, the need for smaller but MCLR (medium capacity, long range), nevertheless, was felt and A330-200 came in handy. But the point made by Dr Keskar was when Air India receives its first of the 27 Boeing 787-8 from March-April 2011, it will save $2.5 million annually on fuel alone compared to A330-200 on the IndiaUK route. When a newsman asked him as to what was Boeing’s response and the status of the compensation claimed by Air India for the inordinate delay in delivering the Boeing
triate pilots upto July 31 A breakdown of the number of expatriate pilots: Jet Airways has the largest number: 111 pilots Air India and Air India Charters Limited (Air India Express) has 89 and its subsidiary, Alliance Air, 24. Kingfisher Airlines has 83 such pilots. IndiGo has employed 34 expat pilots. SpiceJet has 30. Paramount Airways has one. Blue Dart has five. Deccan Cargo has seven expat pilots on their rolls.
APPLICANTS FOR STARTING AIRLINES The civil aviation ministry has received at least 26 applications for granting of licenses to start scheduled airlines. “The receipt and consideration of application is an ongoing process,” according to Civil Aviation Minister Praful Patel in Parliament. He also said 13 companies had been granted initial no objection certificates (NOCs). Four of these had been given operator permits, whereas the NOCs of five companies had expired. MDLR Airlines, Jagson Airways, Aryan Cargo Express and Deccan Cargo Express Logistics obtained operator permits,
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787s (it was supposed to be originally delivered in September 2008), he said Boeing did not wish to discuss contractual details, which were between the supplier and the client. The point he made was B787-8 would be far more fuel-efficient than any comparable aircraft. Dr Keskar said the new schedule of B787 delivery is very much on track and the first of Air India’s B787 is on the assembly line. Talking of the Indian aviation market in general, he said that over the next two decades, LCCs or no-frills airlines like Indigo, Spice, JetLite, and Kingfisher Red will continue to dominate the skies. Indian engine is India will grow by 8.4 per cent aviation is on the upward path once again followed by China with 7.6 per cent, South and with rising GDP, the airline industry America 7.4 per cent, Middle East 7.1 per will expand faster than anticipated and cent, South East Asia 6.9 per cent, Oceania passenger traffic will rise six per cent, Central even faster. Compared to 44 America 5.9 per cent, million domestic Africa 5.5 per cent and the passengers, in the current world as a whole 5.3 per calendar year 2010, Boeing cent annually. According to expects the numbers to rise Boeing’s Latest Current to 50 million. In 2003, India Market Outlook, air travel had 122 aircraft with two on will increase significantly order. By 2010, it rose to in all of South Asia’s 334 aircraft with another markets. The annual growth 281 on order. India’s in traffic will be 7.3 per cent domestic air services, which between 2010 and 2029 recorded a rise of 43 per from South Asia to Middle cent between 1990 and East, within South Asia 9.3 Dinesh Keskar, 2000, rose by 207 per cent per cent, to and from President, Boeing India between 2000 and 2010 Europe 7.1 per cent, to and based on weekly departures/weekly ASKs from South East Asia 9.8 per cent, to and (available seat kilometres). from North America 7.9 per cent. The A global forecast by Boeing showed average annual growth has been estimated that between 2010 and 2029, the annual at 8.4 per cent. traffic growth in South Asia whose main As for the projected requirement of while the NOCs of Skyking Aviation, Pawan Hans Helicopters, Star Aviation and Flyington Freighters and Avicore expired. Patel said there were 14 scheduled flight operators in the country with a total fleet size of 425 aircraft, with Air-India and its subsidiaries like Air India Charters and Airline Allied Services leading the pack with 178 planes. Jet airways, excluding JetLite, is the leader among the private airlines with 86 aircraft, followed by Kingfisher with 67 planes.
THREE RISKY SPOTS AT MUMBAI AIRPORT According to Mumbai International Airport Limited (MIAL), Taxiway N8 is one of the three spots in the operations part of the airport that has been identified as risky. “Our runway safety team has identified three high-risk areas at Mumbai airport and has notified pilots and airlines about them,” said Bryan Thomson, Director (Operations), MIAL, told the media. The other two spots are the intersection point of Runway 0927 and 14-32, and Taxiway Q. “These spots have a history of
1,150 airplanes between 2010 and 2029 valued at $130 billion, the Outlook said 71 per cent of these aircraft would be singleaisle, 23 per cent will be twin-aisle, five per cent regional jets and one per cent large planes. In value terms the single-aisle aircraft will account for 52 per cent of the $130 billion, twin-aisle 44 per cent, and general aviation and large aircraft two per cent each. The future — whether near term, medium term or long term — lay in pointto-point operations based on hub traffic. The example of India-UK mentioned earlier clearly illustrates that the international long-haul markets are fragmenting as much as the medium haul. According to Dr Dinesh Keskar, air travel in India is tied closely to India’s economic growth, which is already on the recovery path and will largely recover further in 2011. The operating environment for India’s carriers shows a positive turn. Passenger numbers, load factors and yields are displaying an upward trend in both the domestic and international services.
runway incursions. We have asked pilots to be more careful when operating near them,” Thomson said. MIAL, observed an air safety week from August 16, during which a workshop on runway excursion was organised by representatives of International Air Transport Association (IATA) for airlines officials. With the main runway set to close down during the year-end for six months from 9 am to 5 pm, the number of flights operated during the winter schedule is also likely to go down by 10 per cent. “We have seen that airlines tend to overbook slots. Hence, we will not give them the overbooked slots, which will lead to reduction of 10 per cent flights in the winter schedule,” said Thomson.
REVENUE FROM COMMERCIAL ACTIVITIES AT AIRPORTS The revenue generated from commercial activities at the respective airports for the last two years (2008-10) are as follows: AAI: Rs 1,624.70 cr Bengaluru International Airport Limited (BIAL): Rs 51 cr Mumbai International Airport Limited (MIAL): Rs 282 cr Delhi International Airport Limited (DIAL): Rs 881.40 cr (Non-aeronautical) Cochin International Airport Limited (CIAL): Rs 183.34 cr
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NEWS DIGEST
Photo Courtesy: unp.co.in
NO LAYOVER
AT LEH
S
anjeev Jindal, the livewire Airports Authority of India’s head of operations at Leh airport had been at the world’s highest airport for less than a month when the sudden cloudburst hit the area. “The runway was completely covered with silt and mud,” said Jindal in a recent conversation on that that horrendous event and added: “We had no option but to get to work early in the morning to clear the debris. The airport is Ladakh’s lifeline and we had a
20
(Above) The Leh airport is a picture of calm; (inset) the runway at Leh airport; and (below) Airports Authority of India’s workers at the relief operations at the airport.
responsibility to fulfill.” So the next morning, Jindal took every worker that he could summon, including the many who were involved in sundry other repair and maintenance jobs for the AAI and began clearing the runway so that operations could be launched by Saturday evening (the cloudburst took place on Friday August 6). Not just that, Jindal sent a team by foot 15km to the place that was one of the worst-affected and right where the VOR (VHF omnidirectional radio range) was located. “We had to activate it if regular operations had to take place. The weather was such that without proper aids it would have been impossible,” said Jindal. The rest, as they say, is history.
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On an average, Leh sees 15-18 operations a week. In the two weeks post the disaster, Jindal and his team made sure that the country’s airlines were able to operate three times that number as they flew sorties after sortie to Leh to evacuate, bring in material (over 25 tonnes) and help in the process of rehabilitation. AAI was also able to persuade the authorities to expand the window till 4pm for operation (usually Leh is open between 8am to 12pm for civilian flights). That apart, AAI has been busy with a well mounted campaign to offer relief to the affected peple, distributing blankets and food packets, particular in the areas that are less accessible. Bravo indeed!
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GAGAN GETS
GOING
“I
t will be a re-defining moment for the Indian aviation sector which is currently ninth largest market in the world. In 5-7 years, it will be in top five,” Civil Aviation Minister Praful Patel said during the launch of final operation phase of satellite navigation system GAGAN in Delhi in early August. Referring to the Rs 774-crore project GAGAN (GPS Aided Geo Augmented Navigation system), Patel asked the Airports Authority of India (AAI) to maximise its investment and market the capability to other countries around India as the system would become “a milestone”, and went on to add that “AAI must look at every small opportunity to maximise revenue generation… bid for airports here and also outside the country.” The minister asked AAI not to see itself as “a mere authority” or a government body but as a professional company. GAGAN, developed jointly by AAI and Indian Space Research Organisation (ISRO), would not only help the civil aviation sector but also in marine navigation, search and rescue operations, rail and road transport, survey and mapping. GAGAN would become operational from June 2013
(Above, left and right) Civil Aviation Minister Praful Patel with AAI Chairman V P Agrawal and D C Mehta at the launch of the final operation phase of satellite navigation system GAGAN in Delhi; and (top) among the others in the photograph include AAI Members Sudhir Raheja, S C Chhatwal and K K Jha, Joint Secretary E K Bharat Bhushan, DGCA chief Nasim Zaidi and Secretary M M Nambiar.
after the necessary certification process that would begin from December this year. The GPS signals, which are currently being received from US satellites free of cost, would be transferred entirely to an Indian satellite to be launched this November. So far, only the US, Europe and Japan have developed similar capabilities. GAGAN would fill the gap between the European EGNOS and the Japanese MSAS systems to provide seamless air navigation service across regional boundaries. The system will enable airlines to chart out direct routes as they will be less dependent on the ground-based radar systems, save fuel and increase efficiency. The space component of the system comprises three payloads in a geostationary orbit. These satellites will help to get signals corrected according to the accuracy specified by the International Civil Aviation Organisation (ICAO). The first of the payloads was slated for launch on the GSAT-4 satellite, but the
CRUISING HEIGHTS September 2010
failure of the launch vehicle GSLV D3 in April has caused a setback. According to the AAI’s roadmap, the space payloads are expected to be in place by November. To meet civil aviation requirements, however, it would take at least two years of testing to get certification from the Directorate General of Civil Aviation, the country’s civil aviation regulator. Speaking on the occasion AAI Chairman V P Agrawal said that the Authority has already completed feasibility study of an airport in Sri Lanka and was aggressively looking to bid for other countries for opportunities to build airports. “We have a unique repository of multi-disciplinary experience and talent. We will now leverage our strengths in the manner of a professional unit,” he added. He also mentioned the expansion and modernisation at Chennai and Kolkata and said: “There will be benchmarks that we will set for the industry as a whole.”
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TRAFFIC DATA PASSENGER GROWTH
CAPACITY VS DEMAND
Passengers carried by domestic airlines from January-July 2010 were 298.71 lakh as against 247.48 lakh in the corresponding period of year 2009, thereby registering a growth of + 20.7 per cent.
Analysis of capacity and demand data on year-to-year basis indicates that trend of increase in both the capacity and demand continued in the month of July 2010 also.
MARKET SHARE
The seat factors of various scheduled domestic airlines in July 2010 are as follows: The month of July 2010 observed comparatively lower seat factor, primarily due to active monsoon in various parts of country.
SEAT FACTOR Airline-wise details of market share of scheduled domestic airlines for the month of July 2010 are as follows:
CANCELLATIONS
PASSENGER COMPLAINTS DURING THE MONTH
The overall cancellation rate of scheduled domestic airlines for the month of July 2010 has been 2.8 per cent. Airline-wise details of cancellations are as follows:
During July 2010, a total of 1,277 passenger-related complaints were received by the scheduled domestic airlines. The number of complaints per 10,000 passengers carried for the month of July 2010 has been 3.1.The airline-wise details are as follows: Most of the passenger complaints relate to lost baggage, staff misbehaviour and refund of air ticket.
UPWARD TREND CONTINUES
A
n analysis of capacity and demand data on year-to-year basis indicates that the trend of increase in both capacity and demand continued in the month of July 2010 as well. Air traffic in India continued to show a marked improvement since the financial downturn in the past
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two years. The total domestic passengers carried by the scheduled airlines of India in the month of July 2010 were 40.84 lakh. Passengers carried by domestic airlines from January-July, 2010 were 298.71 lakh as against 247.48 lakh in the corresponding period of year 2009 thereby registering a growth of + 20.7 per CRUISING HEIGHTS September 2010
cent. The break-up for the month of July, 2010 is Air India (Domestic) — 7.08 lakh, Jet Airways —7.82 lakh, JetLite — 3.08 lakh, Kingfisher — 8.15 lakh, SpiceJet — 5.40 lakh, Paramount — 0.12 lakh, GoAir — 2.28 lakh, IndiGo — 6.91 lakh. The percentage share of the carriers in
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FIVE AIRLINES HAVING HIGHEST OTP (DEPARTURES)
ON-TIME PERFORMANCE (SCHEDULED DOMESTIC AIRLINES) The overall On-Time Performance (OTP) of scheduled domestic airlines for the month of July 2010 has been 82.7 per cent. The airline-wise details of OTP are as follows:
Reasons for delay have been analysed, which are presented below. It has been found that majority of delays have been attributed to 'Reactionary'.
FIVE AIRLINES HAVING HIGHEST OTP (ARRIVALS)
REASONS FOR DELAY
THREE AIRLINES HAVING LOWEST OTP (ARRIVALS)
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 48 carriers was received.
The overall On-Time Performance (OTP) of these 48 carriers for the month of July 2010 has been 69.5 per cent in departures and 60.1 per cent in arrivals.
the month of July 2010 is Air India (Domestic) — 17.3 per cent, Jet Airways — 19.1 per cent, JetLite — 7.5 per cent, Kingfisher — 20 per cent, SpiceJet — 13.2 per cent, Paramount — 0.3 per cent, GoAir — 5.6 per cent and IndiGo — 16.9 per cent. The seat factor of the domestic airlines in the month of July 2010 was Air India (Domestic) — 62.5 per cent, Jet Airways —73.8 per cent, JetLite —
76.6 per cent, Kingfisher — 79.3 per cent, SpiceJet — 76.8 per cent, Paramount — 86.9 per cent, GoAir — 71.3 per cent and IndiGo — 80.2 per cent. The month of July 2010 observed comparatively lower seat factor primarily due to active monsoon in various parts of country. The overall cancellation rate of scheduled domestic airlines for the month of July 2010 has been 2.8 per cent. CRUISING HEIGHTS September 2010
Passenger complaints during the month During July 2010, 1,277 passenger related complaints were received by the scheduled domestic airlines. The number of complaints per 10,000 passengers carried for the month of July 2010 was 3.1. On-Time Performance The overall On-Time Performance (OTP) of scheduled domestic airlines for the month of July 2010 has been 82.7 per cent.
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INTERVIEW
Photo: H.C.Tiwari
A late entrant to the Indian aviation sector, Finnair launched direct flights between Delhi and Helsinki on October 30, 2006. Barely eight months later on June 27, 2007, the carrier started flying from Mumbai to Helsinki. The flights from Mumbai, however, were temporarily suspended in March 2009. Finnair’s India sector has done remarkably well. The six flights a week from Delhi have contributed to the carrier’s 26 per cent growth in Asian traffic this summer. According to reports, the passenger load factor for the first three months of the year was 91 per cent, 84 per cent and over 95 per cent, respectively. In the midst of all the action is Kari Stolbow, Director, Indian Subcontinent for Finnair. Confident about India, Stolbow is optimistic about his product. He spoke to CRUISING HEIGHTS’ Tirthankar Ghosh about Finnair’s future plans and why fliers from India should fly Finnair. Excerpts:
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“WE ARE READY TO GET THE BALL ROLLING IN INDIA” CRUISING HEIGHTS September 2010
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Finnair has reported a 26 per cent Q growth in Asian traffic. Is that the reason for Finnair to increase capacity in
from India, on our routes, is between 25 and 50 per cent (depending on the market) and even that is not enough because we have to get a much higher load factor to make these operations profitable and break even.
:
Asia? :The economies in Asia and India have been developing very fast. Unfortunately, in Europe the development has not been that fast. (Keeping the Asian growth in view) We have announced that we will start a couple of unique destinations, or at least one unique destination next year in Asia. It will be Singapore (from where), we will start a daily flight to Helsinki. We will increase our capacity to Hong Kong from a daily flight to 12 flights a week. When it comes to India, the demand has been developing since last November when we decided that we will concentrate at the moment on our Delhi route. As you most probably know we used to operate from Mumbai as well but we suspended that. We were very serious in restarting Mumbai last October. We saw that there was a demand from Mumbai but we didn’t see a demand from Europe to Mumbai.
A
Is most of the traffic for India directed to Europe or is there a large percentage going out of Europe? A lot of the traffic is to most of Europe. We are from Finland, a country which has only five million people. So, obviously our strategy is to carry passengers between Asia and the whole of Europe — especially northern Europe. We are the only airline that operates flights from Helsinki. To have a successful operation you have to have minimum of five flights a week. And to fly five times a week and to have your aircraft go both ways, you need about 3,000 passengers every week. Even if we could sell a minimum of 50 per cent of that in India, we would not be able to fill the flights from Europe. I don’t think that there is one reason why there are no passengers from Europe to Mumbai. There must be several other reasons. One reason is clear: there is over-capacity in that route. Another reason is that maybe Mumbai was historically being used as a gateway to southern India. Now, there are many direct flights of European carriers from Bengaluru, Hyderabad and Chennai. Has Finnair used all its entitlements in India? Yes. At the moment we can’t have three before operating in two places. At the moment we have two. We are monitoring extremely carefully. Almost every 45 days I report to my head office about restarting Mumbai and the situation looks better (every day)… There is a demand from Mumbai but because the market share of the passengers
Finnair woos its passengers with in-flight entertainment system.
“
There is a demand from Mumbai but because the market share of the passengers from India, on our routes, is between 25 and 50 per cent and even that is not enough because we have to get a much higher load factor to make these operations profitable.
