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DOMESTIC CARRIERS MUST CORRECT COURSE TO WIPE OUT THE RED INK

CRUISING HEIGHTS August 2011 n ` 90

Juhu refuses to take off Even with the green signal to expand, Mumbai’s Juhu airport still cannot accommodate traffic

Dreamliner shows its wings Boeing’s 787 makes a whistlestop tour of India wowing those invited to fly in it

Tough times for cargo carriers While multinationals TNT and FedEx are expanding services, Indian startups face financial obstacles

PLEASE, I WANT SOME MORE ONCE RESPECTED THE WORLD OVER, AIR INDIA’S MAHARAJA IS ALL BUT READY TO THROW IN THE TOWEL. AMIDST REPORTS OF ITS DEMAND FOR MORE FUNDS, A LAST-DITCH EFFORT IS BEING MADE TO REVIVE THE AILING GIANT

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EDITOR-IN-CHIEF’S NOTE

For heaven’s sake, talk! t is a reflection of the times that the Director General of Civil Aviation’s (DGCA) diktat that airlines stop charging for seat K Srinivasan allotment has come almost completely uncontested. After mildly protesting, the affected airlines — IndiGo, SpiceJet, Air India Express and GoAir — have simply complied with the DGCA’s orders. The preferred seat charges are off and it’s now been taken off their websites, too. At the end of the day, the preferred seat revenue stream may be just ‘peanuts’ for all the airlines concerned, but that’s not the point. The real worry is that they simply don’t seem to have the stomach to have a debate with the DGCA on what is clearly an order that can be challenged. I sent an email to three different airlines. While one of them simply declined to even discuss the issue, the other two were willing to talk about it “off the record” or attributable to “industry sources”. Naturally, we declined. If those who have got the wrong end of the stick aren’t willing to protest, then what’s the point? In at least two of the cases, the airlines were clear that they “didn’t want to get into a tangle with the regulator”. What it shows is a deep fear of the DGCA! That if you stand up to question them on some of their orders, they could turn back and growl at you. But surely that’s not the sort of image the Director General would like to project. He is a reasonable man who is fast-tracking the agenda set by his predecessor, Dr Nasim Zaidi, and actually adding a few important elements of his own to the whole package. So why wouldn’t he talk if you go and tell him what your perspective is? Perhaps, one reason for the nervousness is the battering most airlines have taken as part of the pilots’ scam. They have literally been taken to the cleaners for their procedures, winking and supping with the DGCA in fuelling nepotism in the air and, by and large, turning a blind eye to the shenanigans of the Directorate. Granted, some of them needed to have their ears tweaked, but they should take heart in the fact that those

CRUISING HEIGHTS August 2011

who were arrested by the police were scamsterpilots and officials of the DGCA and no one from the airlines. From the perspective of the DGCA what are they going to do about all the airlines that fly into India and charge for seat allocation? You have Air Asia and BA to name just two that charge for this option. So, will we now have a situation where the DGCA has created an unequal playing field with the foreign airlines continuing to make merry on allocation and Indian carriers being

CLAMOUR FOR THE PRICED SEATS: Why can’t airlines approach and talk with the DGCA?

denied the same privilege? At best, the DGCA could have stopped the across-the-board seat fee that airlines were charging as unreasonable. But surely, if I want a preference, I ought to pay for it. What the DGCA, Mr Bharat Bhushan, is saying goes beyond that: you can’t charge for a special service. It’s like telling a theatre that the seats at the back of the hall can’t be higher-priced than the ones in the front. Or, will he accept a situation where there can be differential pricing for seats in different parts of the aircraft? These are all points to ponder. The worry is that no one is talking. If the airlines get into a tizzy each time they need to talk to the regulator, it’s time for us to get worried. It only reflects a communication block or a communication breakdown.

srini@newsline.in

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Off the cuff

Bomb-proof Welcome the Fly-Bag! A new bag designed by Sheffield University’s Department of Civil and Structural Engineering in Britain aims to replace the heavier, more expensivehardened luggage containers that are currently used as a precaution against the threat of in-flight explosions. The flexible, bomb-proof luggage holds for aircraft is undergoing tests by a team of international researchers. Known as the Fly-Bag, it has multiple layers of novel fabrics, composites and coatings, and is designed to be filled with passenger luggage and then placed in the hold of an aircraft. fundamental to the design of the bag is the internal elastomeric coating and impregnation of fabric with shear thickening fluids (STFs), according to Dr Jim Warren. He said that STFs work by increasing their viscosity in response to impact. Under normal circumstances, the particles in STFs repel each other slightly. However, following sudden impact, the extra energy in the system proves stronger than the repulsive forces, causing the particles to clump together in structures called hydroclusters, which bump into each other, consequently thickening the fluid. “The real damage is caused by impulse rather than the energy and that’s a very important concept,” Warren said. What the researchers are actually interested in is taking that impulse and, “rather than have it all applied to a structure over a very tiny time period, we want to take the same amount of momentum and stretch it out over as long a time period as we can so that the peak stress falls”. The group has built a full-scale prototype that Warren said had been tested with an explosive device similar to the bomb that brought down Pan Am Flight 103 over Lockerbie in Scotland in 1988. The bag showed no sign of failing. "We have to just keep putting bombs in bags and blowing them up until something fails, and then we can say this design is good up to this sort of level — which we’d only be able to discuss with secured parties," Warren said.

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contents

TIME TO SAY GOODBYE!

p36

Is there a way out for the cash-strapped national carrier Air India? All options seem to be drying up fast. Amidst rumours that the airline would be privatised, the Dreamliner — which is being touted as the Maharaja’s saviour — swooped in to wow a select few who had a ride in it.

NEWS DIGEST

p12

Work on Juhu airport has long been kept on hold for unexplained reasons. It’s high time that something is done to relieve the pressure on Mumbai airport. Also: how the DGCA working out plans to phase out foreign pilots and more?

CRUISING HEIGHTS August 2011

COLUMN

p32

Domestic airlines are notching up losses despite the boom in traffic. So, what’s the solution? To add to that is the startling revelation that how shortage of pilots, aircraft maintenance engineers and associated personnel could become the bane of the industry.

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contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST

H C Tiwari

CRUISING HEIGHTS Volume VI No 4

Editor-in-Chief

FOCUS ON CHOPPERS

K SRINIVASAN

p45

Welcome to the fascinating world of dynamic choppers and how the DGCA has come to the aid of chopper pilots. Plus: an exclusive interview of Air Vice Marshal (Retired), Arvind Walia, Sikorsky M D for South Asia.

Managing Editor

TIRTHANKAR GHOSH Group Consulting Editor

R KRISHNAN

GLOBETROTTING

p34

Consulting Editor

Heard of a baby ban by an air- NANDU MANJESHWAR line; or for that matter, a man Deputy Editor PC SINGH run over by an aircraft while sleeping on the runway. Strange Assistant Editor JUSTIN C MURIK and often funny stories about airlines from around the world. Copy Editor ASHOK KUMAR Sub-editor-cum-reporter

PUNIT MISHRA Senior Designer

RUCHI SINHA Design

NAGENDER DUBEY, MOHIT KANSAL, SHIVNATH

AAI UPDATE

Picture Editor

p51

Airports Authority of India is engineering developments in the furthest corners of the country. A report on the inauguration of the terminal at Shillong and Bhopal. Also the first-ever Airport Directors meet.

PRADEEP CHANDRA

SNIPPETS

p68

Read the latest buzz and happenings in the aviation sector from national to international in this section. Indigo launches “Get Packing” while Jet Airways ties-up with Ngpay.

Photo Editor

HC TIWARI —————————— Publishing Director

ROHIT GOEL Director (Admin & Corporate Affairs)

RAJIV SINGH Asst. Manager (Subscription)

JAYA SINGH (Mob. 9650433044)

BACK PAGE

p74

Thomas Stuker is no ordinary person as he has notched up an enviable record of flying the most number of hours on a single airline over a period of nearly three decades.

CARGO

p58

Surat Airport holds a great potential for the cargo business and stands tall against all odds. The feasibility of the airport has not been worked out yet despite Surat being the business hub of India with its diamond and textile businesses to boast about.

Cover Design: Ruchi Sinha

CRUISING HEIGHTS August 2011

Executive Director

RENU MITTAL For advertising and sales enquiries, please contact: +91-9999919071, 9810030533 Editorial & Marketing office:

Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 Tel: +91-11-41033381-82 All information in CRUISING HEIGHTS is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase- I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase- I, New Delhi-110020.

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PERISCOPE

Right on target

“

“Boeing will deliver first Dreamliner to Air India in quarter four of this calendar year.”

DINESH A KESKAR, Boeing India President on the delivery of the Dreamliner to Air India.

LETTERS TO EDITOR

The cover story An Indian Summer in Paris (July, 2011) made a pleasant reading. It was heartening to read in the story that India was the show stealer at the air show. Indigo and GoAir created a frenzy of orders along with AirAsia. INDIAN SUMMER Besides that, the air show also showcased some of the finest display of civilian as well as military aircrafts. The 2011 edition of the show saw the startling numbers of 2,100 international exhibitors in 28 international pavilions. The show also showcased 150 aircraft, including the solar airplane Solar Impulse. All in all, the air show lived up to its expectations. Kamal Singh, Patna IT IS TIME AERA NOTICED THE EXISTENCE OF AIR CARGO

July 2011 ` 90

“The

idea that terrorists have been looking for other ways to circumvent security measures in order to target aircraft is not at all surprising.”

JAY CARNEY, White House Press Secretary on the aviation security threat being posed by terrorists.

Ushering development

www.cruisingheights.in

GOAIR’S JEH WADIA INDIGO’S RAHUL BHATIA AIRASIA’S TONY FERNANDES INDIAN CARRIERS, WITH A MASSIVE DOSE OF HELP FROM MALAYSIA CREATE, A “FRENZY” AT THE PARIS AIR SHOW BY ORDERING A WHOPPING 452 PLANES — ALL FROM AIRBUS.

The AGM of IATA ended on a strong note with the change of guard as illustrated in the story A new IATA without Basta (July, 2011). Like always, security and safety remained the two hot topics at this year’s AGM also with IATA’s unveiling of security checkpoint of the future. Also, Tony Tyler took over the reins at IATA from outgoing Director General Giovanni Bisignani while Jet Airways Chairman Naresh Goyal was re-elected to the prestigious Board of Governors of the International Air Transport Association (IATA). The highpoint of meeting remained the bringing out of the future challenges which Bisignani cited. Rahul Dey, Shillong The cargo story Troubled times for Deccan 360 (July, 2011) unveiled sorry state-of-affairs of the Deccan 360 and the gruelling time it is going through. As a matter of fact, the cargo airline is going through very difficult times. Capt Gopinath started the cargo airline last year in an attempt to tap the growing domestic cargo market but has not been able to penetrate the market as was expected. It was started as a next big thing but has not been able to reap the benefits. The cargo carrier has surely got lot of job up its sleeve. Kalyani Mazumdar, New Delhi

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

Security falling-out

“The modernisation of non-metro airports is happening. There were some issues in modernisation of Chennai airport because of (problems in) land acquisition. The work will start soon as it (this hurdle) is cleared.” VAYALAR RAVI, Civil Aviation Minister on the modernisation of non-metro airports.

A tight deadline “Airbus has an order backlog of more than 400 planes to be delivered to Indian carriers over the next 15 years.” JOOST VAN DER HEIJDEN, Airbus’ Head of Airline Marketing for Africa, India, South- East Asia and Japan on the backlog of orders to be delivered to Indian carriers.

Right path “If the pilot project of online exams for ATPL goes on well, DGCA would hold online exams for issuance of Commercial Pilot License (CPL) as well. Pilots require a CPL to join an airline as a co-pilot.” E K BHARAT BHUSHAN, DGCA Chief E K Bharat Bhushan on the issuance of Commercial Pilot Licence (CPL) in the future.

Options galore “In the competitive environment, customers have many options to choose from. It is this demand in the market that has led various airlines to offer packages for an overall holiday experience.” ORHAN ABBAS, Vice-President (India and Nepal), Emirates on the various options available to the customers.

CRUISING HEIGHTS August 2011

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Ryanair: Greenest among all

Focusing on efficiency provides new opportunities for cutting carbon footprints: An analysis of more than 300,000 employee flights at two of the largest American corporations disclosed that these companies could cut their travellers’ carbon footprints by as much as 40 per cent simply by choosing more efficient flights Five key drivers account for the wide disparity in flight efficiency: Aircraft fuel economy; passenger load factor; seat density; freight share and distance are critical factors for accurate flight carbon measurement and management. Market trends in the aviation industry are driving evolutions in flight efficiency: Air travel efficiency has increased 20 per cent since 2000, an improvement that in the US has saved airlines and travellers more than $33 billion on fuel and prevented the release of 670 billion pounds of CO2e.

COLD STATS

According to new analysis by carbon accounting firm Brighter Planet, Low-cost air carrier Ryanair is the world’s most carbon-efficient airline. The other top 10 airlines were Cathay Pacific, EasyJet, Continental Airlines, United Airlines, JetBlue Airways, KLM Royal Dutch, American Airlines, Delta Air Lines, Alaska Airlines and US Airways. Key findings were: Airline efficiency varies dramatically due to aircraft, routes, and payloads:Internationally, Ryanair, Singapore Airlines, and Delta claimed top rankings for efficiency among the 20 largest airlines, with SAS rated the worst. Carbon efficiency per passenger per mile varies tenfold across the industry: This revelation runs counter to standard carbon accounting practices that treat flight efficiency as relatively uniform and lead to major inaccuracies and lost opportunities.

LOOKING GLASS Hey, that seat is mine... I paid a whole lot of money for it...!

Towards indigenisation “The Committee has come to a conclusion that the Regional Transport Aircraft (RTA) should be a narrow-body turbo fan aircraft with a seating capacity for 70-90 persons and stretchable to 80-100 persons.” SAMIR BRAHMACHARI, CSIR Director General on what the first indigenously-developed Regional Transport Aircraft (RTA) would be.

Going upwards “Though air traffic is growing from small towns at a decent pace, it will be a difficult proposition for airlines lacking the right aircraft to fly to the smaller airports.” ANKUR BHATIA, Executive Director, Bird Group on the growing proposition of air traffic in India.

CRUISING HEIGHTS August 2011

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Ryanair: Greenest among all

COLD STATS

LOOKING GLASS Hey, that seat is mine... I paid a whole lot of money for it...!

CRUISING HEIGHTS August 2011

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TRAFFIC DATA

Slow and steady Capacity vs Demand

Capacity (ASKM)

Seat factor of scheduled domestic airlines The month of June 2011 witnessed decrease in seat factor as compared to previous month primarily due to end peak season and onset on monsoon.

Demand (RPKM)

% change over Month

May. 11

100

80 Seat Factor (%)

0 -10 -20 -30

Jul

Aug Sep

Oct

Nov

Dec

Jan

Feb

Mar

79.4 87.4

87 80.1

60 40

Air India

350

2010

2011

Growth

- YoY(+17.7%) - MoM(+17.9%)

298.1

300

Jet Airways

JetLite

SpiceJet

Kingfisher

IndiGo

GoAir

Market share of scheduled domestic airlines

Passengers carried by domestic airlines during Jan-Jun 2011 (half yearly) were 298.1 lakh as against 253.33 lakh during the corresponding period of previous year thereby registering a growth of + 17.7%.

253.33

IndiGo 19.9%

Air India (Dom) 14.9%

Jet Airways 17.8% JetLite 7.7%

200

SpiceJet 14.0%

150 100 45.04

50 YoY

he steady growth in the numbers of flyers was not seem to be slowing down. For though in the last two months, the capacity has been increasing in comparison to demand, according to the latest data released by the Director General of Civil Aviation, the number of passengers carried by domestic airlines during January-June 2011 (half yearly) was 298.1 lakh against 253.33 lakh

88.4 86.5 82.7

Passengers carried by scheduled domestic airlines

84.3 83.3

Apr May Jun

Year-over-Year

250

79.8 78

-40

78.1

Jun. 11

53.12

Kingfisher 19.8% GoAir 6.1%

MoM

during the corresponding period of previous SpiceJet 14.0 per cent, and GoAir 6.1 year thereby registering a growth of + 17.7 per cent. per cent. The month of June 2011 witnessed a decrease in seat factor as compared to The top domestic carrier that held a market share of 19.8 per cent was the previous month primarily due to the Kingfisher. However, if Jet Airways end of the peak season and the onset of (17.8 per cent) and JetLite (7.7 per cent) the monsoon. Air India's seat factor was are taken together, the market share held 73 per cent, Jet's 78 per cent, JetLite's by Jet was 25.5 per cent. IndiGo held 83.3 per cent, Kingfisher was 86.5 per 19.6 per cent, Air India 14.9 per cent, cent, SpiceJet was 79 per cent, GoAir CRUISING HEIGHTS August 2011

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On-time performance (OTP)

Reasons of cancellations

Scheduled Domestic Airlines, Overall OTP (June 2011)- 85%

Technical 47.0%

% of Total Ops 100

Con sec/Misc 25.5%

91.4

90.2

OTP

88.6

89.1

87.5

75.9

71.1

Commercial 16.6

Wheather 4.6%

21.7

22.5

15.3

18 6.6

4.7

Operationl 6.7%

Jet Airways

IndiGo

Kingfisher

11.3

Go Air

JetLite

SpiceJet

AI (Dom)

On-Time Performance (%)

Cancellation data of scheduled domestic airlines

Passenger complaints of scheduled domestic airlines

Overall Cancellation Rate in Jun 2011 – 1.1% GoAir

Indi Go

Total number of complaints (June 2011) – 1189 • Number of passenger related complaints – 2.2 per 10,000 passengers carried. JetLite

1.6

IndiGo

Jet Airways

0.6

1.7

Air India (Dom)

JetLite

1.1

Kingfisher

1.8

Kingfisher 1.3

1.9 2.4

SpiceJet 1.7

Air India (Dom)

0.5

1.5

2.9 3

2.5

GoAir

SpiceJet

3.5

Jet Airways 3.5

0.5

Cancellation Rate (%)

1.5

2.5

3.5

No.of Complaints/10,000 Pax

On-Time Performance Foreign Carriers

70 foreign carriers operating to/from India. At the time of compilation of this report, OTP data of 52 carriers was received. On-Time 74.4%

On-Time Performance Foreign Carriers

On-Time 68.8% Very Late (30-44 min) 6.8%

Very Late (30-44 min) 5.7% Excessiv e (> 44 Min 7.9%

Late (15-29 min) 17.1%

Excessiv e (> 44 Min 7.7%

Late (15-29 min) 12.3%

6.8% (Arrivals) 74.1% (Departures)

was 80.1 per cent and IndiGo was 87.3 had 1.6 complaints per 10,000 cent, JetLite at 88.6 per cent, GoAir was per cent. passengers while IndiGo had 1.7, Air at 87.5 per cent, SpiceJet was 75.9 per India had 1.8, Kingfisher had 1.9, cent and Air India at 71.7 per cent. According to the data, passenger complaints of scheduled domestic SpiceJet had 2.4, GoAir had 3 and Jet Meanwhile, of the 70 foreign carriers airlines in June 2011 had gone down Airways had 3.51. operating to/from India, the data of 52 slightly. The total number of complaints The overall on-time performance of carriers were received by the Director was 1189, compared to 1194 in May airlines in June 2011 was 85 per cent. Jet General of Civil Aviation. The on-time 2011. The approximate number of led the carriers in on-time performance performance for June 2011 was 74.1 per passenger-related complaints was 2.2 with 91.4 per cent, IndiGo was at 90.2 cent (Departures) and 68.4 per cent per 10,000 passengers carried. JetLite per cent, Kingfisher was at 89.1 per (Arrivals). CRUISING HEIGHTS August 2011

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NEWS DIGEST

Air France launches LCC

Euro Hawk after 22h journey Europe moved a step closer to fielding its first operational high-altitude, long-endurance unmanned air vehicle when the first Northrop Grumman/Cassidian Air Systems Euro Hawk touched down in Germany. Developed from Northrop’s RQ-4 Global Hawk by joint venture company EuroHawk for the signals intelligence role, the new aircraft will replace the German air force’s manned Dassault/Breguet Atlantic aircraft, the last of which was retired in 2010. The Euro Hawk demonstrator landed at Munich following a more than 22 hour transatlantic journey, which had started at Edwards Air Force Base in California.

BAA loses Stansted

Airport operator BAA must sell Stansted Airport and either Glasgow or Edinburgh airport, the Competition Commission has confirmed. BAA’s chief executive Colin Matthews said he was “dismayed” by the decision, claiming it would damage the company -- which was investing in UK jobs. Spanish-owned BAA runs six UK airports including Heathrow and has been the subject of a Competition Commission investigation since 2007.

Air France is offering lower-cost regional services to help it regain market-share from its low-cost rivals. By basing crew at provincial airports, the carrier hopes to cut costs and grab more market share. The carrier will debut the new regional services from Marseilles this October. It will roll out similar new services from Bordeaux, Nice and Toulouse in spring next year, launching 54 new routes in total to European cities and the Mediterranean. Under the initiative, Air France aims to reduce operating costs by 15 per cent and increase capacity in the regions by more than 30 per cent. The carrier believes it can cut costs on the services through a variety of changes including increasing aircraft productivity from 8h 15min per day to 11h 40min. Reduced turnarounds of 5min at stations will also contribute to a total productivity gain of around 40 per cent.

Tony tattles

Malaysia Airlines chairman quits LOSS-MAKING MALAYSIA AIRLINES ANNOUNCED THAT ITS CHAIRMAN MOHAMED MUNIR ABDUL MAJID WILL LEAVE THE FLAG CARRIER AS IT RESTRUCTURES ITS TOP TEAM IN AN EFFORT TO RETURN TO PROFIT. IN A STATEMENT, THE AIRLINE SAID MUNIR WILL LEAVE HIS POST ON JULY 31 WHEN HIS CONTRACT EXPIRES BUT DID NOT PROVIDE REASONS. HE JOINED THE BOARD IN AUGUST 2004.

The Jakarta Globe on the irrepressible boss of Air Asia: ‘Tony Fernandes likes to be the life of the party — and he threw a big party in Tokyo to celebrate a new alliance between his AirAsia and the ANA Group, Japan’s largest airline. “At first, I think they got terrified by my culture, my style,” Fernandes said of his new partners in an interview with the Jakarta Globe shortly before he announced the deal. “They thought it would be a disaster. My personality is probably 3,000 per cent different than the Japanese.” Fernandes said the deal was initiated by ANA three years ago. “The delay was because we told them the only way to run it was if we run it. Of course, for an airline such as theirs this was hard to swallow,” he said. But swallow it they did. The new AirAsia Japan will fly the company’s signature red colour and will follow the AirAsia model. He said the two sides kept trying to make it work despite their differences and a tough regulatory environment in Japan that has just recently allowed budget carriers to operate. He said that he convinced ANA they should do what they do best — run a full-service airline — and leave the no-frills operation to AirAsia. For now, however, Fernandes, 48, divorced and with a reputation for liking the ladies and a stiff drink, is moving to Jakarta, where he has purchased an apartment to be near what will be the company’s new regional corporate headquarters at the Equity Building in South Jakarta. He is not forsaking his native Malaysia, he says, noting that AirAsia is now a regional airline. “We are not identified with Malaysia,” he said. Touche!

CRUISING HEIGHTS August 2011

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Airport body scanners to drop naked images New software for screening passengers at US airports will do away with naked images, addressing a major public concern, the US Transportation Security Administration (TSA) announced. After complaints from travellers, the TSA earlier this year began testing, at four airports, software for the full-body scanners that instead uses a generic body outline and highlights the area where any anomaly is detected.

World’s largest-ever order

American Airlines has announced an order for 460 narrow-body airplanes (+465 options). The order is the largest in aviation history, dwarfing recent orders for 180 A320 family aircraft for IndiGo, and 200 A320neos for Air Asia. Deliveries are scheduled to begin in 2013 and proceed till 2022. The order is split between Airbus and Boeing; with Airbus getting a larger share of the orders than Boeing (260 vs. 200). American now flies all Boeing jets, making the order a hit for the US airplane- maker, particularly given that the airline opted for more Airbus aircraft.

Cutting ‘em to size !

“The tax cuts I’m proposing — we will get rid of are tax breaks for millionaires and billionaires, tax breaks for oil companies and hedge fund managers and corporate jet owners. You’ll still be able to ride on your corporate jet. You’re just going to have to pay a little more,” Obama said.

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easyJet breathes easy EASYJET DELIVERED A RIPOSTE TO SIR STELIOS HAJI-IOANNOU’S RELENTLESS CRITICISM OF ITS FINANCIAL PERFORMANCE BY PREDICTING IT WOULD GENERATE HIGHER-THAN-EXPECTED PROFITS THIS YEAR. GOOD NEWS HAS BEEN A RARE COMMODITY AT EASYJET IN RECENT YEARS FOLLOWING THE ERUPTION OF HOSTILITIES OVER THE CARRIER’S EXPANSION PLANS BETWEEN THE AIRLINE’S BOARD AND HAJI-IOANNOU, ITS LARGEST INVESTOR, WHOSE FAMILY HAS 38 PER CENT OF THE SHARES. SHARES IN THE BUDGET CARRIER JUMPED BY 17 PER CENT AS IT BEAT ANALYSTS’ EXPECTATIONS, THANKS TO RISING DEMAND FROM BUSINESS PASSENGERS AND A RISE IN ADD-ON FEES.

Memories of Apollo 11 Close-up views of the one and one-half inch silicon disk, which will be left on the moon by the Apollo 11 astronauts. The disk bears messages of goodwill from heads of state of many nations. The process used to make this wafer is the same as that used to manufacture integrated circuits for electronic equipment. It involves making tiny photographic images and depositing metal on the images. The Kennedy half-dollar illustrates the relative size of the memorial disk.

Flying Car dreams become a reality

For more than a decade, American aerospace engineer Burt Rutan dreamed of building a flying car. Now, the company he founded has built a prototype of his dream.The company, Scaled Composites, has developed a hybrid gasolineelectric roadable aircraft as part of an internal research and development program.The Model 367 or BIPOD, was Rutan’s final design before his retirement in April after a distinguished career. During initial conceptual design studies, Scaled Composites found that many of their propulsion system characteristics were “well aligned with the drivetrain needs of a roadable vehicle” and expanded the research programme to include a “flying car” airframe, the company said in a statement announcing the new vehicle.

CRUISING HEIGHTS August 2011

B e i j i n g ’ s new airport approved: Airlines to be split by alliance BEIJING’S NEW AIRPORT WILL BE ON THE OTHER SIDE OF THE MEGALOPOLIS FROM THE CURRENT CAPITAL AIRPORT, ALTHOUGH DETAILS OF HOW THEY WILL BE LINKED HAVE NOT YET EMERGED. BEIJING’S NEW AIRPORT HAS BEEN GIVEN THE GO-AHEAD FOR CONSTRUCTION TO BEGIN, WITH A REPORTED EIGHT RUNWAYS (A FURTHER NINTH RUNWAY WILL BE FOR MILITARY AND OFFICIAL USE), 55 SQUARE KILOMETRES OF SPACE AND CAPACITY TO TAKE AN ASTOUNDING 400 MILLION PASSENGERS A YEAR. THE AIRPORT WILL BE NEARLY 50 KM TO THE SOUTH OF BEIJING, AND WILL COVER TWO TOWNS IN THE DAXING AREA OF THE BEIJING CITY MUNICIPALITY. ACCORDING TO THE HEAD OF THE CHINA CIVIL AIRPORT ASSOCIATION, QUOTED IN CHINA’S OFFICIAL ENGLISH LANGUAGE NEWSPAPER CHINA DAILY, FLIGHTS WILL BE SPLIT BETWEEN THE NEW “BEIJING SOUTH” AIRPORT AND THE CURRENT BEIJING CAPITAL AIRPORT ACCORDING TO AIRLINE ALLIANCE. BEIJING CAPITAL IS RUNNING TO CAPACITY. AUTHORITIES HAVE SAID IT IS NOW IMPOSSIBLE TO ADD EVEN ONE MORE FLIGHT TO THE TIGHT DAILY SCHEDULE OF THE CAPITAL AIRPORT. THE CURRENT CAPITAL AIRPORT TAKES AN ALREADYIMPRESSIVE 74 MILLION PASSENGERS ACROSS NEARLY 500,000 FLIGHTS A YEAR, BUT HAS ONLY THREE RUNWAYS.

