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EDITOR-IN-CHIEF’S NOTE
A few stray thoughts for 2010
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efore I go any further, let me elaborate that these are not thoughts limited to Indian aviation, but to the aviation scene in general. Of course, Mera Bharat Mahaan is on top of the list, but this has been such a topsy-turvy 2009 that one can only say, 'May there never be a year again as bad as this one'. So here is my wishlist:
May no geese, no birds get sucked into both engines of an aircraft. At least Chesley Sullenberger had the Hudson, but there is no water in the Yamuna — at least in Delhi! May no pilot sleep at the controls and overfly their destination as two Air India pilots did over Mumbai and may they not get into a fisticuff with the cabin crew at 30,000 feet! May pilots desist from using their laptops on flight to discuss their duty schedules and may they not be so caught up in fixing it that they overfly their destination. May the McMahon Line that divides the National Aviation Company Limited (NACIL) into Air India and Indian Airlines heal and heal fast. May Naresh Goyal and Vijay Mallya be friends even if they can't work together (whatever their spin managers may say). May the DGCA improve and may some of its officials stop milking young boys and
CRUISING HEIGHTS January 2010
girls looking for their licenses (shame on you guys). And may Naseem Zaidi quickly put everything online to stop this racketeering. May Giovanni Bisignani sleep well, fight for the airlines and work to bring their losses down (without abusing the airports). May the Air Cargo Clubs in the metro cities get the cargo village they have all been demanding all these years. May the members of the Air Cargo Agents Association of India find the going easy even though the EDI continues to be the Electronic Disaster of India. May the Nagpur Hub grow in stature and volume and attract international freighters. May the Airports Authority of India raise enough money to bankroll all its projects. May the dynamic delay in implementing policies on ground handling end (although it seems unlikely, but what's the harm in hoping). May the world class terminal in Delhi open on time and may it win the admiration it deserves. And, finally, may Praful Patel enjoy his new job as President of the Football Federation of India. May he send footballs flying! And may he spend a bit more time at Rajiv Gandhi Bhawan.
Season’s Greetings and have a great year ahead!
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Sniffing the liquids In the year 2006, British authorities thwarted a bomb plot in which the plotters had planned to use liquids in drink bottles, smuggled in hand baggage. Since then, security agencies at airports around the world have been careful about the volume of liquids, gels and sprays that passengers take abroad in hand luggage. The motive is to detect possible liquid bombs as it has been found that current sensors at airports aren’t good enough to screen bottles inside hand baggage. The reason is the lack of technology to scan the liquids. A new technology, however, has been developed by German scientists that will allow air passengers to take liquids on planes again. The technology, which will be able to tell instantly
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MANNA FROM THE HEAVENS if the liquids are explosive or not, has been mentioned in Superconductor Science and Technology magazine and involves analysing liquids using a broad spectrum of electromagnetic waves that provide a detailed molecular “finger print” of the fluid. On the flipside, the new technology can only be put up at airports after it passes all tests. India could do with such Liquid Screening Technology (LST). According to a recent report in The Economic Times, “airport security in India would go beyond X-ray machines, CCTVs, perimeter patrolling and sniffer dogs. Liquid screeners and radiation detection devices will be part of the security infrastructure in major airports of the country”.
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Like most corporate entities, the aviation industry is taking its corporate social responsibility seriously. While it has taken the lead to reduce emissions for a cleaner environment, airlines, airports and those connected with the aviation sector have been working quietly in different spheres to bring succour and cheer to some lives and even train others for the future. A report.
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The Copenhagen Summit decided on a declaration of sorts to control emissions which the IATA has agreed to. However, it has predicted that airlines will continue to suffer losses. Also, figures on the marginal rise in the number of passengers carried by domestic carriers. Plus the Dreamliner takes to the air and a report on the second India-USA Aviation Summit. CRUISING HEIGHTS January 2010
SPECIAL REPORT
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The ripple effects of the global recession have not spared the profit-making Airports Authority of India. Today, with its revenues dwindling, the modernisation and up-gradation of 35 non-metro airports that it had planned, has received a setback due to shortage of funds. Even so, Chairman V P Agrawal hopes to raise adequate finances to enable the authority to go ahead.
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contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST
CHOCKS OFF
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CRUISING HEIGHTS Volume IV No 9
Editor-in-Chief
K SRINIVASAN Managing Editor
TIRTHANKAR GHOSH Consulting Editor
R KRISHNAN
YEAR-END EVENTS
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What was 2009 like for the aviation industry? There were some hits, some misses and much more happening in the skies around the world. A month-by-month account of the year that has just passed.