”
CRUISING HEIGHTS September 2010
Your President and CEO Mika Vehviläinen recently announced that Finnair would acquire two 270-seat Airbus A340 wide-bodied aircraft to meet its growing long-haul traffic needs. The aircraft will join the Finnair fleet in late 2010 and early 2011. Will they be used for flights for the Asian operations? Absolutely. One of the aircraft will definitely be used for the Singapore route. As I said we will increase some frequencies or some new destinations within Asia. What the destinations will be, have not been announced yet. But I doubt if we will be ready to fly to Mumbai in the nearest future or go to some other city — I mean it doesn’t have to be Mumbai. It may as well be some city in the south. It is no secret that a lot of Finnish companies have established themselves in southern India. These are mid-size companies, not the big ones like Nokia, but others as well. We believe that good developments are taking place (in infrastructure), thanks to the new Terminal 3. It will shorten the travel time because we have a morning departure. In Terminal 3, all the major domestic carriers will be under the same roof. That will mean we will have a very smooth transit from all over India. Why do fliers not use Finnair from India to fly to the US? It makes sense for them not to use our hub in Helsinki to travel to the US. Why they are not using is because at the moment we are flying only to New York in the US. That is our only destination. But we have in our strategy; I would not call it a long-term strategy but maybe a middle-term strategy, to become a big airline between Asia and Europe. That started about 10 years ago and it is working fine. The next move will be northern America and Asia. We want to open several destinations in North America. The shortest flying time is also very important. The flying time is actually so short that even now in summer we have an extremely good connection to New York. We have a lot of passengers this summer to New York because the flight leaves from here at 8.35am, arrives at Helsinki at 1.30pm local time. At 2.15pm, we have a flight to New York which arrives at 3.30pm at New York. So at local time 8 o’ clock you are in Delhi and at 3.30pm you are in New York. But we can’t offer this connection on the way back… we have the flight leaving from Helsinki for India late in the
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INTERVIEW never been any kind of ban on night services to India. India used to be a stopover for most of the European carriers before they started to fly over Russia. In fact, we were the first airline to start nonstop flights from Europe to Asia. So, now we have the newest aircraft, different departure time, shortest flight time, very friendly service. I would also say, we have very attractive fares. We have a corporate programme which is very attractive for mid-sized companies… it’s rewarding from the first ticket. And then the fact is that we are one of the world’s oldest airlines. We have been flying in Asia since 1993. Okay, in India we are a newcomer but on the other hand I think that we are a very ambitious challenger. We have seen what the big, well-established airlines are doing. We have seen some changes they have done and I’ve always said that we are big enough to offer the whole of Europe. Also, we are small enough to make very fast moves.
In-flight meals served to the Finnair’s passengers.
evening. So even though Helsinki airport is one of the best airports in the world, people find the wait (in transit) a long time. It will be a totally different story when we will have more capacity to New York. Are your ex-India fares competitive enough? There are so many varieties of fares and so many different routes that it is very difficult to categorise. We might be a bit more expensive than one or two carriers that fly by our southern gateways. But if we take from the top, our Business Class fares, all inclusive to the whole of Europe at the moment are below Rs 100, 000. Our Economy Class fares all inclusive are around Rs 30,000. It is the northern market but for us, it is still at the moment from India. As for students, we are very happy… we have a lot of students travelling with us. We also have business people who travel to the US and if they have to do something in Europe as well, they love to fly with us. For somebody who’s really watching the time (spent on travel), the fact is the return flight at the moment in Helsinki means it is 10 hours in transit and that’s a lot… But then all this will change as soon as we get more aircraft. Will you be using the A340s for your India flights? In India we use the A330, simply because the time is so short we don’t need the 340s. The flight is so short, that we can carry the full cargo capacity that the aircraft can take. One of the main reasons for us to change our fleet is we wanted to give as few aircraft time as possible. Now we are in a situation when we have a cockpit crew
26
that can fly all of our wide-bodied aircraft: A340s and 330s, our cockpit crew can fly all of them. Actually India at the moment has our youngest fleet because the oldest aircraft is 12 months old and the youngest one is one month. So whether the new A340s will come here or not, for the passenger it makes no difference. They have the same seat capacity, etc. As far as service is concerned, the fact is that it’s a short flight. We have the best in-flight entertainment system. We have very good in-flight meals and stuff like that. The flight time and departure time are one thing which is really a serious thing before us. The airport in Delhi is not crowded. The road to the airport is not crowded. I’m not talking about Business Class but people who want to fly for business; it makes sense leaving India early in the morning and arriving in Europe in the late afternoon. They can (have a) light meal, go to sleep, wake up early in the morning and have a sharp mind for business. If you take an evening flight, you arrive in the morning to your destination and your company expects you to start to work immediately. And then when all your business is done, you fly back during the day. With us, it is the night flight that you have to take to come back. So, after you have done your day’s work, you come to the aircraft and you fly back. So you see, this makes much more sense. Finnair is one of the few airlines that has an international flight from India in the morning... When we started the morning flight, we had some hesitation. All the airlines fly in the middle of the night because there has CRUISING HEIGHTS September 2010
What are the kind of loads that you are getting from India and what are your future plans about India? We have six flights from Delhi. We are getting average loads. Percentage-wise in the whole Asia, our loads are very close to 90 per cent. India is our most important destination. In the nearest future, most of our income will be coming from Asia and you can’t speak about India above Asia. The fact is we have at the moment only one flight, only six flights a week. Trust me, it is only a temporary thing. Aviation has been losing money for many years. Now, we are seeing the first light at the end of the tunnel. Since 2000, there has been only one year for the aviation industry as a whole in the whole world that has been profitable. Now when it is starting to move again, we are in a very good position because we have just renewed our fleet. We have made all those very painful structural changes within our company. So in a way we are now ready. We are ready to get the ball rolling and that’s why we are looking very positively in the whole of Asia as well as in India. We are looking forward to our association with Kingfisher Airlines. Kingfisher has announced that it will join ‘oneworld’, an alliance of which Finnair is one of the founder members. Our alliance has been voted every year as a great alliance and as the biggest alliance. We have been elected as the best one. We are really looking forward to Kingfisher to join us. It will bring us together a great deal with closer abilities and (we will) work together inside the alliance.
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d
Hello
(Left) The old uniform of the airline; (below) the IndiGo crew after the makeover.
New
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AIR HOSTESSES ARE LADIES WITH A SERIOUS ATTITUDE? NOT ANY MORE, THEY AIN’T HOSTESSES OR STEWARDESSES ANYMORE. THAT’S PASSÉ. THEY ARE NOW KNOWN AS THE CABIN CREW — BUSINESSLIKE, EFFICIENT AND QUICK ON THE TAKE. BUT WHAT’S TO STOP THEM FROM BEING STYLISH, ELEGANT WITH A LITTLE BIT OF OOMPH?
CRUISING HEIGHTS September 2010
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ladies! S
he may curtsey next to your aisle seat in the manner of an acquiescent cocktail waitress, delivering champagne and hot towels, leaning forward to operate recline you in club class, fix your table tray in y class (cattle class as Shashi Tharoor famously tweeted) or aiding, with a flutter of her eyelashes, with the seat belt as you prepare for landing. But you also know that she has the authorisation to bang on the door like a bad cop if you spend too
much time in the loo, or zip-tie your wrists to the arm rests if you start getting churlish! However, the “no-nonsense” look need not necessarily match the attire of the air crew, there is a feminine charm and elegance in every avtaar and the men, alas, play second fiddle. “From the point of view of passengers, a good crew uniform is something with “eye appeal”, which includes contemporary design, a good cut and fit, and which is carried off well by the crew. From the point
Gurugyan...
WENDELL RODERICKS Fashion Designer
On the new IndiGo look — I like Rajesh Pratap’s work a lot. But I must be frank on a few points. The hat looks dated from the 50s and will look strange on long hair. The dress should have been converted into a kurta version worn with trousers. The stocking bit is too warm for this country and impractical even in the West during summer. I would have liked to see an Indian sense of colour.
On the new JetLite look — I like this uniform. What I don’t understand is the input of an Italian designer. That too an unknown name. Any Indian tailor could have done this uniform. That said, it is practical. Colour, or rather a lack of Indian colour, is an issue.
(Right) The new look of the JetLite crew.
of view of cabin crew, the uniform should be something which is comfortable to work in without being loose; easily ironable (especially if the flight involves an overnight lay over before return to base) and suitable for the individual’s height and figure. An important part of any uniform in the footwear, which must always match the dress and should be extremely comfortable, since the wearer has to walk 2 / 3 miles on long haul long international flights,” said a senior official from Air India. To digress a bit, in the Indian context, air hostesses first came on the scene in AirIndia way back in the forties (1946). Beautifully tailored European dresses with caps set at a jaunty angle formed the uniform. Sari, as a uniform, was introduced when Air India acquired its first Boeing 707 in 1960s (the Maharaja was the first to fly long haul with a jet in the whole of Asia then). After continuing for many years in the same attire, the airline, at the time of the Air India — Indian Airlines merger roped in Ritu Beri to design the new uniform for its cabin crew and ground staff. The design of the new uniform drew inspiration from the Sun Temple of Konark in Orissa, yet maintained a modern CRUISING HEIGHTS September 2010
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SPOTLIGHT outlook. The colour palette of the uniform, as it is today, is red, orange, black and white, with red standing for strength and orange for cultural roots. While the national carrier of India may have decided to stick to its roots, other Indian carriers decided to go chic, contomperary and funky (translate it as western). The Kingfisher uniform — a combination of red and white-in keeping the red that is the trademark of the Vijay Mallya empire — were designed by Manoviraj Khosla. The uniform was a revolution in many ways as gone were the usual hues of blues and greys, and in place was a bright red ensemble, with an equally bright make-up. While Kingfisher hasn’t changed a whit from its launch (except that Air Deccan hostesses now look like their upmarket sisters), Jet has won praise from its makeover two years back. Now it’s Indigo’s turn! Big ticket designer Rajesh Pratap Singh and stylist Ambika Pillai partnered to give IndiGo, India’s largest low-fare carrier, a chic, new look. The cabin crew of India’s “coolest airline” is all set to don an international look with their deep blue tunic and IndiGo blue hats! “This is my first experience of working with an airline crew and the experience was fantastic. The whole project took six months from start to finish and we did several rounds of samples and worked with several combinations of fabrics before finalising the final version,” said Rajesh. On the blue, Rajesh’s take is that he wanted to work with colours that would go with the overall look and feel of the cabin! Meanwhile, celebrity hair and makeup artist Ambika Pillai translated the look of the models featured in the recent IndiGo TV commercial made by Weiden+Kennedy onto the flight attendants. Ambika Pillai has come up with a unique IndiGo look for all the girls with a set short hair style. “The idea was to come up with something stunning, giving the crew a young international look that will be different from the rest. The whole thing is very western. The make-up is a beautiful pink and brick red colour on the lips and nails that makes a remarkable statement, while the eyes are left nude, coloured with just a pull out liner, thus creating an entirely new look for the IndiGo cabin crew,” said Pillai. Aditya Ghosh, President, IndiGo, is excited with the new look and confident that the guests will love it too. “It’s a reflection of the new India, which is confident and comfortable with its roots and has global aspirations,” he said. Praises are galore for the IndiGo new uniform. “The introduction of caps is a throw back to the western style uniforms worn by Air India (from 1948) and Indian
30
UNIFORMS GALORE
’ crew Jet Airwigahtys yellow
sports a br is unlike any uniform, which looks chic, and e lin air r he ot and vibrant. comfortable
hostess Air IndIniadi’s an tradition in carry the . their uniform
ic flight CathayspPoratincgifa uniform attendant from 1946 to that was worn iss the hat! m to t No . 1950
irways s. British A m 1950s to 60 uniform fro
Photo Credits: www.punjabinit.com (Air India); Hong Kong Digital Vision (Cathay Pacific); and British Airways
CRUISING HEIGHTS September 2010
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ic flight CathayspPoratincgifa uniform attendant from 1950 to that was worn igns. t re 1954. The ha
es’ ore Airtelin Singaprm en has of n be
“
The idea was to come up with something stunning, giving the crew a young international look that will be different from the rest.”
crew unifo ng for its soothi voted “best” cut that ul tif au be d prints an apart from makes it stand the rest.
— AMBIKA PILLAI Stylist
Japan Airlines
uniform from 1952 - 195 4
er
sh The Kingfi uniforms — a stewardess’ ite of red and wh combination tion in many lu vo re a s l wa were the usua ways as gone d greys. an s ue bl of es hu
“
We have tried to give our best keeping the requirements and the spirit of the airline in mind.” — RAJESH PRATAP SINGH Fashion Designer
CRUISING HEIGHTS September 2010
Airlines crew (from 1953) for several years. The cap disappeared when both the airlines switched to the saree and churidar kameez in the late 1950s. The introduction of hats should go down very well with the travelling public since Indigo will be the only airline utilising this concept and passengers always take to something which is ‘different’,” said an official from Air India who refused to be named. Incidentally, on a recent flight we saw every IndiGo lady take off her hat off as soon as the doors were shut for take! So which is the perfect airline attire? It’s a personal choice for most people. For Wendell Rodericks it’s “Singapore Airlines that comes to mind”, he said. While IndiGo may have decided to go the “wow” way, JetLite, has unveiled a new uniform for its staff that’s markedly similar to Jet Airways! The uniform, an important constituent of the company’s comprehensive brand experience strategy, has been designed by Italian fashion designer Roberto Capucci (as Wendell says, “What I don’t understand is the input of an Italian designer. That too an unknown name. Any Indian tailor could have done this uniform.”). The new blue and white uniforms with embroidered collars draw inspiration from the traditional Jodhpuri style of Rajasthan, while maintaining the contemporary and vibrant outlook for the airline, with the light blue colour representing the sky connoting optimism and calmness. Commenting on the new look and feel for the JetLite brand, Sudheer Raghavan, CCO, Jet Airways said, “JetLite’s mission is to be the leading value carrier in India with a reputation for on-time performance and reliability, while offering passengers true value, beyond mere low fares, in terms of a quality product and friendly service.” “JetLite’s new uniforms are strikingly similar in design to those currently worn by Jet Airways’ crew. They are smart, contemporary and offer a “cool look”. Both the female and the male uniforms have closed collars, which in the long run may prove uncomfortable outside aircraft and airport lounges, which are not air condtioned, including transfer for long distances in crew buses,” said a senior fashion stylist. Why is there a need in the Indian carriers to go the western way? “Because people still think that west is a world leader. We should be proud of our Indian-ness and celebrate it...especially when our private airlines are shining. They are Indian in the menu, in the hospitality style and in the overall approach to the global Indian traveller. So why run away from India only in the uniform?” says fashion designer Wendell Rodericks. Well, that’s a query only the airlines can answer.