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Few bids for Air India’s fleet cover The largest aviation cover in India, for Air India’s fleet, estimated at $9 billion (`40,500 crore), has attracted only two bidders — from ICICI Lombard and a consortium of New India along with three other public sector insurers. Air India’s insurance policy is a hull, spares and liability policy, which covers the aircraft value, passengers’ liabilities and suites in the case of an accident, fire, flood or natural calamity. Brokers and insurers say strict norms, including upfront payment in case of claims and low margins, as it is largely reinsurancedriven, have led to such low participation. In 2010-11, ICICI Lombard bagged the cover with a premium of $30 million (`135 crore). Air India’s fleet is valued at approximately $9 billion. The bids invited are for 2011-12. In the earlier years, companies such as Reliance & IFFCO Tokio had participated in the Air India aviation cover tenders, but they have decided to refrain. It is learnt that ICICI Lombard is likely to use its current broker Independent/JLT combination whereas the New India consortium is yet to take a decision as it is discussing the broker options internally.

Cooch Behar gets going again

kaushikbiswas.org

A Northeast Shuttle flight left for Kolkata from Cooch Behar as West Bengal CM Mamata Banerjee “flagged off” the service — that resumed after 18 years — via a video conference. Mamata, who could see the Cooch Behar airport on a screen set up at Kanchenjungha Stadium in Siliguri, waved a flag, which was then conveyed to the AAI officials at Cooch Behar. The airport, too, had installed a screen for the video conference but a last-minute snag spoilt the show. The last commercial flight to and from Cooch Behar had landed and taken off

Cooch Behar Airport

H.C. Tiwari

INFRASTRUCTURE NEWS ¨¨

SHOWCASING AVIATION GROWTH: (L-R) V P Agrawal, Chairman, Airports Authority of India (second from left), Dr Dinesh Keskar, Chairman of the FICCI Aviation Committee and Boeing India President, Dr Nasim Zaidi, Secretary, Civil Aviation, Dr Rajiv Kumar, Secretary, FICCI and Jane Sanders, Deputy Head of Trade, British High Commission at the launch of India Aviation 2012

ndia Aviation-2012, the third international exhibition and conference on civil aviation, will be, held at Begumpet Airport, Hyderabad, from March 14 to 18, 2012. Announcing the meet recently, Dr Nasim Zaidi, Secretary, Ministry of Civil Aviation, said that the civil aviation sector had registered phenomenal growth in India in past decade. Passenger traffic had grown at 18 per cent year-on-year basis and the year 2010 closed at 90 million passengers both domestic and international. The country is the fastestgrowing aviation market and expected to be within four- five big aviation markets by 2020 and third in terms of domestic market after US and China. During the last two decades from a fleet of only about 100, scheduled operators today have 435 aircraft connecting the nation and the world. Considering the geographic position of India, it had the potential to become an aviation hub at the crossroads between Europe/ Middle East and Asia Pacific. Dr Zaidi informed that T-3 Terminal at Delhi International Airport was evolving into a hub. About 11,000 passengers were transiting from various spokes to

different destinations in the world by utilising the spoke and hub system. India Aviation-2012 is being organised by the Ministry of Civil Aviation jointly with the Federation of Indian Chambers of Commerce & Industry (FICCI). It would witness participation of over 250 exhibitors comprising aircraft manufacturers, aircraft machinery and equipment companies, aircraft interiors, airlines services and air cargo, skill development, airport and infrastructure, MROs, etc. The exhibition will be spread over an area of 20,000 square metres. The UK is the partner country for the 2012 event with France as the focus country and USA as the guest country. While the host is the state of Andhra Pradesh, the Overseas Associate for the show is Famborough International Ltd. Apart from the Exhibition, India Aviation-2012 will have a conference on policy issues and business aspects of the civil aviation sector, a CEOs Forum representing chief executives of leading aviation companies, Chalets, Static Display, Demonstration Flights and Media Conferences.

STAGE SET FOR INDIA AVIATION 2012

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INFRASTRUCTURE NEWS ¨¨ in 1993 when the now defunct Vayudoot, a subsidiary of Indian Airlines, used to operate services between the two stations. Three earlier attempts had been made to put Cooch Behar on the air map since Vayudoot stopped services in 1990. The late West Bengal Transport Minister Subhash Chakraborty tried to connect a regional airline (Bengal Air) that would connect the town but the carrier never took off. In 2005, Capt Gopinath agreed to operate Deccan Airlines and even did a test flight. But after Vijay Mallya took over the carrier, Cooch Behar was dropped from the plan. Gopinath then returned with Deccan Charters but the company that owned the plane disappeared with the aircraft before the Cooch Behar flight could be launched. This time, though, the state government as well as AAI is hopeful that the jinx will finally be broken. Apart from Cooch Behar, Northeast Shuttle is also in talks with Tata Steel for operations between Kolkata and Jamshedpur along a similar arrangement of under-writing half the seats. Deccan Charters was operating two-three daily flights to the steel town before the aircraft owner terminated the lease and withdrew the plane.

Proposal for airport at Nagar Haveli submitted

A proposal has been submitted to the Civil Aviation Ministry by the Dadra and Nagar Haveli (UT) administration seeking setting up of an airport at Luhari village in Nagar Haveli, which is located along the proposed AhmedabadMumbai Express Highway. The idea is to decongest air traffic from the nearest domestic airports of Mumbai by developing an airport to which passengers from the cities of Maharashtra, Madhya Pradesh and Gujarat had an easy accessibility. The Planning Commission will also accept the request for allocation of funds for the airport project if it is cleared by the ministry concerned. A sitemap for the proposed airport is being prepared with the help of Indian Coast Guard. About 186 hectares of barren land at Luhari village has been found suitable for the proposed airport, which is just 125 km away from Mumbai airport.

DUBAI SOARS TO A RECORD

ENGINEERING GROWTH: Inside view of Dubai International Airport.

ubai International Airport handled an average of 135,700 passengers each day as the Emirate’s aviation engine powered ahead in the first half of the year. A record 24.6 million passengers passed through the world’s fourth-busiest airport for international passenger traffic during the period, compared with 22.6 million in the same period last year, as the airport’s biggest customers, Emirates Airline and flydubai, added flights, routes and aircraft. The increase of 8.8 per cent keeps Dubai International on track to become the world’s busiest international air hub

MARAN PLEDGES HIS SPICEJET STAKE

CRUISING HEIGHTS August 2011

within four years. A $7.8 billion (Dh28.64bn) expansion of Dubai International is planned to continue driving growth over this decade. More than 200 new weekly flights were launched to 19 new destinations across Asia, Europe and Africa by airlines over the period. Dubai International serves more than 130 airlines flying to more than 220 destinations on six continents. The airport’s figures for last month reveal a 10.4 per cent rise from the same period last year, to 4.07 million passengers. The airport operator said India, the UK, Saudi Arabia, Pakistan and Iran provided the most inbound flights.

alanithi Maran, who owns a 38.16 per cent stake in SpiceJet, has pledged 134.8 million shares, or 87.17 per cent of his total holding in the airline. Maran, who owns the Southbased Sun TV network, together with KAL Airways holds 156.5 million shares in the airline. Maran had, in April this year, pledged 14.84 per cent stake in SpiceJet and has subsequently pledged more shares to raise funds for the airline. SpiceJet, which has a share of a little over 14 per cent in the domestic market for air travel, has been looking at expanding services to Tier II cities and launch of regional operations from 15 July. The airline, however, had to postpone the plans due to funding problems. A rights issue can be one option the company might consider. Merchant banker Enam has been appointed to suggest options and methods of getting capital into the airline. It is expected that the airline wants to raise `400 crore through offering of shares. The carrier hopes to conclude the process by the end-December.

Fraport – Airport Operations from Austria to Xi’an.

The Company Fraport AG is a leading player in the global airport industry. Following its initial public offering (IPO) Fraport has become the second largest listed airport company in the world, by revenues. Fraport’s expertise is based on more than 80 years of aviation history at Frankfurt am Main, Germany. Frankfurt Airport (airport code = FRA) is located about 12 kilometers from downtown Frankfurt. A renowned pioneer for decades, FRA serves as Fraport’s home base and as a showcase for the company’s know-how, technology, products, and services. With outstanding connectivity to all five continents of the globe, FRA is a intermodal hub with one of the largest catchment areas in the world and direct access to the German high-speed railway network. FRA is strategically situated in the heart of Germany and the European Union. Airlines can profit from high utilization rates and traffic yields.

Range of services The company prides itself in being a leading-edge provider of integrated airport services. Besides managing FRA, Fraport AG and its subsidiaries provide the full range of planning, design, operational,

commercial and management services for airports around the world. Fraport AG serves as a neutral partner to the world’s major airlines: offering a complete package of aircraft, cargo, passenger and other ground handling services. Outside Germany, the company has ground services operations in Austria. Other areas of Fraport expertise include cargo and ground handling, real estate development, airport retailing, IT services, consulting, intermodal concepts, environmental management, hub management, training, etc.

Fraport worldwide Through investments, joint ventures and management contracts, Fraport is now active on 4 continents. Fraport served some 73.7 million passengers in 2009 and handled 2.1 million metric tons of cargo (airfreight and airmail) at the Group’s airports. Fraport, which bids for airport management projects worldwide, was awarded a 30-year concession for operating, managing and developing Indira Gandhi International Airport (IGIA) in India. Together with state-run Airports Authority of India (AAI) Fraport AG has formed “Delhi International Airport Private Limited (DIAL)”. Fraport is the nominated “Airport Operator” and an Airport Operator Agreement

concluded with DIAL – under which it will be utilizing its extensive airport expertise developed over the past 80 years to assist with the operation, management and development of IGIA.

Fraport AG Frankfurt Airport Services Worldwide 60547 Frankfurt am Main, Germany E-mail: marketing@fraport.de Internet: www.fraport.com www.frankfurt-airport.com Contact: Ansgar Sickert Vijender Sharma Fraport India Paharpur Business Centre Suite 302 21, Nehru Place New Delhi – 110 019, India Phone: +91 11 4120 7355 (AS) +91 11 4120 7334 (VS) Fax: +91 11 4120 7558 Mobile: +91 99 1038 2806 E-mail: ansgar.sickert@fraport.in vijender.sharma@fraport.in

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Airport developers face combined service tax liability The Finance Ministry has decided to impose service tax on the development fee the Mumbai and Delhi airports collected before the levy was banned, dealing a further blow to the operators facing a funding gap. The Central Board of Excise and Customs (CBEC), the apex indirect taxes body, has told the two airports that the fee will attract a 10 per cent service tax. The combined tax liability would come to over `300 crore. Airport operators have been paying service tax on “user development fee” but not on development fee. Delhi and Mumbai airports collected development fee, and used it to fund development, treating it as a capital receipt. In April, the SC banned the Mumbai airport from collecting this fee, ruling that it had to be first approved by the Airports Economic Regulatory Authority. The Delhi High Court asked the city airport to stop this fee from June. In contrast, Bengaluru and Hyderabad airports collect user development fee, which goes to the investor and is taxable as it is considered a revenue receipt. The ministry has, however, said that development fee will also attract service tax irrespective of how it is used. “It is immaterial how the gross amount charged from this service is treated in the books of the service provider and to what use it is being put to,” a CBEC letter said. Demand notices are likely to be sent to these operators to recover tax on the fee collected in the past. Senior officials of the Delhi and Mumbai airports confirmed the receipt of the letter from the tax department, but declined to give details, saying their experts were examining the issue as the development fee was not for any service rendered. GMR-led Delhi International Airport Ltd has collected about ` 1,200 crore as development fee (DF), which was to bridge the projectfunding gap while GVK-led Mumbai International Airport Ltd has collected `600 crore so far. Experts say lack of clarity in the definition of service was leading to such issues.

note detailing the formation of an autonomous Civil Aviation Authority (CAA) is being finalized. It will ultimately replace the present regulatory body, the DGCA. Making an announcement to this effect, the Director General of DGCA, E K Bharat Bhushan observed similar set ups exist in many foreign countries. The CAA will regulate all aviation safety issues. It will have administrative and financial autonomy and will keep a tab on the entire range of activities - from proper provision of Air Traffic Services and licensing to financial fitness of airlines. A legislation to put in place the CAA will be introduced by the government. According to Bharat Bhushan, the CAA will have a lot of financial, administrative and procedural independence. This means that the CAA will be able to recruit professionals directly without going through the UPSC route and also have the financial powers to spend without going through bureaucratic red tape. The CAA will also have powers to monitor ticket prices and rule on consumer grievances. In this connection it has been stated that it will

be empowered to appoint an ombudsman to address consumer grievances. The most crucial aspect of the CAA will be the separation of the accident investigation wing and the regulatory functions of the Authority so that there is no internal clash within the proposed body. The DGCA, for instance, does safety audits, grants licences and investigates aircraft crashes. It is proposed to arm the CAA with more powers to address consumer affairs as lack of such powers with the incumbent DGCA had often emboldened the airlines to charge sky-high fares. In line with this thinking, the proposed CAA will also have powers to appoint regional ombudsmen to ensure speedier action and settlement of customer or passenger disputes. The note, which has been prepared by DGCA and submitted to the parent Ministry of Civil Aviation, has been based on a feasibility study first made in October 2009 in technical collaboration with ICAO. The mandate — if one can use that word — given then was to shape a new regulatory authority that will have improved financial and administrative autonomy for discharge of safety

FROM DGCA TO CAA

E K Bharat Bhushan

H.C. Tiwari

INFRASTRUCTURE NEWS ¨¨

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oversight functions more effectively. The ICAO feasibility report was received by the Ministry of Civil Aviation in March 2010, which was later endorsed by the FAA stating it would be in line with the ICAO policy. The draft CAA note — in the form of a Cabinet note — has been prepared after studying the existing setup in the UK, the US, China, Germany, France and Singapore. After the DGCA notes are studied by the Ministry of Civil Aviation, the latter will prepare a draft Bill which could be put up on the public domain for comments from stakeholders like airlines, travel agents and the general public. Pending the logical conclusion of these steps leading to the formation of the CAA, the existing DGCA has submitted a modernisation plan to the government entailing an investment of `350 crore. In the last three to four years, DGCA has come under lot of public scrutiny for many reasons though most of them are not of its own making except, perhaps, the issue of fake pilot licences. In this context, the need for granting administrative and financial autonomy to CAA stems from the fact that DGCA itself has suffered immensely from the delays in staffing its crucial safety and other technical arms. For instance, DGCA today has only 130 employees against the required 500. In its May 2011 report, the Parliamentary Standing Committee on Transport and Tourism expressed surprise that the Directorate of Licensing responsible for issuing licences to airline pilots was working with just four Group A officers against the sanctioned strength of 26 such officers. The committee headed by Sitaram Yechury said: “That such a thing (fake licences) was going on within the DGCA shows that its in-house supervisory and vigilance system was weak.” It is now believed that the government may soon approve a proposal for the creation of some additional senior positions in the DGCA, which is facing huge staff shortage. The Ministry of Civil Aviation is understood to have proposed that the number of Joint Director General (JDG) in the DGCA be raised from three to six. At present, the regulator has three JDGs, two of who are technical and one administrative. When it is doubled, the DGCA will have four JDGs in technical capacity and two in administrative capacity. As for the DGCA himself, it was in March 2011, that the government invited applications for the post of

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Director General DGCA. Among the eligibility conditions it said the person concerned should have aviation background with mandatory aviation experience of not less than 12 years. The idea was to appoint a total aviation person instead of stopgap arrangement which the IAS bureaucrats had been providing on and off. Notwithstanding the intention of the government it reportedly drew a blank as not a single application was received from any eligible candidate. It, therefore, decided to extend the tenure of E K Bharat Bhushan in the acting capacity for another six months or till the end of December 2011. Meanwhile, the Ministry of Civil Aviation has informed the UPSC to relax the eligibility conditions or the norms governing the appointment criteria. This is yet to happen. It is now learnt that the IAF is seriously lobbying to get a a senior Air Vice Marshal-level official to head the DGCA as it believes it meets the mandatory criteria as espoused in the original application drawn up by the UPSC. Perhaps, the issue of “civil aviation” must have come in the way. India’s civil aviation sector will need between 1320 and 1500 aircraft over the next 20 years and the next 10 years will see the number of people flying rise six times from today’s nearly 60 million to more than 360 million. Yet another estimate suggests that India’s domestic and international passenger traffic will grow to 450 million by 2020. Thus, it can just be left to one’s imagination as to what will happen if safety and regulatory issues are not focused on even more sharply and customer issues not treated the way they are today. Seen in this context, the lethargy, or should we say mandatory bureaucratic aversion to get things done fast, has become evident even on the issue of posting a full-fledged DGCA. It must be placed on record that the present DGCA E K Bharat Bhushan who is doubling up as the Financial Advisor to the Ministry of Civil Aviation in the rank of Additional Secretary has taken yeoman steps to clean up the DGCA, which was started earlier by his predecessor IAS officer and now Secretary, Ministry of Civil Aviation, Dr Nasim Zaidi. It was in December 2010 that Dr Zaidi replaced M M Nambiar as the new Civil Aviation Secretary and the vacancy he caused by moving to Rajiv Gandhi Bhavan was filled in an “acting capacity” by Bharat Bhushan. CRUISING HEIGHTS August 2011

INFRASTRUCTURE NEWS ¨¨ Vizag airport gears up for more international flights

Visakhapatnam Airport

Visakhapatnam Airport is gearing up to handle more international flights. At present, the airport sees one or two international chartered flights weekly from Sri Lanka. According to airport sources, United Arab Emirates’ Air Arabia is keen to operate regular flights between Sharjah and Vizag. Silk Airways and Sri Lankan Airways are also studying the possibilities to operate international flights from here. During the last financial year, the airport handled about 725,000 passengers, of which more than 15 per cent were overseas. “Vizag air passengers use Hyderabad, Chennai and Mumbai airports to catch international flights. If international flights operate from here, most of the passengers will go directly from this place,” said Varada Reddy, Air Users Association of India. The airport has Customs and immigration facilities. “Once more international flight operate from here, these facilities would be strengthened,” he said. “At present, daily 32 services operate from Vizag and we have direct flights to Delhi, Mumbai, Chennai, Kolkata and Hyderabad. Another six services will be added from August second week including daily direct flights to Bengalurusss and Tirupati,” he said.

Nation’s tallest ATC tower at Delhi After the biggest terminal and the longest runway, Delhi airport is all set to have the tallest Air Traffic Control (ATC) tower in the country. At 100 ATC at Delhi airport metres, the new ATC tower will be much taller than the Qutab Minar (72.5 m) and almost double the airport’s existing ATC tower.

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The new ATC tower, initially planned to open by mid-2012, will now be commissioned only by November 2013, private airport developer Delhi International Airport Ltd (DIAL) said. DIAL has invited bids for the construction of the new ATC complex and tower. Expected to cost `350 crore, the new ATC tower will be built at a more centralised location at the airport, so that air traffic controllers can have a clear view of all the three runways, aprons and taxiways. The present ATC complex and 60metre high tower was built in 1999 and is at a considerable distance from the third runway built in 2008. “Even on a clear day, the new runway is not properly visible from the ATC tower,” said a senior ATC official who didn’t wish to be named. Though all movements are monitored through radar, a clear view can sometimes help avert mishaps if an animal strays on the runway. There are three operational runways at the airport and a fourth is planned when air traffic increases. The new ATC tower will be situated in the middle of the four runways and, with its commanding height, will not miss an inch of the area of the sprawling 5,000 acre airport. “Construction of a new ATC tower was not in the original master plan of Delhi Airport in the current phase. However, at the insistence of the Airports Authority of India and the Ministry of Civil Aviation, we have agreed to undertake the project in the current phase,” said a DIAL spokesman. “The schedule agreed envisages completion of the civil work by November 2012. This will be followed by installation of the ATC equipment and testing, leading to the commencement of operations from November 2013,” he said. DIAL claimed the project is on schedule and that the designs have been finalised.

No relief for DIAL State-owned Airports Authority of India (AAI) has declined to ease the fiscal pressures on Delhi International Airport Pvt. Ltd (DIAL), which could potentially impact the firm’s profit.

JUHU AIRPORT: SPLUTTERING AND SPLUTTERING

t its board meeting on October 21, 2010, the Airports Authority of India (AAI) Board accorded inprinciple approval to the Juhu Airport Master Plan, which envisaged expanding and upgrading the airport with the intent to shift part of the General Aviation (GA) traffic from Chhatrapati Shivaji International Airport (CSIA) or MIAL to Juhu Airport and make it a sort of hub for high and mighty Mumbaikars with private planes, accommodating ATRs and Turbo-Props besides helicopters which in any case it is now exclusively handling. After the Board meet held in Mumbai and attended among others by the then Director General of Civil Aviation (DGCA) and present Secretary, Civil Aviation, Dr Nasim Zaidi, AAI Chairman V P Agrawal disclosed that the entire Juhu Airport expansion project would entail an investment of `2000 crores. This was the only official version of the investment plan announced by AAI. Agrawal said the proposal was subject to approval by the Union Government and required detailed technical studies such as ATC routing, obstacle analysis, sea bed contour mapping, EIA (Environmental Impact Assessment) by the Ministry of Environment and Forests before the project could proceed for final clearance. Since then, there has been no news on how and what AAI intends to do to make the Juhu airport expansion plan a reality. Certain developments, however, have taken place in the public domain. AAI’s long-term modernisation and expansion plan for Juhu Airport included the following: (i) runway extension (ii) realignment of the runway to CRUISING HEIGHTS August 2011

accommodate larger aircraft subject to the approval of the Ministry of Environment and Forests in terms of EIA clearance. Prior to the undertaking of these steps, AAI had engaged KPMG to prepare a pre-feasibility study that said an investment of `1500 crore to `2000 crore would be needed to modernise and expand Juhu Airport under a PPP model. At that time, the consultant stated that it could take up to May 2011 for the studies to be completed after which clearances would need to be taken. It would then take another two years to implement the project that would include the new long runway extending up to 5500 feet that may well have to jut out into the sea — akin to the old Hong Kong airport — or built on stilts on the sea. Either way, it would mean eroding part of the Juhu Beach space as well as a portion of the road now used by the public. As a result, the unrestricted patch of Juhu Beach would be broken up and split into two. Among other things it was stated that extending the Juhu Airport runway would free 10 per cent to 15 per cent of MIAL’s current capacity of about 700 to 750 aircraft movements a day at CSIA — or, in other words, at least 70 aircraft movements (smaller fixed wing GA aircraft and ATRs, Turbo-Props) a day could shift to Juhu Airport. As per the AAI master plan, Juhu Airport runway length would be increased from the present 3750 feet to 5500 feet. The current runway length of 3750 feet is end-to-end and does not mean that the entire length is available for landing or take-off. Simply put, pilots actually have only 2880 feet of runway

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The airport had proposed linking quarterly payouts to the government to actual receipts instead of having to make advance payments as it does now. That has been rejected. DIAL wanted relief to partially offset the financial strain it has come under after the Supreme Court put a freeze on collection of the airport development fee from passengers to fund the airport’s $3 billion (`13,320 crore today) modernisation bill until an explicit order was passed by the Airports Economic Regulatory Authority, allowing the company to do so. In addition, state-run Air India Ltd, announced as the hub carrier for the airport last year, is not paying DIAL its dues on time because of the carrier’s huge debt burden. DIAL currently pays AAI its share on the basis of projections at the start of each quarter. Officials have said there cannot be a deviation from OMDA (the Operations Management Development Agreement that governs the 30-year lease, extendable by another 30 years, of IGIA to DIAL). AAI ran the airport until 2006. One of the officials said that the DIAL proposal was turned down as no one in authority wanted to take decisions that could come under any kind of scrutiny at a later date. A DIAL official, who declined to be named, said the airport had asked for the relief because of delayed payments from Air India and other financial issues. The proposal has not been approved yet, the official said. Paying the revenue share after the quarter ended would have helped in terms of financing. .

Hungerbuehler is DIAL COO

Marcel Hungerbuehler had joined as Chief Operating Officer of the Delhi International Airport Ltd (DIAL) replacing Peter Noyce, who quit the organisation to join an NGO. Prior to this Hungerbuehler had worked as the CEO of Bengaluru International Airport before he moved out in February this year. He would report into I Prabhakara Rao, CEO for Delhi Airport, who looks after overall operational activities of the airport. Hungerbuehler has 40 year experience in aviation industry and was head of Swissport Zurich,

MUCH EXPLAINING TO DO: (L-R) Dr Nasim Zaidi, Vayalar Ravi, V P Agrawal and Marcel Hungerbuehler.

available from the landing threshold point once the aircraft touches down. So, the proposal to extend the entire length to 5500 feet needs to be seen from the threshold point of view. Since this was going to be a long-term plan, AAI wanted the runway to be 4290 feet which would provide the longer runway length based on the threshold point of landing. Thus against 2880 feet, AAI felt it would be able to get 3420 feet of actual runway length from the threshold point of touchdown under the second option. In other words, pilots of smaller GA aircraft would get more flexibility while landing in Juhu. This runway is 08-26. Pending the main expansion plan, and even before the second option was exercised, it was proposed to shift some smaller fixed wing GA aircraft movement from CSIA to Juhu Airport with effect from January 2011. But not a single such type of GA aircraft and of that size has landed till date in Juhu. The plan has remained on paper. No shift is either anticipated in the near future for various reasons enumerated below. In January 2011, the AAI asked Juhu Airport officials to identify obstructions in the runway funnel zone pending the initiation of the expansion and upgrade plan. Over the years many trees, buildings, hoardings, etc have come up in and around the airport and also in the runway funnel zone. An obstacle chart was prepared and obstructions identified. In fact, some action was initiated in seeking to remove such obstructions by notifying some building owners and also some trees (mainly the job of Bombay Municipal Corporation). Some notices were issued to know if they had obtained the NOC from AAI. About a month ago, action was taken against a particular building where its eleventh floor was given notice for demolition as it was right in the runway funnel zone and the building had also not got an NOC from AAI. It is learnt that around eight bureaucratic clearances were given in a day to the builder of this building. The Juhu extension project involves filling 384 acres of land because the airport is situated in a bowl-like area, which is prone to floods. In the great CRUISING HEIGHTS August 2011

deluge that engulfed Mumbai in July 2006, the entire parking area of helicopters at Juhu Airport including the hangars was flooded rendering operations from the airport impossible for a few days. While helicopters can take off vertically, what can happen to fixed-wing GA aircraft is anybody’s guess. Further, another 70 acres of land has been encroached upon. Recently, the AAI sought the assistance of the BMC to demolish illegal structures inside Juhu Airport built by squatters. The BMC refused to help stating that it was already over-stretched and involved in demolitions in more important parts of the city. In all, 280 acres of land would be needed for aeronautical development, while the remaining area needs to be cleared to prevent water-logging and encroachment. The KPMG plan as agreed to by AAI involved the extension of the existing runway into the sea by cutting through the Juhu Beach and the arterial road for which an underpass tunnel would have to be constructed below the runway for the road traffic. Even as it is the current runway at Juhu Airport which extends right up to the busy S V Road and GA aircraft wanting to land would not be able to do so since the minimum clearance required for landing will not be met. Other issues apart, this meant obtaining many clearances — primarily, extension of the runway would mean facing green obstacles as the project falls under the Coastal Regulation Zone (CRZ) and would have to be ratified by Maharashtra Coastal Zone Management Authority. This body would study various aspects ranging from pollution, effluent discharge, fishing and coral life to high and low-tide activity. Till the time of filing this report, no activity of any significance has happened in Juhu Airport in relation to expansion and modernisation nor has any GA aircraft movement shifted from CSIA or MIAL to Juhu. It is also not expected to happen soon since AAI has put the project on hold. Even as the Juhu Airport expansion drama continued on the sidelines, the main act engaging everyone’s attention

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the largest Ground Handling Company at Zurich Airport, which now holds only 5 per cent in BIAL. Hungerbuehler’s appointment comes at a time when GMR has been making losses due to huge capital expenditure incurred on DIAL. The Bengaluru-based infrastructure company, which submitted a `9000crore plan for New Delhi, which involves building a new runway and new terminal to accommodate 35 million passengers by 2010, saw capacity doubling up with a total cost overrun of `3,500 crore.