The new Ground Handling Policy still continues to create controversies. Will the policy be implemented in 2010 now that many airline operators had expressed their concerns about it?
Reporters
PUNIT MISHRA, JASLEEN KAUR SREYA SHANDILYA Art Director
BHART BHARDWAJ Design
RUCHI SINHA, PRADEEP JHA Photo Editor
H C TIWARI Director
RAVI SHARMA (Mob. 9650433900)
Gen Manager
RAJIV SINGH (Mob. 9810030533)
Regional Manager (Mumbai)
MADHURI REKHI (Mob. 9769439988)
GLOBETROTTING
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Ever heard of a pilot hijacking or a baby born in the sky? Just check it out.
SNIPPETS
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Regional Sales Manager (South)
KARTHIK K. V. (Mob. 9880209405)
Senior Manager (Marketing)
VARUN MALHOTRA (Mob. 9871866651/9650433099)
Manager (Business Development)
PRANAV KHULLAR
SpiceJet has shown growth, GHIAL signed a pact with ACI World and Air France brought vintage wine to India and lots more.
(Mob. 9650433088)
Asst. Manager (Corporate Affairs)
AMIT SINHA (Mob. 9650433099)
Subscription
JAYA SINGH (Mob. 9650433044)
Executive Director
RENU MITTAL
BACK PAGE
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Up in the Air in reel and globetrotting in real. That is what George Clooney is busy doing these days. Cover:
CARGO
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After Capt Gopinath’s Deccan 360, Capt Mukut Pathak’s Aryan Cargo Express is all set for a launch sometime between March-April ’10. Will the new entrant open up the market?
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A collage of photos depicting the Corporate Social Responsibility initiatives taken by stakeholders in the aviation industry. Cover Design: Ruchi Sinha
CRUISING HEIGHTS January 2010
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 Adver-tisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase-I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase-I, New Delhi-110020.
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Irked airlines
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We (airlines) had a discussion on the new ground handling policy and proposed amendments on delayed flights by the DGCA and AERA, and we don’t want it.
Kingfisher Airways Chairman VIJAY MALLYA on the government’s move to implement new ground handling policy.
The cover story titled (Year of the pilot — and of course, the cabin crew..., Dec ’09) was very interesting to read indeed. Pilots and Cabin Crew have been in the news all around the year. Be it strikes or exemplary feats, the Pilots have been in the spotlight. Certainly, it has been the year of Pilots and Cabin Crew. Captain Sullenberger proved to the world what ‘exemplary act’ means while some pilots set the bad precedent by being ‘abusive’ and holding the strikes. Cabin Crew too was not far behind, the strikes by them all over the world shaken the airline industry to an extent. Ram Gohil, Surat
I enjoyed reading the story (Questions about Nagpur’s viability remain, Dec ’09). Nagpur airport viability as India’s first multi-modal air cargo hub has long been contested. In fact, Nagpur airport hub has emerged as dark horse. As the story illustrated that it will serve 14 million passengers and 0.87 million tonnes of cargo is quite remarkable in its own terms. In my opinion, the Nagpur airport will reap rich dividends for the ailing air cargo industry of India. Preciously for the reason that Nagpur airport has the capacity of holding large volumes of cargo, which works in favour of it. Suraj Singh, Bokaro
Illustrations: Rajeev Kumar
We are still talking (with Kingfisher). Jet Airways Chairman NARESH GOYAL on the code sharing of two airlines to achieve operational synergies and reduce costs.
A bolt from the blue!
LETTERS TO EDITOR
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Still in talks
The interview with Cochin airport (“We are ready for phase two at CIAL”, Dec ’09) unveiled some very interesting future projections about the airport. Krishandas Nair as a CEO, Cochin airport has got the job in his hands. As a CEO, he has got many challenges to conquer. And it’s not easy, especially in the wake of global recession. But I think he has proved his worth during the one year at his disposal as the interview indicated. His mettle would be further tested when the next phase of growth starts. I think, the plans for the airport are huge and will test the grit of Krishandas Nair. Geeta Prabhakaran, Chennai All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin (East), New Delhi -13, OR mail to cruisingheights@newsline.in.
We are all a bit shocked by the global fallout of the past 24 hours… the airline would not cancel any orders for new aircraft… our finances would not be impacted. Emirates Airline President TIM CLARK on the debt crisis which has struck Dubai recently.