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FOCUS
WITHDRAWAL SYMPTOMS
Top plane manufacturing giants — Boeing and Airbus — have a major problem at hand. Two of their airplanes need to undergo a change of their ageing engines. In the face of growing competition from Bombardier, COMAC and Irkut, all of which have installed new fuel-efficient engines on their planes, the two giants would either have to go to the drawing boards or use the ones in the market. A look at what is going on at the two factories…
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CRUISING HEIGHTS September 2010
W
ill the Boeing 737 and the Airbus A320 — work horses across the globe — be reengineered — in the next 12 months by tinkering with their ageing engines or will a new single-aisle shorthaul aircraft ascend the drawing board at Toulouse and Renton. Both aircraft face stiff competition from newer more fuel-efficient engines that are being mounted on to the Canadian Bombardier C-Series, Chinese manufacturer COMAC (Commercial Aircraft Corp of China) and Irkut of Russia and Brazil’s Embraer. But there are many who believe that Irkut’s MC-21 and COMAC’s C-919 will struggle beyond their domestic markets. Mike Van de Ven, Chief Operating Officer of Boeing’s largest 737 customers, Southwest Airlines, made a blunt assessment in a media interview: “We need a new airplane to deliver step-change
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improvements. We need a definitive timeline with costs and benefits of those options.” Keeping the existing version of the 737, Van de Ven plainly said was not an option. At the core of Southwest’s agenda of changes is increased engine efficiencies — something not really in the control of Boeing and its chief rival Airbus. Van de Ven’s views were echoed by Boeing Chairman and Chief Executive Jim McNerney who said during a conference call with analysts that customers are pushing the company to redesign the 737 to help increase its fuel-efficiency, rather than simply outfitting the jetliner with new engines. “I think on balance, the customer feedback ... is sort of pushing us toward a newer airplane,” McNerney remarked. Boeing has said previously that it would make a decision on a possible new engine for the 737 by end-2010. However, adding a new engine to an existing aircraft model would be costly for the aerospace giant. Re-engineering will cost around $1 billion to Boeing including strengthening the wings, attachment points for engine and landing gear redesign. Airbus, that competes with its A319, has indicated that it is likely to offer its airplane with the new engines on it. “If Airbus offers a new engine option and Boeing offers a new engine option on their 737, there is absolutely no business case for the C-Series at all,” said John Leahy, Chief Operating Officer at Airbus, to growing orders for the alternative jets because of their 15 per cent greater fuel-efficiency. Nonetheless, Airbus should be worried considering it lost an order in February of this year from Republic Airways for 40 jets, which they exchanged for Bombardiers. Boeing’s current engine-maker for the 737, GE/Snecma has offered its ‘upgrade’ option on the CFM-56 model that currently powers Boeing’s fleet. The new engine is, however, 80 inches in diameter — this is a problem because Boeing 737 has a closer to the ground wings. There are many who believe that the Airbus decision to re-engineer will not prompt Boeing into doing the same, more so when the 737RS (Replacement Studies) is being given greater leeway. Analysts believe that Boeing is more likely to defer its decision until it knows whether its customer base will pay a premium for an improved 737 traded off against the growing chorus from those that want something new. Initially, both Airbus and Boeing
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A game-changer I
t’s called the “geared turbofan”— China signed a joint-venture agreement advanced, so advanced that it is with CFM International to develop viewed as a game-changer — jet CFM’s Leap-X engine for the plane engine by Pratt & Whitney that promisbuilder’s C919. es greater fuel-efficiency (it burns 16 Airbus will look to re-engine the per cent less fuel than today’s engines), A319, the A320 and the A321. But less noise and cheaper maintenance. while CFM was quick to point out that it And it’s getting a huge amount of attenwas “ready to go” with the new Leap-X tion from aircraft-manufacturers from engine without any height modifications potential customers and worried heavyfor the 737, the jury is still out as to weights. In the last year, Canada’s Bomwhether Boeing would go down the bardier and Russia’s Irkut Corp. have same path as Airbus. agreed to use the engine on their in-thePlane engines are dominated by two making single-aisle jets, while Japan’s major alliances: CFM, a Safran-General Mitsubishi will use it on its smallerElectric partnership, which has a sized regional jet. monopoly on the 737, and a much more What makes it so attractive is the diverse team driven by Airbus called fact that Pratt & Whitney is prepared to International Aero Engines (IAE). IAE meet the demand at a hugely reduced leaders Pratt and Rolls-Royce appear development cost. The company is split on whether it makes sense to invest already on track to deliver the geared in the short-term tactical engine, and so turbofan to Bombardier (in late August, far Pratt is marketing its new “geared the engine-manufacturer undertook the turbofan” alone. ceremonial process of tightening the last Its engine has won a majority of bolt on the first of the eight engines it new entrants in Canada, Russia and will be doing its tests on for the CJapan. CFM’s rival Leap-X engine has Series) jetliner that won the attention of a enters service in future Chinese chal2013. That would be lenger to Airbus and followed by MitBoeing. subishi MRJ in 2014. Rolls, which is So what’s so spepioneering opencial about this revorotor technology, is lutionary new believed to prefer engine? Simple. It going to work on a was designed with a strategic new engine. “scalable common The single-aisle core,” less than 10 jet market is expectper cent of the jet ed to be close to 70 engine would have to per cent of all new Geared turbo fan engine be redesigned for commercial aircraft each aircraft model. sales in the next 30 So the engine being used on the less years. Also, since single-aisle planes than 100-seat MRJ is essentially the land and take off with greater frequency same engine used for the 110 to 130-seat than twin-aisle planes, they create more C-Series. Furthermore, because the MCrevenue from maintenance and retro21 and the Airbus A320 seat around 150 fitting services. Pratt & Whitney expects people (in a two-class configuration), manufacturers of single-aisle planes, there is the potential for more developbusiness jets and other will demand ment cost reductions as the engines are more than 48,000 engines like the designed and tested concurrently. geared turbofan over a 20-year period If Boeing indeed decides on a new beginning in 2013. engine for its work horse 737, its long And, by the way, what is a geared relationship with CFM International (a turbofan? Unlike typical turbofans, a joint venture of France’s Safran and US geared turbofan has a gear box that giant General Electric) will most likely allows the engine intake fan to turn of lead them to deal with that company the low-pressure compressor and turinstead of Pratt & Whitney. In February, bine, producing the same thrust with Commercial Aircraft Corporation of 1,500 fewer airfoils.
CRUISING HEIGHTS September 2010
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Ramping the numbers I If there was any doubt about the slow return to health of the airline business, it can be set to rest with both Airbus and Boeing announcing output hikes of their work horse — the single-aisle Boeing 737 and Airbus A320. Airbus recently announced that A320 production will be increased in phases from the current 34 a month to 40 within 18 months. Interestingly, the 34-a-month is already an industry record for jet-airliner production. Airbus already planned to up production of its work horse from 34 a month to 36 in December. The new plan calls for raising production to 38 a month in August 2011 and 40 in the first quarter of 2012. The announcement came as part of Airbus parent EADS’ second quarter earnings announcement. The bulk of these will be assembled at Airbus European sites, although four units a month will be built at the Chinese plant in Tianjin
dismissed the C-Series as a potential competitor. But as the aircraft gained attention and orders — from the likes of Deutsche Lufthansa in Europe and Republic Airways in the US — both manufacturers started worrying a lot more about the issue of singleaisle replacement. Their biggest worry is the huge order book that exists for the two jets at present. They simply don’t want to eat into a still vibrant market for their existing jets, a possibly huge risk considering that jointly they have a backlog of around 4,500 orders. As soon as a narrow-body replacement is announced, there is likely to be a significant drop in the value of the older versions of the jets under order. Some of the uncertainty is starting to clear following Airbus’ decision to bit the bullet with the announcement that it will likely launch the NEO before the end of the year. “We are currently evaluating the possibility of a new engine option for the A320 and if it is offered, it’ll be a customer option on the existing aircraft. The A320 NEO (New Engine Option) with sharklets will target 15 per cent lower fuel burn and maintenance costs. We’ve sold almost 6,700 A320 family aircraft making it the world’s best-selling aircraft family ever,” said
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A320 assembly line
for the local market. “Increased demand for the aircraft and a healthy backlog lead us to decide to further ramp up our production rate to 40 aircraft per month by 2012,” Tom Williams, Airbus’ Executive Vice
“Customers are pushing us to redesign the 737 to help increase its fuel-efficiency... I think on balance, the customer feedback is sort of pushing us toward a newer airplane.” — JIM MCNERNEY Chairman and Chief Executive, Boeing CRUISING HEIGHTS September 2010
President for Programmes. Meanwhile, Boeing has decided to boost its production rate of the aircraft. The company will increase its production rate to 35 airplanes per month in early 2012 from the current rate of 34 airplanes per month to cater to a hike in demand. Boeing's current 737 production rate of 34 airplanes per month has come as recently as May 2010 itself, a hike from the previous level of 31.5 airplanes per month. The company is consistently working with its suppliers to ensure a steady flow of raw materials needed for the higher production. Paradoxically, this would be the highest production rate ever for the Boeing 737 but Boeing Commercial Airplanes Chief Jim Albaugh speaking at Farnborough recently said that maybe an even higher output was needed to fend off competition. He said that his “one worry” was that production may not reach the required level “to give people the airplanes we could drive customers to go and buy the C-Series”. Kiran Rao, Airbus’ Executive Vice President for Global Sales. It is inevitable that such a move would force Boeing to respond with its own strategy. The Airbus fix is seen as practical — quicker, cheaper and would, while putting less pressure on engineering resources, make it more likely to be adopted by Boeing. The aircraft with the new engines and the modifications could fly in less than five years’ time at a total cost of between $1.5 billion and $2.5 billion. By contrast, building a new model from scratch would take at least eight years and cost close to $10 billion. John Leahy, who announced the NEO at the Farnborough Air Show this year, said at that point: “We are very close to a decision. But the engineering workload is the driving force at this juncture.” He was categorical that the re-engine programme would be approved once it is settled that all the engineering and financial resources are in place. Leahy also outlined that the new engine would be an option: in other words customers of the A320 could take it or leave it. One reason why Airbus said it is not keen on developing a completely new aircraft is because there is no ‘next-level’ engine solution ready. “If we were to build a new single-aisle
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Engineer inspecting engine at Pratt & Whitney workshop
airplane today, what would it be? It would look exactly like an A320 with some composites and we would spend our 10 billion euros,” he said. The WSJ Market Watch quoted Wedbush analyst Kenneth Herbert about the decision Boeing faced. Herbert said that while he believed a ‘clean-sheet’ narrow-body aircraft would sell more than a re-engined 737 over the next 20 years, it would not sell enough to justify the additional $10 billion investment necessary. As for the fuel-efficiency gain of a new 737 compared to a reengined one, it would only be around five per cent, partly because Boeing would not be able to transfer much of
“New engine would be an option — customers could take it or leave it. One reason why Airbus said it is not keen on developing a new aircraft is because there is no ‘next-level’ engine solution ready.” CFM 56 Engine
— JOHN LEAHY Chief Operating Officer, Customers, Airbus CRUISING HEIGHTS September 2010
IAE Engine
its expertise in lightweight composite materials, used in the 787, to the much smaller aircraft. “Simply put, we do not believe that the extra five per cent fuelefficiency that Boeing would gain from clean-sheeting the aircraft justifies spending five times the money on research and development at a time when the marketplace is becoming more competitive,” he said. The only problem is that at the moment the engine solutions available aren’t totally convincing, which several experts said, justifies holding off on the re-engining effort. “We are looking at re-engining the aircraft, as the CFM team has said and it is technically feasible with what they’ve proposed but at the same time, we’re looking at the possibility of a new aircraft. Our objective is to make a decision based on what our customers want, but we have time to make that decision. If and when the technology (suites) and customer requirements line up (in the next several years), I think we’ll have the right mix for a new airplane and if that doesn’t work, we have the path of continuous improvement that we’ve always been on,” said Randy Tinseth, Vice President, Marketing, Boeing Commercial Airplanes, while talking to aviation website Fleetbuzz. In the meantime, in order to cope with the demand for single-aisle aircraft, Airbus in March said it would step up A320 production. Boeing followed suit in July this year with plans to increase production rate of the 737 to 34 — a month in 2012 from the current 31.5.
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August saw a new security regime in the US — 100 per cent air cargo screening. Simply put, all cargo that goes into a passenger plane will be screened. We too, have screening for cargo that goes on a passenger aircraft but with the heightened threat perception, can we afford to take chances, asks Tirthankar Ghosh.
LONG
HAUL FOR
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hose of you who have flown to the United States and come back after August 1, 2010 may be aware of a new security regimen that the US Transportation Security Administration (TSA) has put into effect. As of August 1, 2010, 100 per cent screening of all cargo transported on passenger aircraft has become mandatory. The law was part of the implementation of the 9/11 Commission Recommendations Act of 2007, which required the establishment of a system that would enable the aviation industry to screen 100 per cent of cargo transported on passenger aircraft commensurate with the level of security used for checked baggage. According to the law, every piece of cargo carried on passenger aircraft will require screening, prior to being loaded on any passenger aircraft. Therefore, pallets will have to be taken apart, screened and reconfigured. The 9/11 Act specifically identifies the types of screening allowed, ranging from physical inspection to various technologies. If airlines are forced to screen cargo, similar to how passenger baggage is screened, there is a potential for delays and damage to ship-
KEY MILESTONE: TSA’s initiative of introducing 100 per cent screening of air cargo added another layer to existing robust security system, including security check by sniffer dogs, explosive trace detection along with x-rays, covert testing and no-notice inspections of cargo operations.
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ments. The screening process, therefore, affects all cargo on passenger planes, but it is the large shippers and exporters who will feel the greatest impact, mentions the TSA website. To overcome the delays and other problems, TSA developed the Certified Cargo Screening Programme (CCSP) as a solution to help industry reach 100 per cent screening mandate. The programme enables freight forwarders and shippers to pre-screen cargo, avoiding any potential bottlenecks at the airport. It is still early days and things seem to be moving smoothly. Brandon Fried, Executive Director of Airforwarders Association (AfA) in the US was quoted, “The early returns are that so far it has been relatively transparent and not a significant event. We have really not seen any of the dire hardships that initially in 2007, we thought, we would encounter when the legislation was passed.” However, Fried was quick to point out that August was a slowmoving month for the aircargo sector. Come September, the situation will be different since the air cargo industry will start moving goods for the “holiday season”. It is then that the delays and holdovers could pile up.
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Measures of deterrence
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he TSA (Transportation Security Administration) has warned that passengers on flight to US from international destinations could be subject to “enhanced, random security measures throughout the passenger check-in and boarding process” on any given day. Fliers would notice enhanced measures, including the increased use of technology and processes such as explosives trace detection, canine teams, advanced imaging technology, and behaviour detection among other measures. The enhanced security measures put into effect have been tailored to counter potential threats and are focused on all passengers from all countries. They are part of a dynamic, the TSA points out, threat-based process, covering all passengers travelling to the United States while focusing security measures in a more effective and efficient manner to ensure the safety and security of all those flying in to the US. The TSA uses layers of security to ensure safety of the travelling public within the USA. Because of their visibility to the public, the TSA’s officials are seen at airport checkpoints. These checkpoints, according to the TSA website, constitute only one security layer of the many in place to protect aviation. Others include intelligence gathering With the August 1 law, the US may have ensured 100 per cent security for its aviation sector, though doubts have been raised in certain quarters. Today, however, the big question that is being asked in our country is: are our flights — domestic and international — safe? The general perception is that our flights are safe: well-known US-based Journal of Commerce, not too long ago, quoted Brandon Fried saying, “The notion that other countries are doing nothing is ludicrous. India has been doing screening at piece level for years and years now. There has been a lot going on with regards to involving security in other countries, and many are in fact ahead of us (the US).” That perception is only the one that is visible. While there are news reports aplenty of security lapses at airports, there are moves too to ensure that our airports are secure. Recently, for example, the Ministry of Home Affairs (MoHA) decided to boost security at 51 airports across the
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NO MORE HASSLES: Will the new law for cargo screening make our security system terror-proof?
and analysis, checking passenger manifests against watch lists, random canine team searches at airports, federal air marshals, federal flight deck officers and more security measures both visible and invisible to the public. Each one of these layers alone is capable of stopping a terrorist attack. In combination, their security value is multiplied, creating a much stronger, formidable system. A terrorist who has to overcome multiple security layers in order to carry out an attack is more likely to be pre-empted, deterred, or to fail during the attempt.
SOLID START: This screening effort by TSA has enabled cargo loaded onboard passenger aircraft each day to be pre-screened, avoiding potential bottlenecks at airports.
CRUISING HEIGHTS September 2010
country in a time-bound manner. The MoHA directed the Bureau of Civil Aviation Security (BCAS) to ensure installation of CCTV cameras in vital locations at all airports, deployment of adequate security staff, raising of perimeter wall and setting up of enough watch towers. The ministry also directed the Central Industrial Security Force (CISF), which is responsible for providing security at most airports, to ensure bomb disposal squads and sniffer dogs are available. The report quoted an official from the ministry saying, “Though we have no major problem in the security of Delhi and Mumbai airports, there are certain gaps in the security of airports like Hyderabad. We have directed plugging of all loopholes within a stipulated time.” India’s seriousness about aviation security can be gauged from the fact that in the beginning of the year, a joint working group comprising representatives from the US TSA along with officers from the Ministry of Civil Aviation and the BCAS met to discuss issues that were vital and sensitive to both India and the US. Among the issues that were discussed were: the deployment of Sky Marshals/Air Marshals; the concept of an Aviation Security Force and adoption of best practices in security with cooperation of both sides; US cooperation for the need, technology and source identification of human body scanners; training on in-line x-ray baggage inspection system and information on the latest/desirable technology; and, cooperation on behavioural detection training. It was also agreed that while carriers flying out of India to the US were required to comply with the Emergency and
Security Directives of the TSA, the directives essentially should be routed through the BCAS. Also the Indian side requested that dual screening of baggage on USbound flights be dispensed with. Whatever the moves between India
WE DON’T J U S T T R AV E L . WE ARRIVE. The ‘Best Travel Technology Partner’ gets even better. Amadeus bags the prestgious TAAI award as the ‘Best GDS of the year’. The award was for outstanding contribution to the development and promotion of travel. Since 1994, as one of India’s largest travel conglomerates, we have been pioneers in providing a global platform, a Global Distribution System (GDS) which enables businesses to access state-of-the-art travel automation technology. We only wish to take this opportunity to express gratitude for all the invaluable support extended to us by the industry and the faith entrusted upon us. We thank you all for making this happen.
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MORE SECURE: The 100 per cent screening of air cargo on passenger aircraft has led to a step ahead in strengthening the security of air travel.
and the US, there are facts that shake our belief in the system. Over the last eight months or so, for example, the government has been grappling with the problem of finding a head for the BCAS. The last head retired in January this year and till the time of filing this story, the Commissioner Security’s position was held by a Joint Secretary in the Civil Aviation Ministry. It was recently reported that the government has finalised a name and he could take over shortly. The feeling in the BCAS and those departments related to it is that the Bureau should be recast. Today, it is under the Civil Aviation Ministry when its prime job is ensuring security and safety to all aviation-related activities. Ideally, the Bureau should be under the Home Ministry. The need, perhaps, of a strong person at the head of the Bureau, is greatest now with the threat perception rising almost every day. To top it all, the BCAS has been under fire from the Comptroller and Auditor General (CAG), according to a report tabled in Parliament, for not moving fast enough on two vital aviation security projects: the Civil Aviation Security Training Academy (CASTA) and the construction of an office building for the Regional Deputy Commissioner of Security (RDCOS) at Mumbai. While CASTA had been approved 13 years ago, the RDCOS building got its nod more than five years back. The CAG in its audit report stated, “These cases highlight the apathetic attitude of the authorities towards strengthen-
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Ensuring safety The Bureau of Civil Aviation Security (BCAS) was initially set up as a cell in the Directorate General of Civil Aviation (DGCA) in January 1978 in the wake of the hijacking of the Indian Airlines flight on September 10, 1976. The role of the cell was to coordinate, monitor, inspect and train personnel in civil aviation security matters. On April 1, 1987, the BCAS was reorganised into an independent department under the Ministry of Civil Aviation as a sequel to the Kanishka tragedy in June 1985. The main responsibility of BCAS, since then, has been to lay down standards and measures of security of civil flights at the country’s airports. Among the security standards are: Monitoring the implementation of security rules and regulations and carrying out survey of security needs. Ensure that the persons implementing security controls are appropriately trained and possess all competencies required to perform their duties. Planning and coordination of aviation security matters. Conducting: Surprise/dummy checks to test professional efficiency and alertness of security staff; and mock exercises to test efficacy of contingency plans and operational preparedness of the various agencies.