High-rises without NOC: AAI to issue notices The Airports Authority of India (AAI) will issue notices to the builders of high-rise apartments and flat complexes which had not availed the No-objection Certificate (NOC) required for constructing the buildings in the city. Director General of Civil Aviation (DGCA) E K Bharat Bhushan told the media that he had taken up the issue with the local self-government institutions concerned in Thiruvananthapuram. Airport Director Chandramouli, who was present at the meet-the-press, said one of the builders who had constructed a high-rise near the airport without obtaining the NOC had already been served with the notice. Bharat Bhushan said a huge amount was being pumped in for upgradation of the Air Traffic Control (ATC). He said the Global Positioning System (GPS) being implemented at a cost of `750 crore will be installed at the Thiruvananthapuram Airport also. He said the State Government has assured the DGCA that it would make available 87 acres land for the second phase of development of the new terminal. But the airport terminal urgently required the acquisition of 39 cents of land to provide a Runway End Safety Area (RESA) to prevent skidding of the aircraft to danger zone and checking Mangalore-model accidents. As per the safety specification, the RESA required a 90 x 90 square metre area.

GALA TIME: People around Juhu Beach.

around the time V P Agrawal made his announcement of the in-principle approval to the Juhu Airport expansion programme in October 2010 was the environmental clearance to Navi Mumbai airport. On November 22, 2010, at a press meet in Maharashtra Sadan, New Delhi, the then Union Environment and Forest Minister Jairam Ramesh announced in the presence of the then Civil Aviation Minister Praful Patel and Maharasthra Chief Minister Prithviraj Chavan that environmental clearance had been given to Navi Mumbai airport project and that work could start immediately. Separately, Jairam Ramesh informed the then Civil Aviation Minister Praful Patel that no such clearance could be expected to be given to the Juhu airport expansion plans. The Environment Minister wanted the entire Juhu Airport area to be a No Construction Zone and that it would be a new green lung space for the city of Mumbai. Till he was Minister, there had been no change in his stance. It is now more or less clear that the report of KPMG has been dispatched to the cold storage. The never-say-die attitude of the Chairman, AAI, V P Agrawal could, however, lead to some movement in the project. He conducted an internal review of the Juhu Airport project some weeks ago after which it was decided that the KPMG project report be sent to the PMO. It was felt that the AAI could not take on the Environment Minister. It may be pointed out here that former Civil Aviation Minister Praful Patel personally drove the Navi Mumbai airport project and a similar approach would have been required for Juhu airport upgrade as well. Jairam Ramesh, on the other hand, is believed to have told CRUISING HEIGHTS August 2011

certain quarters that matter that since there was no alternative land available for Navi Mumbai, his ministry — the Ministry of Environment and Forests (MoEF) — had agreed to it in public interest. There is no compulsion for it to adopt a similar attitude in so far as Juhu is concerned. Moreover, the MoEF also argued that since Navi Mumbai was going to service the city there was no point in disturbing the environment right inside Mumbai city by expanding Juhu Airport. Even as the AAI forwarded the KPMG report and its so-called master plan to the PMO, it drew up Plan B or the `60-crore plan. AAI has been alternatively considering the possibility of extending threshold limit for landing by increasing the current runway length from 3750 feet to 4250 feet, which will be within the airport premises and would require no-green clearance. This way the threshold landing length could be increased from 2880 feet to say 3420 feet. AAI engineering officials say it will not be possible to do this project in rupees 60 crore and perhaps may cost much more. AAI Chairman has already forwarded his plan-b to MOCA and Minister Vayalar Ravi who is not enthusiastic as his predecessor and Mumbaikar Praful Patel was about Juhu Airport upgrade. It seems that following the clearance accorded to Navi Mumbai airport for which tender documents are expected to be released towards the second half of 2011, the possibility of Juhu accommodating fixed-wing GA aircraft will be remote if not altogether nil. In fact MIAL officials say with the clearance given to Navi Mumbai, they are reworking the future NPV of CSIA and may therefore not want another airport

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NEWS DIGEST

INFRASTRUCTURE NEWS ¨¨ Chennai airport renews its licence

Chennai Airport

Forty-four airports in the country, including Chennai and Coimbatore, have renewed their pending licences. The renewals done recently follow a notice issued by the aerodrome licencing authority of the Directorate General of Civil Aviation (DGCA) last October. The notice had made it clear to all the 63 airports in the country that no airport would be allowed to have air transport operations if it did not renew the licence by June 30, 2011. Director General of Civil Aviation E K Bharat Bhushan said that of the 63 airports, 44 had renewed their licences within the deadline. “The process of issuing licences for the rest of the airports, including the defence airfields is on,” he told the media. All major airports, including Chennai, Delhi, Bengaluru and Mumbai have renewed their licences, he said.

New airport to cut iconic tower to size The much talked-about iconic tower coming up in Wadala may not stretch to 101 floors, or 526 metres, as planned earlier but instead may have to be finally built to rather modest proportions. Mumbai Metropolitan Region Development Authority (MMRDA) officials connected with the project said that officials from the Civil Aviation Ministry have made it clear that the earlier height would not be permissible because the tower comes within a four-km radius of the new airport coming up near Panvel. While this warning had been sounded earlier by the Central authorities, the MMRDA had been hoping that some relaxation would be possible. “We might have to develop new plans for the project or opt for several smaller towers now,” MMRDA officials said.

howsoever small like Juhu to add to its revenue stream problems. No environmental clearance to Juhu Airport as no violation of CRZ and hence no possibility of extending the existing runway at Juhu to 5500 feet as stated in the KPMG report or beyond the existing fence around the airport. Even the possibility of aligning runway to Mumbai Airport runway and connecting the gap of 800 meters by clearing obstacles in between has been rejected as it would mean displacement and resettlement of legally dwelling population unlike the squatters in and around Santa Cruz Airport. Taking all these into account, MOEF recently again rejected (informally) the Juhu Airport expansion proposal which was the main trigger for AAI approaching PMO with KPMG version of the project. It is in this context, AAI has alternatively proposed to just about increase the threshold limit of landing on current runway at Juhu airport as stated above and about which it has informed the MOCA officials. This is where the matter reportedly stands AAI officials say. It may be mentioned here that AAI has not even forwarded the extended proposal of lengthening the present Juhu runway beyond 5500 feet to 7500 feet a la Hong Kong airport. This will require large scale reclamation of sea and also may interefere with Worli Sea Link. According to MIAL officials, the genesis of Juhu airport expansion lay in the discussions they had at the time of launching modernisation of Mumbai Airport. Since they knew that CSIA would get choked very soon, they told MOCA about the possible expansion and Juhu airport so that part of the general aviation traffic could be shifted there along with ATRS and Turbo-Props. This was sometime in 2007. Rest of what happened has already been described above. Even MIAL officials confirm that since the announcement was made by AAI in October 2010 there has been no movement in Juhu nor any GA traffic shifted from CSIA to Juhu. Therefore, all GA traffic in Mumbai remains confined to CSIA. The main runway 0927 in Mumbai was expected to be completed by June 30, 2011. Four rapid exit taxi ways have been built in CSIA while the plan is to have 11 in all. Further two parallel exit ways are likely to be in place by 2013, which will be east of 14/32 runway, which was upgraded last year. But this will require demolition of the existing ATC and building of a new one. Even the MRO of Air India will need to be removed. In terms of GA traffic, MIAL as on date has 38 GA movements, which is CRUISING HEIGHTS August 2011

round the clock or 24 hours. The GA aircraft range from King Air to Falcon and from 10 seaters to 18 seaters. The biggest GA aircraft is Mukesh Ambani’s A 319, that is housed in a special hangar near Jet Airways. Very recently MIAL readied its separate GA terminal, which is near Gate No 8 on the Kalina side. The new GA terminal has its own Customs and immigration check counters. What MIAL officials say is that GA movement in CSIA is not the issue but that airside infrastructure inadequacy is an issue. Most importantly, the problem of parking GA aircraft is becoming a major problem as all owners of such aircraft are influential and often MIAL gets calls from New Delhi to accommodate an aircraft for overnight parking. The approved number of GA parking slots in CSIA is 29 that include overnight parking as well. The parked aircraft are of types that seat between 10 and 18 as stated above. Even though 29 is the approved parking slot for GA many times, the airport officials are forced to accommodate a couple or even four more aircraft that is to say 33 GA aircraft parked overnight. As for the runways — both main (0927) and secondary (14/32) — officials say the most important topic on hand is how to raise the hourly aircraft movement in CSIA. Only last year (2010), MIAL appointed Nats, UK, to study its traffic and recommend how the hourly aircraft movement could be increased from the present dismal 32 an hour. Nats in association with both MIAL and AAI is taking a holistic view of the project and has already submitted its interim report. The final report is expected to be submitted in May 2011. Nats has been able to allow 60 aircraft movement in Gatwick, UK, where there is only one runway. But this may not be possible to do in CSIA and hence Nats, AAI and MIAL have targeted a maximum of 45 aircraft movement each hour. As part of this Nats has already formed a view on disusing the smaller secondary runway and converting 0927 main runway for “intense single runway operation”. However, whether its increased runway use — resulting in higher hourly aircraft movement or increased GA movement and parking — it will require massive cooperation from Air India, which needs to dismantle its hangars, engine and MRO shop. Considering the problem Air India is in, any such step by AI management could be construed as a further scam. This is where the situation in MIAL rests.

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NEWS DIGEST

INFRASTRUCTURE NEWS ¨¨ Land acquisition for airport expansion to begin soon With the pre-survey work pertaining to land acquisition to extend the runway at Mangalore airport expected to be completed soon, a clear picture on the extent of land that needs to be acquired would emerge. The Airports Authority of India (AAI) has indicated the areas adjoining the airport at Kenjar that it needs to extend the runway and this has been tentatively identified to extend to around 150 acres. The state government has set aside `15 crore in the 2011-12 budget for extending the runway, he said adding that the issue of acquiring Dakkan Park building close to the new integrated terminal building at Kenjar is presently with the department of infrastructure. There is no clarity regarding who would bear the cost of acquisition, he said adding there is unanimity of view that acquiring the building is vital from security point of view. M R Vasudeva, Director, Mangalore Airport, said providing better connectivity to the airport would certainly help boost the customer satisfaction index, which was at 85 per cent as against the target of 95 per cent.

City far from international flights Chandigarh is not going to have international flights taking off from its airport too soon. As the status of ‘’Customs airport’’ has not been accorded to the city’s facility, it cannot operate flights to other countries. Officials said the process of getting the status may take another four to five months. They stated that only after declaration of the status would the local facility get immigration and Customs facilities for limited international operations by national carriers. As of now, Bengaluru, Hyderabad, Ahmedabad, Calicut, Cochin, Goa, Varanasi, Patna,

he DGCA has begun to churn the Kingfisher Airlines comes out of the Indian aviation industry rather woods, the numbers one is looking at vigorously in order to prepare the over the next 10 years could be as high as players for intense competitive times in 450 to 500. India has many international the coming years. Foreign pilots gateways unlike the city state of employed in the Indian aviation sector Singapore or even EU where each would be asked to leave member nation has one by 2013. According to big or two big the DGCA E K Bharat international gateways. Bhushan, “This is the According to Boeing’s date we are planning and just released current we feel that we will be market outlook, India able to achieve it.” may require 1320 aircraft Airlines will make in the next 20 years. huge savings as foreign This will be in pilots are highly paid addition to the existing compared to Indian 450 aircraft flying under pilots. There are at 415 the scheduled category. foreign pilots employed Airbus Industrie has with various Indian carriers and about estimated it at 1500. In any case in the next 1500 Indian pilots who are flying with 15 to 20 years, India can expect to have various domestic carriers. There are between 1750 and 2000 aircraft (all types seven scheduled private airlines in the — narrow body, regional type, wide body, country operating 433 aircraft and this large planes, etc). Because of the number over the next decade, or say by uncertainty of fuel prices and earlier 2025, may go up to 1000 or even more. recession, the fleet induction by many The way this sector, except for the Indian airlines was staggered. However, brief lull during the 2008-09 recession, with the economy certainly on the has grown is evident from the fact that upswing — the economy continues to compared to 6500 weekly departures in expand by not less than 8.5 per cent each 2005, there were 12,000 weekly departures in 2010. Passenger traffic is now expanding at break-neck speed of over 24 per cent. IndiGo has placed orders for 180 new aircraft followed by GoAir for 72, SpiceJet for 45 and Jet Airways for 49 besides Air India, which is to receive three more Boeing 777-300 ERs and 27 Boeing 787 Dreamliners. This itself adds up to 370 aircraft between now and 2025. With SpiceJet and Jet, and if IRONICAL SITUATION: Aviation schools in India are still under-rated.

SAYING GOOD BYE TO ‘PHOREN’

CRUISING HEIGHTS August 2011

Courtesy:www.flywithgati.com

Chandigarh Airport

ADDING VALUE: Foreign pilots form a high share of the Indian aviation industry.

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year-the aviation sector can be expected to grow by not less than 15 to 17 per cent. Just imagine if the present fleet of 433 aircraft carry over 55 million domestic passengers plus international passengers based on an average load of not less 75 per cent (including laggard Air India), what will happen if the passenger numbers rise to 360 million as predicted by the DGCA in the next 10 years? Can India be permanently dependent on foreign pilots? Certainly not. The need is for in-house preparation, which is what Bharat Bhushan hinted at and wants to work towards. The tempo of speeding up the procedures slowed down with the sudden discovery of fake pilot licences. Following this, the government decided to tighten the procedure and reformat the examinations system for entry-level pilots for CPL as also those seeking Air Transport Pilot Licence (ATPL), which is where most fake cases emerged. In all, there are about 10,000 CPL and 4000 ATPL holders in India. As part of tightening the procedures, DGCA has initiated third-party audit of all the 40 flying schools in India. Already about 20 flying schools have been audited. Further the Ministry of Civil Aviation

Page 29

has set up a committee under the DGCA, which is expected to submit its report in August or September 2011 on these related issues. Following this, the DGCA may introduce screening tests for entrylevel students intending to acquire a CPL and also hold an aptitude test. A uniform exam system and fixed number of semesters is also being considered. These steps are welcome. But the issue is: how will the shortage of commanders be met once foreign pilots exit in 2013? After all, considering the number of new planes arriving or going to be inducted by domestic carriers both for domestic and international operations — that means bunching up by at least the LCCs and Jet — where will they find the pilots? Already IndiGo has taken away nearly 35 pilots from Kingfisher Airlines, mostly commanders and also a dozen from Air India (domestic) flying the same type of A320 planes. The second thing, which is not clear, is when the DGCA says 2013, is it January 2013 or December 2013 or is it going to be mid-2013 as it would be following the earlier extensions sought for by domestic airlines.

JET HITS LOW WITH LOW YIELDS Jet Airways has opened the first quarter (April-June) or Q1 of the current fiscal 2011-12 with a loss of `123.16 crore which is supposed to be slightly lower than what was expected by the industry. The loss was mainly on account of rising fuel prices and passenger preference shifting towards low fare travel. The loss in Q1 is against a small profit of `3.52 crore a year ago. The fact that the full service carrier was unable to make profit in April-June quarter — considered the second best period after the October-December quarter each year — should be a cause for concern not just for Jet but the industry as a whole. JetLite, a subsidiary of Jet Airways, also posted a loss of `5.2 crore in the quarter under review. The airline tried to increase yields by not dropping fares (below costs) to maintain high loads. But based on April-June figures, it seemed that Jet would require loads of 86 per cent to attain profitability as against 80 per cent in the previous year. This may also be due to rising capacity being inducted by various carriers. The situation will only worsen as the months pass. Perhaps, the reference to fares being below cost could be a reference to Air India

that dropped as much as 20 per cent in fares to attract passengers and Kingfisher, which despite higher loads was nowhere near profitability. The airline has also decided to hold the fares at the current level, citing "irrational competition", said KG Vishwanath, Vice President in charge of Commercial Strategy and Investor Relations and added: "The No 2 and No 3 airlines are dumping cheap seats into the market, leaving us with no room to upfares. But the current fare structure is irrational." The airline also plans to have just one low-fare brand against the current two- JetLite and JetKonnect - within the next two months. The company is currently weighing options to do this. "We are confident about consolidating them in the next two months," said Viswanath. During an earnings call recently, Viswanath said the airline will have just a single fullservice brand and one no-frills airline. Jet acquired JetLite from the Sahara Group in 2007, then called Air Sahara. JetLite has a fleet of 18 aircraft, all of which are leased. Jet Airways, on the other hand, has a standalone fleet of 97 aircraft. The airline has mostly used JetKonnect as a swing inventory, using it as per demand. CRUISING HEIGHTS August 2011

INFRASTRUCTURE NEWS ¨¨ Agra, Jaipur, Amritsar and Tiruchirapalli have Customs airports. Residents of Chandigarh, Panchkula and Mohali have been waiting for the international flight for past two years. It was in July 2009 that the proposed international flight for Dubai was cancelled at the last moment because of lack of infrastructure and logistical issues. Thereafter, in August 2010, local airport authorities offered to start international flights for three possible destinations — Dubai, Malaysia and Thailand — on completion of the construction of its new terminal. The new building opened for operation in March this year following the ICC World Cup semifinal match between India and Pakistan and it was announced that international flights would start from June 2011. But not much else happened to allow such flights. Various business organisations like Confederation of Indian Industry have, on various occasions, also raised the issue of connecting the city with international destinations.

Gurgaon will soon have a helipad for VIP choppers

Helipad on top of a building

The Haryana government has asked all district administrations to identify places for landing VIP helicopters. A letter sent by the state government to district officials stated that several districts have failed to adopt minimum safety measures required for landing a VIP helicopter. The state government has also inducted Eurocopter-145 for the CM’s use. As per guidelines issued by Directorate General of Civil Aviation (DGCA), the administration must give a certificate about the suitability of temporary helipad.

Fine aircraft parked illegally in Mumbai, says MIAL Months after the Directorate General of Civil Aviation (DGCA) cracked the

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NEWS DIGEST

INFRASTRUCTURE NEWS ¨¨

whip on aircraft using Mumbai as their parking base illegally, the Mumbai International Airport Limited (MIAL) has approached the Airports Economic Regulatory Authority (AERA) to levy fines on such aircraft. When an aircraft is purchased, the DGCA grants each buyer a parking slot at some airport. Mumbai’s CSIA has parking space for 28 general aviation aircraft, as private planes are called. But the number of aircraft that park here are at least three times more. In January, when the DGCA head Bharat Bhushan was on a visit to Mumbai, he saw private aircraft parked in a haphazard manner, with one aircraft wing on top of another. He asked the MIAL to draw up a list of aircraft that were allowed to park at the airport legally.

Kanishka families reject compensation Air India Kanishka victims’ families have rejected the Canadian government’s offer of $24,000 each for the 1985 bombing that killed all 329 people on board the plane near the Irish coast. The Kanishka flight 182 to Delhi from Montreal was blown up mid-air by a bomb planted by Vancouver-based Khalistani radicals after the Indian army action at the Golden Temple in June 1984.

Air India Kanishka memorial at Canada.

The Canadian government announced the $24,000 ex-gratia during a meeting with families — as recommended by the Air India inquiry commission. But the offer — which amounts to $7.9 million in total — enraged victim families who called it insulting to the memory of their loved ones. “Once more we are treated with disdain. It seems that Indian life is cheap in the eyes of Canadian politicians. This is so degrading,” Melbourne-based Anil Singh Hanse, whose father Narendra Singh Hanse was the pilot of the illfated plane, told a news agency.

KFA’S RED TURNS CRIMSON!

Meanwhile, the financial position of the other full-service carrier Kingfisher Airlines which has a large chunk of its fleet under the low-fare or low-cost model, Kingfisher Red, continued to struggle to tide over its financial problems. The situation has come to such a sorry pause that the promoters of Kingfisher Airlines had to pledge 90 per cent of their stake with bankers following the debt recast it got from a group of 13 banks based on RBI approval some months ago. It was then believed that this would provide a breather to Kingfisher and the airline would use the opportunity to float its GDR to raise a sum of $300 million. In the interim period, Kingfisher Airlines suffered financially and it was also not an exception to the rising fuel prices, dropping yields and very competitive fares that knocked the bottoms off domestic carriers. The promoters of Kingfisher Airlines held a total of 58.61 per cent with the rest held by public and banks consequent to the debt recast. Of this 58.61 per cent stake, the promoters have pledged 52.85 per cent stake as part of the continuing debt recast plan. The two promoter firms — United Breweries (Holdings) Limited and Kingfisher Finvest India Limited — pledged their stake. While UB pledged its 40.1 per cent stake, Finvest 12.75 per cent. Only 3.04 per cent stake of the airline currently is with Vijay Mallya and 2.72 per cent with UB Overseas Limited. Following the debt recast, Kingfisher Airlines reduced its debt by about 20 per cent to `6000 crore in April 2011 from `7651 crore a year ago. The gravity of Kingfisher Airlines can be seen from the fact that the airline never made profits since it was launched in mid-2005. In fiscal 2010-11 it made a net loss of `1027 crore on a revenue of `6496 crore compared to a loss of `1647 crore on a CRUISING HEIGHTS August 2011

revenue of `5271 crore in 2009-10. After the debt recast, a consortium of 13 banks converted `750 crore loan of the airline into its equity totalling 23.37 per cent or 8.8 lakh shares on March 31, 2011. The shares were then valued at a premium and cost the banks `64.48 per share. Today, the same shares are trading at between `36 and `38. So, between April and July, the shares have lost huge value and the banks should be like sitting ducks. According to stock market watchers and based on their Systematic Investment Return Matrix, assuming a constant sum of money is invested every month, the Kingfisher Airlines shares earned a negative return of 23.9 per cent in three years: -26.12 per cent in two years and -29.15 per cent in one year. The airlines because of its severe financial crunch is unable to pay both the oil companies and the airport operators, AAI and GMR. In mid-July 2011, some important metro flights of Kingfisher Airlines were grounded as the oil company, HPCL, refused to supply fuel to the airlines as it had not made payments for previous supplies. In fact, a few flights had to be cancelled. It is not just Kingfisher Airlines that is losing for many reasons; the helping banks seem to be losing even more on their investment and, perhaps, even faster. Since the uncertainty in Kingfisher Airlines has been unsettling the management, there has been an exodus of pilots and copilots from the airline to other carrier, mainly IndiGo, which flies the same A 320 family aircraft. So far, 35 pilots have left Kingfisher in the last six months or so and more are expected to desert the carrier and move to IndiGo, which is all set to operate not just its foreign flights but also increase its domestic presence following the placement of a new order to buy 180 more A 320 aircraft.

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COLUMN/CHOCKS OFF

Painting the skies a deep red R Krishnan

Almost all the airlines have notched up losses despite the boom in traffic in the first six months of 2011. Instead of increasing fares to improve yields and matching capacity with demand, carriers have gone in for more airplanes, comments R Krishnan.