Ready yourself! We have plans to introduce the A380 from India to the US but only when the airports are ready to take a plane that size. Lufthansa’s Director South Asia, ALEX HILGERS on new products of the airline.
Rekindled hopes Airlines say they have approximately 150 to 200 co-pilots with 1,500 or more flying-hours experience. They are eligible to be converted into commanders and this process has to be expedited. DGCA chief NASEEM ZAIDI on the plight of thousands of unemployed co-pilots.
Flexing muscles All (local) Airlines are flying in the comfort zone. Last year during this time, jet fuel prices were around $140 per barrel, which was way above today’s $80-85 per barrel. I don’t think it will climb to last year’s peak level. M THIAGARAJAN, M D, Paramount Airways on local carriers performing well in the last two quarters of 2009.
Excuse me, please! As a Union minister I am entitled to travel business class. Where does Trinamul come in? It is a convention that if the economy class is full, the passengers are upgraded to the business class. The airline did the same for me and there was nothing wrong. Union minister of state for tourism, SULTAN AHMED on flying business class.
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Domestic carriers
Copenhagen accounted for 350 cancelled weekly flights — the second highest. While Milan (302), Berlin (257), Paris (227), Rome (221), Oslo (184), Stockholm (184), Barcelona (183) and Madrid (155) were the cities which accounted for maximum cancelled weekly flights after London and Copenhagen. Estimated number of weekly seats lost as a result of these flights being pulled were even more baffling. London accounted loss of 95,000 weekly seats while Copenhagen registered loss of 44,700 weekly seats. Milan (34,250), Berlin (23,150), Paris (34,800), Rome (30,160), Oslo (23,500), Stockholm (26,500), Barcelona (25,250) and Madrid (23,100) were the cities which too suffered major losses.
COLD STATS
Domestic carriers are fast losing passengers in Europe. An eyeopening research from InsureandGo (www.insureandgo.com), the leading travel insurance provider exposes alarming trends. 76 routes from London airports were pulled by airlines between March 25, 2008 and October 25, 2009. This is the highest rate of cancelled airline routes of any city in Europe. During this period, 59 airline routes were cancelled from Copenhagen — the second highest rate for a European city. Other cities which followed: Milan (47), Berlin (28), Paris (33), Rome (36), Oslo (46), Stockholm (36), Barcelona (28) and Madrid (26). Number of cancelled weekly flights as a result of these routes being pulled were whopping 646 from the city London while
LOOKING GLASS
Forget the recession of 2009... Here’s to some great aviation feats in 2010!
Hoping growth We work in an industry that is longterm. If you look at the order backlog in the region it stretches out for 10-20 years. We feel that the economic growth there can accommodate this. FAKHER DAGHESTANI, Spokesman, Boeing, Middle East on company’s forecast of demand for huge number of new planes.
Angry Akbar If this is the way they treat customers as they have tried to treat us then... yes, they will not only lose me but they will lose others. Qatar Airways CEO AKBAR AL BAKER on his threat to Boeing regarding aircraft delivery delays.
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ASSESSMENT
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omeone should present a copy of Dale Carnegie’s best selling book — How to Win Friends and Influence People — to Arvind Jadhav, Chairman and Managing Director, Air India before it’s too late. It’s now close to eight months since Jadhav took over as the CEO at Air India’s Nariman Point Headquarters. All this while the questions have only continued to multiply and the one question that tops any discussion on the Maharaja is a simple one: Is Arvind Jadhav really in command? “We are the laughing stock of the world,” Jadhav had said in August last year in his first interview, (given to Anjuli Bharagava Business World/ August 8, 2009), which Madhavan Nambiar, Secretary, Civil Aviation said he had to coax Jadhav into giving. Since then, Jadhav has had two opportunities to update his opinion, one at the IATO (Indian Association of Tour Operators) meet in Bengaluru and the second at the recent Indo-US summit in Washington. He declined both! In the other interview
that he did (with Forbes India) Jadhav said, “ There are fundamental fault-lines that need to be addressed. Pray, has anything been done in the intervening months to change that image?” Now, Jadhav may argue that it is asinine for anyone to question the centrality of his role when he slogs from morning to night, runs between the Ministry (Rajiv Gandhi Bhawan), the airport and his own perch at Airlines House at Rakabganj Road, Delhi waging a battle royale to keep the airline afloat and squeeze money out of the government, cut costs and is also fighting enemies, within and without, to get the Maharaja back on its feet. But that’s the point. Jadhav is running around like a Lone Ranger ploughing his own lonely furrow with literally the entire staff angry and sullen at him. The pilots took the extraordinary step of writing to the President of India (which only shows how much faith they have in the Ministry or the Minister. To be fair, though, the pilots are outrageous in some of their demands ) to claim that Jadhav was instigating a ‘lockout’ from the day he
The Arvind Jadhav story:
Pause, pause and pause AS AIR INDIA TEETERS FROM CRISIS TO CRISIS, THE QUESTION ON EVERYBODY’S MIND IS: WHO IS IN COMMAND?