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he report about the Air India Kanishka tragedy is still fresh in our minds. John Major made it a point to warn the Canadian air transport security agency that there was a need to modernise the systems. This, despite the fact that the Canadian government has committed $96million for cargo screening over five years. “It needs to move faster, and fix the urgent problems that endanger Canadians,” said the Globe and Mail in an editorial. It went on to point out that “after September 11, 2001, Canada nationalised and federalised passenger screening. But policymakers often focus on the last disaster (hijackings, bombs in unattended bags, suicide bombers) rather than preparing for the next… Air cargo could be the next big disaster.” The major report had mentioned that most cargo loaded onto passenger aircraft was still not subjected to inspection by x-ray or other means. Indeed, the efforts by security agencies almost everywhere to usher in and use state-of-the-art technology at airports to ferret out material that could harm passengers or a flight has till today rarely ever been used for luggage that goes into plane bellies. More efforts, therefore, the Major report stated, were needed — from better machines and manual searches to training and procedures — to expand the security boundaries so that all cargo is checked before it is put on board. The process that has been followed in India for a long time, under instructions from the BCAS, is simple enough: all cargo meant for passenger flights is screened by officially certified screeners of the airlines and the airport custodians (in a large number of airports, it is the Airports Authority of India). The process began when we had fewer flights. Over the years, as the number of flights have grown, the screening process has been upgraded and perfected. Today, according to stakeholders in the air cargo sector, the system is near-perfect. It is a difficult enough task. The law states that not only should all cargo be screened, but that it must be screened at the piece level. Simply put, that means carriers would have to break down each pallet and force each piece of cargo through the screening process and then build the pallet once again before putting it on the plane. It is not an easy task and also not one that can be done very fast. With air cargo volumes rising by the day and infrastructure lacking
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Israel bags security honours
E
xperts are unanimous in their choice of the safest airline in the world. It is the national airline of Israel, El Al. And as for the safest airport: yes, it’s the Ben Gurion international airport — again in Israel. To begin with, El Al started the system of Sky Marshals way back in the 1960s and any flier who has ever taken an El Al flight will bear testimony to the fact that the carrier has been doing racial profiling. The country’s aviation-related security system has been very successful, simply because the whole business is handled by the Israeli secret service. In addition to the sky marshals on each El Al flight — they are, in fact, the last in the pecking order, because if they are forced to take action it means that the security system has failed somewhere — the airline checks and rechecks each pas-
(see Mumbai Woes in the Cargo section), 100 per cent screening should be a worry for certain industries. The pharmaceutical industry, for example, that sends out timesensitive and often costly formulations need to worry. These products cannot be opened or tampered with. Another industry that should worry is IT. When highlysophisticated equipment or products are subjected to piece-by-piece handling, especially by untrained cargo handlers, the end result could be anybody’s guess. So, what could be the way out? Like the TSA did by forming the Certified Cargo Screening Program (CCSP), our cargo stakeholders should coordinate and certify agencies capable enough — of clearing the screening process without creating bottlenecks and piling up damaged goods. These
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senger. The process begins as soon as a passenger buys a ticket. Along with the ticket, the system gets hold of the passport number and the investigation starts. That is the first ring of security. When a passenger enters the Ben Gurion terminal, there are two other security rings that he has to pass through, the first of which is the gate to the airport where armed guards inspect his vehicle. At the terminal entrance, there is the third ring comprising men with weapons. Within the terminal, security personnel are everywhere, but they do not stand out. There are only a few, in fact, in uniform. At the check-in counter, the passenger has to face a barrage of questions from a security person who could be fresh out of the army — all part of the security drill. These are the profilers who try to ferret out anything out of the ordinary. Their only task is to find out a terrorist before he boards a plane. The El Al system works on the assumption that there could be an attack every day. That is why the heightened security, the questioning and the profiling. The whole process might be time-consuming but has never failed. Perhaps, we should take a leaf out of their security book.
Physical cargo inspection may be a way out but when volumes are large, checking every piece of cargo can create a whole range of problems CRUISING HEIGHTS September 2010
agencies will be given powers to independently screen cargo at their own facilities so that when a pallet arrives at the airport, it can be loaded directly on to the plane. The question here is: Can we have such agencies that can screen cargo? And even if these agencies are certified, given the conditions and the situation, can we trust such agencies completely? The moves in the US, incidentally, were not smooth. A Government Accountability Office (GAO) report in June this year had said that the TSA would find the going tough to meet 100 per cent screening of cargo on domestic passenger aircraft from August 1, difficult. One of the reasons cited was that not many freight forwarders had become part of the Certified Cargo Screening Programme. The CCSP, which enabled cargo to be screened in the supply chain, was going slow because the TSA lacked funds and personnel. However, by August 2, 2010, the TSA reported that there were more than 900 facilities which had become CCSP certified. As a result, more than half of the nine million pounds of cargo loaded on passenger-carrying planes each day, is pre-screened. It is no wonder that on the second day of the 100 per cent screening process, TSA Administrator John Pistole, said in a statement, “TSA has taken another step forward in strengthening the security of air travel. Screening all cargo on domestic passenger aircraft adds another layer to our already robust security system and ensures that TSA is doing everything possible to ensure the safety of air travel.” Last but not the least is the cost involved in changing over to a 100 per cent cargo screening regime. According to Brandon Fried of the US-based AfA, the screening equipment would cost between $30,000 - 500,000. To begin with, physical cargo inspection may be a way out but when volumes are large, checking every piece of cargo can create a whole range of problems. Though no delays have been reported by passenger carriers yet in the US due to delays caused by 100 per cent screening, freight forwarders have found the easy way out — at least for the moment — by not going for passenger aircraft. In our case, while the high financial commitments would not be easy to come by, sending goods by all-cargo planes would be difficult. There are regions like the North-East, for example, that are only served by passenger planes, which transport perishables and other time-bound goods. Before the number of flights within the country rise to unmanageable proportions, our security managers should take a long, hard look and plan for the future.
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The recent announcement that Delhi’s T3 will be a hub for the country’s national carrier Air India will not solve the carrier’s problems. A detailed look at the myriad obstacles the airline faces.
A spoke in the hub plans 44
CRUISING HEIGHTS September 2010
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(Left to right) Air India CMD Arvind Jadhav, Civil Aviation Secretary M M Nambiar, and DIAL CEO P S Nair.
O
n July 14, 2010 a confident Air India announced to the world a new deal it signed with DIAL to designate T3 as the Maharaja’s major hub. Delhi International Airport Limited (DIAL) CEO P S Nair said both the airport and the airline were dedicated to creating, what is seen as, India’s first hub. In line with this decision, Air India realigned its winter schedule so that a majority of its domestic flights would feed international flights creating a true hub. As part of the deal, Air India would get 16 to 18 aerobridges, 56 exclusive check-in counters in the central space of T3. It also stated that T3 would be the base for Air India’s long-delayed and yet-to-be delivered Boeing 787 Dreamliner aircraft. Air India would get preferred gates and parking bays which would help cut transfer time from one flight to another by at least one-and-a-half hours thus increasing the appeal of Air India as a carrier. The whole idea was to bring passengers from all over the country to the Delhi hub and fly them to various overseas destinations. While DIAL would benefit from this association, Air India expected discounts to be as high as 30 per cent and its revenues could rise by nine to 12 per cent annually from the flights from Delhi to overseas destinations, including
New York, Chicago, LA, San Francisco in North America as well as London, Paris, Frankfurt in Europe, Melbourne in Australia, Seoul in South Korea, Tokyo and Osaka in Japan besides most bread and butter routes in Gulf and the Middle East as well as South East Asia and, of course, SAARC member countries. Perhaps, the hub planners had at the back of their mind a possibility of quickly inducting at least 10 Airbus A330-200 on lease so that the Maharaja could get its business of flying people to various parts of the world and give the true hub experience going. Stand alone, it was and still is a great idea provided the Air India management is able to get it done. But the moment one looks at its finances, the failure to deliver on much smaller ideas, the hub itself could become like painting oneself into a corner. Let’s take the finances part first. Civil Aviation Minister Praful Patel informed Parliament that NACIL (National Aviation Company of India Limited), Air India’s holding company had an outstanding loan of $3,856.24 million in forex and Rs 6,475.69 crore to finance aircraft acquisition/spare engines for replacement of its ageing fleet and cater to expansion plan. The working capital borrowing had already touched, to be precise, Rs 17,957.75
EXUDING OPTIMISM: Air India would get 56 exclusive check-in counters in the central space of T3.
CRUISING HEIGHTS September 2010
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The AI perspective A
ccording to Air India, the Air- half of 2011, which Air India feels is fact, it is on the lower side. Not only bus A330-200 is the ideal air- still doubtful, a significant capacity that even the B787 promised originalcraft to fill the gap that exists gap would continue to exist in Air ly has undergone a change. It is now in Air India’s mid-sized fleet. Since India’s mid-size fleet. This may well time for Air India to act and induct mid-2008, the capacity of Air India’s drag to 2015 by when, according to the Airbus A330-200s as early as posfleet segment of 200 and 300-seaters the turnaround plan, Air India hopes sible; in fact, there is enough room has more than halved with the phas- to fly 25 million domestic passengers for inducting 10. Air India needs to ing out of older 747-combis, 767 and and 15 million international passen- act fast or else even these may be A310s. Due to the continued delay of gers. Hence, doing nothing would picked up by other carriers to take the 787, this capacity has not been mean that Air India will not be able to advantage of rising global air traffic. replaced or filled up. This has meant rebuild its market position. While Air India in the past had been operator rather forced Air India to drop sig- competition is growing stronger, Air ing both Boeing 747 and Airbus A310 nificant number of routes due to lack India is unable to take advantage of and, therefore, there can be a peaceful of capacity leaving the market open rising GDP and air traffic. Non-avail- coexistence between the B787 as and to competition to take advantage. On ability of the 787 is continuing to when they arrive and the A330-200, some other routes, including those to cause serious losses to Air India and which are literally available off the Singapore, Bangkok etc, Air India has the damage of a billion dollars shelf for Air India only. been forced to transfer its passenger claimed is not at all misplaced. In The A330-200 proposed to be givto narrow-body singleen to Air India can fly nonisle aircraft leading to stop from Mumbai or Delhi reduced market share to London Heathrow, and higher unit cost than Johannesburg, Nairobi, the competition. Hong Kong, Narita in On some of these Tokyo, Perth, Sydney, etc. routes, Air India is With seating between 265 forced to fly narrow and 280, A330-200 can bodies with payload meet many of Air India’s penalties leading to a expectations. Already Indidouble whammy. Even an carriers like Jet airways, if some Boeing 787s are Kingfisher airlines are delivered in the second WORKHORSE IN THE SKY: The A330-200 is a best seller in the Airbus table. operating A330s.
crore. The Government had infused equity of Rs 800 crore in two tranches of Rs 400 crore each in February/March 2010. It had promised another Rs 1,200 crore in the current fiscal 2010-11 subject to Air India meeting specified trigger points set by the government that included a major cost cutting. Meanwhile, time had come up for it to raise another $1.6 billion for new aircraft acquisition on top of $3 billion it had already raised to fund its aircraft acquisition plan so far. Hence, it went to the government for yet another sovereign guarantee. However, the government informed Air India that it could not possibly give a full guarantee nor seemed warm to the idea of pledging its aircraft as collateral for the loans it sought to raise. The potential creditors who are ready to fund Air India wanted both sovereign guarantee and pledging of AI planes. This issue was even discussed by Civil Aviation Secretary M M Nambiar with Finance Secretary Ashok Chawla who was the Civil Aviation Secretary before Nambiar took over from him in late
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The potential creditors who are ready to fund Air India wanted both sovereign guarantee and pledging of AI planes CRUISING HEIGHTS September 2010
2008. Air India was informed that the central government could give sovereign guarantee only for Air India’s working capital loan and was willing to offer a part guarantee for the term loans it wanted to raise to buy aircraft. After India became a signatory to the Cape Town Convention, an international treaty designed to facilitate asset-based financing and leasing of aircraft, it became necessary for a borrower to both pledge aircraft as security and offer a sovereign guarantee while raising loans. The central government did not agree to this proposal in full measure and offered only a part solution, putting Air India in an even tighter spot. Obviously, Air India cannot continue to flounder with tax payers always expected to be at its beck and call in the name of patriotism (as if competing domestic carriers are not patriotic!). So, Air India had to depend on Plan-B: wait for the Reserve Bank of India (RBI) to give its final view on the commercial banks’ proposal to restructure the loans extended to various domestic air-
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A RAY OF HOPE: T3 is going to be major hub of national carrier Air India.
lines, mainly Air India and Kingfisher and not Jet Airways whose Chairman had announced that they do not want any such support from the government or banks. This is the status of Air India as far as its need for fresh funding is concerned. All this does not mean that there has been any change in its financial condition that continues to be as serious as before. CRUISING HEIGHTS had in its August issue shown the ridiculous state of Air India with a domestic fleet nearly three times that of IndiGo and still managing to garner a market share of just over 17 per cent as against 16.4 per cent of IndiGo. What market observers wish to point out here is that while it is true that Air India might have been hamstrung by the non-availability of MCLR (Medium Capacity, Long Range) type of aircraft to meet its need for medium-haul traffic, it had no such restraint in operating its domestic services. The fact that it failed miserably to capitalise on its brand new fleet from the Airbus A320 family (with all the 43 new orders being fully delivered) speaks volumes about Air India’s ability to face domestic competition, which is much less compared to international operations. Now we are told that Air India will steeply cut domestic fares by between three and 23 per cent effective September 1, 2010. It has been reported that between April and July 2010, Air India domestic registered ticket sales of Rs 300 crore were more than the same period of 2009. A good show, indeed! However, the critical issue is what happens to the yield or simply put, revenue per passenger flown. With high
48
costs how could Air India expect to make money by reducing fares? The other side of the story is that Air India might end up provoking a fare war, which will help the passengers but damage the airlines. This is because if other carriers also drop fares then what happens to Air India once again. If it is going to be a fight for market share, there is no way Air India can win. One needs to look at only the salary bill of Air India and other carriers. The rise in domestic loads to over 72 per cent may seem good but at what yields is the crucial question. As for the international operations of Air India, it continues to be dismal as evident from its load factor of just between 62 and 64 per cent. A top secretary to the Government
According to the Ministry of Civil Aviation, of the 189 international flights operated by Air India on a daily basis, only nine flights make a profit CRUISING HEIGHTS September 2010
of India said when he flew back from London to Delhi by Air India’s Boeing 777-300 ER, was the only person in the first class as a full fare paying passenger. In the Business Class, there were only two passengers of whom one was a Joint Secretary. Later that Secretary asked Jet Airways to give a comparative fare they charged for First and Business Class on their London-Delhi route. The Secretary was astonished that Jet managed to get near full occupancy on its First and Business Class at fares much higher than that was being charged by Air India. So what does Air India do? Blame the aircraft type and say it is too big! If this is an argument we accept, then may we ask the Air India management why is it that it does not fill up its smaller narrow body planes on the domestic sector where, till some time ago, a web search for air tickets showed that they were much higher in prices than LCC and sometimes even the full service carriers? Now, if we superimpose the Delhi hub idea here, how does one get passengers from all over India to Delhi and feed Air India flights to the US, Europe, Far East, Oceania, South East Asia, Gulf, Middle East, etc.? It will be wrong to compare hubs like London, Paris, Amsterdam, Frankfurt, Singapore, Dubai, etc. with India as a geographical entity. Why should a passenger in Chennai fly to Delhi and fly onwards to Chicago when a British Airways, Air France, Emirates can do that via their home hubs more seamlessly than Air India? If Air Indians cannot be patriotic how can they expect the passengers to be so when they have to pay for their passage? The latest we have heard is that the Ministry of Civil Aviation and a special committee has turned down Air India’s much-publicised plan to fly Delhi/MumbaiMelbourne sector in Australia. We believe Air India has been told that there is no need to induct one more loss-making route. Air India used to fly earlier to Sydney and from where much of the Indian traffic comes to and goes from India. According to the Ministry of Civil Aviation, of the 189 international flights operated by Air India on a daily basis, only nine flights make a profit. They say it will be much better to save money by grounding many of these flights than actually operate them. It is in this context that the proposed flight to Melbourne was scrapped after having been included in Air India’s winter schedule. The hub idea is possible in smaller countries and city states. On the contrary, do we hear of one major hub in the US? No. the whole idea of Boeing777, Boeing787 and even A330200 was based on the premise that Indians in metros could fly direct to foreign destinations of their choice. Second, it takes 18 to 24 months to develop a route and till then the
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SPECIAL REPORT losses will have to be sustained. Air India’s hub idea needs to be seen in this context. True, there was serious global economic recession in 2008 and the second half of 2009. Since then, the markets have begun to swing up and even IATA says the Asian market is now logging a 10.5 per cent rise in traffic. Even Jet Airways has been registering a load factor of over 81 per cent on its international flights. True, it also leased out seven of its Boeing777-300 ER and brought in the smaller Airbus A330-200 to fill the gap. But now it seems to be in need of the B777s again. British Airways has already begun to refurbish the Boeing 747 jumbos it had parked in the Arizona desert to induct on its UK-India sector. Air France is now planning to upgrade its flights to India with B777s instead of only A330s. Singapore Airlines is mostly using B777s to skim off passengers from India for its long-haul operations and so
$850 million from Boeing for the lost opportunity in the MCLR segment leading to lost revenue in the absence of a comparable aircraft. While it has been reported that Air India has asked for over a billion dollar in damage, this figure perhaps includes the $250 million, which Air India had paid in advance for the aircraft it had ordered and waiting for deliveries. It is in the above context that Air India felt the need for leasing ten Airbus A330200s immediately. In fact, Airbus Industrie has offered to lease directly to Air India. The Air India board has set up a threemember committee to look into this. The committee is headed by the Additional Secretary and Financial Advisor in the Ministry of Civil Aviation Bharat Bhushan Nambiar and its other two members are Joint Secretary Prashant Sukul and independent board member and FICCI Secre-
APPLE OF DISCORD: Delay in the delivery of B787 Dreamliner has become obstacle for Air India.