The air traffic market has once again begun to boom but airlines' shares continue to be in the red. Jet Airways, when it came out with an IPO in February 2005, with scrip priced at ` 1150, was valued at a few billion dollars. 32

t will not be an exaggeration to say that all scheduled Indian carriers are in dire financial straits except for one — it remains a closely held company and beyond public scrutiny, so we know little about its finances. We had seen in the past our domestic carriers placing huge orders and projecting a dream, which subsequently turned into a nightmare. That was the phase when Indian domestic traffic was booming by over 36 per cent and fuel cost was not even one-third of what it is today. Nearly seven years ago, Air Deccan placed huge orders for more than 60 A 320s. Soon afterwards, it got into a financial crisis and its promoter Capt Gopinath, as everyone knows, sold his airline in 2007-08 to Vijay Mallya. Those were heady days and Mallya claimed that he would take what he had ordered: five Airbus A 380s, a few A 340s and all of what Capt Gopi had ordered in terms of A 320s except that they would be reconfigured suiting Mallya’s high tastes like leather upholstery, in-flight entertainment, etc. He wanted every Kingfisher Airlines’(KFA) passenger to be his personal guest. Capt Gopinath, who had to migrate from running a passenger airline to freighter services, is today again in dire straits and forced to close down even his cargo operations for the same financial reasons. As for Mallya, Kingfisher Airlines is in deep red. Even after getting the State Bank of India-led 13 banks to restructure his debt, there is no relief and Kingfisher Airlines, like the bird it is named after, is in its natural posture — nose down and wing spread out — waiting to dive into deep waters for fish. As for Mallya, instead of fish, it is money that he is looking for. While the air traffic market has once again begun to boom with traffic rising by more than 18 per cent in the first six months of 2011, the stock market — at least in the case of airline shares — continues to be in the red. For example, Jet Airways when it came out with an IPO in February 2005, with scrip priced at `1150, was valued at a few billion dollars. Today, at `480 per share, the airline is valued at just US$ 980 million. By that yardstick, it may be CRUISING HEIGHTS August 2011

difficult to even value Kingfisher! Jet Airways promoter Naresh Goyal also made a costly mistake by taking over Air Sahara and after dumping more than `2000 crore and another `500 crore in dispute, his financial woes are far from over. While these financial hits were self-inflicted, the outside blow coming from never-ending rise in fuel prices has added yet another painful chapter to the story of India’s rising — but now falling — airlines. Mallya’s UB Group and Kingfisher Fininvest ,which hold over 52 per cent stake in the airline , have already pledged all their holdings with the lending banks. In a move that can be termed some sort of comfort for them in the garb of restructuring his debt, he took over 26 per cent of Kingfisher shares at a premium price of `64 as against the current market price of below `40. So, these banks have also lost money. The story of SpiceJet’s new promoters is even more interesting. Sun TV Group owner Kalanithi Maran, who is closely related to the DMK ruling family, bought out previous promoters with shares totalling 37 per cent in June 2010. He then went for an open offer as per SEBI regulation. Since the price he offered was lower than what was prevalent in the market, there was no response and Maran coolly sat back after fulfiling his statutory obligations. He then went on expansion mode and ordered 30 Boeing 737-800s valued at over US$ 2.4 billion and 15 Q400 turbo-jets from Bombardier of Canada valued at $900 million. He expected to launch his regional airline with the turbo-jets from July 2011. Unfortunately, not only the stock market tanked for his kind of scrip but the political scenario on his home ground Tamil Nadu changed completely. His political patronage vanished overnight as the AIADMK returned to power. Now, it is public knowledge that even Kalanithi Maran is finding it difficult to raise money and launch his regional dreams even as his LCC SpiceJet, like other airlines is suffering from the serious impact of rising fuel prices and other costs. We don’t know about IndiGo or for that

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matter GoAir but all others like Jet, KFA, Spicewhich already flies to five destinations in India. Jet are all in the red in the first quarter (AprilAt the end of the day, will IndiGo make money June) of the current fiscal 2011-12. SpiceJet proon its international forays? We don’t know. moter Maran through his holding company KAL The lesson, however, that needs to be learnt Airways has already pledged — albeit for a short is that even though it is a good thing to garner time — all his holdings in SpiceJet to raise Rs more and more market share, will it also bring 200 crore to meet some urgent expenses. This is, along with it high yields and revenue? Perhaps, perhaps, because his request to raise over US$ not yet, in the Indian context as is evident from 200 million is yet to receive approval from the the recent past of Indian carriers. Jet Airways Reserve Bank of India (RBI). has already expressed serious apprehension at Whatever the case, the placement of Maran the dropping of fares by Air India and Kingfishand his SpiceJet is no different from that of er in the recent past to boost passenger loads. Mallya and his Kingfisher Airlines. There are But what we have seen is that Kingfisher Airwild rumours that the Marans may even exit lines — even after dropping fares — is threatSpiceJet. While there is no independent way of ened with the prospect of being pushed to the checking that, the fact remains that the situation third place while Air India is likely to move to is pretty bad for most airlines and their respecthe fifth place. Maybe we need a new commistive promoters including GoAir — except Indision to find out the truth even as everyone Go that is now getting ready to unleash a new knows that the solution in the short term lies in price war on the Gulf and Singapore sectors. increasing fares to improve yields and matching As a quickfix adjustment, Jet Airways is capacity with demand. This is not going to hapseriously thinking of combining/merging pen considering the kind of orders Indian carriJetLite or the erstwhile Air Sahara into Jet Koners have placed — mostly for domestic operanect, its low fare arm. It is also reordering its tions. priorities by shifting to a utility band from the There is another danger lurking in the corbrand band or product band in sectors like the ner: shortage of pilots, aircraft maintenance Gulf and Singapore. This statement from Jet engineers and associated personnel. So, as the came during its announcement of Q1 results airlines begin inducting their new fleets, they which in any case saw losses — much below will also begin to pinch crucial people like pilots market expectations. A top Jet official said the — mainly commanders — from other airlines. airline would also use narrowbody B737s for its Already IndiGo has done this with Kingfisher Gulf and Singapore operations. Surprisingly, and taken away nearly 35 of its pilots. About ten there is also a probcommanders have ability of Jet using left Air India widebody aircraft domestic for Indion some of its Go. domestic routes. When private It is supposed to airlines were be a studied reaction allowed to start to the announcescheduled domesment made by Inditic services in Go President Aditya 1993 there was Ghosh who said that largescale poachhis airline would be ing from Indian flying to both Dubai BACK TO BASICS: Domestic carriers have to pull up socks. Airlines and also and Singapore on between each othvery low fares and without any trappings. Meals er which forced the DGCA to insist on ‘No and hot beverages, if forced by DGCA, will be Objection Certificates’ from the pilot-losing airavailable on board for a price. Should this hapline as well as a waiting period of six months. pen, it will be for the first time that an Indian Today, I wonder if the situation is the same but I carrier (Indians are known for hospitality know for certain that the DGCA would not like though not for punctuality) will charge for food to get into too much of it as later it may discovand drinks on its international operations. But er that NOCs were handed out easily because of the fear is from another quarter. Aditya Ghosh the fear of pilots turning out to be fakes! I mean announced that for a Delhi-Singapore return it as a joke but the gravity of it is nevertheless flight, IndiGo would charge a fare of Singapore true. We have been hearing that some airlines Dollars 276 as against the fare of between Sinare reducing the hours for turning copilots into gapore Dollars 700 and 1000 charged by full commanders in order to meet the commander service carriers. What will Mallya do or for that shortage. Though they meet the DGCA guidematter what will Naresh Goyal do? In any case, lines, they are nevertheless far away from glob Air India is doing nothing and will continue to al good practices in this area. do nothing. However, Singapore Airlines will (Veteran journalist and long-time aviation watchcontinue to be fuelled by its excellent product er R Krishnan is Consulting Editor at CH. He can and widebody 777s or A 330s. It will provide be reached at rkrishnanji@yahoo.com.) competition with its low-cost arm SilkAir CRUISING HEIGHTS August 2011

There is another danger lurking in the corner: shortage of pilots, aircraft maintenance engineers and associated personnel. So, as the airlines begin inducting their new fleets, they will also begin to pinch crucial people like pilots from other airlines. 33

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GLOBETROTTING

FROM RUNWAY TO HEAVEN

AIRPORT UNDER SEIGE

In a bizarre incident, an intoxicated farmer was run over and killed by a biplane after falling asleep on a runway. The incident happened when Bartosz Dudek, 53, decided to take a nap on what he thought was a patch of grass but was actually a rural airport’s landing strip. Meanwhile, the pilot of the singleengine Antonov An-2 failed to see the

This is a classic case of animal overpowering man’s bastion. A group of Turtles intruded John F Kennedy Airport in New York thereby wandering on the runway in search of a sandy beach to lay their eggs. The New York Post reported that the creatures held up flights, closing a runway and forced staff outside to hurry the slow-moving animals to safer ground. Runway 4L was shut down for an hour as Port Authority teams worked to move the animals. Workers from the Port Authority and

elieve it or not, Malaysia Airlines recently imposed a ban on infants flying in the first class cabin of its Boeing 747 jets and has confirmed it will also apply to its A380 superjumbos when it takes delivery of them. It all happened when the airline’s Chief Executive Tengku Azmil on Twitter said the airline’s policy of banning infants from first class had been in place for a while. Azmil said the airline had received many complaints from firstclass passengers who had spent big money to fly in the cabin but were unable to sleep due to crying infants. He said parents travelling with young children could fly in business or economy class.

man while landing at around midday at the airport in the province of Krasnodar. The pilot, who has been cleared of any blame for the accident in Krasnodar, southern Russia, said apart from a slight bump the single-engine aircraft landed without a problem. Interestingly, according to the reports no charge was filed against the pilot. In the wake of media attention the airline posted a statement on its website, stating the ban came about as a result of the airlines revamped first-class seats, with an electrically operated ottoman that doubles as a visitor seat. “As a result of this seat revamp and the introduction of the ottoman, there was no facility for positioning bassinets in the first class of the B747s,” the website said. The issue of children on flights is always controversial. A survey last year found 60 per cent of travellers wanted airlines to create a “family friendly” section of the aircraft to keep children contained to one area.

NO babies, please!!!

CRUISING HEIGHTS August 2011

GAY BASHING IN PILOT STYLE

What a joke! An anti-gay rant became so offensive that a Southwest pilot James Fritzen Taylor had to apologise. And ultimately, the pilot had to issue written apologies to his fellow employees. Taylor sent a letter to the employees of the airlines accepting responsibility for the “derogatory” and “truly insensitive” comments. In the letter he asked forgiveness especially from Houston-based flight crews — on the tape, he described Houston as “easily one of the ugliest bases”. The letter stated: “Because of the impact of my comments, I wanted to communicate with you directly. Please accept my most sincere apoogy for the inappropriate and disrespectful remarks I made in March with an open microphone. I deeply regret the derogatory remarks I made and the hurt I have caused — I take full responsibility for those comments. It was truly insensitive of me and I would like all of you to know that from now on, I will show nothing but the utmost respect during my interactions with all employees.”

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EVACUATE! IT'S SMOKE OUT THERE

the US Department of Agriculture were scooping up turtles and moving them across the airport as the newspaper reported. An airline was quoted as saying, “Running over turtles is not healthy for them nor is it good for our tyres.”

Passengers on a US Airways flight to Asheville were evacuated on the tarmac after smoke filled the cabin of the plane at Charlotte Douglas International Airport. WCNC-TV reported that US Airways officials said Express Flight 2263 was evacuated before takeoff. 70 passengers and four crew members were on board. Officials said two passengers were hurt during the evacuation but their injuries were not serious. Buses removed passengers from the area. The airline worked

SCORPION IN FLIGHT

What would happen if you get stung by a scorpion in a flight? This was exactly what happened with Jeff Ellis of West Linn, Oregon when he was stung by a scorpion while on a commercial flight from Seattle, Washington, to Anchorage, Alaska. He was trying to sleep on the 1,400mile overnight Alaska Airlines flight when he felt something in his sleeve and tried to brush it away. “I picked my hand up and said: Oh, my God. That’s a scorpion,” he told KPTV. Ellis said he grabbed the Scorpion with a napkin and showed it to his girlfriend, but not before it stung him on the elbow. Ellis was quoted as saying that he was pleased with how the airline handled the situation and he had been offered 4,000 frequent-flier miles and two roundtrip tickets. “Never in a million years, would I have thought a scorpion would have been on an Alaska Airlines flight headed to Alaska,” he said. “Everybody I’ve talked to thinks it was incredible, unbelievable. I’m here to tell you, it was definitely there.”

MID-AIR TRANSFORMATION, LADY GAGA STYLE

Lady GaGa clearly isn’t one to put her feet up and relax on planes. The singer underwent her latest major image overhaul on a short flight from Japan to Taiwan. Waving adeiu to fans in Tokyo, the Edge of Glory star was clad in the green wig she’s been wearing for much of her emotional trip to Japan. She teamed up witch-like locks with conventional top and skirt, finishing off the look with her trademark super-soled shoes. But mere hours later, she touched down at Taoyuan Airport in Taiwan in a completely different guise. Gone was the green barnet, replaced by a

with the passengers to reschedule flights.

towering creation of blonde hair with black streaks. She matched the elaborate hairdo with a two-tone dress and dark shades. Afterwards, GaGa made a huge impact in Japan, urging tourists to travel back to the country in the aftermath of the March 11 earthquake and tsunami disaster.

BUS-ING IT BY AIR

Passengers gets angry and they get more angry when they are left stranded at the eleventh hour. One such incident happened when disgruntled Air Zimbabwe passengers lashed out at the airline’s management for asking them to complete their trips by bus. "We expect a sound management system in place. As a national airliner, it carries our national pride, but we cannot say so if they offer mediocre services like this. If they are failing they should simply stop or call in private partners. Air Zimbabwe should know that as passengers generate income for the national airline hence they should respect us and not tell us to jump onto the bus,” quoted one of the passengers on flight. Air Zimbabwe Acting Group CEO Moses Mapanda said they had resolved to limit their flights in and out of Harare because of the Boeing 737s, which were grounded but said they always advised their passengers in advance of any cancellations. Mapanda said they, however, did not book people on buses as alleged. “We contact our clients in advance and we give them three options. The options we offered them were either they are refunded, book on the next flight or we put them on another airline," said Mapanda. "We have a flying time schedule, which we have adopted since the Boeing 737s were grounded, otherwise we are flying.” Disgruntled Air Zimbabwe passengers lashed out at the airline’s management for asking them to complete their trips by bus.

CRUISING HEIGHTS August 2011

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PLEASE, SIR, I WANT SOME MORE

AS AIR INDIA ASKS FOR MORE MONEY, FINANCE MINISTER PRANAB MUKHERJEE IS ASKING TOUGH QUESTIONS TO THE AIRLINE’S MANAGEMENT. A SPECIAL CORRESPONDENT LOOKS AT THE AI ROLLER COASTER RIDE OF THE PAST THREE YEARS AND DETAILS WHAT CONFRONTS AIR INDIA TODAY.

ad Air India gone nose down from outer space, the friction of its entry into the earth’s atmosphere would have burnt it completely. Fortunately for the Maharaja, it has been coming down for a long time from within the oxygen-filled atmosphere and instead of cracking itself up, it is continuing to burn a big hole in the treasury chests. Maybe it is time to write a new book — Discovery of Air India — where instead of recounting history as the original Discovery of India written by India’s first Prime Minister Pandit Jawaharlal Nehru did, Air India’s history being created on a daily basis for all the wrong reasons will fill up the pages. Air India employing 41,000 persons including 10,000 as contract labour, has run up a debt the size of which has now far exceeded the expenditure incurred by the Union government on guaranteeing work and wages to millions of rural Indians under the Mahatma Gandhi National Rural Employment Guarantee Act. This flagship programme of the United Progressive Alliance (UPA) government was allocated `40,000 crore in the Union Budget for 2011-12. In the absence of any far-reaching solution, the government seems to be stuck and forced to operate the Air India employment guarantee scheme. In these competitive days where low cost is the buzzword, the government is unable to move away from its very high cost airline operations. In any other country, they would have either shut down the airline and if it was politically not feasible as is true with Air India, then downsize it drastically to improve the economics of running the enterprise. But this is

AI made at least three turnaround plans, which have come back to it like boomerangs. Each of the turnaround plans assumed more in the realm of imagination instead of being rooted in reality. CRUISING HEIGHTS August 2011

not happening and it was in this context that we said: “Air India is continuing to burn a big hole in the treasury chest.” Air India’s loss and debt burden today stands at `67,270 crore and the Air India management wants the Union government to infuse funds into the airline as fast and as early as possible. Since the time the stateowned carriers, Air India and Indian, were merged in April 2007 and the end of the last fiscal on March 31, 2011, the merged Air India had run up an accumulated loss of `20,302 crore. Besides, it has incurred a debt burden of `46,950 crore, of which aircraft purchase loans have accounted for `20,185 crore and `22,165 crore in working capital loans besides over-dues to debtors mainly banks, Airports Authority of India (AAI) and oil companies of `4,600 crore. AI made at least three turnaround plans, which have come back to it like boomerangs. Each of the turnaround plans assumed more in the realm of imagination instead of being rooted in reality. But what taxpayers are seeing is a reality show where the crumbling of Air India is not just perceived but happening before everyone’s eyes. We were, perhaps, the first to carry in these pages the imminent collapse of Air India three years ago. We even separated facts from fiction. What happened after that was fiction took over and the results are there for everyone to see. It was, therefore, not surprising that at the July 18 Group of Ministers (GoM) meet, when Delloite was about to make its presentation on Air India’s turnaround plan based on what it was fed by the first consultant, SBI caps, the head of the GoM, Finance Minister Pranab Mukherjee asked

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CRISIS MANAGEMENT: Finance Minister Pranab Mukherjee, Prime Minister Dr Manmohan SIngh’s crisis manager, has questioned Air India’s turnaround plans.

them to stop and advised that it needed to be re-worked and at the same time also instructed the finance sub-committee under the Expenditure Secretary to re-examine the financial claims of Air India. As part of its turnaround plan and also financial restructuring plan, Air India said it would issue redeemable preference shares for over `7,400 crore out of its `22,165 crore outstanding working capital loan. Air India offered an interest rate of 8 per cent on these bonds. What it did not explain was how and from where because the plan as we said earlier bordered more on imagination than reality. Air India also proposed that it would repay `11,000 crore of outstanding loans at 11 per cent interest over a 15-year period. The Maharaja’s financial restructuring plan also called for another huge equity infusion of nearly `31,000 crore through funding of principal and interest repayments matched against the guaranteed aircraft loans up to financial year 2021. This including the upfront equity infused and money for funding cash deficits would take the total equity infusion till the year 2021 to `49,920 crore. This grand plan comes on top of an injection of only `2,000 crore split between `8,00 crore and `1,200 crore over the last two fiscals thus taking the total equity of Air India to `2,145 crore. Against this backdrop, one does not know what to say about the observation of the Civil Aviation Secretary Dr Nasim Zaidi when he said the government was fully committed to help Air India. He said, “Initiatives are being coordinated at a very high level and government is very committed to supporting Air India and the problem will be sorted out

in a time bound manner.” But Dr Zaidi’s remark actually flies in the face of what Air India had legitimately sought from the government. For instance, Air India sought payment of `1,222 crore from the Centre for operating VVIP and special flights over the last five years. During this period Air India operated 47 VVIP flights for which it withdrew five Boeing 747-400s from commercial services for a total of 313 days. But the government has reportedly agreed to pay only `8,02 crore. There were rumours that Air India had not been maintaining its books on these flights properly and, therefore, the need to re-look. The googly came from the Delloitevetted SBI caps AI revival plan, which, among other things, suggested that Air India should induct another 240 narrowbody and widebody aircraft over 10 years, which would make the Maharaja viable by 2020. It was in this context that the plan talked of a fund infusion of `43,255 crore over the years. Obviously, the moment this suggestion was heard by the GoM, there was all-out consternation. A senior finance ministry official questioned how Air India could be allowed to swing into expansion mode when it was unable to utilise its existing fleet optimally. While it placed 15 Boeing 777-300ers, it decided to postpone receiving the delivery of three such widebodies that are making money for many global airlines flying into and out of India. Even its narrowbodies — be it the Boeing 737-800 flown by Air India Express and Airbus A320 family aircraft used by Air India domestic — have pathetic daily utilisation compared to any other airline both within and outside India. Already CRUISING HEIGHTS August 2011

because of the poor utilisation, the pilots belonging to the Indian Commercial Pilots Association (ICPA) struck work as they began to get lower salaries and allowances due to lower flying hours logged as part of their duty. But within the same Air India, the pilots flying medium and long-haul widebodies were being paid far more at higher fixed hours of flying even though they might not have flown that many hours. It was rather strange that the pilots of Air India Express were paid more than the commanders and co-pilots of Air India domestic (erstwhile Indian) who were paid much less for similar routes. Against this background, for the airline, to seek 240 more aircraft on top of the 111 aircraft it had ordered in 2006-07 came as a bolt from the blue to the government and the GoM. It needs to be mentioned here that when both Indian and Air India placed orders for a total of 111 aircraft in 2006, the Ministry of Civil Aviation officials had reportedly noted in the file that the revenue these aircraft would generate would easily pay back the loan taken for aircraft purchases. Now it is for all to look at the tragedy of Air India. True that for many reasons Air India has not been able to make money or ensure high loads and therefore lower yields compared to competing airlines — both domestic and foreign. The question that needs to be asked is whether there is any redemption for Air India. Obviously none, if the current drift continues. What needs to be done is to ensure a drastic downsizing and shock treatment to the commercial staff of the airline so that they get passengers back to Air India. The staff needs to know that Air India is no longer the only patriotic airline as there are many from the private category as well. To say that only public enterprise can be patriotic will be a distortion of the truth since even private enterprises are as patriotic. It will be like saying that only government servants are patriotic Indian citizens. This is precisely the dilemma the government is facing and is unable to resolve. Even if we assume that there is a complete freeze on any more bilaterals, Air India still will not be able to do much because its culture is to own what does not exist anymore. Against this background, the demand for `17,000 crore (all inclusive) made by Air India for a turnaround not only seems fishy but could also end up as the most risky venture the Union government would have ever attempted. The reason why we say it will be the riskiest because Air India would want everyone in the GoM, the Government of India and elsewhere to believe that it will be able to perform very well because all other competing airlines will simply sit and suck their thumbs!

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DREAM THE LONG-AWAITED DREAMLINER FROM BOEING ON WHICH AIR INDIA HAS PINNED ITS HOPES FOR A REVIVAL, FLEW TO INDIA RECENTLY TO SHOW OFF ITS CAPABILITIES. ON BOARD WAS ABHIJIT BHATTACHARYYA. HE WAS IMPRESSED BY WHAT HE SAW AND EXPERIENCED DURING HIS 52-MINUTE FLIGHT. A REPORT.

CRUISING HEIGHTS August 2011

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Courtesy:www.boeingmedia.com

GRAND SET-UP: A panoromic view of Boeing assembly line.

DEBUT I

t was a “dream” launch for “Boeing-787 Dreamliner” programme on April 26, 2004 as All Nippon Airways too announced a big order for 50 aircraft as the “launch customer”. Nothing could be better than this; yet the “dream” soon soured; despite Boeing studies showing “20-year market for between 2000 and 3000…airliners of 787 class”, on January 1, 2009, “orders held were for 910 aircraft” which soon “reduced to 840 by the time of first flight” and increased to “851 at the end of 2009”. All this happened owing to delay in developing the craft and teething problems eating into the economics of the manufacturer’s product. However, things did look rosy when the “Super Efficient Airliner” studies began 2001-2002 and the new product was named “Dreamliner” on June 15, 2003. The programme planned was a “15000 hours of tunnel testing”. CRUISING HEIGHTS August 2011

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COVER STORY The “good” planning nevertheless soon turned “not-so-good” a performance as “airworthiness delayed by flight control software availability and need to complete manufacture of some sub-contracted parts of airframe on production line owing to worldwide shortage of aerospace fasteners at the time of subassembly” struck Boeing787 hard. Boeing was compelled to reschedule its maiden flight (from) November/December 2007 to first quarter of 2008. Boeing’s woes did not end, as subsequently too schedules were re-fixed, delayed and failed to keep with the target dates for landmark developments. “These dates,” as was found later, “did not take into account of unofficially reported problems requiring strengthening of centrewing box”. Ultimately Boeing “abandoned plans to assign first six (trials) aircraft to airlines”. The embarrassment of the manufacturer inflated as the “787 prototype was…reported to be 9548 kilogrammes (21050 pounds) overweight... Boeing also acknowledged range deficiency of early 787-8s, which expected to fall short of target 8000 nautical miles (14816 kilometres/9206 miles)”. Understandably, the delayed programme created an unpleasant and embarrassing situation as can be found from the reported ambivalence of cash-starved Air India, which appears eager to cancel some orders and seek financial compensation for delayed delivery by the manufacturer. Although none can question or doubt the quality of a Boeing product owing to its legacy and lineage, Boeing’s marketing team will have to go that extra mile to convince all and sundry about the value-for-money for the delayed product, confirmed 27 aircraft orders of Air India notwithstanding. Intended to “reduce seat/mile costs while providing increased versatility by enabling direct operations into smaller airports, thereby obviating the inconvenience of passenger transfers at hubs”, each B-787-8 aircraft, as reported by Jane’s All The World’s Aircraft 2010-2011, is likely to cost between “US $ 157 million” (`722 crore approximately) and “US $ 167 million” (`768 crore approximately). And that is not cheap. But “Boeing”, reportedly, “has failed to post 2006 prices”. What does that mean? Does it imply a further potential escalation of price owing to the delay at the manufacturer’s end? If that is the case, is not there any clause in the “contract” for penal provision for the delayed delivery? Now coming back to the actual performance of the flight test/demonstration flight undertaken by Boeing on Thursday, July 14, 2011 at Delhi airport, one can only appreciate the clockwork precision

and professionalism of the manufacturer on board. It was an All Nippon Airways “green” (aircraft flyable but unpainted, unfurnished and basically equipped) Boeing-787-8 powered by two Roll Royce engines of 69000 pound static thrust. About a decade ago, one flew the twinengine Boeing-717 prototype (subsequently aborted) from Mumbai to Delhi in the cockpit along with the test-pilot and the engineering entourage of the craft. However, the aircraft could not pass the litmus test of both, manufacturer’s quality and the consumer’s choice. July 14, 2011, however, was a new day for a free citizen to fly 52 minutes from Delhi to Delhi (via Jaipur sky) in a technical demonstration by the Boeing-787-8 Dreamliner. Accompanied by a select band of 10 passengers, one’s “extra-privileged” slot lay in one of the “jump-seats” (there are two seats behind the flying crew) to take down all the flight information report for one’s log book and diary. On an overcast sky of high humidity and gentle head wind, the 183’ 5” long and 197’ 3” wing span, 160 tonnes (weight) Boeing787-8 smoothly lifted off at 150 nautical miles (277.8 kilometre ground speed) on one of the longest runways (number11/29) of the country in Delhi airport. Turning right to gradually backtrack 180 degree, the Dreamliner took flight level 20000’ at 700 kilometre per hour ground speed and smoothly penetrated the dark pepper and salt coloured (gathering) cumulo-nimbus clouds with occasional mild lateral turbulence thereby giving a feeling of a shaky aerial posture of fragility and fear, addiction and passion -- all in same quantity but with a varying quality. Clouds aside, what could possibly

unnerve an uninitiated passenger was the frequent crackling sound of the unconventional raw material (like carbon-fibre used in windows) adjusting with the changing altitude of the ascending and descending aircraft along with the temperature, humidity, radiation, heat, weather and the velocity and direction of the wind. Short of Jaipur began the “return” flight at a higher altitude of 21000’ with denser cloud and a stronger cross wind. The various display systems of the cockpit nevertheless were transparent and visible with varying colours and the handling of the control giving instantaneous commands to flap, slat, aileron, power plant, systems, avionics and landing gear thereby making the Dreamliner easy, accessible and simple to operate. The best, however, was the sun-breaker for the pilot with varying colour combination to deal with the changing contours of light, shadow and shade for day and night operational flexibility and soothing vision. With complete fly-by-wire (electrical/electronic systems which function quick, fast and instantantly) and digitalcontrolled command capability, the test pilot shut each of the 69000 pound static thrust engines by rotation thereby checking and demonstrating the automaticflight-control/systems correction capability of the aircraft at an altitude 20000’/21000’. One thus lost the sound of the humming engine for a fraction of a second, only to be followed by coursecorrection and “attitude” (the posture of the craft in the air) stabilisation in no time. Understandably, first it was the fear of unfamiliarity and the unknown. But, soon it became fresh knowledge for the curious mind. One need not have to learn

PRIDE AND HONOUR: Dr Dinesh Keskar (second from left) welcoming the arrival of Boeing 787 Dreamliner during its maiden visit.