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joined the airline, the engineers have been threatening to work to rule, the steel frame of the airline-the administrative hierarchy right up to the Executive Directors and the whole-time directors have been, to use the word of one official, “castrated”. Their PLIs (ProductivityLinked Incentive) have been done away with and most are serving on one-fifth or one-sixth salary and running two establishments: one in Mumbai where they have been forced to move and one where their family is settled. As for the rank and file, well, to put it mildly, they are too insignificant to mat-
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ter. They are demoralised, disenchanted and upset. They have no communication with the boss barring his letter to his colleagues initially asking them to tighten their belts and prepare for sacrifices. ****** ****** ****** t’s no rocket science, to use a cliché, to understand that the success of the merger will depend on how the human resources in both organisations are handled. The McMahon Line (many prefer to call it the Radcliffe Line) that separates Air India into IAwallas and AIwallas is now being officiated by a doctor who is the officiating ED (Personnel). Dr Lata Nakwa is the General Manager (Medical) and continues to hold that position as well as be President of the SC/ST Association. Whenever she has the time she handles matters relating to personnel. She is Arvind Jadhav’s choice to resolve the HR crisis in the organisation. If you talk to people in the IA section of the McMahon line, they’ll tell you that Jadhav is now getting a doctor to fix them and if you cross the line of control,
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the AI employees will tell you that with four RDs (Regional Directors) from the erstwhile domestic airline this was bound to happen. But no one is happy that a medical doctor with a zero track record is handling issues that are the most complex and most important of the merger is driving HR. As a wag said, “A doctor has been appointed to fray the nerves and soothe the tempers of all Air Indians!” On a more serious note, the biggest problem that confronts the airline today is the issue of who will work from where, what is their brief and what do they have to deliver. A majority of the Executive Directors in the set-up have been transferred to work out of Mumbai and there has been a huge churning below at the General Managers’ level as well. The idea is that since the AI Headquarters are in Mumbai, the senior officials need to work from there. How does that help in improving efficiency is anybody’s guess. All the four Regional Directors in New York, London, Dubai ad Hong Kong have been recalled to work out of Mumbai. In New York, you have the extraordinary situation where there is no RD, no senior manager, no manager and an airport manager who wants to come back at the earliest. Two senior managers were offered the job at New York but both have declined. As one of them said, “With the salary on offer, you have to join a dole line pretty fast.” The situation at the other centres is no better. What, however, angers most of them is that the CEO continues to spend almost two-thirds of his working hours, crafting the recovery policy from Airlines House in Delhi while asking everyone else to move to the headquarters. How this policy will move forward when key personnel is stationed in Mumbai while he works most days out of Delhi is a million dollar question. And mind you there are four state-of-the-art conference facilities at Airlines House, Safdarjung Airport, AI’s Nariman Point Headquarters and Santa Cruz, for employees to be hooked on in real-time to take the agenda forward from wherever they are. Some of these facilities were put together under Jadhav who himself stated initially that in today’s networked world, you can be real-time from Timbuktu as long as you are connected. Jadhav could well be angry when his personnel policies are questioned (and the good doctor mentioned above is just one of the sundry examples), but if he is in a high profile position, wanting to motivate a disenchanted team,
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Photo: H.C. Tiwari
ASSESSMENT
READY TO FACE CHALLENGES: (Centre) Air India chief Arvind Jadhav at his first and only press conference where he outlined his plans for the revival of the carrier and (bottom) Air India headquarters at Mumbai.