is Emirates. It must be pointed out here that many of these and other carriers are also operating Airbus A 330-200, a versatile aircraft. It is no wonder that Air India is seriously missing out on it. Obviously the inordinate delay in delivering the B787 Dreamliner by Boeing has already raised the temperature of Air India CMD Arvind Jadhav who has gone on record to state that the “Boeing delivery schedule of B787 is total disaster”. At the recent Farnborough Air Show, Jadhav said, “We have not got any confidence in the delivery schedule of Boeing of its 787s.” In late August, the Air India board decided to nominate its independent Director, former Air Force Chief Fali Major to re-negotiate with Boeing the contract for the 787 that had been signed in 2006. Meanwhile, Air India has also sought a damage of over
50
The delay in delivering the B787 Dreamliner has raised the temperature of Air India CMD Arvind Jadhav who stated that the “B787 delivery is total disaster” CRUISING HEIGHTS September 2010
tary General Dr Amit Mitra. Incidentally, this is the same committee that shot down the Delhi-Melbourne flight. On the issue of Air India seeking damages, sources point out that nothing can be done outside the contract that has been entered into between Air India and Boeing. If the contractual obligation allows for damages of only $150 million for delayed deliveries, there is no way Air India can extract more. If Air India has the right to cancel the order, then the agreement, an official of the Finance Ministry said, provided for even Boeing to turn back and cancel the supply of Boeing 787s. In any case, the Ministry of Finance has indicated that should there be a cancellation of the order for 27 Boeing 787s, then it could escalate into some kind of trade war just before the arrival of the US President Barack Obama in November 2010. The way the Indian government has been playing up to the US administration, including the passage of the Nuclear Liability Bill to be in place, before Obama’s visit reflects the importance of Indo-US geopolitical relations of which trade and investment form an important part. So, should India want Air India to unsettle excellent relations that have been built up with the US? More importantly, the recent brush-off with China on the visa issue and India taking a very strong stand also reflects that nothing happens in isolation. Therefore, some in the government wonder, should Air India hold India’s foreign policy to a kind of hostage? It was also pointed out that this did not in any way influence the decision to lease or not lease the A330s. At the same time, they also said that as on date no airline had the Boeing 787 and, therefore, to say Air India was losing all its opportunities was not fully right but only partially as it was feeling the absence of a comparable MCLR in a A330-200. But what is not understandable is that why is Air India failing to use the B777-300 ER when others have been making money on it and that too out of India? It will be very pertinent to point out that the interest rate at which Air India has received its Boeing 737s, Boeing 777s and, perhaps, Boeing 787s, will be at three per cent with government of India providing sovereign guarantee as against nine per cent being paid by the domestic arm of Air India for its acquisition of narrow-body aircraft. Incidentally, Air India is the biggest borrower and beneficiary of US Exim Bank funding globally. So, while Air India may have its grouse, the Finance Ministry does not want to create a situation where other Indian corporations suffer because of Air India. Only very recently ADAG Group’s Reliance Power (Anil Dhirubhai Ambani) signed an agreement with the US Exim Bank for a loan of $960 million.
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AIR CARGO & LOGISTICS
Freightplane, freightplane
Movin’so fast
The international freighter market is not exactly on a song but the numbers projected by the major manufacturers for the next two decades are encouraging. Etihad CEO James Hogan at the press conference in Farnborough where the carrier was handed over the first A330-200F
Air cargo woes at Mumbai p58
FedEx ramps up India ops p62
Facilities for freight forwarders and airlines remain inadequate at the airport
New Bengaluru flight to connect South India to Middle East, Europe and the US
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TRENDS
Air cargo: Moving ahead steadily THE INDIAN air cargo sector has performed beyond expectations — especially domestic cargo — according to a reply in the Lok Sabha by Praful Patel, Civil Aviation Minister. The target set for and the achievement for international and domestic cargo traffic for all the airports taken together during the last three years (2007-08, 2008-09 and 2009-10 — see chart) were: The Airports Authority of India (AAI) has forecast that there will be a growth in Year
2007-08 2008-09 2009-10
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International Cargo (in’000 Metric Tonnes) Targets Achievement 1133.41 1146.75 1259.94 1149.92 1402.49 1270.71
international and domestic cargo at all the airports at 10 and 15 per cent during 201011 and 2011-12; at 10 and 12 per cent during the year 2012-13 and 2014-15, respectively taking 2009-10 as the base year. The AAI has taken steps to facilitate movement of cargo at a number of airports. Among them are Kolkata, Chennai, Coimbatore, Amritsar, Delhi and Bengaluru airports. The AAI has also chalked out expansion plans for cargo terminals at Port Blair, Domestic Cargo Srinagar, Surat, Pune and (in’000 Metric Tonnes) Patna airports. It has also Target Achievement identified the sites for 575.34 568.23 establishing cold storage 627.90 552.06 facilities at Agartala, Dimapur 686.01 690.90 and Guwahati airports.
LEADER LUFTHANSA — Lufthansa Cargo’s Opticooler, a loading device tailored for the pharmaceutical and hightech industry, has been launched recently. The box, built by the German cargo carrier in close collaboration with numerous clients and producer DoKaSch GmbH, is able to maintain a permanent temperature between +2 and +30 degrees Celsius. It uses compressor technology instead of running on dry ice like its forerunner Unicooler. All that the Opticooler needs is electricity to charge and re-charge the accumulators embedded in the device’s floor. The charging process takes between five and eight hours. Once fully charged, the
FTWZ to reduce costs
The Opticooler from DoKaSch
IN WHAT could become a trend, a supply chain and logistics infrastructure solutions company, Arshiya International, recently announced the operational launch of the country’s first Free Trade and Warehousing Zone (FTWZ) in Panvel, Mumbai, just 24km away from the Jawaharlal Nehru Port Trust (JNPT). Logistics costs in the country hover around 14 per cent of GDP, compared to 8-9 per cent in most developed nations. A major contributor to these higher costs stems from the lack of infrastructure investments into the logistics space within India. Arshiya’s FTWZ will highlight a landmark beginning within the logistics sector that is expected to improve efficiency and lower costs for Arshiya’s customers. The first of five strategically located FTWZs being built by the company, this 165-acre state-of-the-art facility will be operational over two phases employing over 25,000 people at full capacity and is expected to cost approximately Rs1,500 crore. The FTWZs offer immense benefits to companies with import, export, and trading activities out of India.They allow flexibility towards end-distribution through duty deferment, higher inventory visibility, reduced buffer stocks, and overall lower product costs.They also enable flexible and hassle-free re-export in addition to other advantages. Ajay S Mittal, Group Chairman & Managing Director of Arshiya International Ltd said that with the launch of the FTWZ, Arshiya would also serve as a game changer in the Indian logistics landscape. The FTWZs develop a whole new dimension in providing integration, flexibility and savings for global and Indian customers.
batteries run 100 hours. Unlike dry ice, compressors can be permanently controlled, which assures high transport reliability. Also there are more advantages the Opticooler offers in comparison to the Unicooler. It is perfect for specific products like insulin that cannot come in contact with carbon dioxide. The new product has been deployed on both freighter and passenger flights with roughly 100 Lufthansa Cargo stations being involved up to now, according to Michael Goentgens, spokesperson for Lufthansa Cargo. To coordinate constant availability and the seamless flow of the coolers — it is taken on hire by customers — LH Cargo has implemented new software and set up a management team.
“Our (TIACA’s) prime focus is in the area of Industry Affairs because we want to become a stronger voice for the industry. I also want to see TIACA working more closely with other trade associations and developing closer dialogue with shippers and forwarders.”
Uli Ogiermann
Chairman of The International Air Cargo Association on the priorities of the 2010 Air Cargo Forum in Amsterdam in November, 2010
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CARGO
Etihad CEO James Hogan at the press conference in Farnborough where the carrier was handed over the first A330-200F.
Photos courtesy: S. Ramadier / Airbus S.A.S 2010.
Fleet building
GETS A PUSH
As the sun starts shining on the world economy, the two top plane manufacturers have projected that the air cargo sector will need almost 3,000 freighters in the next two decades. A report. ooking up is not difficult — at least not when the cargo front is doing rather well. In a recent television interview, Lufthansa’s Chief Financial Officer
L
Stephan Gemkow commented, “The cargo business is currently absolutely booming. For the first time in over 10 years we are seeing not just strong imports out of China, but also strong
exports to China. And when he was asked about the immediate future, Gemkow said: “As far as a CFO can be, I am optimistic.” This was not the case a few months ago. Indeed it
CRUISING HEIGHTS September 2010
was strange to note that with air cargo tonnages dwindling almost every day, major players Boeing and Airbus were building new widebodies: A330200F, 747-8F and 777F. While Boeing’s 777F made
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CARGO Boeing’s Freighter Forecast Freighter market 740 new and 1,750 converted share of fleet
Delivery units 520
100%
1,070
75%
250
50%
210
25% 2009 Freighters 1,750
10
430
0%
2009 Freighters 2,980
2010 to 2029 Freighters 2,490
Large
Medium
standard
More than 80 tonnes Converted New
40 to 80 tonnes New Converted
Less than 45 tonnes new Converted
Source: Boeing Current Market Outlook 2010-2029.
its appearance in 2009, the first A330-200F was handed over to Etihad Airways during a ceremony at the 2010 Farnborough Air Show and is expected to enter service with Etihad Crystal Cargo in September 2010. As for the
would triple from its present rate while the freighter fleet would almost double by 2026. The optimistic outlook is reflected in the air freighter market. While Airbus points out that the cargo aircraft fleet will
The good news is that with the improvement in the world economy, cargo capacity has changed the outlook for production of larger freighters. B747-8F, news is around that there is a “very high probability”, according to an official source, that first deliveries of the freighter would slip into 2011. But the good news is that with the improvement in the world economy, cargo capacity has changed the outlook for production of larger freighters. Daniel C Fernandez, Secretary General of The International Air Cargo Association (TIACA), commented that since 30 per cent by value of all freight moved by air, overall traffic around the world
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increase globally from just over 1,700 aircraft in 2008 to 3,864 in 2028, with both new and converted freighters — simply put, the dedicated freighter fleet will grow 2.2 times from today’s level — Boeing projects that the world freighter fleet will shoot up from the present around 1,750 to 2,980 airplanes by 2029, therefore presenting a requirement of 2,490 freighters. Boeing’s Current Market Outlook 2010 forecasts the induction of 740 freighters (worth $180 billion at today’s catalogue prices) around the world. Of these
520 freighters would be in the Large category (more than 88.2 tonnes capacity/80 tonnes), 210 airplanes would be in the Medium (44.1 to 88.2 tonnes/40 to 80 tonnes) category and 10 would be the Standard-body freighters (49.6 tons/less than 45 tonnes). Simply put, the freighter strength will rise from 1,750 in 2009 to 2,980 in 2029 and that would include in addition to the 740 new-production freighters, 1,750 airplanes converted from passenger models. Randy Tinseth, Vice President of Marketing for Boeing Commercial Airplanes, put it rather matter-of-factly, “The inclusion of the high-traffic growth levels in 2010, following the recession, is driving our cargo forecast upward. However, the strength of the industry and its growth will continue to be driven by sound fundamentals — speed and reliability, consumer product innovation and global industrial interdependence.” Competing manufacturer Airbus, has a different set of numbers. The projection of 3,864 freighters — both new and converted — in the Global Market Forecast 20092029, joining the world
fleet in 2028 has taken into account the large planes. According to John Leahy, Airbus COO Customers, the
(Left) Randy Tinseth, Vice President of Marketing, Boeing; and, (right) Didier Lenormand, Head of Marketing for Freighters, Airbus
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Didier Lenormand
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An Air France Boeing 777F freighter taking off.
Asia-Pacific region would top the airfreight market; hence the need for more wide bodies. The European manufacturer has forecast that there would be a fleet increase of more than 750 aircraft, primarily due to the high growth rates from China’s link with markets as far apart as Brazil and countries in Central America. “To meet this demand, larger aircraft will be needed to ease congestion and do more with less. This will see airlines from the region account for more than 50 per cent of the demand for very large aircraft, such as the A380,” says Leahy. The long routes would mean large freighters that would be capable of flying long
The Airbus A330-200F on display at Farnborough Air Show.
distances, with a much higher daily utilisation; therefore new-built ones. Whatever the projections, it is almost a certainty that large
freighters will be in demand. Airbus, for example, has hyped the “buzz” created by the A330-200F at the recent Singapore air show.
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Apparently, the long queue of professionals interested in having a look at the A330 freighter made Didier Lenormand, Airbus Head of Marketing for Freighters, ecstatic, “The number and quality of visitors exceeded our expectations, as the A330200F really created a ‘buzz’ at the show. The visitors’ reaction confirmed our slogan that the A330-200F is ‘the right-sized freighter, right now’.” He was backed by the numbers on the order book — a majority of them are from the Asia-Pacific region — from BOC Aviation of Singapore, MNG Airlines and Turkish Airlines from Turkey and the yet-to-take-off India’s Flyington Freighters. Notwithstanding the forecasts, the demand and the production schedules, plane manufacturers have their own compulsions. Boeing, for example, pushed back the delivery of the B747-8 freighter from the end of 2009 to the third quarter of 2010. The company had also postponed the delivery of the 777 freighter from end-2008 to the first quarter of 2009. One of the major compulsions of manufacturers is the pressure from passenger carriers. Production delays of passenger planes have had their effect on freighter planes. Analysts point out that the Dreamliner’s delay has pumped up the demand for Airbus A330-200. Result: the European manufacturer has concentrated on producing passenger versions and delayed the delivery of the first A330-200F from 2009 to 2010. As demand, for new-
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CARGO Airbus maps the demand World
2009
2028
1,731 100%
3,864 100%
Europe and CIS
North America
2009
2028
982 57%
1,550 40%
2009
2028
290 17%
547 14%
Africa Latin America
2009 8 5%
2028 148 4%
Middle East
2009 41 2%
2009
2028
61 32%
72 2%
2028 99 3%
Asia-Pacific
2009
2028
277 16%
1,447 37%
Source: Airbus Global Market Forecast 2009 - 2028
built freighters rise with the growth in air cargo volumes, the number of passengerto-freighter (P2F) conversions — low because operating and maintaining such aircraft is an expensive proposition in comparison to the more economic new ones — could remain steady in the long run. Though 2009 was a particularly bad year for P2F, analysts forecast that this year will be different. Boeing, for example, projected that there could be around 2,495 conversions between 2007 and 2027, of which 1,172 would be wide bodies and
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The number of passengerto-freighter conversions could remain steady in the long run though 2009 was a bad year.
1,323 narrow bodies. In fact, Boeing is going ahead with its project of a passengerto-freighter conversion programme for the 777200/200ER slated to start sometime in the middle of 2010. The converted freighters would be ready to enter service in 2013-14. Boeing hopes that the 777200BCF will replace the Airbus A300-600/A310 and McDonnell Douglas DC-8 and DC-10. On its part, Airbus too had planned to launch an A330-300 P2F programme. Scheduled to enter services in 2013-14, the A330s are
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not meant to be long-haul planes but medium-range aircraft; hence the utilisation would be limited to shorter flights or around 4000 nm and therefore a market limited to the handful of international cargo integrators: FedEx, UPS, TNT and DHL. The market conditions notwithstanding, most carriers are looking at the growth prospects that will emerge from the African continent. Termed the “next India”, freight from Africa will occupy centrestage in the coming years. According to Airbus forecasts, air freight from the region will grow at an average annual global rate of six per cent over the next 20 years in comparison to passenger traffic, which will be only 4.8 per cent. The only catch is that the freighters that could see extensive use would be in the less than 30-60 tonnes cargocarrying capacity. While that would not interest the biggies, it would certainly attract the P2F conversion sector. Among these will be the wide-bodied A300600s as well as the 300s and 310s. Among the others would be the Boeing 757s and 767s. The other major player in the freighter market is Volga-Dnepr, the manufacturer of the wide bodies work horse, the Ilyushin II-76. The four-engined plane meant for heavy loads has been used widely by charter brokers. Of late, the Stage 3-compliant version has been banned from EU, US, Japan, Australia and some Gulf nations’ airspace because of noise restrictions. Volga-Dnepr has introduced the Stage 4 version — three of them are flying today. Since these planes are meant only for outsized loads, they are not in the same league as Boeing and Airbus.