CRUISING HEIGHTS August 2011

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DREAM ENTRANCE: The Boeing Dreamliner receives a watery welcome at Delhi.

the “sequence of simulated crisis” in the air. Yet, one learnt a trick of professional hazard in the 21000’ thin summer air of the “Aryavarta”. Down below lay the parched swathe of barren landscape of the Aravalli highlands with ground temperatures rising as high as 110 degree Fahrenheit. The craft made a feather-touch landing at 146 nautical miles after spending 52 exciting and illuminating minutes in the air. Since Air India placed an order for 27 Boeing-787-8, powered by two General Electric X turbofans (each in 52800 to 69000 pound static thrust), on December 27, 2005, Boeing officials’ eagerness to take the Indian glitteratti to have a “real” glimpse of the craft is understandable. Nevertheless, a doubt lingers, owing primarily to costly time over-runs pertaining to the deliveries to India’s ailing Maharaja. One hopes Boeing’s delayed delivery will not cost Air India dear, the unquestionable quality of the aircraft notwithstanding. Boeing-787-8’s operating cost is reported to be US $ 5160 per hour (as on 2006), thereby making it `240000 expenditure per passenger group. Boeing nevertheless “has failed to post 2008 prices”. It has been claimed by Boeing that the 7878 has “efficiency gains of 15 to 20 per cent, compared to Boeing-767, to be achieved by 17 per cent reduction in fuelburn, aerodynamic improvements and airframe reduction”. In its own way, 787-8 is

the “first airliner with all-composites primary structure in fuselage and wing; and first to dispense with engine-bleed and pneumatics in favour of increased electronic components”. To a curious observer a question comes in mind; what exactly is the utility of the Boeing-787-8 and whose space is it going to fill up? The answer is provided by the design of the aircraft, which is a bigger, heavier and upgraded design and version of Boeing-767, which was ordered by United Airlines on July 14, 1978. Both B-767 and B-787 are twinaisle, wide body medium/long-range twin-turbofan airliners. Yet, both are different from each other. B-767 is the product of the last quarter of the twentieth century; B-787 is the showpiece of the second decade of the twenty-first century. B767 empty operating weight varied between 80.51 tonnes and 89.13 tonnes. B-787 Dreamliner empty operating weight ranges from 101.19 tonnes to 115.35 tonnes. B-767 payload was limited between 16.57 tonnes to 23.67 tonnes; B787 maximum structural payload is 45.35 tonnes. B-767 maximum take-off weight varied between136.08 tonnes to 181.43 tonnes; B-787 is between 165.10 tonnes and 244.94 tonnes. Again, whereas the operational radius/range of B-767stood between 3160 nautical miles (5852 kilometres; 3636 miles) and 6060 nautical miles (11223 kilometres; 6974 miles); B787 has a higher and longer (ambitious) CRUISING HEIGHTS August 2011

range in mind. Thus from all angles B787 is an upgrade and superior to B-767. Boeing-787 has undoubtedly crossed several teething problems thus far. Nevertheless, one cannot rule out fresh, unforeseen or unanticipated problems in case the extensive use of composite raw materials do some tricks in the air! No doubt a unique and novel attempt has been made by Boeing, but the actual result of the craft’s quality will take time for the world to see and judge. In this scenario, it would be imperative for Air India to make judicious and careful use of the new assets, which have been ordered from the Boeing-787-8 manufacturing plant. The aircraft, as mentioned earlier, is a wide-bodied, electrically (fly-by-wire) controlled aeroplane with an acclaimed pedigree, and fuel-efficient engine no doubt. Yet one also sincerely hopes that the new Boeings would be used in such a way to enable the Maharaja of India to turn the corner through its experienced and inexhaustive human resources in the near future. The machine may be good. But it is the man behind the machine who will matter to make it a success or a failure. (The author is an alumnus of the National Defence College, New Delhi and a member of International Institute for Strategic Studies, London. The views expressed are his own.)

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PRIVATISING AIR INDIA CANNOT BE A SOLUTION, WRITES A FORMER CIVIL SERVANT. THE NATIONAL AIRLINE HAS TO BE FIRST BROUGHT BACK TO HEALTH AND EVEN BEFORE THAT, THE GOVERNMENT HAS TO STOP RUNNING THE AIRLINE BY REMOTE CONTROL.

THE P SAD SAGA OF AIR INDIA

rivatisation of Air India, given its present state of financial health, is not a solution at all. Who would like to take over a company that is on its deathbed? The value one would get will not even be that of scrap! If that be so, who would like to take it over at a throwaway price? Perhaps, it would be one of the existing operators who has been consistently and continuously favoured by deliberate acts of making Air India sick! They would love to do it since they would discount the liabilities and cash in on the assets â&#x20AC;&#x201D; both real and intangible. In fact, the recent clamour for privatisation of Air India, it is alleged, is being articulated by the existing private sector operators since none other than they can bid for Air India in the present atmosphere. No new investor in their senses would touch it with a barge pole. I am not and I was never an employee of Air India. Nor do I claim to have any great expertise on aviation matters. But I have been closely associated with Air India for a number of years. I have not been writing articles on how to save Air India or waxing eloquent on TV channels about what is wrong with Air India. I am even more hurt when I see people, who have been responsible for this mess, have been criticising the present management and the government. It is not my view that the present management and the ministry are blameless. But hearing it from persons , who have been active parties to the downslide of Air India is rather painful. I know from my personal knowledge that some of these columnists and TV debaters are the people, who bent over backwards to please the ministers and civil servants who brought it to such a pass. Air India has a committed set of employees except a few at the top whose only aim is to get favours for themselves from ministers and other civil servants of the ministry. The general motivation of most employees may differ from person to person. They may have petty jealousies and competition among themselves and may even try to use influence to get outof-turn promotions and lucrative postings. But almost all of them are deeply committed and loyal to the company. They are as much peeved about the present state of affairs. It is not difficult to identify the causes that brought Air India to the present mess. The mess has not been brought out by the Air India management alone. A large part of the blame should be attributed to various decisions of the government that systematically undermined the company to benefit others â&#x20AC;&#x201D; both domestic and foreign. One has to nullify these decisions that brought about this sad

CRUISING HEIGHTS August 2011

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state-of-affairs and then try to privatise it. All the existing players in the domestic aviation sector should be debarred from bidding for the airline as and when it is done. Secondly, the artificial restriction on foreign equity holding by foreign airline operators in Indian carriers should be done away with. I do not hold the view that Air India should not be privatised. But it should be done after restoring it to some degree of health so as to realise value as well as to enable it to compete with others. TURNAROUND — The magic word has been used consistently over the last two decades in the context of Air India. The manner in which it is turning around would indicate that it is never still and it is turning around for the worse every day. I have a different take on the recent strike by the pilots. I am convinced that the airline reduced losses during the strike period. The daily loss of Air India is of the order of `15 crore a day. When the aircraft did not take off, the company did not have to uplift fuel, pay salaries to the striking pilots, disburse allowances to the staff, pay route navigation charges, pay extra for maintenance efforts, pay overtime to many employees, etc. Air India saved almost `8 crore or so on a daily basis thus cutting the losses by half. In fact, its cash management improved. If Air India decides to pay all its staff salaries for the rest of their careers and stop flying altogether, they can bring the losses down by 90 per cent or so. They can even save more funds by returning the leased aircraft and selling other owned aircraft in stages by assessing the market. Will anyone do an exercise on the number of consultants engaged over the last two decades, the amounts paid to them and the fate of their reports? It will be interesting to find out how much money was spent on these consultants over this period and what exactly happened to their reports. The government often holds the view that in-house knowledge, expertise and experience are of no relevance and only an outside consultant would be able to recommend strategies. The consultants disappear after their reports are given and they do not own any responsibility if their recommendations turn out to be disasters. Who were the consultants that recommended the merger of Air India and Indian Airlines and what is their responsibility for the mess it has created? The bane of the aviation sector has always been the over-interference of the ministers in the management of the PSUs under the ministry. They tend to micromanage the PSUs and the management hardly has an option to differ and a few

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Air India has a committed set of employees except a few at the top whose only aim is to get favours for themselves from ministers and other civil servants of the ministry. The general motivation of most employees may differ from person to person. But almost all of them are deeply committed and loyal to the company. CRUISING HEIGHTS August 2011

who resist are shown the door. I have known ministers who take decisions on the uniforms of cabin crew (design, colour, etc), food to be served on board, caterers to be engaged, hotels for the crew to be selected, routes to be started or given up, etc. These are not ministerial responsibilities and they are not answerable, if things go wrong. Ministers have got top officials suspended, promoted a few out-of-turn, given a few others foreign postings, etc (Incidentally, the MD who got suspended was not a government officer but a professional who spent a lifetime with the company). Day-to-day interference from the ministry has ruined the airline and its work culture. A few chief executives in the recent past have turned out to be footmats of the ministers with no objective attitude towards the airline. The ministers also use the company to give free passes to their friends, relatives, media people to keep them in good humour. I am aware of a well-known journalist who flew to JFK in First Class by getting his economy ticket upgraded — courtesy the minister — and demanding a limousine to take him to the hotel because he flew first class. The ground staff at JFK had to oblige since he travelled first class — courtesy the minister. I do not want to name the media people that were purchased by the most recent Minister by offering them freebies. Why does the media not blame the minister squarely instead of having only meaningless debates and irrelevant articles on Air India? Why is Raja alone being targeted? Is it because he did not keep the media in good humour? Poor Raja! He knew how to extract money but did not know how to please the media. True, there is a great deal of criticism that far too many aircraft were ordered in the recent past and massive loans were contracted. I am aware that this was done without any clear business plan. In fact, I know well the manner in which the business plans were modified to suit the purchase orders (number, type, manufacturer, etc) that were pre-decided. The board was reduced to being a hand maiden of the minister in the recent past. Would someone go into the role that the so-called independent directors played in the management of Air India? But what is the responsibility of those earlier Ministers who did not acquire the aircraft in time and modernise the fleet? Had this been done in a planned and staggered manner linked to the needs, the present bunching of orders and loss of market share would not have happened at all. If commission is an offence, omission should also be an offence.

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COVER STORY

I saw a news item recently that the India business of Emirates is US$ 1.7 billion and the carrier has 184 flights a week to India. Look at the amount of transit traffic they meet from India to USA and Europe. I do not know if I remember these figures right. Is Air India’s Gulf business anywhere close to this? Who gave them all the rights to fly to so many different airports in India? After all, Dubai, Singapore, Abu Dhabi, etc. are sovereign municipalities and not even the size of our cities. Their aircraft leave their air space when they take off from their bases. How do they generate so much business out of India when we cannot even fill our aircraft? Who asked Air India to withdraw from routes in which they were well established and allowed other carriers to fly on those routes? If Air India found the routes unviable, how do the others find them profitable? I am shocked to learn that Air India plans to have a hub at Dubai. Is there any country in the world that has a hub outside its own borders? Strange are the ways of the government. It was well known at the time of planned disinvestment of Air India during the NDA period, that the Tatas were bidding for the same. I am aware of the views of the conditions of the Tata group when the shareholders agreement was being discussed. They made two pertinent points: 1. That the company has been devalued thoroughly and they would at best offer scrap value for the airline and the government cannot expect a very large offer; and, 2. If they were to win the bid they would ask for protection on the bilaterals for a period of seven to 10 years after which the government would be free to allot them to other operators. It is an entirely different matter that the process was derailed by the then government’s own ministers. But what made the gov-

DEMANDING PAY PARITY: Air India pilots shouting slogans during a strike.

Most of the crisis has been brought about in the last six years through the ministers but the ministers, who were in charge earlier were not without blame either. Who will bell the cat? The minister would nonchalantly say that all the decisions were approved by the Cabinet and he was not the only decision-maker. But none can ask as to who misled the Cabinet. CRUISING HEIGHTS August 2011

ernment give away rights to foreign carriers and other Indian carriers? The inability of the national carrier was used as an excuse to concede the rights to all private carriers. No thought was given to strengthening Air India to enable it to use all the rights. The private sector Indian airline companies were allowed as “Scheduled Domestic Operators” in the early Nineties. How did the government give rights to them to go international without changing the definition of “Domestic Operators”? Not many are aware of the mess that has been created in the Airports Authority of India. Possibly, the media would wake up when it reaches the mess that Air India is presently in. DGCA is a directorate and has no balance sheet to offer. Its effectiveness should be reflected in the safety of the air traffic that has not been praiseworthy in the recent past. Would anyone investigate the mess in the DGCA with fake licenses, liberal enforcement of regulations, etc? I was a witness to a minister telling a newly-appointed DGCA that he should be very strict and enforce the rules scrupulously without any discretion so that he gets requests for directing the DGCA to do or not to do a certain act. It is the reality in India. Most of the crisis has been brought about in the last six years through the ministers but the ministers who were in charge earlier were not without blame either. Who will bell the cat? The minister would nonchalantly say that all the decisions were approved by the Cabinet and he was not the only decision-maker. But none can ask as to who misled the Cabinet. Does the Cabinet approve everything that a minister from a coalition party wants without any application of mind? Unfortunately, given the current-style-of governance nobody will be held responsible for the mess that has been created. Let us be practical and objective. Privatisation, by itself, is not a solution. If it is to be done, nurse Air India back to health, stop the special treatment to existing private and foreign carriers and then have a business plan that would be taken forward by the new owners. But please let the government stop running the airline by remote control. The telecom scandal has broken out. Who will look at the aviation scandal? The loss cannot be quantified in thousands of crores of rupees alone. The complete destruction of an airline that had an international reputation is as much an offence. I do not want to level allegations that cannot be substantiated by me on the corruption in the sector. But those in the sector know it well.

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BREAKING NEW GROUND

STELLAR DEBUT

DAREDEVIL PRINCE

Sikorsky India Chief AJS Walia spells out the company's strategy

Eurocopter unveils the X3 at the Paris Air Show

Another royal shows off with his chopper antics

PREFERRED CARRIER: Accidents notwithstanding, helicopters remain the favoured mount of political leaders across the political spectrum

RESPITE TO CHOPPER

PILOTS, COURTESY THE DGCA THE DGCA HAS FINALLY ISSUED A DIRECTIVE THAT GIVES PILOTS THE POWER TO REFUSE TO FLY IN INCLEMENT WEATHER.

n the morning of September 2, 2009, Y S Rajasekhara Reddy’s Bell 430 took off from Begumpet Airport, Hyderabad, and soon encountered with bad weather. Shortly afterwards, the helicopter went missing. Air Traffic Controllers at Begumpet and Shamshabad lost contact with the chopper at 10:02 am, while it was flying through the thick Nallamala forests. It was nearly 24 hours later that the wreckage of the aircraft was found on top of Rudrakonda Hill, 74 kilometres from Kurnool. Inclement weather was believed to be the cause of the crash. It is said that the flight crew never discussed the bad weather,

CRUISING HEIGHTS August 2011

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FOCUS ON ’COPTERS COPTER CRASHES

CHOPPER BLUES: A spate of accidents involving choppers has forced the DGCA to come up with a new set of guidelines (above the accident site of YS Rajashekhar Reddy)

Arunachal Pradesh Chief Minister Dorjee Khandu died in a helicopter crash near Sela Pass on April 30, 2011. Andhra Pradesh Chief Minister YS Rajasekhara Reddy's lost his life in a chopper crash on September 2, The wreckage of the 2009. chopper was found a day later top of Rudrakonda Hill, 74 km from Kurnool. Haryana Power Minister and well known industrialist, O P Jindal, and State Agriculture Minister

Surendra Singh were killed when the chopper carrying them developed a technical snag and went down near Saharanpur in Uttar Pradesh in March 2005. Speaker of the Lok Sabha GMC Balayogi died in the crash of a Bell 206 helicopter in the West Godavari District of Andhra Pradesh in March 2002. There are others who have had close shaves and incredible escapes. BJP president Rajnath Singh and vice president Mukhtar Abbas Naqvi had a miraculous escape in 2010 when they were travelling to Rampur in Uttar Pradesh. The chopper landed close to a pile of dry grass that caught fire. The pilot immediately took off again and landed at a safe place.

UNFORTUNATE VICTIMS: (Clockwise from top left) GMC Balayogi, Dorjee Khandu, YS Rajashekhar Reddy and OP Jindal, all died in chopper crashes.

Former Punjab chief minister Amarinder Singh and Minister Pratap Singh Bajwa survived one such chopper accident when it hit electrical wires soon after taking off in Gurdaspur in September 2006.

CRUISING HEIGHTS August 2011

diversion or returning to base. Now almost two years later, in a move that is sure to bring cheer to chopper pilots, the Directorate General of Civil Aviation (DGCA) has issued a directive that pilots will not be prosecuted now on if they refuse to fly or undertake unscheduled landings in case of bad weather or an emergency. According to official sources, the DGCA has instructed that "no punitive action would be taken" against the pilot if there is an unscheduled landing in case of an emergency, like bad weather. In such a situation, the pilot should immediately land the chopper at a "suitable place", according to the DGCA directive. The DGCA move followed a recommendation by the Parliamentary Standing Committee on Transport, Tourism and Culture that pointed out that pilots should be provided "adequate legal protection to decline to fly in absence of mandatory technical or weather clearances". In its recent report, the committee headed by CPI(M) leader Sitaram Yechury also suggested that "some kind of penal provision may be considered against those putting such pressure on them without clearances”. The Committee also expressed concern over several instances of forceful chopper landings and take-offs in low visibility, bad weather and even during nights. DGCA chief E K Bharat Bhushan has asked all helicopter operators to strictly adhere to safety parameters and follow the laid-down procedures while flying during elections and in hilly areas. The DGCA chief warned the operators of strict action in case of violation of these procedures, stressing that safety was a shared responsibility of the operators and the regulator. Besides these procedures, the government has decided to implement a series of measures to make helicopter operations safer, including training chopper pilots in handling various kinds of emergency situations with the use of simulators. The government will also introduce a safety management system in line with those in place in many countries. As part of this action plan, stress would be laid on analysis of data relating to accidents (fatal) and incidents (non-fatal) and implementation of recommendations of inquiries into them. This was essential as recent accidents have been caused by factors like loss of control of the pilot over the helicopter, ‘collision with terrain’, bad weather, pilot error and maintenance, they said. Of the 271 helicopters in the country, 209 were engaged in commercial nonscheduled operations.

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CHOPPER AMBULANCES FOR ANTI-NAXAL FORCES orces ranged in battle against the Maoists in the country’s F hinterlands will soon be able to call upon chopper ambulances to aid wounded comrades. The Home Ministry plans to make available a dedicated helicopter ambulance service for more than 70,000 paramilitary forces deployed in anti-Naxal operations. The government has decided to deploy air ambulances at three “strategic” theatres of operations: Left wing extremism, combating insurgents in the North East and countering militants in Jammu and Kashmir after analysing feasibility reports prepared by the Union Home Ministry. This is yet another attempt to expedite response time during any medical emergency. Reports suggest that a squad of specialist doctors and paramedical staff will also be trained and deployed on these helicopters to evacuate and rush troops of CRPF, BSF, ITBP, SSB and state police forces deployed in the Naxal-affected areas. Plans are afoot to either lease some choppers for the new ambulance fleet or convert some aircraft from the BSF air wing for the ambulance role. The new service will be run by the medical wing of the Home Ministry with the Indo-Tibetan Border Police (ITBP) acting as the nodal agency amongst all the forces. It has been observed that the maximum number of sorties undertaken by helicopters in Naxal-affected states are to extricate injured personnel or patrol parties. The Home Ministry also plans to maintain five vehicular fast field support hospitals’ in the insurgency-hit areas.

EUROCOPTER’S SUPER SHOW AT PARIS E

urocopter unveiled a series of state-of-the-art products at the recent Paris Air Show. Among the most anticipated of its products were the X3 hybrid demonstrator and the new EC175 helicopter. Living up to the pre-event expectation and buzz around it, the X3 demonstrator proved to be the 'showstopper' of the event. The X3, which is one of the fastest choppers in the world with a top speed of 333 kph, is a sight to behold. A five-blade main rotor system and two propellers on short-span fixed wings provide the X3 with the best of both worlds: excellent vertical takeoff and landing capabilities of a helicopter and aircraft-type fast cruise speeds and maneuverability. Eurocopter believes that its X3 hybrid concept helicopter can be put to best use in many ways, including long-distance search and rescue (SAR) missions, coastguard duties, border patrol missions, passenger transport, offshore operations and inter-city shuttle services. Another star attraction from the Eurocopter stable was the EC175. This multi-role helicopter in the seven metric-ton weight category fits into Eurocopter's product range between its AS365 Dauphin and the AS332/EC225 Super Puma aircraft families. The EC175 benefits from a mix of proven and advanced technologies, providing excellent performance and reliability. The EC175 is in fact the only 16-passenger helicopter in its class; fitting perfectly to the customised requirements of Indian operators without compromising on the world-class safety and comfort standards set by Eurocopter.

JUHU CHOPPER OPERATORS FRET AT DELAYS uhu chopper operators have approached the Mumbai J ATC to improve coordination between the two ATCs and reduce delays that are plaguing flights. This, barely six months after helicopter operations were shifted to Juhu from Mumbai's Chhattrapati Shivaji International Airport (CSIA). According to the chopper operators despite helicopter corridors over Mumbai airspace, pilots sometimes wait for up to two hours at Juhu airport or at the Mahalaxmi Racecourse helipad, before getting clearance from Mumbai ATC. Continued on Page 50

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Q: A:

Where do you see Sikorsky in the context of the Indian aviation scene today?

I think we are the first aviation company that has established itself in terms of supplier base as well as joint venture and if I can take you back to 2009, we signed our agreement with Tatas and they are now producing the cabins of the S 92, which is a 12.5-tonne machine. And that was an iconic milestone in the history of independent India because it is the first time that besides HAL (Hindustan Aeronautics Ltd) somebody from the private sector had got into the aviation sector. So, we kind of started the ball rolling for participation in aviation. But we did not stop there. We now have a joint venture, which should be up and about in two months’ time — maybe three-four months — where we are going to be producing close to 4000 detailed components for the aviation industry.

Photo: H.C. Tiwari

“India can be a second home for Sikorsky”

Air Vice Marshal (Retired) Arvind Walia, Sikorsky Managing Director for South Asia, is a man who doesn't hide his punches. In this freewheeling and frank interview, he discusses the Sikorsky saga in India and the plans for the future. Exclusive excerpts:

Besides these two activities, of course, we have certain other plans in our minds and we have drawn out a road map. In that road map we have decided that as we meet the milestones in the times to come, we should be able to produce indigenous helicopters by the year 2015-2016. That should give you an idea as to how Sikorsky places itself in the Indian context and how we look at the Indian market. To us, India is a huge market not only in terms of sales but in terms of talent, skills, labour, environment and government policies. All these make it a very viable consideration for us to establish ourselves as a major player.

If the idea is to manufacture by 2016, the blueprint is obviously ready. Who are you tying up with? Yes, the blueprint is already there and we are looking at all options. It should be collaborative since we know that the

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FOCUS ON ’COPTERS Indian corporate sector has the tenacity and the urge to get into this kind of activity and we would certainly like to exploit that and we are not restricting ourselves. Well, we can consider all factors to make India a second home for Sikorsky.

And where are you likely to set up base? That again depends on the environment, the kind of facilities and the other requirements of any aviation manufacturing hub. There are activities going on in Hyderabad and there are other areas that can be considered for setting up the other activities.

What's your own estimate about the demand for choppers in India? Oh! There's a huge potential. The study that we have done conveys that the commercial market of our products is close to about $6.7-7 billion and the defence market is anywhere close to $14 billion. With this kind of a market, you need to be present here. It may not be farfetched for me to state that if United States with 300 million people as population has more than 11,000 helicopters, we are 1.2 billion and we have just 300 helicopters. And if you see the area of activities for the helicopters, it is a versatile machine. You have communication activities; you can have offshore oil and gas exploration activities; you can have law and order, search and rescue, medical services, surveillance, pilgrimage, use by corporates, I mean any number of activities. And you do not require the kind of assets a fixed wing requires for its operations. So, there's a huge potential and the government declared 2008 the year of helicopters. A lot of initiatives had been taken at that point of time and we can see those things now emerging. The people have started realising the importance of helicopters.

“

Sikorsky is today the No. 1 helicopter manufacturer and we need to have the capacity around the world to meet the requirements.

we have our roadmap and we will follow our roadmap and everything that we have worked out till date, we have been able to achieve those milestones. That is how, you see, we are progressing towards that ultimate aim. So, as we go along I'm sure you'll be hearing a lot about Sikorsky and its activities in India.

The fittings will be done separately though those come under the configuration of completions and customisations. So we can customise according to the role, requirement and the demand.

Will they be done in the same place? Not necessarily. We do have various plants at various locations within the United States where we do the completions.

Fittings for the VIP fleet or defence -where will they be done? We will, perhaps, have the Indian partners to be with us to do those things; maybe systems integration, some customisations and if required, the machines can also go back to the United States for completion. Our aim would be to bring as much work within the country as possible to meet the growing demand within the time and the stipulated requirements.

What sort of investment is one looking at?

Where are all you manufacturing bases?

It's unthinkable. It's hundreds of millions of dollars.

China, Japan,Turkey where we just got 109 helicopters … We manufacture in Poland, the 70i we call it — Black Hawk International. That is being produced there.

We have a $20-billion market but the infrastructure is abysmal. There is no backend. You can't just manufacture and be oblivious of the other issues.

Freezing the routes too will help…

Why so many manufacturing bases?

That's right. All the committees set up to define the departure and arrival routes for helicopters have done their work and I'm very happy to state that the DGCA has already implemented that for Delhi and Mumbai. So, there's forward thinking by everyone in the government as well as in the private sector to ensure that this small industry becomes a bigger industry.

Our demand is huge. Sikorsky is today the No. 1 helicopter manufacturer and we need to have the capacity around the world to meet the requirements. I think we are on the right track at having (manufacturing bases) in these areas where we know the markets are emerging and shall emerge. We need to position ourselves.

To go back to the manufacturing plans, have you decided on your Indian partner?

You will be doing both civil and military choppers out of India?

We had some dialogue with some people but these are the initial dialogues. Absolutely preliminary but as I just said

Of course. Basically, the machines are made and a clean machine can be used for commercial and defence as required. CRUISING HEIGHTS August 2011

Well, we have had some dialogue with some people who are into training, be it the simulators, be it the helicopter training establishment, where the helicopters are being used for training the pilots. So there is quite a bit of activity at the moment which is going on to meet the rotary wing requirements at the earliest. We have been in dialogue with some because we know that not only do you need to train the pilots, you also need to provide them with continuous and advanced training. We are aware and as we go along, we will not be hesitating in bringing whatever is required to ensure that the quality of training improves and we provide qualitative requirements to the Indian pilots.

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FOCUS ON ’COPTERS PRINCE WILLIAM’S CHOPPER ANTICS f you thought that Prince Harry with his Apache piloting Iagain. skills was the only royal with a hunger for adrenaline, think It also turns out that elder brother William is also a bit of a daredevil…this was apparent when the young prince visited Canada. The prince who is a certified search-and-rescue chopper pilot, jumped at the chance to undergo so-called ‘waterbird’ training, which is done only in Canada. Even as his wife, the Duchess of Cambridge, watched from dry land on Prince Edward Island, Prince William landed a Sea King helicopter on water as part of a demonstration of the search and rescue manoeuvre. The huge crowds that braved rain to see his flying skills in Dalvay-by-the-Sea let out a cheer as the lumbering helicopter, with Prince William at the controls, settled to a gentle landing in the lake. Canada is the only country which trains its Sea King pilots to perform ‘waterbird’ landings and the duke performed it for the first time. Amid grey skies and stormy winds, Prince William repeatedly brought the helicopter down in a maelstrom of spray. He was shown various techniques, including water taxiing and landing and taking off with one engine powered down.

CHOPPER THAT DEFIES CONVENTION aman promises to auger in a new age in unmanned rotorcraft K with the K-MAX. This rotary wing cargo drone uses the Kaman intermeshing rotor design and lacks a tail rotor. Moreover it is capable of day and night operations. Like other drones, such as Predator, a ground station operator can remotely fly the KMAX through a satellite link. But what sets the K-MAX apart is that it can be preprogrammed to lift off with multiple loads on its four-hook carousel, fly to remote locations and drop off loads at four different locations. And this, without putting the life of any human pilot in danger. And it gets better, the K-MAX can haul 4,300 pound loads upto 15,000 ft , only a Chinook helicopter can lift heavier loads at higher altitudes. As the payload of the K-MAX is carried at the end of a long tether, the drone does not have to touch down. When it comes onto the landing area, the weight is off the hook as the sling load sets down. The hook then opens, drops the load and the helicopter can be sent to its next location. The US Marines plan to deploy two K-MAX helicopters to Afghanistan later this year for operational tests.