then clearly he has to be the leader who sets the agenda by example. And that would include listening to other points of view. Clearly, Dr Nakwa is a “yes sir, yes sir, three bags full” variety of officer. But is that the timber that Jadhav wants all around him. Or does he need committed individuals who could offer him a fresh perspective, obey his dikat but not necessarily say ‘yes sir, yes sir’ every time they see him. One doesn’t want to take individual names, but be it Ramesh Nambiar or Captain Beri (he had a charmed life in Delhi as a Director when V Thulasidas was the CMD and got into a massive controversy over a huge cache of electronic items coming in through his VVIP flight. Praful Patel ordered him off all VVIP flights. His other claim to fame is that he considers National Security Advisor M K Narayanan and Principal Secretary to the PM, T (Kutty) A Nair as his “uncles”. He now works out of Jadhav’s Delhi office. His key aide, Karan Khara, doesn’t draw his salary from Air India, but was on the payroll of IBM and when Booz, Allen and Co were appointed as advisors, he moved to that company. But he travels on AI, has an AI email ID, sits in on most meetings and no one knows what is he there for. Would anyone else in AI be allowed the same facility if they want to bring in an outside aide? In any case, is this right?
Executive Director, Air India, who drove the Star Alliance project till two months back, talking to reporters at a ceremony when Continental Airlines was inducted into the Star Alliance programme in late October ’09. It was plainly explained that one of the main reasons for the delay in AI’s induction is that the reservation and other systems of Indian Airlines (IA) and Air India (AI) were yet to be integrated. In any merger, the two key drivers are the
****** ****** ****** e have taken longer than others in joining the Star network but there are good reasons for the delay,” said Shirin Lalwani, superannuated
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meshing of the reservation systems and the human resources. Soon after he took over, Jadhav personally met the Central Vigilance Commissioner and scrapped the PSS (Passenger Service System) tender that had been finalised (though not signed) and its implementation. A fresh global bid was floated and a shortlist of two is now under consideration - Amadeus and SITA (Sabre). The file is believed to be awaiting Jadhav’s approval and he is now believed to have sought permission from the CVC to inspect the facilities of the two shortlisted vendors before finalising the contract. As things stand at the moment, SITA has the lower of the two bids. What is astonishing is that this request has come after the technical and financial bids were vetted and finalised and visit to the facilities of global companies, who have airlines around the world using their network, is really an exercise in futility. By this yardstick every time a PSU in India undertakes a global bid, it must incorporate site visits as part of the “good practices” policy. At the very minimum, it will take either of the two a good eight to twelve months to get the PSS off the ground. At the present speed, it’s unlikely that Jadhav will have the Alliance moving forward through 2010. But he has been categorical that he split the roadmap for
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“as if Cairo is a stereo that is always on...”
Cairo by Night
www.egypt.travel
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ASSESSMENT integration into Start Alliance into IT and non-IT related issues and a ‘step by step’ process will be followed to make sure that the alliance takes of. The airline has already taken two extensions and Star doesn’t have too much patience left. “I think that because of our delay and lackadaisical approach, we are preparing the ground for handing over the torch to Jet Airways (that is salivating and waiting to join the Alliance and is held back only because the Maharaja will oppose it tooth and nail) in a systematic manner,” said an insider. He could see no other reason for the delay. In fact, most people can see no other reason. Maybe, the perception is wrong, but isn’t it time that in eight months Jadhav should officially offer a reasonable road map of what is happening? After all, he has met with the Alliance in Frankfurt, he has met them in Delhi, he has a fresh PSS order on his table, but everything continues to be opaque. Why not make a categorical commitment of when the alliance will indeed happen. After all, eight months are enough to right the wrong on the PSS and get it going again. For the record: Air India was invited to join the Star Alliance as far back as December 2007. ****** ****** ****** here are scores of other issues that one can talk about: on route rationalisation, on fleet restructuring, on engineering, on ground handling and what the airlines proposes to do both in the short term and the long term. One isn’t talking about them here for we have dealt
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with them in detail in our earlier editions. On August 8, Jadhav in his only major news conference in Delhi made several interesting observations: The airline’s plan is to increasingly transform into a low-cost carrier. “This winter, of the 100 schedules we fly on domestic routes, we will fly the 27 least profitable routes as low-cost carriers by transferring ten aircraft to AI Express.” One is waiting to hear about that.
On joining the Star Alliance, he said the cut-off date was June 2010 and hoped that IT integration would be completed by March next and Air India and the erstwhile Indian Airlines would have a single code. Jadhav has since visited Frankfurt and had the deadline extended to December 2010.
A number of initiatives, including ontime performance, seamless connectivity and aggressive brand building would help Air India to tide over the current crisis. He said that the National Aviation Company of India Ltd (NACIL), the holding company of Air India, would have to change the “way it does its business”. One reason why AI isn’t making much headway both in the US and elsewhere is because seamless connectivity is abysmal. Ask the non-stop travellers on AI’s flight to New York and they’ll tell you. Star could have helped, but that’s sometime away.