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CARGO t’s a dog’s breakfast.” That is what Ram Menen, Divisional Vice President, Emirates SkyCargo had said about the cargo facilities at Delhi’s Indira Gandhi International Airport. Will it be the same story at Chhatrapati Shivaji International Airport (CSIA)? While it is in the process of being upgraded by GVK, the private operators, who took over the airport in 2006, to keep pace with increasing passenger traffic growth in the Indian aviation sector, feel that the cargo facilities still need some improvement. In the upgradation process, new passenger terminals, taxiways and construction of a new ATC tower are being built. As for cargo, MIAL invited the Air Cargo Agents Association of India (ACAAI) and ensured the cargo community that it would be provided with a state-of-the-art air cargo complex at the airport. They were informed that the first phase of the upgradation programme would be ready by 2010, while the second and third phases would be ready in 2015 and 2020, respectively. These plans notwithstanding, the air cargo facilities at CSIA continue to function with virtually the same infrastructure that existed before the takeover. In fact, according to ACAAI members, almost no development has taken place. The members point out that a few months back, a cargo truck could make two or even three trips for unloading; but now, it takes a whole day for unloading a shipment. A harried Keshav R Tanna, Director, Links Forwarders Pvt Ltd and one of the members on the ACAAI board of advisors said, “If I send my truck in the morning at 11 am, it does not return before seven in the evening. To send the cargo truck early in the morning for clearance, my entire staff has to be at the
“I
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Mumbai woes The aircargo community operating out of Mumbai airport is a worried lot. Notwithstanding the city airport’s position as one of the top gateways of the country, the air cargo facilities need further improvements to cater to the growth. Roohi Ahmad spoke to the freight forwarders and cargo handlers to find out what the airport authorities need to do urgently. office at 8 am. At times, some of my trucks return without unloading because of the long queue of trucks at the air cargo complex.” Another concern that ACAAI members have been facing is the shortage of staff. Around 400-500 tonnes of export cargo a day is unloaded
as compared to 300 tonnes a day in 2006. Said Tanna, “MIAL has repeatedly assured the freight forwarders that they will soon come up with some arrangement to resolve their concerns and they seem very positive about increasing manpower, etc. So far, nothing has been done. We need
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around 150 off-loaders but hardly 50-70 workers can be found at any time of the day.” The staff is overworked and stressed with long working hours and delays and sometimes even cancellation of the day’s shipment. There has been no investment in infrastructure
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ROAD BLOCK: The long queue of loaded trucks bear witness to the lack of infrastructure at the Mumbai International Airport cargo complex.
with the increase in cargo capacity during the last four years. J Krishnan, President, ACAAI, pointed out the bigger picture, “In India, there has been no foreign direct investment (FDI) in infrastructure as regulations are a concern and there exists uncertainties with respect to the profitability of the investment. This needs to be addressed and no Indian entity has come forward to address this issue. FDI in infrastructure has been rather lukewarm. Our expectations have been belied and we are totally disappointed. Cargo has been conveniently sidelined. It is the cargo that adds to the economy. The 33 per cent share of the foreign trade is not a small amount that can be ignored.” Tanna too was equally vocal, “The percentage
share of total freight traffic at Mumbai Airport is 31.22 per cent; Delhi is 25.11 per cent and in Chennai it is 16.05 per cent; that totals to 72 per cent approximately; vis-à-vis the increase in cargo infrastructure is near nil.” The 12-truck dock area at the CSIA is insufficient in comparison to other cities. Delhi, for example, has 30 truck dock areas. The existing air cargo complex was an old airport hangar that was converted in mid-1970s and little has changed. Tanna pointed out, “Air cargo is revenue generating business and today we are paying the terminal storage and processing (TSP) charges that are at par with international standards, but in exchange, there are no facilities available.” The dwell time at
CSIA is 27 hours per shipment for exports and for imports it is 126 hours whereas at other international airports around the world the average dwell time is around 6-12 hours. During the monsoon, the situation worsens with the cargo getting wet and ultimately spoiled, thus leading to claims. Sometimes, the whole shipment is cancelled. Bharat Thakkar, Vice President, ACAAI, and Jt Managing Director, Zeus Air Services Pvt Ltd enumerated, “Expenses are going up and with just one trip a day and we are forced to hire private vehicles at higher cost. The freight forwarders have to bear the extra cost incurred due to all these factors. They are also facing the pressure of reduced margins owing to increased competition. Our clients are of the opinion that we are not competent enough to put pressure on the service providers, in our case, MIAL.” Adding to losses and claims, the trade is also grappling with the problem of backlogs that leads to further delays in clearances and shipment of cargo. The trade was also informed by MIAL that a shed would be demolished and parking areas shifted from the air cargo complex to facilitate movement of import trucks. This, the ACAAI members pointed out, would result in absolute chaos. There is indeed a genuine lack of space at the CSIA that the ACAAI members understand but what the cargo fraternity wants are basic facilities that are required for smooth functioning but unavailable at the moment. ACAAI President Krishnan emphasised, “The core activity of an airport is not cargo processing, cargo has to arrive and move on. Around 36 per cent of the exports is airborne though by volume it is around 7.5-8 per cent. There are delays that lead to penalties and inefficiencies snowball into increased transaction
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costs. If any breakdown occurs at the Delhi or Mumbai airports, air cargo business will come to a grinding halt. There are no options available. For every order, there is a window of eight to 10 hours for delivery failing which, for every hour of delay, cost increases. Cargo requires seamless transfer that is currently a dream.” It is not that ACAAI has not been in touch with MIAL. “All the stakeholders like the exporters, importers, customs forwarders, and freight forwarders continuously meet for trade facilitation meetings,” said Thakkar. MIAL has come up with a cold storage at the airport for pharmaceuticals that has taken away the prime space of the general cargo. “APEDA, a government undertaking, has financed the cold storage at the airport. There is already a perishable shed at the airport managed by Air India. We as forwarders are of the opinion that there was no need for a separate cold storage facility. If the general cargo facility has been made supplied, around 20-30 per cent of the congestion would have eased by now. However, since 1977, not an inch of development has taken place but space has been reduced. They project that 30 per cent of the cargo that is currently being shipped out of the general cargo shed will move out to the pharmaceutical cold storage that will be ready by October 2010. But we do not know how far their proposals will culminate into reducing the congestion because the approach road itself is still to be widened. And until this road and the access to and fro for the cargo trucks are not streamlined, things will not fall into place,” said Thakkar. Christoph Remund, CEO, DHL and one of the members of the managing committee, ACAAI, said, “The impact of the development going on at Mumbai airport has now reached the level where it is seriously impacting the trade.
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CARGO
MIAL’s viewpoint M
IAL (Mumbai International Airport Pvt Ltd) has been constantly consulting the stakeholders — whether it is ACAAI, BCHAA (Bombay Custom House Agents’ Association), Customs and others — as far as infrastructure redevelopment is concerned. MIAL’s K Govindarajan, Vice President-Cargo, and Manish Kalghatgi, General ManagerCorporate Communications pointed out that serious space constraints exist at the Mumbai airport. The officers said that the locations of the facilities of the custodians at CSIA — Air India and MIAL — were not well defined. That was the same with the cargo facilities with MIAL handling cargo for certain airlines and Air India for the others. There are, in fact, overlaps that lead to inefficiencies. The facilities that MIAL inherited were not highly efficient to start with. While the throughput for passengers is 40 million, for cargo it is a million tonnes. “MIAL has been exploring different options to restructure the cargo facilities that will benefit both MIAL and Air India, and also the stakeholders. It wants to properly address all the concerns and inefficiencies. During the process, MIAL has looked at the option of relocating cargo within the airport,” said the officials. For cargo, the key requirements are: roadside connectivity, parking and additional land. Recently, it acquired eight acres of land from the Central Public Works Department and is also in the process of developing the cargo master plan of which the trade is aware. While redeveloping all the cargo facilities, it will be addressing all the issues, especially those concerning MIAL and Air India. Plans are also afoot to go for maximum vertical storage of space with fully automated handling of equipment and systems in place because that is the only way the capacity requirements can be met. “Mumbai airport cannot be compared with any other airport in India, especially Delhi. We are the most constrained airport in the world from the land point of view and there are many other complexities that exist due to the scarcity of land. Mumbai airport has an area of less than 2,000 acres while Delhi airport is spread out over an area of around 5,000 acres,” said the officials from MIAL and added, “to top it all, Mumbai airport is the busiest airport in the country.” Commenting about the master plan of the airport, the officials said that when MIAL took over the airport in April 2006, it was supposed to come up with a master plan pertaining to the passenger facilities and terminals by October 2006, which it did. But subsequently, MIAL realised that there were many inadequacies and it had to request the government to change that master plan. To do this, it had to go back to the drawing board and it came up with another master plan in 2007. Similarly, for cargo, MIAL has looked at various options but land has been a constraint. Now, with the acquisition of additional land, it is looking at a new master plan for cargo from a totally new perspective. It wants to come up with a lasting solution that will last for another 30 years or more. MIAL cites this as the reason for not rushing with short-term solutions. “In the beginning, some delays can be expected but at the end, if it is beneficial for all the stakeholders, then the delay will be worthwhile,” said the MIAL officials.
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As for the scarcity of truck dock areas and warehouse capacity, the MIAL officials pointed out, “At Mumbai airport, we have multi-locations whereas Delhi is highly organised.” Export cargo has increased from 6, 000 to 11,500 metric tonnes while import cargo has increased from 8,000 to 14,500 metric tonnes. As for the time taken for the unloading process, there is no rush in the morning but as the day progresses, the traffic increases. “Extreme delays in offloading shipments take place on exceptional days depending on circumstances and are not a daily feature. The gates for offloading are open from 8.30am to 9pm. If a cargo truck comes between 8.30and 9am, it can be unloaded by 10am at the most. As the day progresses, with the constraints of truck dock areas, roads, etc, delays are unavoidable as the sheds are small and they become overcrowded quickly. The cargo trade has been co-operating with us on this. We have these constraints and resources cannot be encouraged only for few hours,” said the officials. If the trade wants to use the facilities late in the evening for 4-5 hours, then the capacity cannot be fully-utilised. As far as the labour shortage and handling equipment are concerned, these issues have already been addressed. If the gates and the sheds are kept open for 24 hours, then the sheds will be full as they are quite small in area and the truck dock area is small too. When fresh cargo arrives in the morning, there will no space left for it. The Customs department works from 8.30am to 9pm and they are already working in two shifts, so this alternative is not viable as MIAL operates under Custom’s regulations and the timings are provided by them. Currently, all the cargo that is admitted is Custom-cleared on that same day. Agreeing that cargo should have a smooth and seamless transfer rather than just lying around for hours, MIAL has offered an incentive of 20 per cent reduction on the tariff in consultation with the trade and Customs — that is the TSP charges for cargo — that arrives early in the morning. As far as the option of a CFS is concerned, CSIA has just one city-side access road to the airport. It needs to be found out how cargo can be offloaded with so much traffic on the road. MIAL has made expansions after taking over. The already existing chain-linked fence was canopied. Processwise MIAL has developed online systems that take care of all day-to-day functioning. It is flexible in terms of accepting the documents or cargo and is aware that trade is important. As far as the cold storage for pharmaceutical products is concerned, it has to be realised that Mumbai is the capital for the pharmaceutical industry and the Ministry has been asking for such a facility at the Mumbai airport. MIAL is working round the clock to address these issues and provide long-term solutions and is looking at all possible options. At this time, MIAL officials assured that it was very close to a solution. In another month or so, more clarity can be provided on this issue but all that can be said now is that the master plan is in a very advanced stage. MIAL proposes to discuss solutions with its stakeholders, including ACAAI, said K Govindarajan and Manish Kalghatgi.
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Inefficiencies and delays have become common. Exports are missing their deadlines with their customers overseas and are not being able to deliver their wares on time. Sometimes, we even have to face penalties and cancellation of bookings and there is a huge constraint on our staff with the extra work and long hours.” ACAAI members have listed out the details mentioning the everyday issues that they are facing at the terminal and to provide them with alternative facilities that are available. On its part, MIAL is in the process of designing another blueprint for the air cargo complex and have assured that it would provide the exim community with some interim facilities soon. For example, an empty warehouse near the airport, that has an area of around 50,500 sq ft, has been lying unused and could be utilised for cargo imports. This would go a long way to ease the congestion at the current air cargo complex and speed up clearance of shipments. Another alternative proposed by the cargo members is to keep the complex open for 24 hours as opposed to the current timing of 10 am to 8 pm. This will ensure the continuous movement of cargo and ease congestion during the day. The members have also proposed to open gate number 5 that was earlier operational but remains shut now. However, there is a Bureau of Civil Aviation Security (BCAS) restriction against doing so. Krishnan offered, “It is not practical to let any air cargo wait for 24 hours. In that time, it could fly to any part of the world. There are short-term, mid-term and long-term solutions. The first would include taking the decision to establish off-dock locations — that is the container freight stations (CFS) — that will ensure that cargo is not processed in the port area. At the CFS, all the custom
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“
The impact of the development going on at Mumbai airport has now reached the level where it is seriously impacting the trade. — Christoph Remund Chief Executive Officer, DHL Lemuir Logistics Pvt. Ltd
processing, the loading and off-loading of the cargo will take place. This is the process followed at both the Mumbai and Chennai ports. All over India, CFSs exist and it does not require a capex to move air cargo. This is because when an existing CFS is converted into an Air Freight Station (AFS), the customs linkage is in place and customs officials posting is there, so there is no capital expenditure required. The only thing that is needed is a dedicated area where cargo can be received and unitised or unitised cargo can be received and delivered. So, it is only a process that takes place and is an immediate solution where efficiency can be achieved. We are not insisting on AFSs, CFS can also handle air cargo that can be unitised. Security and screening is a minor issue in India, in compliance with the US norms, a 20 ft or 40 ft container can be scanned. I see no difficulty in the airport installing a scanning mechanism, so the security concern won’t be compromised. The central suburb of Mumbai, Mulund can be a very effective AFS offering a very good solution.” Proposals have been sent by ACAAI for establishment of cargo villages and air freight stations that can work offline
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“
“
“
It is not practical to let any air cargo wait for 24 hours. In that time, it could fly to any part of the world. There are short-term, mid-term and long-term solutions.
The major issue that we are facing is the space constraint. MIAL has asked us to provide some solutions but the only thing that can be done is to sit together and devise some alternatives.
MIAL has assured freight forwarders that they will soon come up with arrangement to resolve their concerns and they seem positive about increasing manpower, etc.
— J Krishnan
— Bharat Thakkar
— Keshav R Tanna
President ACAAI
Vice President, ACAAI
Director, Links Forwarders Pvt Ltd
to further ease the congestion at the major airports around the country. The members have been insisting on some interim facility to be provided soon. Krishnan confirmed, “Moving forward, we are looking at the formation of a common user facility called the cargo villages. Here also, cargo processing does not take place at the airport. When AERA (Airport Economic Regulatory Authority) was introduced, cargo was considered a non-aeronautical charge and was totally left out of its ambit. We went to the
AERA is still to get completely functional. We are already working closely with it and trying to highlight the concerns of the trade. This is the absolute minimum that we would require if the airport is entitled to collect the charges from the trade. Things are moving in the right direction and we hope to see results in the next 12-14 months.” At least, the AFS concept is the first aspect to be developed. Creating infrastructure is capitalintensive and could take around 8-12 years. ACAAI
ACAAI members have been insisting on some interim facility to be provided soon at Mumbai like the formation of a cargo village. expert joint parliamentary committee on AERA and presented that as long as the airport remained a processing area, it has to benchmark our performances. The parliamentarians saw reason in our arguments. Today, if cargo is included in the ambit of AERA, it is because of the singular efforts of ACAAI.
has also requested MIAL to enhance the staff at the truck dock area staff. Said Krishnan, “We are actively engaged in addressing these issues. Unless there is awareness, action will not follow.” The focus of the privatisation efforts at Mumbai have remained
CRUISING HEIGHTS September 2010
mainly on the passenger side. Krishnan complained, “The neglect that the cargo has suffered continues even today. No definite plans have been drawn for the cargo, even the airlines have not been consulted on their requirements and neither has any time-frame been set. The concept of air cargo has not been understood by the government or even the private operators.” Bharat Thakkar echoed similar sentiments, “The clients also need to cooperate with us in resolving this issue that will lead to the smooth clearance of export and import cargo. The major issue is the space constraint that we are facing. MIAL has asked us to provide some solutions but the only thing that can be done is to sit together and devise some alternatives. I do not see any solution in the next six months. If something is not done drastically in the next few months, then there will be absolute chaos.” ACAAI has taken up the upgradation of the cargo infrastructure with MIAL. The association members are in touch with the airport authorities to find solutions but most say, what is needed, is immediate action.
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CARGO JOTTINGS Planes for Flyington? AIRBUS, it is reliably learnt, will be delaying delivery of 12 A330-200 freighters to Flyington Freighters, the Hyderabadbased dedicated freighter airline that was supposed to start way back in 2008. Airbus will now deliver the aircraft by the end of 2011 and Flyington is threatening legal action as they were originally set for delivery in July 2008. Flyington has accused Airbus of using its order to prove the viability of building the A330 line at a new plant in Alabama (US) and so win the US military’s aerial refuelling tanker contract, that would also have been built at the plant. However, Airbus is defending itself by blaming Flyington for being too disorganised to accept the freighters when they were first ready for delivery. Flyington had not been able to get an air operator’s certificate and therefore, it was Etihad Crystal Cargo that took delivery of the freighter when it was ready.
Gati forays into ASEAN GATI International has spread its wings further in the ASEAN region by commencing operations in Kuala Lumpur, Malaysia. Gati Malaysia’s new sales and marketing office is strategically located at the Maxis Tower in the heart of Kuala Lumpur City Centre (KLCC) with easy access to seaports — Port Klang, Penang and Johor Bahru — and Kuala Lumpur International Airport. As a part of “Gati International”, Gati Malaysia offers Freight (Air and Sea), Express and Supply Chain solutions in the domestic and international markets which include door-to-door service, customs clearance, distribution, warehousing, transportation, etc. from all parts of Malaysia to various destinations across the world. Major export destinations for Malaysian goods include Japan, China, USA, Singapore, South Korea, Thailand, Australia, Hong Kong and India. According to the figures
available, more than 70 per cent of Malaysia’s total exports are made to these countries. While, 70 per cent of total imports into Malaysia are from USA, Japan, China Singapore, Indonesia, Thailand, Germany, Taiwan, South Korea and Hong Kong. Malaysia holds a key position in the ASEAN region, exporting electrical and electronic goods, liquefied natural gas (LNG), palm oil and related products, petroleum and related products, timber and timber-based products, chemicals and metals through seaports and airports.