SIKORSKY’S RECORD-SETTING X2 RAISES THE BAR SIKORSKY AIRCRAFT was recently awarded the Collier trophy for the development of the X2, which achieved a speed of 288 mph in level flight. The X2 is the fastest helicopter in the world without external thrust. Sikorsky X2 uses a coaxial rotor design with a pusher prop. Using counter-rotating main rotors, some of the drawbacks of high speed helicopter flight are minimised. The troubles associated with retreating blade stalls are also reduced by slowing down the main rotor speed and using the pusher propeller behind the chopper for thrust as speeds

increase. The Sikorsky’s X2 is touted as the starting point for a fresh light attack helicopter being created for the US Army’s Armed Aerial Scout programme. The military rotorcraft, known as the S92 Raider, will retain an identical basic layout. It will also be quieter and is expected to carry a greater payload than present choppers with a similar size. Sikorsky hopes to market the fast-flying helicopter for a wide variety of uses like search-andrescue, border patrol and the military. For more information on the Sikorsky X2 read the detailed article in our sister publication Geopolitics.

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SHILLONG AND BHOPAL TAKE OFF

INDIAN AVIATION ACADEMY LAUNCHED

New terminal building at Shillong and Bhopal airport inaugurated

Academy to become a global centre of excellence in aviation training

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Dr.Nasim Zaidi, Secretary, Civil Aviation (centre) with V P Agrawal, Chairman, AAI and Lee Zak, Director, USTDA and other AAI officals immediately after signing the MoU

he Bilateral Aviation Safety Agreement (BASA) between India and the USA was recently signed by Dr Nasim Zaidi, Secretary, Civil Aviation and J Randolph Babbitt, Administrator, Federal Aviation Administration (FAA). The signing coincided with the visit of US Secretary of State Hillary Clinton to India. The signing took place in the presence of senior officers from the Ministry, DGCA, AAI from the Indian side and FAA and USTDA from the US side. Incidentally, the USA has signed BASA with 24 countries. BASA will facilitate reciprocal airworthiness certification of civil aeronautical products imported/exported between the two signatory authorities. Indian standards would be comparable to global standards and its aeronautical products would be accepted by the US.

INDIA TIES UP WITH US ON

AVIATION SAFETY

The nascent aircraft manufacturing industry in India would be hugely benefitted and it would spur trade between the two sides. It would demonstrate that India has the capability to develop FAA certifiable aircraft CRUISING HEIGHTS August 2011

articles/appliances and would encourage the civil aeronautical products industry which will eventually lead to selfsufficiency in the sector. BASA would encourage indigenous aircraft and aeronautical products industry and the US acceptance of Indian products will help their global acceptance. Perhaps, what is more important is that it would lessen the economic burden imposed on the aviation industry and operators by redundant technical inspections, evaluations and testing. The next stage in Indo-US aviation relations will be signing the implementation Procedures for Airworthiness (IPA) that provides for airworthiness technical cooperation between FAA and its counterpart civil aviation authorities. The scope of the IPA can be enhanced from time-to-time.

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AAI update A I R P O R T S

he Civil Aviation Minister, Mr Vayalar Ravi, believes that “fulfilling the customers’ expectations” is the key to success in a service-oriented responsibility like running airports. Addressing the firstever conference of airport directors organized in Delhi on June 16, 2011, Mr Ravi said: “Compete with the privatelymanaged airports... so that someone landing at Chennai or Kolkata airports (being modernised by the Airports Authority of India) can say they are as good as or better than Terminal-3 of the Delhi airport.” Mr Ravi said that officials must get on the shop floor so to speak or in other words not be officebound but find time to connect with the passengers: “You have to see what problems the passengers and all your other customers like airlines are facing and find solutions,” he said. The Civil Aviation Secretary, Dr Nasim Zaidi, also asked the airport

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FIRST-EVER AIRPORT DIRECTORS MEET

Chairman, AAI, V P Agrawal lights the inaugural lamp at the start of the conference.

A BRAND NEW TERMINAL AT SHILLONG

he new terminal building at Shillong Airport — designed in keeping with the architecture of buildings in the city — was inaugurated on June 25, 2011, by Mr Vayalar Ravi, Union Minister for Overseas Indian Affairs and Civil Aviation, and Dr Mukul Sangma, Chief Minister of Meghalaya. On the occasion, Dr Vincent H Pala, Union Minister of State for Water Resources, Mr Abu Taher Mondal, Minister of Transport, Meghalaya, Mr P P Shrivastav, Member, North-East Council, Mr V P Agrawal, Chairman, Airports Authority of India along with other officials of AAI were present. A colourful cultural programme was organised by the College of Arts and Culture, Shillong, which made the gala ceremony a momentous one. Mr Vayalar Ravi assured the audience of about 1000-odd that development work at the Shillong airport would be completed soon. On the occasion, Chief Minister Dr Mukul Sangma handed over the deeds of

192.253 acres of land around the airport to Mr V P Agrawal. He praised the villagers for their selfless contribution towards development of the State. He felt proud to declare the contribution on unique and one that had made history not only in the country but also in the world. Chairman, AAI, also urged the officials to expedite the works such as installation of Instrument landing System (ILS) and the extension of the runway so that aircraft of A321 type could also be operated from Shillong, which has a huge passenger potential. He emphasised the need of air-connectivity of this beautiful and land-locked state of Meghalaya with the rest of the country and the world for rapid economic growth of the nation. Mr V P Agrawal, Chairman and Mr S Raheja, Member (Planning), AAI, appreciated the works of project officials and all employees of Shillong, Airport for the completion of the task and the successful organisation of the inauguration ceremony. CRUISING HEIGHTS August 2011

The construction of the new terminal building was undertaken by AAI at an cost of about `30 crore with a target to complete it within three years; but it was possible to finish the task before the due date owing to the commitment of the AAI officials and staff. The members of the AAI family are proud of this remarkable achievement. The new terminal building is equipped with the state-of-the-art equipment such as explosive trace detectors, baggage X-ray machines, conveyor belts and close-circuit cameras. In addition, there are six checkin counters and a complete security-hold area. Separate blocks have been created for arrival and departures along with a modern medical inspection room. The runway of 6,000 ft will be lengthened to 7,500 ft and will have a strength of PCN (Permanent Classification Number) 54 to cater to operations of A321type of aircraft. The installation of ILS on Runway 22 is already underway.

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AAI update A I R P O R T S managers to reorient their functioning to meet the new competitive challenges. Maintaining that `1.35 lakh crore would be required over the next decade for a massive upgrade and development of aviation infrastructure across the country, he said both government and private investment would be needed. “In future, there could be more than one airport in some cities. Therefore, the AAI and airport managers have to reorient their functioning to meet this competition,” he said. Noting that the country was projected to have 400 million air travellers and over 1,000 aircraft in the next ten years, Dr Zaidi said the AAI had earmarked `12,000 crore for the 11th Plan period to modernise airports. The Secretary also stressed on the need to hike income from non-aeronautical revenues. He also said that while pricing services at major airports was determined by the Airports Economic

A U T H O R I T Y

Regulatory Authority, in the near future each airport would have their own pricing mechanism and the government would lay down the standards they should maintain. “This would depend on the nature of air traffic flow in each airport,” he said, adding all airports would have to maintain their ratings in service standards or face “serious penalty clauses”. Dr Zaidi said broad policy parameters to this effect and a “new regime” of safety and security would be evolved soon. The Secretary also asserted that the government would keep a close watch on the health of the AAI, which would have to raise enough resources to meet the growing demand for largescale modernisation of airports, communication, navigation and air traffic management systems. AAI Chairman V P Agrawal said airport managers in India would have to compete with the best in the world as the

Dignitaries at the inauguration of Bhopal’s Raja Bhoj Airport New Integrated Terminal Building

r Vayalar Ravi, Union Minister of Overseas Indian Affairs and Civil Aviation, inaugurated the New Integrated Terminal Building at Raja Bhoj Airport, Bhopal, on June 28, 2011. Mr Rameshwar Thakur, Governor of Madhya Pradesh, was the Chief Guest and Mr Shivraj Singh Chouhan, Chief Minister, Madhya Pradesh, presided over the function. Mr Kamal Nath, Union Minister for Urban Development, and Mr Kanti Lal Bhuria, Union Minister for Tribal Affairs, were guests of honour. Built at a cost of `135 crore, the new Integrated Terminal Building has an aesthetic structural shape in a curvilinear form. With its total area of 26936 sq m and a provision for future expansion, the

BHOPAL’S RAJA BHOJ AIRPORT OPENS AMIDST FANFARE

terminal is sleek and artistic and encompasses all modern facilities. The salient features of the building are 14 check-in counters, 10 immigration counters, four Customs counters, six security check X-ray machines, two escalators, enhanced parking facilities CRUISING HEIGHTS August 2011

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best airports were situated in the AsiaPacific region. While huge investments would be made over the next few years to improve and expand aviation infrastructure, he said that the airport directors would have to learn to market their airports to customers as was done the world over. Mr Agrawal also asked the AAI to devise innovative methods to maintain the plush new terminals which have come up in various states in the recent past. The conference, an initiative of AAI Chairman, Mr V P Agrawal was aimed to focus attention on the various issues confronting the AAI-run and managed airports across the country. “We are one team and we believe it will help us to learn from each other’s experience, outline our best practices and collectively find solutions to the issues that come up from to time,” said Mr Agrawal explaining his decision to hold the conference.

for 700 cars and 20 buses and apron. The state-of-the-art building has all modern user-friendly amenities such as childcare room, smoking room, etc. The apron has been constructed to accommodate 13 aircraft. The runway has been extended to 9,000 ft. to facilitate operation of bigger aircraft. Speaking on the occasion, Mr Vayalar Ravi mentioned that the new Integrated Terminal Building with a peak hour handling capacity of 700 pax was being inaugurated to mark 100 years of civil aviation in the country. This would help enhance the connectivity within the state as well with other parts of the country and destinations abroad. It would also help boost economic activity. The Minister also mentioned that to provide a push to the development of infrastructure, AAI had embarked upon a plan to develop airports across the country. In fact, he also said that Indore was also getting ready to be inaugurated soon. Earlier, welcoming the dignitaries Mr V P Agrawal, Chairman, Airports Authority of India, mentioned the salient features of the new facility and thanked the state government for making available the land for the development of the airport. He further elaborated AAI's plans for development of other airports in the state i.e. Indore, Jabalpur and Khajuraho. The newly inaugurated facility became operational from July 1, 2011.

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AAI update A I R P O R T S

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INDIAN AVIATION ACADEMY AIMS FOR EXCELLENCE

he recent changes in the aviation environment have resulted in greater business complexities, as far as the business is concerned. In such a scenario, effective and constructive interaction between individuals and groups has been found useful for the overall development and growth of an organisation. To meet this challenging task, Indian Aviation Academy has been set up under the aegis of National Institute of Aviation Management and Research Society (an autonomous body) with Airports Authority of India (AAI), Director General of Civil Aviation and Bureau of Civil Aviation (BCAS), as stakeholders to become a global centre of excellence in aviation training and research-related activities. NIAMAR was registered as a society under the Society Registration Act XXI of 1860 (vide Registration No. S/RS.SW/0043/2010) on July 22, 2010, pursuant to the decision taken at the 136th Board Meeting of AAI. Today, the Indian

-SMGCS brings the movement area of the airports under electronic scanning to provide the ATCO with details of vehicle and aircraft movement on the airside of the airport for better surveillance, control, routing and control of airside ground movements. A typical A-SMGCS includes Surface Movement Radar (SMR) Sensor, Multilateration (MLAT) Sensors, vehicle transponders called squids and a Central Processing System (CPS). MLAT is a multilateration sensor that receives positional data of vehicles fitted with vehicle transponders in the manoeuvring area and presents an integrated display of the airside of the airport to the tower controller with aircraft/vehicle identification and their

Aviation Academy (erstwhile National Institute of Aviation Management and Research — NIAMAR), has turned into a premier training institute conducting courses in all technical and non-technical disciplines of Airport Management. Non-scheduled programmes are also organised to cater to the needs of various functional departments of AAI.

ICAO FELLOW PROGRAMMES During 2010-2011, ICAO — India Fellowship Programmes for Developing Countries were held. Under an MoU signed between AAI and ICAO, two programmes were conducted from December 6 to 10, 2010, and December 13 to 17, 2010, respectively. Apart from AAI officials, six fellowships in each of above training prorammes were offered to participate from developing countries such as Bangladesh, Nigeria, Zimbabwe, Mauritius, Saint Lucia, etc.

The Indian Aviation Academy will be conducting two ICAO-India Fellowship programmes for developing countries in July and August 2011. In 2010-2011, the academy had conducted 96 training programmes where 2177 persons were trained. A dozen programmes on Dangerous Goods Regulations (Basic) and (Refresher) benefitting 153 participants were held. Similarly six training programmes were conducted by the academy on ab initio course for Airport Managers, ICAO-STP Course on Bird Hazard Control Management Part-I & II, Airside Operations Management & Induction Course for Airport Directors/Airport Controllers. A common training calendar of the Indian Aviation Academy for the year 2011-12 containing details of training programmes to be conducted by the stakeholders i.e. AAI, DGCA and BCAS has been brought out. The list has also been uploaded on the website of AAI: www.aai.aero.

location through the CPS. In an ASMGCS environment, all vehicles like fire tenders, jeeps, etc. need to be fitted with transponders. However, SMR assists MLAT by providing data on the presence of vehicles and aircraft that are not fitted with transponders. The salient features of A-SMGCS are: The A-SMGCS provides a display to controllers with the uninterrupted identification of all suitablyequipped aircraft and vehicles on the manoeuvring area. In conditions of restricted or reduced visibility, the benefits of the system become more apparent, allowing the controller to be completely sure of the position of aircraft and vehicles. In addition, the system enhances

safety, alerting the controller by detecting potential conflicts on the runway. The A-SMGCS uses multilateration technology to provide accurate surveillance and identification of all aircraft and transponder-equipped vehicles on the airport surface while the Surface Movement Radar (SMR) usually assists the multilateration (MLAT) system by detecting any non-transponder-equipped aircraft or vehicle. Range of SMR from 0 to 5 NM, Height from 0 AGL to FL030, Azimuth 360°. The key benefits of the system are: Reduction in airside accidents Reduced runway incursions Reduction in taxi-time Increase in throughput Reduction in weather delay, and Improved situational awareness in all- weather conditions In Chennai, two surface movement radars and 13 MLAT sensors are installed at strategic locations. 40 vehicles on the airside are fitted with vehicle transponders and the display of the A-SMGCS system is provided to the Tower Controller. The A-SMGCS is a pioneer project installed in Chennai awaiting DGCA clearance for commissioning.

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SURAT Missing cargo badly

TOP 10

LOGISTICS MARKETS OF THE WORLD

THE DIAMOND CAPITAL OF THE WORLD AND AN ESTABLISHED INDUSTRIAL POWERHOUSE OF THE COUNTRY, SURAT HAS BEEN DEMANDING AN AIR CARGO TERMINAL FOR A LONG TIME

DOMESTIC CARGO BOOM? BUT HOME-GROWN CARGO CARRIERS FIND IT TOUGH

LOGISTICS IS NO SLEEPING MATTER SIESTA DEVELOPS LOGISTICS EXPERTISE FOR NICHE PERISHABLES

CATHAY PACIFIC RAMPS UP INDIA OPERATIONS GET A BOOST WITH HK-DELHIBENGALURU SERVICE

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Trade facilitation call gets TIACA nod A CALL by the Director General of the World Trade Organisation (WTO) to include trade facilitation in a new package of multilateral trade negotiations has won the backing of The International Air Cargo Association (TIACA), which has said that the move would not only benefit the air cargo industry but also the world economy. In his statement to an informal Trade

TRENDS

Negotiations Committee meeting some time ago, WTO Director General Pascal Lamy described an “LDC (least developed countries) Plus” package that could include trade facilitation as well as certain other measures as part of the package of agreements that negotiators were seeking to conclude in time for a ministerial conference this December. TIACA strongly supported the inclusion of trade facilitation in the December package. Modern, efficient customs procedures are critical for international airfreight shipments, and TIACA has long supported them, as they are essential if the air cargo sector is to capitalise on its inherent advantage of speed. Furthermore, trade facilitation can promote economic growth and aviation is a key facilitator of international trade, allowing small and mediumsized businesses to compete internationally, a spokesman said.

India-Africa trade on the up INDIA-AFRICA trade relationship has seen considerable growth over the last few years. The government has pushed it further: Prime Minister Dr Manmohan Singh announced a financial assistance of $5.7 billion for a wide range of initiatives ranging from capacity-building and human resource development to investment in Information, Communication and Technology (ICT). To add to that private Indian investment in Africa is providing the relationship more muscle. Keeping pace with these business and other investments, cargo carriage between India and the African continent has increased substantially over the last few years. According to Exim Bank's Chairman and Managing Director T C A Ranganathan, India-Africa trade had gone up seven-fold in the last seven years. Last year, for example, the trade went up to $ 45 billion. The forecast is that the figure could go up to $ 70 billion by 2015 with air cargo and ocean freight volumes expected to grow at over nine per cent annually. Gone are the days when most of the cargo went to South Africa, Kenya and Uganda. Today, air cargo has new destinations in central and western Africa. In fact, India has been exporting approximately 6,000 tonnes of goods by air to the African continent every month. It is no wonder then that airlines like Emirates have been pushing forward to strengthen operations to destinations in Africa. Ram Menen, Emirates' Divisional Senior Vice President Cargo, pointed out that there was potential to increase cargo capacity between Asia and Africa. The major reasons for that are the Indian and Chinese investments in various projects in Africa. According to Menen, trade between India and Africa had gone up four-fold in the last five years. However, the impediments to air cargo growth are many: while cargo facilities need to be expanded there is also a necessity to move ahead in communications technology, etc.

“Logistics is such a fantastic industry to work in, and I feel it is particularly suited to women, as there is often the need to juggle lots of information and tasks at once — it's a cliché I know, but women do seem to be great at this. Language skills are often a bonus too, which is another area where women tend to perform well.”

Ruth Waring

Founder, Women in Logistics.

CRUISING HEIGHTS August 2011

Container for the future THE FUTURE belongs to “Unit Load Devices” (ULD) made of composite materials that are up to 20 per cent lighter than the boxes used now. Less weight means lower kerosene consumption and lower CO2 emissions. Last year, Jettainer started a trial which till then was unique for the industry.The company arranged for a total of 1,000 revolutionary lightweight containers from four different manufacturers to be tested for their everyday suitability on 120,000 test runs on Lufthansa flights. For the new generation of containers, the manufacturers made use of fibreglass, kevlar fibre or the synthetic material Dyneema. After the trials in the everyday operations, the new containers were subjected to a six-month material test at the “Süddeutsche Kunststoffzentrum Würzburg”. The Kunststoffzentrum Würzburg investigated the effects of UV light or saltwater on the new composite materials and simultaneously checked the expected service lives — the present aluminium containers last for 10 years — of the revolutionary container construction. The test result is a confirmation of the new material.The AKE standard container, in which suitcases of passengers are transported on passenger flights weighs 82 kilograms when it is empty.The new one weighs between 65 and 69 kilograms. A Boeing 777 passenger aircraft, for example, has space for 32 AKE containers on the lower deck.With a saving per flight of around 15 kilos per empty container would mean a saving per flight of around half a tonne.

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100 per cent screening? ,

Yes but…

The move to institute 100 per cent screening of belly cargo and freighters by the US Transport Security Administration by December 31, 2011, has not been welcomed by the industry. What most industry stakeholders are upset about is the rush to bring forward the screening programme that was officially planned to begin in 2013. A look at the challenges on the road to 100 per cent screening. ne more chapter in the 100 per cent screening saga started with the US Transport Security Administration (TSA) planning to prepone the deadline for maindeck capacity from 2013 to the end of this year. The aim is to bring it in consonance with the 100 per cent rule for belly cargo screening which was brought forward to end-2011. The move has sent airlines, freight forwarders and other stakeholders in the air cargo sector up in arms. During its recent meet in Dhaka, the Federation of Asia Pacific Aircargo Associations (FAPAA), the reactions that emerged to the TSA’s proposal to fast forward the 100 per cent screening mandate were all negative. FAPAA’s security advisor David Fielder mentioned that he had been given to understand that the TSA was seriously interested in fast-tracking the screening deadline. That, he said, would mean all air cargo globally going into the US would have to be screened. “They had wanted to do all-cargo by 2013, but there is a strong thrust to bring that forward to 2011. Personally I don’t think that will ever happen this year. In two years time? Maybe.” Fielder has his reasons. He is a member of many global security bodies and is convinced that the TSA will never be able to achieve 100

per cent screening on-site simply because freighter tonnages are more belly cargo in, for example, the 777s. Nevertheless, the TSA is moving ahead with its plans. The rush to bring the deadline to the end of this year and include freighters was prompted by the discovery of bombs planted on FedEx and UPS flights some time ago. According to Doug Brittin, General Manager, Air Cargo of the TSA, the plans were yet to become law but would be in the near future. The TSA proposes to start screening freighters flying out of US airports and later move to ensure that inbound air freight shipments are screened as well. Eventually, all air freight meant for the US would have to undergo the thorough screening process before entering any airport in the USA. Reports from around the world indicate that freighter operators are getting ready. Nick Rhodes, Cathay Pacific’s Director and General Manager of cargo was quoted as saying that the carrier was “working hard to secure the logistics chain in Asia. This means working with forwarders and ground handlers alike to screen and secure all cargo before it departs to the US”. Perhaps, more important is the fact that the 100 per cent screening regime would entail delays — a fact that car-

riers would not put up with. In addition, while transshipped cargo would cause serious problems at Dubai, Singapore or Hong Kong, there would be no such delays at Indian airports. Cargo shipped out from Indian international airports has been going through the 100 per cent screening procedure for quite some time now. However, before the deadline is brought forward to the end of this year, the TSA would have to get its act together. That would require validation and certification of the national air cargo security programmes from around the globe that the US authorities require. The whole process is moving at a slow pace because of disagreements over standards. Over the last few months, it is important to note, the TSA has been ready to sit down and talk with the industry stakeholders to find ways to sort out the problems. At the recent TIACA (The International Air Cargo Association) summit in Bangkok, a number of members — among who were airline representatives and members from the freight forwarding industry — doubts were expressed that the global supply chain would face disruption if the TSA enforced the proposed deadline of December 31, 2011 for 100 per cent screening of all international inbound cargo on passenger aircraft.

CRUISING HEIGHTS August 2011

The subject dominated the summit in Bangkok with strong views expressed by both panelists and delegates. It incorporated an update from Doug Brittin and stimulated a lengthy debate involving industry experts from Asia and the United States. Neel Shah, Senior Vice President and Chief Cargo Officer for Delta Airlines and a TIACA Board Member, voiced his concern over the lack of progress in certifying foreign country air cargo security programmes. He had commented: “Unless TSA and, more broadly speaking, the entire US government focuses the necessary resources on reviewing the process and timeline by which foreign security programs are validated and placed into the TSA’s National Cargo Security Program (NCSP), we will face some significant disruptions to the global supply chain. It’s critical that we get more foreign programs under review and certified into the NCSP in the next few months — especially if TSA is considering an accelerated deadline for 100 per cent inbound screening.” Michael Steen, TIACA Chairman, said the Association had received “strong feedback from our members, not just in Asia but globally, that the potential December 31, 2011 deadline and the slow progress on foreign programme certification are critical issues.”

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Surat cries out

for cargo facilities If there is one city in India that justifiably needs air cargo facilities, it is the diamond capital of the world—Surat. While work is on to upgrade the facilities and turn the airport into an international one, the paucity of regular flights, reports Tirthankar Ghosh, could put brakes on the cargo terminal plan. The recent blasts in the diamond district of Mumbai brought home to the Surtis — the residents of Surat in Gujarat — that it is about time that their city has an airport with all the bells and whistles of a top-of-theline airport. Witness the facts. Eight of every ten diamonds sold in the world are cut and polished in Surat city. The city is India's topproduction centre for synthetic textiles; next door is Hazira, a deep-water LNG terminal and multi-cargo port. To top it all, Hazira has some of the top industrial corporations of the country—

Reliance, Essar, Larsen and Toubro, Shell, and the government-owned Oil and Natural Gas Corporation Ltd, among many others. Among the top few Indian cities for investments, Surat with one of the highest GDP growth rates — at 11.5 per cent (according to 2008 figures)— attracts a large number of start-ups. All these ingredients make Surat an ideal location for an international airport. The Surat airport story has been a long and painful one. In fact, according to locals, the city has been waiting for around two

decades for a proper airport. Till 2007, the city did not have a functioning airport and it was only in May that year that the airport got some kind of respectability with the regular Indian Airlines’ Surat-Delhi flight. Incidentally, work to enhance the airport began way back in 2003 but the pace was painfully slow. In desperation, the locals sent more than 5,000 postcards to the Prime Minister and the then Civil Aviation Minister Praful Patel in Decmber 2006. Things moved faster after that and the Airports Authority of

India (AAI), which was handling the construction of the new terminal, opened it for use on February 27, 2009. Surat hopes to get a full-fledged international airport by June 2012 that is under construction at Magdalla-Dumas. As for flights from the city today, the number is hardly worth talking about. There is an Air India flight to Delhi. For some time it was a daily but operations were reduced to four times a week and at the time of writing, it is six days a week, according to Air India website. Kingfisher too had started services between

TOWARDS STRONG GROWTH: Surat Airport holds tremendous potential for cargo business due to its strategic location.

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BIG AMBITION: Surat is poised to become business hub of India owing to its vast diamond and textile industry.

Surat, Ahmedabad and Jaipur but discontinued it. It is not that there are no flyers. It is estimated that around 5000-odd diamond merchants and corporate honchos take a flight out to Mumbai every month from the city. A newspaper report mentioned that around 12,000 businesspersons travel in and out of Surat every day. Most of those, who are from Mumbai, take the 300-km road journey. According to industry pundits, the diamond and textile two industries can look at growths of 20 per cent every year if there is a Surat-Mumbai service. The diamond industry has been demanding secure cargo facilities since it is faster and easier to ship diamonds by air than send them by couriers and road transport to Mumbai. Other than the diamond merchants, the Southern Gujarat Chamber of Commerce and Industry (SGCCI) has been lobbying for a fully functional cargo terminal at Surat. Sometime ago, logistics player Gujarat State Export Corporation Limited (GSECL), evinced interest in setting up an air cargo complex at Surat Airport — the corporation runs a complex at Ahmedabad airport — and even sent a proposal to the AAI in October 2010 after it carried out a feasibility study for the cargo

complex. SGCCI is convinced that the cargo terminal would be able to attract business of Rs 1,000 crore from the first year. To begin with, the list of perishable goods -- fruits, flowers, agro products and seafood -- from the south Gujarat region that is exported now has to go by road to Mumbai. In September, 2010, the Associated Chamber of Commerce (ASSOCHAM) made a demand to the Civil Aviation Minister and the Gujarat Chief Minister to set up a completely developed airport and a cargo hub in Surat. The move, said the Chamber would attract Foreign Direct Investments (FDI) in large amounts. The diamond industry apart, Surat's textile sector had the potential to attract large investments. The industry employs around 700,000 and accounts for 18 per cent of overall export of man-made fibres and 40 per cent of the production of manmade fabric in India. The government too, has realised the potential of Surat. The AAI carried out the groundwork and agreed to set up a cargo facility but only after the city starts getting more flights to more cities. Even today, two years after the new terminal opened, travelling by air from Surat to Mumbai can be a nightmare -- often taking more than 14 hours. There is

the Air India flight to Delhi and it is from the capital that passengers have to make their way to Mumbai. Work on the airport's expansion plans by the AAI — setting up a cargo terminal and a maintenance hub — almost came to a standstill in August last year. It was reported that the AAI had taken the decision to go slow on the work in the wake of the passenger traffic figures from the airport. The number, obviously, was low, thanks to the only flight from the city. At that time, Pramod Chaudhary, President, South Gujarat Textile Processors’ Export Association, had been quoted, “This is a case of neglect towards our city. If they (the AAI) announce the plan, major players will jump to grab the offer and conquer the diamond city. They know the capacity and actual business that transpires from here. Forget passenger traffic, only cargo business from city will be sufficient to run the show.” Two months later, a twomember AAI team visited the airport and the city to find out the cargo potential. The two left convinced that a cargo terminal would be able to justify its existence with the high tonnage of imports and exports. The AAI believes that Surat could have a cargo terminal for 50 aircraft. However, without proper air connectivity, the huge investments for a cargo

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terminal would be useless. Industry experts are certain that with more flights and better infrastructure, the airport could shape up as a major cargo station after Mumbai. For the present, the airport can handle four midsize cargo planes while space for two more can be created. A meeting of air carrier operators has been planned in September and the SGCCI hopes that things will work out. The Chamber has demanded a minimum of eight flights connecting major cities from Surat every day. Along with the domestic flights, Surtis have been demanding direct flights to Antwerp, Tel Aviv, New York and Johannesburg. The SGCCI is determined to bring the cargo terminal to the city. The city’s businesses were apparently losing more than `700 crore per annum. It may be worthwhile to mention that early last year, the Consul General of Israel in Mumbai, Orna Sagiv had visited Surat and pointed out that the city with its more than `50,000 crore diamond industry and `30,000 crore textile industry held great potential. She was quoted: “Air cargo lines of our country do business worldwide and we see enormous possibilities in the state. Our cargo operators would find a large market here as the region has huge potential.”