Cargo/ground handling are non starters. Jadhav’s plans to make them profit centres is still a long long way of.
CRUISING HEIGHTS January 2010
****** ****** ****** ne reason why AI is the way it is because the AI Board simply refuses to be a collective decisionmaking body where opinions are shared freely and there is reasonable debate on complex matters concerning the airline. Wholetime directors, who are employees of the two wings of the merged NACIL, hardly open their mouth and some of them are downright yes men. There are a sizeable number on the board and collectively they ought to represent the rank and file. The occasion when one of them chooses to air a view, Jadhav considers it sanguine to applaud them for their interjection and either appoints a committee to look into or asks for a note. In real terms, it’s the two government nominees on the board — Joint Secretaries Bharat Bhushan and Prashant Sukul — who are the bread and butter directors guiding Jadhav. They are taking a keen interest and Bharat Bhushan was, infact, the first to formally state that AI had a problem. But even they wonder what the way out of the mess is? It’s a no-brainer that the first step has to be reconciliation within. At the moment, AI is like a ghost house where there are enemies around every corner. Maybe when he returns from his vacation, Arvind Jadhav will try and connect with his employees. That has to be the first step if AI has to make a come back from the brink in 2010.
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Recovery and loss!
PERFORMANCE OF DOMESTIC AIRLINES FROM JANUARY TO NOVEMBER, 2009 Market share of scheduled domestic airlines for November, 2009:
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he recovery in the domestic travel sector which began since June this year has finally seen domestic carriers report a 29.8 per cent increase in traffic for the month of November, compared to the same period last year. According to the Directorate General of Civil Aviation (DGCA), the total number of domestic passengers carried by scheduled airlines of the country stood at 38.98 lakh. But when you look at the October/November 2009 figures, airline traffic in November was down 1.7 per cent compared to the passengers carried by the airlines in October. In line with the renewed demand, airlines have also increased their capacity, which was at its highest during November, according to the DGCA figures. In terms of market share, the combination of Jet Airways and its low-cost brand JetLite retained the top slot with a combined market share of 27 per cent. However, the lead domestic carrier lost around 0.7 per cent share equally between both the brands. On the other hand, both Air India and Kingfisher Airlines increased their shares marginally. While Air India has gained 0.2 per cent to have 18.8 per cent share, Kingfisher had 21.1 per cent share in November compared to 20.7 per cent in October this year. As far as the low-cost carriers are concerned, while IndiGo registered a gain in market share at 14.1 per cent (compared to 13.6 per cent in October), SpiceJet and GoAir lost shares marginally. At the end of November, SpiceJet had 12.2 per cent share and GoAir had a 5.3 per cent share. Not surprisingly, while the number of air passengers has also picked up the loss making airlines are still strapped for cash and are not being able to pay even their airport dues in time. Praful Patel, Minister, Civil Aviation told Parliament that the major private domestic airlines
Airline-wise market share from January to November, 2009:
CAPACITY vs DEMAND Analysis of Capacity (ASKM) and Demand (RPKM) data for the year 2009 vis-Ă -vis 2008. Data suggests that demand started increasing with effect from June 2009 indicating better utilization of the capacity.
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ON-TIME PERFORMANCE (SCHEDULED DOMESTIC AIRLINES) The overall On-Time Performance (OTP) of scheduled domestic airlines for the month of November, 2009 was 74.5 per cent:
Marginal increase in November ’09
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ON-TIME PERFORMANCE (FOREIGN AIRLINES) There are 70 foreign carriers operating to/from India. At the time of compilation of this report, OTP data of 43 carriers was received. The overall On-Time Performance (OTP) of these 40 carriers for the month of November, 2009 has been 71.8 per cent in departures and 66.9 per cent in arrivals.
he total number of domestic passengers carried by the scheduled domestic airlines in November 2009 was 38.98 lakh. The number of passengers carried by domestic airlines in October 2009 was 39.69 lakhs. The break-up for the month of November, 2009 was: Air India (Domestic) - 7.34 lakhs, Jet Airways - 7.61 lakhs, Jet Lite - 2.91 lakhs, Kingfisher - 8.21 lakhs, Spice Jet - 4.77 lakhs, Paramount - 0.58 lakhs, Go Air 2.06 lakhs, IndiGo - 5.50 lakhs. The percentage share of the carriers in the month of November, 2009 was: Air India (Domestic) 18.8 per cent, Jet Airways - 19.5 per cent, Jet Lite - 7.5 per cent, Kingfisher -21.1 per cent, Spice Jet - 12.2 per cent, Paramount - 1.5 per cent, Go Air 5.3 per cent and IndiGo - 14.1 per cent. The seat factors of the domestic airlines in the month of November, 2009 was: Air India (Domestic) - 74.1 per cent, Jet Airways - 72.3 per cent, JetLite - 76.4 per cent, Kingfisher Airlines - 73.4 per cent, Spice Jet 74 per cent, Paramount Airways - 87 per cent, Go Air - 77.3 per cent and IndiGo - 78.9 per cent.