Emirates targets Senegal seafood cargo BEGINNING September, Emirates will launch flights to the Senegalese capital — Dakar. Located off the Atlantic Ocean in the West of Africa, it has a rich tradition in fishing and its produce will be reaching the market fresher than ever once the only direct flight between Senegal and the Middle East is added to the airline’s network. The Dubai-based carrier’s freight division, Emirates SkyCargo expects to transport up to 3,500 tonnes of seafood a year in the belly-hold of the A340Emirates expects to transport up to 300, which will be serving 3,500 tonnes of seafood a year in the Dakar five times a week. belly-hold of the A340-300 which will Fresh produce — such be serving Dakar five times a week. as lobster, shrimp and sea bream — will be landing in supermarkets and restaurants throughout the UAE and the rest of the GCC, as well as various destinations across the Emirates network, including
FedEx connects South India to the world FEDEX is on an overdrive in India. Last November, it launched domestic services in India — taking, as it were, the competition with other multinational express majors and homegrown providers. The move —primarily meant for 14 cities will now be expanded to 58 from August 2010 in phases — was to provide customers with a reliable and convenient shipping solution for their time-critical commercial and noncommercial consignments across key Indian markets. According to FedEx, the 58 cities selected for the domestic express service expansion contribute to 40 per cent of India’s GDP. Satellite cities like Secunderabad, Tirupur, Chinchwad, Pimpri, Thane and Navi Mumbai have been added into the service points from August 2010. Nine months later, in another aggressive move, FedEx has launched a flight from Bengaluru. It will connect to the Middle East, Europe and the US. With that, Bengaluru has become the third Indian gateway for FedEx after Delhi and Mumbai. The Bengaluru flight will be in addition to A310 daily flight with a total capacity of 75,000 pounds FedEx operates from Mumbai to Europe and US. According to Kenneth F Koval, Vice President, Operations, FedEx Express India, “The launch of the new flight from Bengaluru, coupled with the domestic service expansion, broadens market opportunities for customers doing business locally as well as internationally by leveraging the reach of the
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Kenneth F Koval, Vice President, Operations, India, FedEx Express Europe, Middle East, Indian Subcontinent and Africa (EMEA) receives the symbolic first package delivered by the new FedEx Express flight to Bengaluru. Samuel Thomas (on right), Managing Director, Operations, FedEx Express and Indranil Sen (on left), Managing Director, Marketing, Middle East, India Subcontinent and Africa and Customer Service India, FedEx Express, look on.
FedEx worldwide network.” He went on to mention the potential that FedEx has noticed in the India market: “India has witnessed exceptional levels of economic expansion, and despite the global economic downturn, the economy reflects strong performance in manufacturing and export-oriented industries.”
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Athens, Larnaca, Rome, Milan, Madrid, Paris and Beirut. Said Ram Menen, Emirates’ Divisional Senior Vice President, Cargo, “With such a huge demand for fresh fish across our network, Dakar is a real catch for Emirates SkyCargo.” “With Dakar as the 19th African destination on our network, trade from the continent is playing an increasingly important role in our operation. This new trade route will create further opportunity for growth and strengthen our African ties with Senegal now able to establish trade links with the UAE and other countries across our global network,” he added.
Calogi at the DWC LEADING air-freight portal solution Calogi recently announced that it had expanded to the new Dubai World Central - Al Maktoum International Airport (DWC). With this expansion, Calogi now boasts a one-stop shop for members covering all elements of the air cargo supply chain across the eight freight gates located in JAFZA, DAFZA, Dubai International Airport and the new DWC airport. Combined, this fully IATA e-freight compliant portal provides users exclusive features and benefits, including access to more than 80 airlines and their general sales agents (GSAs) with a single subscription. Designed as an integrated system interface for day-to-day export and import operations, based on the successful model currently in operation at Dubai International Airport, Calogi offers DWC subscribers the ability to share shipment information with the terminal operational systems, through a standard interface. The system allows users to print the air way bill at the terminal, bypass the terminal counters and proceed directly to the acceptance and delivery docks with their shipment and document pouch. "Our launch at DWC is further proof of how the Calogi
The new flight is in tune with the economic growth of the country. Between 2008 and 2009, the share of Europe and America in India’s exports stood at 23.8 per cent and 16.5 per cent, respectively. The flight also emphasises the growth of Southern India. Over the last few years, many airlines have concentrated on enhancing services to the southern cities of Chennai, Bengaluru and Hyderabad. Martinair, for example, has a freighter flying in to Chennai thrice a week. As Koval commented at the press conference announcing the launch, “Bengaluru and its surrounding cities are a major component of India’s economic expansion with south India contributing to approximately 20 per cent of India’s GDP. By launching our flight from Bengaluru, we’re confident that businesses in south India will gain from greater global access.” The express major’s Bengaluru connection will provide facilities like: Later pick-up times for customers by up to 90 minutes in Bengaluru. Access to the full FedEx suite of services, including the shipment of heavyweight express freight. Additionally, customers in Bengaluru will now be able to ship perishable, valuable and dangerous goods. The moves by FedEx also point to the scorching speed that the Indian logistics industry is going through. Taarek Hinedi, Managing Director, Operations, FedEx Express, had not too long ago pointed out that the “Indian logistics industry witnessed a constant growth process, particularly between
The Calogi Team, Patrick Murray at the keyboard.
business model can benefit leaders in the air cargo industry and significantly reduce costs by fully automating their communities," said Patrick Murray, Head of Calogi, adding, “At a time when industry profit margins are being squeezed, there is constant pressure to reduce costs. By enabling the air-cargo supply chain to do business electronically, Calogi continues to reduce costs for the industry.” Swift Freight International recently became Calogi’s first customer to seamlessly process over 82 tonnes of export freight in less than an hour at DWC. This was achieved using Calogi’s e-Pro forwarder solution, one of the various Calogi products that have been specifically enhanced for operations at the new DWC. As a result of this unique business process, Swift Freight was able to bypass the terminal reception counters and deliver the freight and accompanying document pouch to the Dnata acceptance dock within less than an hour, a testament to the simplification of the business model.
2002 and 2007, during which time the sector grew from eight to 10 per cent annually. Highlighting the future potential of the sector is the expectation that the logistics business will reach a market size of over $125 billion in 2010.” Realising that the manufacturing sector has taken firm steps to go global, Hinedi felt that express service providers had become a necessity. He said that the outlook for the air cargo industry in the country was bright and companies foresaw tremendous potential in the sector. No wonder, the new enhancements by FedEx have been planned to strengthen its foothold in India whilst building the trade lane between Asia and Europe. Way back in March 2005, FedEx started the air cargo industry’s first express direct flight from mainland China to Europe. That was followed in September 2005 by a second flight doubling the capacity between Europe and Asia, with a stop in Delhi, making it the first overnight express daily flight between India and China. FedEx’s plans to penetrate the domestic market may get a boost if the talks with Naresh Goyal’s Jet Airways, the country’s largest private carrier, yield results. Way back in December last year, Jet, which has been planning to start a dedicated cargo airline for quite a few years now, started talks with FedEx about tying up for a dedicated cargo airline. Though no further developments have been reported, Jet is understood to be still interested in the project. If the project does take off — it could be either a joint venture or a simple tie-up between the two carriers — it will be a win-win situation for both.
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An irritant mother aboard A female passenger was separated from her crying child on a Southwest Airlines flight, after she slapped the baby in frustration. An airhostess took action on the Dallas to Albuquerque flight and later told police officials at the airport that she had removed the 13-monthold after she was slapped by her mother. After the paramedics had checked the baby upon landing, the aviation police returned the
Pillow fight! child to her parents after speaking to the couple, the flight attendant and other witnesses. The parents were not cited. The aviation police chief felt that it was an isolated incident and the attendant’s decision to hold the child neutralised the situation.
PASSENGERS on board a Lufthansa flight got more than they had bargained for when a “pillow fight” broke out in the cabin. The air hostesses were dishing out pillows to hand over to the passengers, as is the norm in a long-haul flight, when a pillow was thrown at the German member of the cabin crew, who smiling
Caught smuggling cigarettes! IN a country where a pack of cigarettes costs Rs 440 (£6), smuggling them from India is perhaps the easiest way to make a quick buck. However, this cost two Jet Airways crew their jobs. They were apprehended at London’s Heathrow airport on charges of smuggling cigarettes in February and May this year. The first incident was on February 21 when a crew member on flight No 9W 118 (Mumbai-London) was found carrying 9,000 cigarettes (45 cartons). The second incident was on May 30 when a crew member on flight 9W 120 was found carrying 1,800 cigarettes with him (nine cartons). The two were
Putin fights wildfire
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rime Minister Vladimir Putin climbed into a fire fighting plane and dumped water on two of the hundreds of wildfires sweeping through western Russia and cloaking Moscow in a suffocating smog. Putin has been a very visible leader in the battle against the fires, which have caused billions of dollars in damage and left thousands homeless in the past two weeks. He demanded that soldiers help overstretched fire-fighting brigades and has walked through smouldering villages, consoling residents and promising them new homes by fall. But with his once sky-high approval ratings dropping — and sociologists warning that discontent could grow as fire and a severe drought take their toll — Putin has not let up. Filled with the determination to help in fire fighting, Putin got on a Be-200 firefighting plane and then moved into the copilot’s seat. Television footage showed him
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pushing a button to unleash water on blazing forest fires about 120 miles (200km) southeast of Moscow. After hitting the button, Putin glanced toward the pilot and asked, “Was that OK?” The response: “A direct hit!” The stunt was classic Putin. In past years, he has co-piloted a fighter jet, ridden a horse bare-chested in Siberia and descended to the bottom of Lake Baikal in a mini-sub. Just last month, he drove a Harley Davidson motorcycle to a biker rally. All of his exploits have been widely publicised on the national television networks, which are under government control. Russia holds its next presidential election in 2012, and Putin would be eligible to run. Damage from the fires was expected to hit $15 billion, or about one per cent of Russia’s gross domestic product, the business newspaper Kommersant reported. The government however has yet to release any damage estimates. CRUISING HEIGHTS September 2010
de-rostered on their arrival in India and were served a letter seeking an explanation. Fearing termination, the crew members chose to resign. As per the United Kingdom custom’s regulation, a traveller from outside the EU can carry 200 cigarettes (one carton). The entitlement for airline crew is the same. Jet Airways cabin crew line operations manual makes it clear that crew who violate customs regulations will face disciplinary action, including possible termination.
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Shape up or ship out!
Demands to get off, mid-air! BARBARA Morton, 47, was pleaded guilty in a Winnipeg courtroom for forcing a WestJet flight to make an emergency landing in Winnipeg, under the national Aeronautics Act for not following the directions of an airline cabin crew. A WestJet plane with 131 people on board was headed to Halifax from Calgary when Morton, from St John’s, NL, tried to open a door to the outside in mid-flight. Court was told that an hour into the flight, Morton told a flight attendant, “I need morphine now, I’m on major withdrawal. I’m going to open that door — I’m getting off.” About two days before the flight home to Halifax, Morton, who suffers from panic attacks, lost her OxyContin pills. A psychologist who examined Morton said in a report that she may have been overcome by a sudden sense of delirium from the OxyContin withdrawal symptoms. While on the flight, Morton made a dash for one of the exit doors and attempted to open it. Three flight attendants and several passengers tackled her. During the struggle, she bit a 77-year-old man and kicked an airline employee in the face. Morton, who has been in police custody since her arrest, was sentenced to 97 days behind bars.
Celina angry at CISF men MODEL-turned-actress Celina Jaitley filed a complaint of misbehaviour and ill-treatment against Central Industry Security Force (CISF) staff at Kolkata airport. Celina, who was bound for Mumbai on the 3.10 pm Jet Airways flight, got into an argument with CISF jawans at the domestic terminal security check area when she found that her expensive handbag has been damaged during x-ray. The actress, who claimed that the bag was worth around Rs 50,000, alleged that careless handling by CISF men at the x-ray terminal had led to the damage.
TURKISH Airlines has grounded 28 flight attendants for being overweight and has given them six months to slim down or face reassignment. The employees, 13 of whom are women, are on unpaid leave until they lose weight, said a statement from state-run
Turkish Airlines. All of them had been previously warned to shape up. “Weight and height are important factors at all airlines. These criteria are important both in terms of appearance and the ability to move about,” the statement said.
Illustrations by Rajeev Kumar
responded back, as chaos reigned in the aircraft. A Lufthansa passenger captured the moment on his mobile phone before uploading it to YouTube, where it has since become a worldwide hit. Everyone seemed to enjoy the rather unusual flight from Tel-Aviv to Frankfurt, as the cabin was full of smiles and laughter as the pillows were seen flying around!
The security men, however, insisted that the scratch was minor and had probably happened before the bag was put in the x-ray machine. Heated words were exchanged thereafter. Later, Celina claimed that the CISF jawans had insulted her. An official complaint was then lodged in by the actress.
Flight attendant runs away in fury A US flight attendant allegedly cursed a passenger, grabbed a beer, deployed an emergency exit slide and then fled the plane. The flight attendant, furious with passengers who refused to follow his instructions, abused them over loudspeaker before making his own dramatic personal emergency exit, US police said. The attendant, identified in the US media as Steven Slater, 39, was working on a JetBlue flight from Pittsburgh to New York that had just landed. Steven told passengers to remain seated upon landing. But when a passenger started collecting his belongings from the overhead bin, disregarding the instructions, he tried to stop him but was hit in the head by the baggage and he became irate. Upon being “asked for an apology”, the passenger “instead cursed at him”, The New York Times reported. It further reported that Slater “got on the plane’s public address system and cursed out all aboard. Then he activated the inflatable evacuation slide at service exit R1, launched himself off the plane, an Embraer 190, ran to the employee parking lot and left the airport in a car he had parked there.” However, his silver-screen worthy escape was short-lived. Shortly after, police arrested Slater from his home nearby in Queens.
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DOMESTIC AIRLINES IndiGo continues to soar high AFTER bagging the prestigious Skytrax World Airline Award for being the best low-cost airline of India and Central Asia, IndiGo marks a double milestone this year by winning accolades from the Travel Agents Association of India (TAAI) for being the ‘best domestic low-cost service airline’ for the year 2010. Accepting the TAAI award, Aditya Ghosh, President, IndiGo, said, “We sincerely appreciate this recognition and the faith that the travel agency community have bestowed upon us…Their strong endorsement and support has helped IndiGo carry over 21 million satisfied customers in our 48 months of operations.” Continuing its successful journey in the Indian skies, IndiGo is further enhancing its customer experience through the induction of 28th new A320 into its fleet, and the launch of six new flights on its network. The airline will operate its seven daily non-stop services from Delhi to Mumbai, and two daily non-stop services between Mumbai and Nagpur and Mumbai and Goa.
Platinum privileges at Mumbai airport ADDING a new facet to luxury services and privileges for its Platinum card members, American Express has set its Platinum Lounge at Mumbai’s Chhatrapati Shivaji International Airport. Located next to the main boarding gate of the domestic terminal 1C, the lounge will provide a welcome haven for American Express Platinum card members and their guests while they spend time at the airport awaiting their next flight. Shailesh
ADVANTAGE OF PLATINUM: American Express Platinum Lounge at Mumbai airport will provide mélange of travel benefits for Cardmembers and their guests.
Baidwan, Chief Executive Officer, American Express Banking Corp, said, “Platinum card members have significant travel needs for business and leisure, domestic and international…We already have very strong lodging and airline privilege benefits and are now making the card members’ on-ground experience better.” Depending on how much time a traveller has between flights, they are offered snacks or a full meal with table service. Guest relations executives take special care to welcome to the guests at the lounge, looking for every opportunity to make them feel relaxed after a long day of meetings or stress from a long trip. Both primary and supplementary Platinum Charge card members can share this benefit with one guest, absolutely complimentary from American Express, while the Platinum credit card members and their accompanying guest can access the lounge by paying a nominal entry fee.
GoAir increases its fleet strength
Photo: H.C.Tiwari
Photo: H.C.Tiwari
GOAIR has announced the expansion of its network strength with its ninth new Airbus A320. Air travel traffic is increasing and the airline is looking forward to addressing this growth by introducing new aircrafts and new routes.
Kaushik Khona, Chief Executive Officer, GoAir
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More aircrafts and routes are expected to be announced in the next month or two. Kaushik Khona, Chief Executive Officer, GoAir, said, “The ninth aircraft strikes the right note for our winter travel season. Following the introduction of the new aircraft, we shall be operating 890 commercial flights per week under the new winter schedule. We plan to add 10th Airbus A320 by October 2010 and also introduce four new routes. We are gearing up to address the increase in air travel traffic.” According to this expansion programme, GoAir is increasing the overall frequency within its network by increasing commercial flight operations from 730 flights to 890 commercial flights per week. Added capacity: GoAir has added few new destinations and increased connectivity to some of its existing routes. The connectivity to Nanded from Delhi, Nagpur and Mumbai has increased to four days a week. For the benefit of the travelling fraternity, Nanded now enjoys connectivity on Saturdays and Sundays as well. In addition, the three new cities of Patna, Pune and Leh will be added to the existing network of 15 cities, including Mumbai, Delhi, Bengaluru, Ahmedabad, Goa, Bagdogra, Guwahati, Chandigarh, Cochin, Jaipur, Nagpur, Nanded, Indore, Jammu and Srinagar. Patna will be connected from September 2, 2010, followed by Leh and Pune from October 2 (subject to DGCA approval).