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Home birds find the going tough FedEx and TNT are ramping up services from India but domestic start-ups are having a hard time. While the main problem is lack of funds, there are others too, reports Tirthankar Ghosh. ndia’s air cargo seems to be in the throes of a strange crisis. While, on one hand, outfits such as Capt G R Gopinath’s Deccan 360, Quikjet Cargo Airlines and the Capt Mukut Pathak-headed Aryan Cargo Express seem to be floundering around, despite reports about the booming domestic market, international majors have launched initiatives to cash in on the boom. Figures from the Centre for Asia Pacific Aviation (CAPA) point out

that cargo traffic in the country grew 21.3 per cent in the first 11 months of fiscal 201011. In a 2011 report, CAPA mentioned: “domestic volumes were up 25.3 per cent and international volumes 19.2 per cent.” The domestic outfits have been facing liquidit y problems. Deccan 360, for example, has seen the exodus of its top executives. The carrier has been forced to return the two Airbus freighters it had leased. Today, it has only two turbo-

prop ATR-72-202s. To top it all, Mukesh Ambani’s Reliance Industries Ltd that had sunk in funds in Deccan 360 in April 2010 has all but asked for its investments back. Deccan’s chief, Capt G R Gopinath is optimistic about resumption of services in the next few months and is reported to have said that the carrier was acquiring additional aircraft in addition to the ones it had purchased some time ago. Quikjet too is facing prob-

lems. On the one hand, there were reports that some international promoters — two of them being FedEx and TNT — had got together to breathe life into the home-grown cargo airline and, on the other, the Director General of Civil Aviation (DGCA) has decreed that Quikjet cannot fly. In a move that has put the brakes on the start-up, DGCA E K Bharat Bhushan has suspended Quikjet’s licence that had been granted four years ago. The airline had, in fact, been

JUMPING ON THE BANDWAGON: (L-R) Michael J Drake, Regional MD, TNT Express Asia Pacific and Abhik Mitra, MD, TNT India Pvt Ltd, in an interaction with the media during the launch of the dedicated B767 freighter service between India and Europe.

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taking extensions every year but when it sought one for the fifth time, the ministry’s aircraft acquisition committee refused. A ministry document, according to business daily Mint pointed out: “The committee did not approve the proposal.” It is reported that Quikjet has requested the ministry committee for a review. However, if the appeal is declined, the licence will be revoked. It is only after the Aviation Ministry grants a noobjection certificate for an airline to start operations that the DGCA gives the airline a licence to fly and that too if the technical parameters are met. Like Deccan 360, Quikjet has not given up hope. One of Quikjet’s directors and AFL promoter Cyrus Guzder was contacted by Mint. In a text message from Germany, he said that the company was “still in dialogue with the ministry as we believe that all the facts of our case may not have been fully considered. We are hopeful that after all facts have been reviewed, the ministry will appreciate that we are in advanced state of preparedness and we will be able to progress matters further.” If and when it is allowed to fly, Quikjet could take the help of TNT and FedEx to start its services. In its first avatar, the carrier had among its three promoters AFL. AFL’s takeover by FedEx happened sometime ago. However, it is not yet known whether that acquisition included AFL’s share in Quikjet. However, the international operators seem to be doing well. Recently, TNT started a dedicated five-times-a-week freighter service with B 767s between New Delhi and TNT’s European air hub in Belgium, with a stopover in Dubai on the way back to India. The new service enables TNT Express customers to enjoy faster transit times, as well as improved control and visibility over shipments moving between India and Europe. The new B767 freighter has a weekly capacity of 210 tonnes. The introduction of

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PAN-INDIA PRESENCE: (R-L) Kenneth Koval, FedEx Vice President Operations, India and Rakesh Shalia, MD - Marketing Middle East, Indian subcontinent & Africa with the newly introduced B777F aircraft in New Delhi.

the India-Europe service is part of TNT’s plan to expand its leadership position on Asia-Europe routes. Said Abhik Mitra, Managing Director of TNT India, “The addition of a dedicated TNT freighter from India will enable our customers to become even more competitive due to faster factory-tomarket lead times and improved efficiency. With the frequency of our service, it will now take just one day for shipments to reach Europe from New Delhi.” FedEx too, started regular services from Delhi with a Boeing 777F that were in addition to its regular flights from Bengaluru and Mumbai. To add to that, it has been expanding its domestic services. All this has been welcomed by stakeholders in the air cargo community. To begin with, the freighters have given them the capacity to take large consignments; no longer do they have to depend on belly space in passenger carriers. Additionally, dedicated cargo planes mean economical rates, despite the shooting fuel costs. What then is the problem with start-ups? According to a recent report prepared by KPMG for the Associated Chambers of Commerce and Industry of India, in financial year 2011, the total tonnage of cargo handled in India was around 2.33

mn MT of which nearly onethird was international cargo that was, incidentally, less than that handled by leading international airports like Hong Kong, Shanghai, Incheon, Anchorage or Paris. The report points out to the significant opportunity that lies ahead if the country gets its “infrastructure, processes and policies in place”. Analysing the factors for the missed opportunities, the report lists out the key challenges facing the cargo sector. Unlike everyone pointing fingers at infrastructure, the report lists the first as the “mindset issue”. It says that with passenger traffic attracting the maximum focus in the Indian aviation sector, cargo has been “a bit relegated to the background”. The air cargo sector would do well if more attention is paid to key export items like agri-produce, meat, flowers, pharma and textile items. The second challenge detailed in the report is infrastructure. Poor cargo handling infrastructure at airports across the country has been leading to spoilage, pilferage and increased turnaround times for the cargo carriers. The third important factor is dwell time. The time for import and export cargo at Indian airports is three to five days as compared to an average of only 6 to 12 hours at other leading international airports. The report points out

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that the reduction in dwell time, cost and faster Customs clearance and delivery of cargo would be beneficial for the industry. The report forecasts that air cargo would face competition from other modes of cargo carriage and the major reasons for that is the improvement of highways and the proposed plan of building dedicated freight corridors criss-crossing the length and breadth of the country. As far as domestic cargo is concerned, the airport managements as well as the ministries concerned would have to look at enhancing the infrastructure, process and handling costs. Air cargo stakeholders have often pointed out the manner in which the Customs department has been functioning and the report says that there is not only need for a review of the Customs clearance procedures but also there is need to identify the ways in which processing can be hastened without compromising the safety aspect. Another aspect that has been highlighted is acquisition of land near major airports to expand cargo-handling capacity. Indeed, acquisition of land is a cumbersome process in India and with volumes set to increase in the coming years, the government has to find ways to make it easy.

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World leaders in

logistics India is No 2 in global logistics and the growth percentage would have been higher if the infrastructure had improved. ow important are emerging markets in the global supply chain? One of the world’s leading providers of expert research and analysis dedicated to the global logistics industry, Transport Intelligence (TI) has compared 39 countries in its annual ranking of the topemerging markets in global logistics. According to John Manners-Bell, Chief Executive Officer of Transport Intelligence: “It is clear that emerging markets are playing an increasingly important role in global supply chain strategies as manufacturers look to the next wave of low-cost production locations. However, investors need to be cognizant of the specific challenges which exist in each market as well as the opportunities. Our index enables companies to differentiate between those markets which offer immediate potential and those which will take much longer to develop.” The first country among the emerging logistics markets is China. Thanks to its large economy, China like last year, continued to be at the top. According to Transport Intelligence, the top factor that has helped China is the country’s connectivity to global shipping networks. The government too has helped with infrastructure. The value of China’s logistics industry is expected to reach $20.9 trillion by the end of 2013, growing at a CAGR of

approximately nine per cent over the next couple of years. India is second on the list. TI’s report pointed out that the market for third party logistics in India will reach around $4.6 billion by 2013, growing at a CAGR of roughly 26 per cent over the next few years. Most of the action will be brought in by multinational companies in the automotive and IT industries. TI mentioned that domestic companies too have started to outsource their basic supply chain operations. Brazil is the third on the list. Thanks to the country’s growing economy, manufacturers and retailers have started outsourcing logistics activities. Result: air cargo tonnages have gone up by 7.6 per cent last year while seafreight too has increased. But even so Brazil’s airports lack cargo infrastructure and that is hampering growth. Another country that has performed exceedingly well is Indonesia. In fact, it is almost at par with Brazil. According to Transport Intelligence, the connectivity of Indonesia to global trade lanes had captured the attention of foreign investors, even with concerns about security. Its total trade in real terms grew by 16 per cent last year after a contraction of 12 per cent in 2009. As for air freight, Tri-MG has planned to operate 20 weekly scheduled 732-200 freighter flights between Singapore and Indonesia and even Garuda Indonesia has re-

established its foothold in the European air cargo market after previously being banned on safety issues. Russia is in the top five, according to Transport Intelligence. Road freight has gone up by 25.3 per cent from last year after the decline of 24 per cent in 2009. Though the chances of growth are many, but good roads are hard to come by in the country. Rail and shipping, however, have not done too well. The top climber in this year’s top ten is Saudi Arabia. The country will do well now that six ‘economic cities’ to replicate the success of Dubai are being developed. The largest of these will be the King Abdullah Economic City, which comprises six key components — a seaport, an industrial zone, a central business district, a resort district, an educational zone and residential communities. Once completed the economic city will be a hub for at least 2700 manufacturing companies and the 13.8 square kilometre port is estimated to emerge as one of the world’s top five largest industrial ports. This will prepare the kingdom for the growth of its logistics industry, with predictions by Frost & Sullivan that the market will earn revenues of $20.54 billion in 2015, compared to $13.78 billion in 2010. Mexico’s air cargo sector has seen a growth of 20.5 per cent in the last year. Its port also saw growth of 18.2 per cent. Today, the

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growth has strengthened the position of Mexico as the gateway into the emerging economies of Latin America. But there is a strong belief that with the US economy not doing well in 2011, the repercussions will be felt in Mexico too. Turkey is No 8 on the list. The country’s proximity to Europe has made it an important destination for foreign investors. It is estimated that Turkey’s air cargo volumes will grow by 7.2 per cent, road freight by 3.1 per cent and rail by 4.4 per cent. The last two positions are held by the UAE and Chile. The UAE has gained in stature and has become an important gateway to member countries of the Gulf Cooperation Council, as well as an important transit hub for goods between Asia and Europe/Africa. The total tonnage at Jebel Ali and Port Rashid will reach 148.2 million tonnes in 2011, while airfreight volumes at Dubai International Airport will grow to 2.3 million tonnes, reaching 2.81 million by 2015. Chile overtook Thailand and Malaysia in this year’s ranking. The country saw a strong recovery in airfreight last year, with 17.5 per cent growth, and a further 11.5 per cent could be expected this year. Chile’s largest port, the port of San Antonio (POSA) is forecast to experience growth of 9 per cent in total tonnage in 2011, after a gain of 11.2 per cent in 2010.

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“We decided we will become a product-specific logistics company”

Kiran Salunke

Q: A:

What is so special about Siesta Logistics?

As far as logistics industry is concerned, we decided that we would start a logistics company with a statement that we do not logistics. That makes it simpler for us to grow in this region. There is immense competition from top to bottom. There is an organisation of $106 billion to a `one crore company (all involved in logistics) and everybody is able to do something or the other with the funds available. We decided to carve a niche for ourselves and

The privately-held Siesta Group, started by Ashok Chattaraj in 2006, was in the news when its three-year-old logistics services firm Siesta Logistics raised $10 million from Ashmore Alchemy India, a joint venture between Alchemy Partners LLP and Ashmore Investments (UK). Engaged in transportation, freight forwarding, port and cargo services, Siesta has a portfolio that includes a number of big names. According to Ashok Chattaraj, Chairman and Managing Director, Siesta Group, there was a need for an outfit like Siesta Logistics since “the sustained growth in Indian industry, from manufacturing and retail to farming and technology, is creating an increasing need for seamless logistics solutions”. Headquartered in Bengaluru, the logistics unit serves clients with a portfolio of customised solutions. Backed by a team of specialised professionals, Siesta Logistics delivers expertise-based consultancy services across the supply chain spectrum to corporations. Cruising Heights spoke to Kiran Salunke, Managing Director, Siesta Logistics Corporation Limited. Excerpts: we decided we will become a productspecific logistics company. Siesta Logistics started a company with only one product which is sugar. For a product like sugar we started handling the entire range of services which may include transportation, warehousing, raw material cargo, or for that matter freight forwarding, etc. whatever the business required. The model was tested by us for one year for sugar and the fresh produce in India: We remain an India-centric company. In a span of eight months we could capitalise the market of over `100

KEY DIFFERENTIATOR: Logistics business in India is mainly routed through roads.

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crore from the date of start. That prompted almost every foreign investor, FIs to look at our model and look at the sustainability of the model. We have proved that it is unlike creating an infrastructure and then giving it part of your capabilities. Suppose I have 800 aircraft and I try and fit my customer into those 800 planes…it is not the right thing. We decided we would create an infrastructure for that product only. From sugar we started with ITC, then moved on to Britannia, Parle. (We were involved in) Every part (of the logistics chain) where the sugar component was the most

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TRUE POTENTIAL: Use of heavy trucks in transportation of high-end goods holds a great potential for logistics business in India.

important thing; we decided to add value only on that segment.

What are the challenges that you faced with a niche product? The major drawbacks of this product were the ups and downs in the pricing, the stocking norms, the government regulations, etc. One-by -one we started adding all the components which we have brought into our organisation. Hence the service portfolio creation that happened was very product-specific and we have remained a knowledge-based organisation. Today, we are able to address the terms that a customer like UB wants. We took a project where UB wanted to launch a fresh produce business. Right from incorporation of business up to the farm-to-table business, we took up the entire chain. That gave us an image of a niche player in this market. In the fresh produce segment we found there was no one who could say, 'Yes, I understand this product only.' I may not understand the whole gamut but what we understand we understand in totality. As the business went on, we got invitations from a lot of French food companies wanting to enter into the Indian market. They were suppliers of turkey, for instance, a product which is much in demand in India. We got a huge reaction from the top-end hotels segment where the requirement may be for fresh fish from Japan or Turkey — both niche products. Are the low quantities feasible for an organisation like yours? Quantity is the subject matter. Like when we are handling sugar in millions of tonnes, fresh produce is again into millions and millions of tonnes there is no issue. In that also there is a niche

segment. Within fresh produce, I mean meat and fish as fresh produce. You need to address their requirements. I may be the largest player in this country but for a particular hotel or for a particular chef — he would want his turkey or fish to reach him within 48 hours from France or the UK or Japan or from wherever he decides to buy. Hotels and chefs are particular about this aspect. We are the only player trying to address this. For other players this is one of their services and it is not the routine service that they are in (unlike us).

Does it work out that way? It actually became an extremely credible model because we found there was no competition. We are not only addressing the needs of door-to-door. Let us take the air carriers. There is Air France or British Airways, for example, that has the infrastructure for cold chain. British Airways can deliver the fresh goods from Bengaluru to London airport but what happens beyond that and before that… The best vegetables are not grown next to Bengaluru airport. They are produced deep inside the country. That in itself is an inaccessible portion… What about infrastructure? Let's take GST, for instance… GST in a fresh produce market or GST in a certain segment is still not a major concern. What is a major concern is the food chain… something like this is an issue that can only be addressed with volumes. Somebody has to start that business. We are going to be a pioneer in that area: First let us resolve the basic need of delivering fresh meat, flowers or vegetables. If I am able to generate at CRUISING HEIGHTS August 2011

least 1.5 lakh tonnes per month, it will be easy for us to commit an entire cold chain infrastructure. A commitment can be given to the investors that we can produce the infrastructure overnight. For that we require a volume of over 1.5 lakh tonnes.

Are you thinking of expanding and bringing in aircraft for deliveries? Not at this stage. As for aircraft, we do not need for domestic use. We had planned at some stage of using aircraft— but not domestically, it doesn't make sense here. It would make sense (to possess aircraft) if I was a courier company. Where does the Indian logistics industry stand in comparison to players around the world? Far behind. A major issue that the logistics industry is facing is customer maturity. Customer maturity in India vs customer maturity in Europe is a major difference. That is something you cannot fulfill overnight. The understanding of local conditions is very difficult. The understanding of cost difference as I can do this job at a lower cost in India and that is one individual perception of a customer which is a very big challenge in this country. Are you planning any acquisitions? We are looking at a few companies where the knowledge base is very high. These would be companies where they have the expertise in any given field. When we see that these companies are handling millions of tonnes… there are only 4 or 5 players in India today that are handling millions of tonnes in six locations, for example, these are the people we are looking at.

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CARGO JOTTINGS Cathay extends freighter network to India CATHAY Pacific Airways recently announced that it would further extend its freighter network with the launch of a new service to Bengaluru in India. The twice-weekly service will commence on August 1 and will operate every Monday and Thursday on a Hong Kong-Delhi-Bengaluru-Hong Kong route. The launch of the new service, operated by Boeing 747-400F aircraft, will reinforce Cathay Pacific’s position as one of the biggest freighter operators in India, with 20 flights a week to, from or through four major commercial cities: Delhi, Mumbai, Chennai and now Bengaluru. For flights into Bengaluru, the airline expects to see strong interest from China and countries in Northeast Asia for shipments of computers, computer components, high-value electronic goods, integrated circuits/semi-conductors and garments. The main markets out of Bengaluru will be Japan and North America, with shipments of cars, auto parts, pharmaceuticals, garments and textiles. Nick Rhodes, Director, Cathay Pacific Cargo, said, “India is an increasingly important market for our cargo business and we are pleased to be able to extend our coverage in the country through the launch of a freighter service to Bengaluru. This new service will enhance Cathay’s presence in India.” In addition to the new destination, Cathay Pacific also

recently boosted cargo ties between India and Europe by launching a twice-weekly direct freighter service from Chennai to Frankfurt. The freighters continue onwards to either Manchester or Brussels, providing access to three European destinations from South India. Cathay Pacific General Manager, Cargo Sales and Marketing, James Woodrow, said, “We saw continued weakness out of our key Mainland China and Hong Kong markets in June, but this is traditionally a quieter time of year in the airfreight industry. The consistently strong demand seen throughout 2010 was certainly not the norm. Our India routes continued to perform well and we will launch a new twice-weekly freighter service to Bengaluru in August to further boost our presence in the subcontinent.”

Blue Dart Express declares profits BLUE DART Express Ltd., a premier courier and integrated express package distribution company, declared its financial results for the second quarter (Q2) ended June 30, 2011, at its Board Meeting held in Mumbai. The company posted `34.01 cr. profit after tax for the quarter ended June 30, 2011. Income from operations (inclusive of fuel surcharge) for the quarter ended June 30, 2011 stood at `370.94 crore, an increase of 33.80 per cent over the corresponding quarter of the previous year. Anil Khanna Anil Khanna, Managing Director, Blue Dart Express Ltd. said, “Being a customer-centric brand, Blue Dart has robust plans for India and will continue to focus on product innovation, reach expansion, transit time improvements, small town (Tier-II and III) activation and strengthening channels. We will continue to focus on delivering world-class service quality, experience and maintain our reliability quotient.”

HNA Group to launch cargo business BULLISH ON INDIA: Cathay Pacific Cargo has charted out big plans for India.

HNA Group is planning to launch a large cargo business in Turkey. HNA Group will announce a “strategic investment partnership” with Turkey’s ACT Airlines, an air-cargo company

investments to help provide businesses in the region with greater access to the global market place. We are committed to providing our customers with the best FEDEX Express was recently recognised as India's Best possible service and we will continue listening and International Logistics Provider in Frost & Sullivan's 2011 responding to their needs. Our focus is to ensure that our Voice of the Customer Awards in India. The award was given customers continue to receive best-in-class experience and a value-added proposition, to FedEx for its excellence in international logistics services which they have come to expect and for overall best from us,” said Kenneth F performance in this segment Koval, Vice-President, across key industry sectors, as Operations, FedEx Express rated by end-users. FedEx India. received the highest ratings “This award highlights from customers for its FedEx excellence as an excellence across evaluation international logistics provider parameters including timely to the Indian market. FedEx delivery, security of material, Express has established itself pickup locations, global as a true leader in this industry network, commitment to through its commitment to providing the very best in providing integrated solutions customer experience and to fulfill the diverse needs of value-added services. its customers,” said Anand “India is a key market for CROWNING GLORY: Anand Rangachary, Managing Director, Rangachary, Managing South Asia & Middle East, Frost & Sullivan handing over the 2011 us and we have consistently Best International Logistics Provider in India award to Kenneth F. Director, South Asia & Middle made the necessary Koval, Vice President, Operations, FedEx Express India. East, Frost & Sullivan.

FedEx is 2011's Best International Logistics Provider

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based in Istanbul, according to a statement. HNA’s Boeing 747 cargo planes, also known as jumbo jets, will start operating in Turkey in cooperation with ACT, the source said, adding that there were no such large cargo jets in the local business. ACT currently operates with Airbus A300 aircraft. HNA Group provides aviation, logistics, finance and tourism services with a staff of 90,000. The company’s total investments approach $30 billion, according to official data. HNA last year acquired an aircraft maintenance facility at Istanbul’s Sabiha Gökçen Airport on the Asian side of the city in cooperation with Bravia Investment from New York.

procurement, K + N will manage the transportation of perishable items such as flowers, plant cuttings, fruits and vegetables. The company will also perform cold-chain storage, vacuum-cooling, and distribution to locations throughout Europe. K + N also gained significant market share in South America with the January acquisitions of Translago and Agencia de Aduanas Excelsia of Colombia and Mastertransport of Ecuador, three companies specialising in the transportation of perishables.

TNT's quest to end child hunger

World Airways ties up with Etihad Crystal Cargo WORLD Airways has extended to December 2012 an agreement with Etihad Crystal Cargo to provide two MD-11 cargo aircraft operating on international freighter routes. “These two World Airways MD-11 freighters will help us maintain the cargo capacity we require as we sustainably grow our successful cargo business,” said Roy Kinnear, Senior Vice President of Etihad Crystal Cargo. “Etihad Crystal Cargo is one of our longest-term customers, utilising World’s MD-11 freighter aircraft continuously for the past four years,” said Brian Bauer, Global’s Chief Commercial Officer. “We are BIG ON PLANS: Etihad Crystal Cargo pleased to be part of Etihad’s rapidly expanding international network.” Etihad introduced all-cargo services from its hub at Abu Dhabi International Airport in February 2005 and currently operates a freighter fleet of one Boeing 777F, two Airbus A300-600RF regional freighters, two A330-200 freighters, in addition to the two MD-11 freighters from World Airways.

K+N announces cargo growth, acquisition THE first half of 2011 has been promising for Kuehne + Nagel, with airfreight tonnage increasing by 18 per cent. The global logistics firm contributes this growth, which AGAIN ON TOP: Kuehne+Nagel has increased occurred despite a airfreight tonnage by good numbers. second-quarter slump in the global airfreight market, with its recent foray into the perishable logistics sector. Much of K + N’s business during the first half of 2011 occurred in the North America-to-Europe and North Americato-South America trade lanes. One route where airfreight volumes failed to meet expectations, however, was Europe to Asia. K + N is posting growth in a challenging market, which is a direct result of its recent acquisitions, such as the purchase of the Amsterdam-based J van de Put Fresh Cargo Handling. With this

ENDING HUNGER: Staff members of TNT India during the promotion of “End Hunger — Walk the World” in Mumbai.

RECENTLY, TNT joined the World Food Programme (WFP) in a walk in Mumbai to raise awareness and money to feed hungry school children in some of the poorest countries in the world. The walk started from Hotel Ramada at Juhu Tara Road proceeded towards Amitabh Bachchan's Bungalow — Pratiksha, and back. It witnessed people from all age groups. Actor Shiv Pandit and Mihoko Tamamura, WFP India Representative and Country Director participated in the walk. “End Hunger — Walk the World”, provides a powerful demonstration of public support for WFP's fight against hunger, with employees from the three supporting companies walking together with friends and family, as well as celebrities, local dignitaries, and WFP employees. In some countries, children who have benefited from the WFP school-feeding programme also walk in solidarity. “End Hunger — Walk the World” evolved from an initiative of TNT employees in Asia in 2003. Over the past nine years, the event has mobilised approximately one million participants and raised funds to feed over 100,000 children in schools for one year. Said Abhik Mitra, Managing Director, TNT India, “Hunger continues to be the greatest threat to health worldwide, killing a child every six seconds. We at TNT believe that it is our duty to fight hunger, a menace that threatens the basic of human existence.” “Walk the World is an excellent example of how global partnerships can make a huge impact in the fight against hunger and it was indeed heartening to see a huge turnout. This has reaffirmed our belief that we are not alone in our pursuit of rooting out under nutrition from India. It is our privilege to work with our private sector partner TNT along with the government and we stand committed to reaching out to vulnerable communities who need most help,” said Mihoko Tamamura, WFP India Representative and Country Director.

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DOMESTIC AIRLINES IndiGo launches “Get Packing” INDIGO RECENTLY launched a new and innovative holiday package called “Get Packing”. With an aim to providing unmatched customer experience and enhancing “hassle-feel travel experience” — “Get Packing” initiative has been designed for both leisure and business travellers. It provides end-to-end travel services from flights, hotel accommodation, airport transfers, local conveyance to entertainment. Travel package comprises 150 packages in 30 destinations to choose from which include religious, business and leisure packages. For the frequent business travellers, unique business packages are also offered with day — return features. The site will allow customising trips according to one’s convenience and affordability, thus making the vacation a hassle free experience.