Continued from page 14
FIVE AIRLINES HAVING HIGHEST OTP (DEPARTURES)
CRUISING HEIGHTS January 2010
owed over Rs 274 crore to the Airports Authority of India (AAI) for availing its services. AAI-run airports do not include Mumbai and New Delhi, which are managed by private operators and charge much higher fees. The outstanding dues payable by major private domestic airlines as on October 31, 2009 are Rs 16,792.19 lakh by Kingfisher Airlines, Rs 4986.62 lakh by Jet Airways, Rs 1,542.42 lakh by Spicejet, Rs 908.67 lakh by Go Air, Rs 853.96 lakh by Paramount Airways, Rs 872.78 lakh by Indigo and Rs 1,466.60 lakh by JetLite, Praful Patel said in reply to a Rajya Sabha query. The minister further said in case of defaulting airlines, AAI charged interest on defaults, encashed bank guarantees and reduced credit facilities.
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AI-SATS story in numbers AI Express: Poor utilisation, mounting losses
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here is a very interesting statistics given by Air India to a Parliamentary Standing Committee on its ground handling joint venture with Singapore Airport Terminal Services (SATS). The JV has been functioning in Hyderabad and Bengaluru — the only two working JVs in operation — while the pending
AI-SATS building at Bangalore Airport.
INFRASTRUCTURE NEWS
over-arching agreement for a full-size JV with SATS subsidiary SIPL, awaits clearance from the official Air India. It has been officially stated that NACIL entered into a Memorandum of Understanding (MoU) with SATS for
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ground handling at Bengaluru International Airport Limited and Rajiv Gandhi International Airport at Hyderabad. The consortium of AI-SATS entered into a service provider rights holder agreement with respective airport operators. And after the JV coming to force both de jure and de facto, NACIL or Air India has seen a drop in its revenue earnings from third party ground handling. Take the case of Bengaluru where the revenue earned from third party handling rose from Rs 25.57 core in 2004-05 to Rs 34.90 crore in 2005-06, Rs 51.99 crore in 2006-07, Rs 53.69 crore in 2007-08 and dropped sharply to Rs 25.96 crore in 2008-09 after the AISATS JV came into force. In Hyderabad, the revenue earnings of Air India from providing third party ground handling was Rs 39.20 crore in 2004-05 which rose to Rs 50.91 crore in 2005-06, Rs 61.19 crore in 2006-07, but dropped to Rs 39.13 crore in 2007-08 and further down to Rs 12.45 crore in 2008-09 when the AI-SATS JV was incorporated. It is true that part of the fall in revenue was also due to the economic slowdown since early 2008 apart from, of course, the net revenue being shared between AI and SATS after the JV first shared revenue with the airport operators in these two metro airports.
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ir India Charters Limited (AICL) which is operating Air India Express has also got into a bit of a financial mess if official figures are any guide. But for this mess Air India Express is not fully responsible as its parent Air India is, largely, for most of its own problems. The service/pay/wages/ allowance condition of AICL employees is different from that of Maharaja Air India. During the financial year 2008-09, AICL’s Air India Express capacity increased by 28 per cent compared to the previous year. Passenger revenue rose by Rs 421 crore or 34 per cent in comparison to the previous year. Passenger load factor touched 73 per cent as against 71 per cent in the previous year despite an increase in capacity and drop in global passenger traffic. The net loss before tax during the year 2008-09, however, was Rs 340 crore as against Rs 10 crore in the previous year after sharing revenue of Rs 428 crore. This was mainly due to the following: (i) increase in high cost of ATF owing to unprecedented
54, Bhubaneswar - 50, Coimbatore - 42, Visakhapatnam 33,Ranchi - 32, Raipur - 31, Mangalore - 30, Patna - 27, Jammu- 23, Agartala - 23, Trichy - 21, Chandigarh - 21, Udaipur -21, Imphal - 19, Madurai - 20, Bagdogra - 19, Varanasi - 16, Aurangabad - 14, Silchar - 11, Tirupati - 9, Jodhpur - 7, Leh - 6, Rajkot - 6, Gaya - 1.