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Fly Ludhiana with Kingfisher
Fly for Formula One action with Jet
THE launch of daily direct flights on the New Delhi-Ludhiana route marks the first time that Kingfisher Airlines is commencing operations from Ludhiana. Also, it is currently the only private airline to offer services to Ludhiana. The flights between New Delhi and Ludhiana are being operated as Kingfisher Red Service — a unique class of low-fare flying from Kingfisher Airlines and offer guests a whole host of benefits, including complimentary hot, delicious food and a choice of beverages, reading material, frequent flier privileges and multiple check-in options. Commenting on the launch of the new route, Manoj Chacko, Executive Vice President Commercial, Kingfisher Airlines said, “This new direct flight will offer travellers from GRAND LAUNCH: Deepak Sharma, Ludhiana a one-stop connec- Ludhiana Airport Manager, Kingfisher Airlines hands over Kingfisher Airlines tion to Mumbai, Bengaluru, aircraft model to Manpreet Singh Hyderabad, Chennai, Badal, Finance Minister, Punjab to Kolkata, Jaipur, Ahmedabad commemorate the launch of the airline's New Delhi-Ludhiana route. and Indore via New Delhi, thanks to the unparalleled route network of Kingfisher Airlines. Besides catering to the small and medium enterprises segment, this new route is expected to cater to the needs of various industries like the garments industry, sports goods industry, bicycle manufacturers, steel rolling mills and the like.”
Pre-order booking facility at CSIA PASSENGERS departing from the Chhatrapati Shivaji International Airport (CSIA) in Mumbai can now browse and preorder from a wide range of products on offer at its duty-free shops at the international terminal. The purchased goods can then be collected at the arrival store, which is conveniently located in the international arrivals area next to the conveyor belt upon one’s return to Mumbai. This new pre-order booking facility introduced by Mumbai International Airport Pvt Ltd (MIAL) in association with DFS includes dominant categories such as liquor that is a popular shopping item on most passengers list. Additionally, it also has an impressive collection of watches, fragrances, cosmetics, leather goods, bags and sunglasses that passengers can pre-order. This hassle-free process would require a passenger to make a selection bases on one’s permissible allowance and preference, submit one’s passport and flight details and then make the payment before boarding one’s flight. This facility will enhance passenger’s convenience by helping him save crucial travelling time and also reduce the hassle of carrying purchased goods safely through journey.
HASSLE-FREE: Passengers can now pre-order their duty free and save time at Mumbai airport.
JET Airways, in association with Fans On Stands Sports Pvt Ltd, has introduced attractive JetEscapes holiday packages for the 2010 Formula One SingTel Singapore Grand Prix, to be held in Singapore at the Marina Bay Street Circuit from September 24 to 26, 2010. These three nights/four days JetEscapes packages include return air travel on Jet Airways, airport transfers, hotel accommodation, three-day race ticket pass for Zone 4 Walkabout stand and travel insurance, besides offering guests the opportunity to earn five JP Miles for every Rs 100 spent. A three-day ticket pass for the other nine Grandstands at additional cost are also on offer. In addition to the action on the tracks, guests may also enjoy big name music acts by Mariah Carey, Missy Elliott, Daughtry, and Adam Lambert appearing at a mega stage in the Padang, which is accessible to all ticket holders. According to Sudheer Raghavan, Chief Commercial Officer, Jet Airways, “With the legion of Formula One fans in India constantly growing, and Singapore’s popularity among Indians as a leading business and tourist destination, we are confident that the new JetEscapes 2010 Formula One SingTel Singapore Grand Prix THE SPECTACULAR: During the 2010 Formula One SingTel Grand Prix, packages will prove extremely Singapore will transform into a pulsatpopular with the guests.” ing wonderland of fun, entertainment Starting from Rs 48,515 and sporting action. (rates per person on twin sharing basis), packages are subject to availability and as applicable at the time of booking. Flying Jet beneficial for students: Jet Airways has enhanced its popular Edujetter programme for 2010-2011, offering students, who have secured admission in educational institutes abroad, attractive offers. The new Edujetter programme is valid for all students travelling from India to the UK, Australia, Europe, Singapore, Malaysia, Hong Kong, USA and Canada till March 31, 2011. As part of the programme, students will enjoy numerous benefits, including excess baggage allowances (between 30 and 69kg, depending on the destination), as well as 1,000 JPMiles on enrolment into the airline’s JetPrivilege frequent flyer programme that results in a free ticket after the first flight. In addition, students will also enjoy Rs 1,000 worth of free talk time from Clay Telecom with no activation, deactivation or delivery charges, three 35 per cent discount Fed Ex overseas shipping vouchers, an ICICI travel card, discounted forex rates, ICICI Lombard Student Medical Insurance, and a 20 per cent discount on Samsonite luggage and accessories. Jet’s move: Jet has migrated its operations from the existing Bajpe Airport terminal building, to the New Integrated Terminal Building (NITB) at the Mangalore airport. With this migration, the airline will operate eight flights daily from Mangalore’s NITB, and plans to increase capacities for offering enhanced connectivity to/from important destinations across India. The terminal features brand new check-in counters, of which the Jet Airways Group will manage multiple integrated check-in counters for domestic travel, significantly reducing check-in time for the airline’s guests.
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SNIPPETS Tourism growth to intensify competition, says Amadeus THE establishment of strategic partnerships and the use of technology to maintain competitiveness will allow travel businesses to capitalise on a period of unprecedented growth in India’s tourism industry — this is what Peter Smith, Vice President of Amadeus Asia Pacific’s Business Solution Group, feels. Speaking recently at an Amadeus Power Breakfast in India, Smith said, “As the global and local economy recovers, travel agencies will increasingly look for ways to out-perform and outmanoeuvre the competition. Amadeus is committed to helping travel agencies get the most out of what is shaping up to be a strong year for travel and tourism in India.” He suggested four key areas where travel agencies should focus their attention: Consolidation: To survive and to capitalise on India’s growth, travel agencies may need to consolidate or explore strategic partnerships with industry partners. Infrastructure development: According to him, India will need to develop its infrastructure rapidly to keep pace with the growth it expects from international and domestic tourism, and with the Commonwealth Games barely one month away, Amadeus is uniquely poised to offer technologies that create better, smarter systems and processes for the aviation industry. Importance of operational processes: If there are two areas that travel agencies in India are constantly monitoring, it is the development of travel payment and human resource solutions for travel agencies. Solutions like Amadeus’ Hotel Store were developed to help travel agents make commission payments
up-front, thus improving profitability and cash flow. Lower yield and revenue: Due to economic recession in 2009, travel agencies are experiencing lower yields and decreased revenue. In such a scenario, Amadeus can help travel agencies open new revenue streams or strengthen existing ones through customised promotions and by empowering travel agents to operate at maximum efficiency. Rakesh Bansal, CEO, Amadeus India, said, “Amadeus offers a wide range of technology solutions to help our partner agencies to operate at optimum efficiency and enable them to deliver better services to their clientele and increase their productivity.”
PROVIDING SOLUTION: Peter Smith, Vice President of Amadeus Asia Pacific's Business Solution Group outlining the key opportunities and challenges for Indian travel agencies.
INTERNATIONAL AIRLINES Emirates to expand US services EMIRATES has underlined its commitment to the US by announcing the launch of second daily flights to Los Angeles and Houston. The airline, which recorded a significant increase in revenue for the Americas in 2009-10, will soon offer over 15,000 seats on 98 return flights per week to the US. Starting October 31 this year for Los Angeles, and November 1 for Houston, Emirates will fly non-stop to both cities twice a day on Boeing 777 aircraft. The services will provide the highest standards of passenger comfort, with luxurious private suites in First Class, lie-flat beds in Business Class and generously-sized Economy Class seats. Tim Clark, President of Emirates Airline, said, “Emirates has experienced very strong demand across all of its US gateways this year, including very healthy premium and business traffic. We are delighted to meet this increased demand with the start of second daily services to both Houston and Los Angeles.” Emirates’ services play a significant role in supporting trade and tourism between the United Arab Emirates and America. Since the
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airline launched its first flight to New York in 2004, the value of trade between the two nations has almost tripled, reaching $12.7 billion in the 12 months to June 2010. Emirates currently flies non-stop to four US cities — New York, Houston, Los Angeles and San Francisco.
UA extends agreement with Travelport UNITED Airlines (UA) has signed a two-year extension of its current full content agreement with Travelport which has been designed to provide full content well into 2013, subject to the terms of the agreement. Through the extension of the agreement, all UA published fares and seat inventory, including web fares available on its own site, reservation offices and through third parties, will be available to subscribers of Travelport’s Apollo, Galileo and Worldspan GDS systems, including all Travelport-connected offline travel agencies and online agencies booking through Travelport. As part of the agreement, UA offers Travelport-connected travel agents the option of selling their passengers upgrades into the airline’s popular Economy Plus seating, while this Economy Plus seat upgrades will become available later this year through the Travelport travel agency point of sale tools, Apollo Focalpoint, Galileo Desktop and Worldspan GoRes. UA’s Economy Plus seating provides more room to work or rest on a flight with up to five more inches of legroom and are located at the front of the economy cabin. Robert McDowell, Managing Director, Distribution and ECommerce, United Airlines, said, “This extension provides United with a cost-effective solution to distribute upgrades to Economy Plus to Travelport subscribers in a flexible, innovative and appropriate manner. United is continually looking for distribution solutions that provide benefit for United, distribution partners such as Travelport and, most importantly, our customers.”
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Cathay goes high-tech
ACCOLODES: (L-R) Akbar Al Baker, CEO, Qatar Airways and Capt Chris Schroeder, Senior Manager CSR, Environment and Fuel Optimisation, Qatar Airways with the Environment award.
Fly eco-friendly Qatar Airways QATAR Airways has been honoured by the leading monthly aviation magazine Airline Business, for its wide-ranging global environmental initiatives. The Doha-based carrier’s well documented move in the research of alternative jet fuel as part of an overall mission to secure a cleaner and environmentally friendly future, helped win it the environment accolade at the annual Airline Strategy Awards held in London. The airline earned recognition among an illustrious judging panel comprising chief executives, aviation consultants, leading analysts and academics drawn from across the industry. And the success criteria for the award included demonstrating the creation and implementation of a companywide environmental strategy; the creation, development and implementation of measures that produce environmental benefits; and the support of industry-wide initiatives through research. Akbar Al Baker, CEO, Qatar Airways, said, “It is a great honour for the airline to be recognised with this prestigious award. At Qatar Airways, we don’t just talk, but take positive action to produce results and these measures we have and will be adopting, will only help airlines around the world on fly the global skies with a cleaner and friendly environment at the forefront of their growth strategies.” Addition of new aircraft: Qatar Airways recently took delivery of its 20th Boeing 777-200 long-range aircraft, arriving in Doha from Seattle, Washington. The new aircraft is the seventh long-range Boeing in the airline’s fleet with a total of 20 Boeing aircraft which Qatar operates, including 11 extended-range (300-ERs), seven long-range (200-LRs) and two freighter versions. Akber Al Baker has announced the order of two additional long-range Boeings at the recently concluded Farnborough Air Show 2010 that will be used to target new ultra long-haul markets. “The long range Boeing offers Qatar Airways the capability to serve virtually any key city in the world non-stop from the airline’s hub in Doha. That provides great flexibility and economics for a network carrier,” he added.
CATHAY Pacific’s CX Mobile application for the iPad can now be downloaded free of charge from Apple’s iTunes store, offering users access to a wide range of Cathay Pacific services and information. In addition to providing all the functionality of the CX Mobile app developed for the iPhone and other handheld devices, the iPad application also enables users to make bookings for their Cathay Pacific flights. James Ginns, General Manager, Marketing, Cathay Pacific, said, “We are pleased to be one of the pioneers in launching an airline application for the iPad. Cathay Pacific has been working hard on developing its mobile services and we are delighted to offer iPad users the ability to book their flights directly from their device.” Besides being able to book their flights, iPad-users will now have access to Cathay Pacific services such as checking in for flights, checking the status of flights, accessing flight schedules and managing their bookings. CX Mobile also links users to Marco Polo Club information and insights into more than 70 destinations worldwide through the popular city guides. They can also find out more about the people who go the extra mile to make passengers feel special through the interactive “Meet the team” function. The CX Mobile application for the iPad is currently only available in English. More languages will be featured soon. Cathay’s purchase plan: Cathay Pacific has entered into a letter of intent with the Airbus to buy 30 Airbus A350-900 aircraft. The airline has also expressed its intention to exercise existing purchase rights in respect of six Boeing 777-300ER aircraft. The total value of the intended aircraft purchase at list price is about HK$75 billion — a sum in addition to the significant investment, Cathay Pacific will make between now and 2013, including aircraft already on firm order, the new cargo terminal at Hong Kong International Airport and enhanced products in the cabin and on the ground. Tony Tyler, Chief Executive, Cathay Pacific, said, “The A350-900 is a perfect fit for the development of our fleet — a mid-size long-haul aircraft that is fuel efficient, environmentfriendly, and provides the kind of capacity, range and operating economics that we need to complement and enhance our existing fleet.”
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Katrina is the new face of Etihad WE have seen Bollywood beauty Katrina Kaif endorsing products ranging from beauty brands to juice drinks, but the Bollywood belle will now also be seen on the posters of Etihad Airways. The national airline of the United Arab Emirates, has signed the coveted actress Katrina Kaif, as the airline’s new brand ambassador. Etihad and Katrina will work on a series of initiatives to promote the airline across India and around the world, including addressing Indian communities in Etihad Airways’ key markets such as the UAE, the United States and the United Kingdom. Etihad recently filmed an internet video with Katrina Kaif dancing in the airline’s First Class lounge in Abu Dhabi, under the direction of award winning Indian film director and choreographer, Farah Khan. The video, which has been distributed online across YouTube and various social networking sites, will be used to promote the partnership between Katrina and the airline throughout the campaign. Peter Baumgartner, Chief Commercial Officer, Etihad Airways, said, “Our partnership with Katrina Kaif will help build Etihad’s brand name globally and further introduce our world-class products and services across India and to Indian communities around the world.” On being chosen as the brand ambassador, Katrina Kaif, said, “Once they first started flying, Etihad Airways has succeeded in becoming one of the biggest names in the airline industry. I have always loved flying
with Etihad and I am extremely honoured to work closely with the world’s leading airline.” To view the video featuring Katrina Kaif dancing in Etihad’s First Class lounge, visit www.whereiskatrinakaif.com Benefits from Etihad: Etihad Guest, the loyalty programme of Etihad Airways, has launched a new programme called IndiaConnect, an exclusive club designed to offer a wide range of benefits to Etihad Guest members travelling to and from India. Once registered at www.etihadindiaconnect.com, Etihad Guest members will be able to access a number of exclusive benefits, including travel offers on Etihad’s Indian routes, and discounts and special deals with a variety of partners in India and relevant partners abroad, including hotels, restaurants, retail outlets, entertainment outlets, and community associations, with more options scheduled to be added soon. The programme was launched by Etihad’s new brand ambassador, Katrina Kaif, who was also named as the founding member of IndiaConnect. “For people like me who are always travelling to and from India, IndiaConnect is a perfect travel solution, making it even easier to fly home,” Katrina said. Neerja Bhatia, Country Manager in India, Etihad Airways, said, “India is one of our most important markets, generating major traffic on Etihad destinations across the globe. We are always looking for ways to offer targeted, innovative and unique benefits to our Etihad Guest members.”
STAR STUDDED: (L-R) Andrew Ward, V P Marketing, Etihad Airways; Bollywood actress, Katrina Kaif; and, Neerja Bhatia, Country Manager in India along with the Etihad crew.
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A plane home H
eard about the house that was made from the parts of a 747? Oh yes, the love for aviation can make people to the craziest of things, and the “wing house” is definitely one of them. Francie Rehwald of California is trading in her plain home for a plane home. Here's how it works — buy a retired 747 for a measly sum of $35,000. Register it with the FAA so that the pilots flying overhead don’t mistake the house for a downed aircraft. Disassemble the 230-foot-long, 195-foot-wide machine. Elevate the wings and tail stabilisers to use as a roof for the master bedroom. Create a roof for a detached art studio from a 50-foot-long section of the upper fuselage. Add a guesthouse, constructing its roof from the remaining front part of the fuselage and the upper firstclass cabin. The front of the airplane works well — for someone with absolutely no fear of flying — as a meditation gazebo, where the cockpit windows form a skylight. And
since we’re in ranch country, use the cargo hold as an animal barn. The philosophy behind the Malibu house, dubbed the “wing house”, has taken shape over time, like the disassembled parts of the plane. The 55-acre property previously belonged to costume designer Tony Duquette, who built more than 20 structures from found objects, and the rugged terrain favours multiple smaller structures. However, the new owner, Francie Rehwald wanted curvilinear “feminine” shapes, and imagined a kind of floating roof set among the hills. An airplane wing sprang to architect David Hertz’s mind, and “wing house” materialised! The house will be completed by the end of this year. “We are trying to use every piece of this aircraft, much like an Indian would use a buffalo,” says Architect David Hertz, while the owner is happy contributing to the environment. “It’s 100 per cent post-consumer waste,” she says.
THE WINGS OF CAGE: (Clockwise from top right) Parts of the retired 747 take shape as the fancy Malibu home of Francie Rehwald; (below) the retired Tower Air 747 ready for dismantling; and (above the tail of the 747) a view of the finished building showing the different parts of the plane used. Photo Courtesy: inhabitat.com
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RNI No. DELENG/2006/16897 Posting Dt. 8-9/09/2010 Reg. No. DL(E) 20/5294/2009-11
A NEW BEGINNING
NEW TERMINAL 3