R Neelakanthan joins SpiceJet as CFO THE GURGAON-based low-cost airline SpiceJet has made yet another change in its management and has appointed R Neelakanthan as new Chief Commercial Officer (CFO) of the airliner, the company said in a stock exchange filing. Earlier, Neelakanthan was the Vice-President (Finance) of SpiceJet. The appointment will be in effect immediately as the

Jet Airways ties up with Ngpay JET AIRWAYS recently entered into a partnership with Ngpay, offering guests a convenient option to seamlessly book Jet Airways tickets on their mobile phones. This service allows guests to book, cancel and refund their e-tickets and also manage payment cards on their phones. Upon completion of the booking process, an e-ticket will automatically be sent to the guest's preferred email address. The e-ticket details will also be sent to his mobile phone via SMS. To activate this facility, Jet Airways guests would need to download the Ngpay — mobile ticketing application on their GPRS-enabled mobile phones. According to Sudheer Raghavan, Chief Commercial Officer, Jet Airways, “Jet Airways partnership with Ngpay will offer yet another convenient booking channel, enabling our guests to book tickets on their mobile. We are confident that the convenience and simplicity of this service will be much appreciated by our guests especially since mobile phones have now become an integral part of our daily lives.” Announces attractive 2011 Formula 1 packages: Jet Airways recently partnered with Fans On Stands Sports Pvt. Ltd. to introduce attractive JetEscapes packages for the 2011 Formula 1 Singtel Singapore Grand Prix, to be held at the Marina Bay Street Circuit, Singapore, from September 23-

company’s former CFO, Seema Chandra has resigned. This is the second management change made by the airliner in a short span of time. From June 1 this year, SpiceJet appointed S Sridharan as a whole time director of the company.

GMR partners with UFIS Airport Solutions GMR AIRPORT Developers Ltd (GADL) recently signed a collaboration agreement with UFIS Airport Solutions (UFISAS). Under the agreement GADL will undertake services like project management, airport expertise and AOCC consultancy for UFIS-AS projects in addition to operating a support centre for UFIS installations. With this development GADL, will be a preferred system implementer and support partner for UFIS-AS. Commenting on the occasion, P S Nair, CEO, Corporate, Airports Sector, GMR Group, said, “GADL has become one of the leading airport infrastructure development company in a very short period of time. It P S Nair was created with an objective, to be the leading state-of- the-art airport development related service provider in the region. The strategic partnership with UFIS-AS will allow GMR Airport Developers Ltd. (GADL) to offer quality products and services to the emerging aviation industry. The seamless integration of the UFIS products has given us confidence in expanding the business and creating a winning alliance for the future.” 25, 2011. Guests who avail of these packages will enjoy a podium finish view of the world's first night race and Asia's only street race. Fans On Stands is a sports tourism firm dedicated to providing unique and memorable sporting experiences to fans. JetEscapes has introduced two sets of unique packages over three nights/four days and four nights/five days. These packages include return air travel on Jet Airways, return airport transfers, hotel options ranging from three to five star accommodation with buffet breakfast, three day race passes for Zone 4 Walkabout stand and travel insurance for Indian nationals below 70 years. To get new-look Boeing 737: Jet Airways will get a newlook Boeing 737, with improved cabin features and LED lighting in September, Boeing India President Dinesh Keskar said. Jet will be the first Indian air carrier to get Boeing 737s with these features. Announcing Boeing's market forecast for India, Keskar said Boeing had an order book of 110 planes from India, including 37 Boeing 787s for Air India and Jet Airways and Boeing 737s for Jet Airways and SpiceJet. The deliveries will be completed in five years. The first Boeing 787 to Air India will be delivered in the last quarter of 2011.

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Signs ‘Sister Airport Agreement’ with Incheon Airport: GMR Airports Holding Ltd. (GAHL) recently signed a ‘Sister Airport Agreement’’ with Incheon International Airport Corporation (IIAC), South Korea. The ‘Sister Airport Agreement’ concept basically outlines the process for progressive airports to share technical, commercial and environmental best practices through mutual cooperation. The agreement encompasses establishment of joint training programmes under the aegis of the GMR Aviation Academy and the Incheon Airport Aviation Academy both accredited by ACI as its global training hubs. The agreement was signed between C W Lee, President and CEO, Incheon Airport and Kiran Kumar Grandhi, Chairman- Airports, GMR Group and P S Nair, CEO (Corporate) GMR Airports at Incheon.

MIAL launches social media initiative CSIA HAS unique distinction of being the first and only airport in India to go live on social media with a dedicated Facebook page and Twitter. As a part of its ongoing efforts to provide its passengers and customers with enhanced accessibility and convenience, Mumbai International Airport Pvt. Ltd. (MIAL) recently announced the launch of the social media initiative for Chhatrapati Shivaji International Airport (CSIA). You can connect with CSIA on Facebook at (www.facebook.com/CSIAMumbai) and on Twitter at (www.twitter.com/CSIAMumbai). For convenience, CSIA’s official website (www.csia.in) has links for accessing the Facebook and Twitter pages.

BIAL conducts eye test camp BANGALORE INTERNATIONAL Airport Limited recently announced the beginning of a four-month-long eye test camp for drivers at the Bengaluru Airport. The initiative is a part of BIAL’s larger Corporate Social Responsibility (CSR) programme of ‘Road Safety’. In association with Shankara Nethralaya and Essilor, the vision of over 2000 drivers of taxis and employee transport vehicles will be tested for free and spectacles will be provided at a nominal cost, for those who require them. Over the next four months, this facility will be extended to drivers, including Bengaluru International Airport authorised taxis (Easy Cabs, Meru Cabs, KSTDC cabs, Akbar and Hertz), SRS travels and BIAL drivers, both on the airside and on the landside. The next level would be to include the drivers of the airport’s partners and airlines. Through association with organisations that are experts in the field, BIAL conducts ongoing programmes to educate drivers about the importance of following road rules, driving safely, ensuring that they are adequately rested and relaxed while driving to ensure that they and their passengers reach their destinations safely.

CSR AT ITS BEST: Drivers being tested at an eye test camp at the Bengaluru International Airport.

Delhi Duty Free announces 'Gold Rush' DELHI DUTY Free Services Pvt. Ltd (DDFS) recently announced a unique promotion for Indian travellers in association with Dewar's Scotch Whisky. International travellers, travelling between July 1 and August 15, 2011, could win 10 gms gold coins and a mega prize of 50 gms gold bar from Dewar's on purchases of Dewar's Whisky. Travellers need simply to fill in a lucky draw coupon on every purchase of two or more bottles of Dewars Whisky. Lucky draw to be held immediately after the August 15 will decide the very lucky winners. This ‘Gold Rush’ promotion is happening at Delhi Duty Free for the first time. On top of which travellers will also be entitled to $8 off on purchase of two Dewar 12Yo bottles and $8 off on purchase of one bottle of Dewar 18Yo. Dewar's Signature lovers too can rejoice and on purchase of each Dewar's Signature, a product of more than 150 years of blending tradition, buyers can also get $15 off. Winner of ‘Spirit of Ireland’ festival at Delhi Duty Free announced: Delhi Duty Free and Bord Bia recently announced the winner of the month-long Irish Spirits festival running at Delhi Duty Free — the 'Spirit of Ireland'. The month-long festival offered buyers of Irish spirits from Delhi Duty Free attractive discounts and an opportunity to fill a coupon to win an all expenses paid trip to Ireland. Vaibhav Badodkar and Colonel Jit Singh are the two lucky winners who would now get an all-expenses paid trip to Ireland, courtesy Bord Bia. The promotion saw over 20 different Irish spirits and a variety of chocolates on offer at concessional prices at Delhi Duty Free, with a select few also being available for tasting. The Ambassador of Ireland, Kenneth Thompson announced the names and gave away the prizes to the lucky winners after taking out the draw of lots at his residence. Announcing the names of the winners, Kenneth Thompson said, “The launch of the month-long ‘Spirit of Ireland’ festival at Delhi Duty Free was a very noble idea as travellers were made aware of the wide variety of brands and flavours available in Irish Spirits. I am very happy to handover the winner's voucher to Vaibhav and to Harpreet Kaur, wife of Colonel Jit Singh, who very rightly deserve to now enjoy a week-long holiday in Ireland.”

HANDS FULL: (L to R) Vaibhav Badodkar, Ambassador Ken Thompson and Harpreet Kaur (wife of Jit Singh).

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INTERNATIONAL AIRLINES Emirates’ Ice system wins Skytrax Award FOR THE seventh year in a row, Emirates Airline’s ‘ice’ inflight entertainment system has been awarded the ‘World’s Best Airline Inflight Entertainment’ award at the 2011 Skytrax World Airline Awards. The awards are based on voting by over 18.8 million airline passengers from 100 different nationalities. “As a global airline serving 113 destinations on five continents, our passengers are as diverse and unique as our routes. Emirates strives to make our service the most comfortable and entertaining in the world. This year’s Skytrax ‘World’s Best Airline Inflight Entertainment’ award once again underlines our relentless commitment to providing the best inflight entertainment in the air —offering more content, in more languages and ultimately more choice, than ever before,” said Patrick Brannelly, Emirates’ Vice President, Corporate Communications Product. “We are proud to have our efforts recognised once again and we can assure our passengers that we won’t be resting on our laurels at all; we’ll be working harder than ever before to make sure that our passengers continue to have the best entertainment experience in the air.”

Qatar lands in Venice QATAR AIRWAYS continued its 2011 European expansion drive with the launch of daily scheduled flights to the Italian city of Venice. Venice became Qatar Airways' third gateway in Italy after Rome and Milan, to where the airline also operates daily flights, bringing the carrier's Italian presence to 21 services a week. Flight QR961 touched down at Venice Marco Polo International Airport to a welcome ceremony attended by airport and government officials, together with local dignitaries. Qatar Airways Chief Executive Officer Akbar Al Baker led a highprofile delegation on the inaugural non-stop flight from the airline's operational hub in Doha, capital of the State of Qatar. Onboard guests included the Italian Ambassador to Qatar, Andrea Ferrari, as well as international media. Speaking on arrival in Venice, Al Baker said, “We are delighted to add this beautiful, historic city of Venice to our global route network, further cementing our presence in Italy and clearly proving how important this dynamic market is for Qatar Airways.”

Lufthansa opens largest lounge in Frankfurt LUXURY PERSONIFIED:Emirates' award-winning ice system provides more than 1200 channels on-demand, with a wide selection of entertainment for children and adults.

Emirates mulls MRO facility in Dubai: Emirates Airline recently unveiled plans for the construction of technologically-advanced engine overhaul shop in Asia.The engine shop will complement the present Test Cell Facility in Dubai and will be constructed on a 90,000 square metre piece of land at an estimated cost of $120 million. The engine shop will have the capability of performing 300 engine repairs per annum for the GE90 and GP7000 engines fitted to the B777 and A380 aircraft. This announcement represents another milestone for Emirates engineering in their efforts to increase engine maintenance capability in terms of volume and repairs. It is anticipated that construction will commence by first quarter of 2012 and commissioned by the fourth quarter of 2014. Emirates has signed a Letter of Intent with General Electric (GE) to oversee the design and construction of the shop using the most advanced technology, equipment and best practices in the industry. “We are very pleased and proud to be working with Emirates in supporting the building of the engine shop and to use GE expertise in this field to introduce best industry practices in managing engine repairs,” said Muhammad AlLamadani, Senior Executive Sales, VP GE International Inc.

afe of

Lufthansa recently opened First Senator Lounge with spa facilities. Frequent flyers who have achieved Senator status now have an opportunity to relax in style at Lufthansa's largest airport lounge. In the departures area of Terminal 1 at Frankfurt, top customers can for the first time enjoy a modern wellness area with luxury facilities that include ten showers and two spa rooms. Another entirely new addition to the Senator Lounge is the City Lights Bar. In the centre of the lounge is an atrium that allows natural light to flood into all the areas not fronted by the 130 square-metre glass facade. The atrium is surrounded by numerous service facilities, including an inviting wellness area, where Lufthansa Senator Card holders can unwind and enjoy massages, facials, full-body treatments or other beauty treatments. Another entirely new feature of the lounge concept is the City Lights Bar, which was designed in coordination with Lufthansa Senators. The bar incorporates unique lighting effects that have been created with over 30,000 light-emitting diodes. A bartender is in attendance to fulfil guests' requests for drinks and mix cocktails or classic long drinks. The whole lounge has a floor space of about 1,800 square metres with seating for over 300 guests.

Etihad unveils Manchester City livery ETIHAD AIRWAYS took its sponsorship of Manchester City Football Club to new heights with the unveiling of a specially liveried A330-200 aircraft. The new “Blue Moon Rising” livery also marks the

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commencement of double-daily flights between Manchester and Abu Dhabi. A team of 40 painters worked around the clock for 18 days in Abu Dhabi to paint the A330-200 in the colours of Manchester City. About 450 litres of paint was required to complete the job. The aircraft, which will operate on the Abu DhabiManchester route, will also serve Milan, Frankfurt, Brussels, Johannesburg, Cape Town, Kuala Lumpur, Jakarta, Singapore, Istanbul and destinations throughout the Middle East and India. James Hogan, Etihad Airways' Chief Executive Officer, said, “We are very proud of our sponsorship of Manchester City Football Club, and of our commitment to the wider community. Manchester has been a key destination for Etihad for five years, and the increase in frequency to double-daily indicates our dedication to the region.” Etihad Airways has been Manchester City Football Club's main club sponsor since May, 2009. During that time the club has enjoyed considerable success, including its first FA Cup win since 1969 in the 2010-2011 season.

Cathay tempts Indian travellers CATHAY PACIFIC Airways has launched “Discover the World”, a unique interactive page for its Indian fans on its Facebook fan page — Cathay Pacific, India at www.facebook.com/cathaypacificIN. Visitors can win exciting prizes every fortnight for which they need to participate by first clicking the 'Like' tab on the page. Apart from fortnightly prizes, at the end of the competition one lucky winner will win the grand prize of two return tickets to Hong Kong. During the competition, Indian travellers can also take advantage of the special online fares from India to the featured destination when they book their tickets on Cathay Pacific website www.cathaypacific.in. Speaking on the initiative, Rakesh Raicar-Sales & Marketing Manager-India, Nepal, Bangladesh and Bhutan, stated, “We are integrating social media strategies to bring new and relevant target audiences to our flagship sites for online sales and servicing. We want to allow our customers to interact with us the way they want to and at the same time increase customer awareness and retention. Through social media we are able to provide more updated product and flight information in a fast, interesting and cost-effective way, as well as holding contests and competitions to engage users.”

TRUE DEDICATION: Etihad A330-200 aircraft symbolises the spirit of Manchester City Football Club.

Gatwick Airport: New base for AirAsiaX

Like its US counterpart, the Asian edition will be an AIRASIA X recently announced that from October 24, 2011, elimination-style competition with the eventual winner earning AirAsia X will commence flights from Kuala Lumpur Low the right to be a paid apprentice to Fernandes. Cost Carrier Terminal (LCCT) to Gatwick Airport. The new "We are tremendously excited to have Tony on board," base for the airline is set to further increase passenger traffic Devesh Chetty, chief executive of Singapore-based production from South-East Asia to London and Europe with six flights firm RGM, said in a statement. Not only is he a great and weekly to Gatwick Airport by mid-December. charismatic businessman; he is also a personality Asians have AirAsia X's decision to switch from Stansted to Gatwick come to associate with worldwide success," he said. Airport was to maximise commercial opportunities at Gatwick, Tun Dr. Mahathir flies on AirAsia X: Y A Bhg Tun Dr. to ultimately drive increased traffic flow between UK and Mahathir bin Mohamad, the former Prime Minister of Malaysia, and also the various key feeder markets within Malaysia, flew on AirAsia X's flight to London. AirAsia's network in Asia Pacific which the airline has proven The former premier flew on AirAsia X flight D7 2006, at Stansted Airport. AirAsia X guests would be given a wider which departed Kuala Lumpur for London and touched down choice to travel onwards and in Stansted, UK. connect domestically and Tun Dr. Mahathir was internationally via Gatwick accompanied on the flight airport. Public transport and by his wife, Tun Siti Hasmah accommodation facilities are Mohamad Ali and Deputy easily accessible via Gatwick Group CEO of AirAsia and for guest stopover's or for co-founder of AirAsia X, those heading towards central Dato' Kamarudin Meranun. London and the surrounding This is the first time for the region. airline to receive the honour Tony Fernandes will host of having Tun Dr. Mahathir Asian 'Apprentice': Tony as a guest onboard and also Fernandes, Founder, AirAsia, the first for Tun Dr. will host the regional edition Mahathir to experience of the business-themed reality GREETINGS OF THE DAY: (L-R) Deputy Group CEO of AirAsia and AirAsia X's Premium fly co-founder of AirAsia X, Dato' Kamarudin Meranun, Y.A.Bhg Tun Dr. show, The Apprentice, its Mahathir bin Mohamad and his wife, Tun Siti Hasmah Mohamad Ali on flatbed on the Airbus A340 AirAsia X's premium seats. producer said recently. aircraft. CRUISING HEIGHTS August 2011

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TRAVEL & TOURISM Get luxury at Hilton, Mumbai Airport

LUXURY AT ITS BEST: Aditya Sarovar Premiere provides world-class service to business travellers.

Aditya Sarovar opens in Hyderabad SAROVAR HOTELS & Resorts recently announced the opening of Aditya Sarovar Premiere, an upscale five-star business hotel in Hyderabad. The hotel is promoted by Manjeera Group and is Sarovar's third in the city with Aditya Park Inn and Aditya Hometel already operational. Located at HITEC city, Gachibowli this business hotel offers 203 guest rooms and suites geared with all-modern amenities and facilities for the comfort of the business traveller. The rooms are dressed with LCD television with satellite channels, tea/coffee maker, private mini bar, electronic safe, daily newspaper, a selection of premium toiletries, wireless internet connectivity coupled with 24-hour room service and valet laundry service. The hotel also provides 10,000 sq ft of banquet and conferencing space to cater to the growing MICE segment.

THE HILTON Mumbai International has been positioned as a ‘Business Hotel’, keeping in mind the ever-increasing number of travellers coming to the city and its proximity to both the airports. The Hotel is designed to ensure an ambience that combines business and leisure, while retaining comfort and luxury as well. The Executive floor is the elite floor of the hotel where the most exclusive accommodation is available. The understated luxury and quiet elegance continues to surround you as you make your way to the royal residence where personalised service extends to every nook and corner of the rooms, which have been designed to suit your every need. The business Centre is designed after the library of a manor — complete with books, workstations, meeting room, private offices and a boardroom. Some of the other venues present are Chancellor — chic, modern and stylishly decorated banquet rooms that lend an aura of grandeur to any occasion.

Lemon Hotels in pact with Experian CheetahMail

Yatra.com launches “Jordan Explorer”

YATRA.COM recently announced the launch of an experiential holiday package “Jordan Explorer”. This six nights and seven days package offers a visit to the land of mesmerising beauty and contrasts. With this newly introduced offer, the Indian travellers can visit the ancient cities of Amman, Jerash, Desert Castles, Wadi Rum the Dead Sea, to name a few. The package priced at `99,999 includes sightseeing, hotel accommodation, buffet breakfast and airport transfers. It can be availed from Delhi and Mumbai. This holiday package, introduced by Yatra.com, is ideal for those who are fascinated with picturesque desert landscape and are interested in archaeology. Apart from being the home to one of the new Seven Wonders of the World, the remains of the rich inheritance of past civilisations are one of the main attractions of Jordan.

STRATEGICALLY LOCATED: Inside view of a room at Hilton at Mumbai Airport.

InterGlobe garners ‘Best Place to work for’ award

SOTC bags StarBrands 2011 Award

INTERGLOBE Enterprises recently was awarded the ‘Best Place to Work for’ by Great Place to Work Institute, Mumbai for the fourth consecutive year in 2011. Moreover, the enterprise has been adjudged “The Best Company in the Transportation industry”, second year in a row, and second best in “The Best Recruitment, Selection and Induction Category”. InterGlobe has been ranked 27th in this study which is conducted every year by the Great Place to Work Institute‚ in partnership with The Economic Times. The survey measures employee responses to the Great Place to Work ‘Trust Index’ and the ‘Culture Audit’ that assesses the people practices prevalent in the organisations.

SOTC WAS felicitated with StarBrands 2011 Award on July 6, 2011 in a gala ceremony organised by Planman Marcom at JW Marriott Hotel, Mumbai. Kashmira Commissariat, COO-Outbound Division, Kuoni India received the award on behalf of SOTC from Anisha Motwani, Director and Chief Marketing Officer, Max New York Life Insurance and Rohit Manchanda, Director, Planman Consulting. SOTC is the only tour operator to be conferred with this honour. Star Brands is an annual property of Planman Marcom based on research with the consumers to select the strongest brands that created the most impact in the year. The Indian Council for Market Research (ICMR) conducted research across India on four parameters, namely, Product, Innovation, Recall Perception and Impact on Consumers to select the StarBrands.

EXPERIAN CHEETAHMAIL recently announced that it has been selected by Lemon Tree Hotels for its email marketing campaigns. After a competitive evaluation process, Lemon Tree Hotels has selected Experian CheetahMail to provide an end-to-end email marketing service from consulting, creative designing and campaign deployment through to comprehensive reporting. With an international footprint and vast experience of working with brands in the travel industry, Experian CheetahMail is well positioned to help Lemon Tree Hotels improve deliverability, create more focussed email campaigns and drive higher RoI by strengthening relationships with existing customers and reaching new audiences, so building brand loyalty.

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Amadeus: Mobile tech to transform air travel MOBILE TECHNOLOGY is set to transform both airline operations and the overall traveller experience, according to a new industry report published by Amadeus. The alwaysconnected traveller: How mobile will transform the future of air travel is a global report that identifies changing traveller attitudes to airline mobile services while also highlighting the specific, emerging mobile technologies that will revolutionise each stage of the travel experience in the future.

Developed by Norm Rose of Travel Tech Consulting Inc, the report includes an assessment of airline mobile capabilities today, the emerging mobile innovations that are likely to be launched over the next one to two years, and also the advanced functionality that is set to entirely change the traveller journey as

we know it, over the next three to five years. Designed to stimulate new thinking and drive innovation in the travel sector, the report draws on a range of qualitative interviews with airlines from across the globe, complemented by primary data gathered from a global study of 2,978 travellers conducted by JD Power on behalf of Amadeus. Unveils inter-regional hotspots of airline traffic growth: Asia Pacific and the Middle East, followed by Europe, have become global hotspots for inter-regional long-distance air travel, according to analysis by the market intelligence solution Amadeus Total Demand. The review looks at trends in worldwide passenger demand in between regions over the last two years, comparing the first quarter of 2009 to the first quarters of both 2010 and 2011. Demand for air traffic between Asia Pacific and the Middle East grew at a compound annual growth rate (CAGR) of more than 13 per cent to almost 3 million passengers a months in the first quarter of 2011. Dubai remains the most prominent origin and destination amongst the fastest growing city pairs, such as Dubai-Mumbai, Dubai-Karachi and Dubai-Delhi. Traffic between the Middle East and Europe has surged 10.7 per cent CAGR over the last two years, creating a market of approximately 2.4 million passengers a month. Dubai, London and Paris are the chief contributors to this trend, with London-Tel Aviv, ParisCairo, and Dubai-London as examples of rapidly growing city pairs. “The Middle East is frequently misconceived as just a point of transfer. Our data, however, shows strong evidence of the sharp increase as origin or final destination of this part of the world,” says David Doctor, Director, Amadeus Airline and Travel Agency Distribution city pairs.

They may be sweet, salty, sour, spicy, pungent, hot or all of these. The restaurant has an exhaustive repertoire of more than AFTER A decade of wowing guests with authentic pan-Indian 200 varieties of unusual chutneys made of fresh, seasonal fruits, cuisine at its Indian specialty restaurant, Delhi's Metropolitan vegetables and herbs to add on to the gourmet dining. Hotel recently introduced another dimension to the popular Along with the chutneys, the restaurant serves a fusion of Chutney by including a modern flavours from across India. luxurious bar in a brand new The concept of pre-plated ambience. food with innovative and The renovated Chutney, Bar exquisite presentation has +Tandoor, in its new avatar given a different dimension continues to be a fine dining eatery to the way food is served. but with accents of the vibrant Delhi One can choose from street culture. The gilded interiors signature dishes of the define it as a restaurant of style and restaurants like Kebabi elegance where one can have an Choosa — tandoori chicken unmatched dinning experience. A marinated in chef's special colourful rickshaw at the entrance spices or Adraki Chaap — gives it a local touch, while ethnic minced chicken tempered fabrics in vibrant colours adorn the with ginger and cooked in walls. onion and tomato masala. The eatery specialises in chutneys FROM THE HAVENS: Chutney Dum Biryani remains the best The piece de resistance is used to enhance the flavour of a dish. delicacy at the Metropolitan Hotel. the Biryani.

Metropolitan dishes out India on a platter

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magine picking up your telephone to speak to your ‘very own’ airline and as soon as you say “Hello!”, the voice at the other end says, “Yes, Mr Yourname. And where do you want to fly today?” It is almost like chartering a special flight. Indeed, it is no longer imagination. At least not for Thomas Stuker. He became United Airlines’ “number one customer” recently. And his claim to fame: flying on United’s 5,962 over the last 29 years. Stuker, a car salesman from Chicago, became the only one to have clocked 10 million miles on United’s Mileage Plus programme. Stuker is way beyond the ordinary frequent flier with his hoard of mega-miles. Stuker’s feat - and he loves flying as he confessed: “I just — I love travel. I mean, for a person who 25 years ago was scared to death to fly — I couldn’t get on an aircraft; it really bothered me. But now it’s evolved to a time where if I go a week without a flight, I just feel something is not right” - reminds one of high-flying Ryan Bingham played by George Clooney in ‘Up in the Air’. This summer, Stuker flew so much that he had 23 conBEFITTING HONOUR: United Airlines' aircraft bearing the name of Thomas Stuker. The aircraft was dedicated to Stuker as a mark of respect to him.

AIR

STU(C)K IN THE

WELL-DESERVED: Thomas Stuker was felicitated for his commendable feat by the staff of United Airlines at a glittering function.

secutive meals on planes. The day Stuker reached his 10 millionth mile and entry into the United Airlines Global Services Program, a closelyguarded secret society - after a flight from Los Angeles to Chicago - United could not help but make it a huge PR event at the end of which Stuker was loaded with a number of classy gifts and even had an United plane named after him. What does the membership mean? According to United spokeswoman Robin Urbanski Janikowski: “You don’t know what you get until you are in it, and then you don’t want to leave. It’s a world that not many folks know even exists.” Simply put, these special flyers privileges include arrival at special check-in areas where agents greet them by name and take away their bags. Their boarding passes are

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already printed and at many airports they are taken away through a hidden door to the front of the security checkpoint queue. These people get first choice of meals and in the event of their baggage getting lost, special efforts are made to find and deliver the bags home. The real perks come when a flight is delayed or a connection has to be taken with little time in hand. For these persons, the airline bends over backwards with a special agent meeting the traveller at the arrival gate with the boarding pass of the connecting flight. He is then taken on a speeding golf cart to his next flight. No wonder Stuker said, “They really, really, really take care of you…It is total, total VIP.” He remembered the time when he was flying out of Chicago’s O’Hare International Airport. He was escorted by Global Services through the terminal with the then-US Sen Barack Obama, just before Obama announced his intentions to seek the presidency. “It’s nice to know that United literally treats me like the President of the United States when I fly,” said Stuker. And at the United Los Angeles first class lounge, Stuker has his favorite drink — a Bacardi and Diet Coke - waiting for him before he can sit down and when he leaves, he is handed a packed snack for the next flight of his favourite chips and guacamole.

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