FLIGHT STATS
Here is a statistical nugget from the Ministry of Civil Aviation: The average number of flights operated in a day from each of the International Airports in the country is as under: Mumbai(MIAL) - 654, Delhi (DIAL) - 666, Chennai - 306, Banglore (BIAL) - 280, Kolkata - 231, Hyderabad (GHIAL) 219, Cochin - 112, Ahmedabad- 107, Guwahati - 90, Trivandrum - 71, Goa - 64, Calicut - 50, Jaipur - 66, Nagpur 48, Port Blair - 15, Srinagar - 27, Amritsar - 27, Pune - 66, Indore - 61, Juhu - 60, Bhopal - 59, Lucknow - 56, Vadodra -
MEDICAL TESTS FOR CABIN CREW
Airline cabin crew may have to undergo regular medical tests to prove that they are physically fit, according to new training norms proposed by the Directorate General of Civil Aviation (DGCA). The new rules, to be introduced soon, are meant to improve cabin safety. The move by DGCA to make bi-annual medical tests mandatory for cabin crew, could also lead to grounding of unfit crew members and push up operating costs of airlines. Currently, only pilots undergo a stringent medical check-up each year for renewal of their licences. In Air India, cabin crew members aged over 35 years have to undergo annual medical tests. (The number of crew members aged over 35 years in private airlines is fewer.) Cabin crew undergo checks prior to induction, but there is no rule that makes regular medical examinations compulsory
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Document1
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complaints.
HRG has always been committed to their clients and their diverse requirements. With Galileo’s holistic booking solution we ensure them the very best. Malvinder Rikhy Chief Operating Officer, HRG Sita, India
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www.galileo.co.in
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NEWS DIGEST escalation in the prices of crude oil in the first half of that financial year; (ii) global economic slowdown leading to steep fall in air travel and drop in yield; and (iii) unfavourable exchange rate during the year resulting increase in foreign currency expenditure. Look at the physical performance of Air India Express in 2008-09. Air India Express clocked an ATM of Rs 808.02 million as against Rs 644.50 million in 2007-08 representing an increase of 25.4 per cent. Air India Express logged in RTKs of Rs 553.37 million compared to Rs 437.60 million in 2007-08 or a rise of 26.5 per cent. Air India Express’s overall load factor rose to 68.49 per cent in 2008-09 from 67.90 per cent in 2007-08. The crucial ASKMs (Available Seat Kilometres) increased to Rs 7657.83 million in 2008-09 as against Rs 5961.49 million in 2007-08 or a 28.5 per cent rise. Look at the RPKM (Revenue Passenger Kilometres), in 2008-09 it rose to Rs 5575.27 million up from Rs 4243.72 million in the previous year or 2007-08. The passenger load factor in 2008-09 was 72.80 compared to 71.19 in the previous year and the number of revenue passengers rose to 2.237 million in 2008-09 from Rs 1.713 million in the previous 2007-08. Air India Express registered a marginal increase in its yield per RPKM at
3.02 in 2008-09 up from 2.98 in 2007-08. Overall, Air India Express aircraft logged a total of 67,110 flying hours in 2008-09, up from 52,327 in 2007-08 mainly due to increase in fleet. The average utilisation of Air India Express Boeing 737-800 aircraft in 2008-09 dropped to 9.38 hours per day from 9.80 hours in 2007-08. What might have also hit Air India Express as any other carriers could also be the appreciation of dollar vis-à-vis rupee. The average exchange rate in 2007-08 was Rs 40.44 which rose further to Rs 45.21 in 2008-09. The financials of Air India Express is even more startling. The operating revenue of Air India Express in 2008-09 rose sharply to Rs 1373.32 crore from Rs 1034.86 crore in 2007-08 or a rise of 32.71 per cent. But the operating expenses rose even more sharply by 53.40 cent to Rs 1578.64 crore in 2008-09 from Rs 1029.07 crore in 2007-08. The
after joining work. DGCA has also laid down rules regarding the qualification and experience required for senior cabin crew members. Most airlines now designate a crew member with a single year’s experience as cabin crew in charge. Stringent rules for cabin crew coming DGCA has now proposed that a cabin crew member will need at least five years’ experience to become a senior crew member. The new regulation aims to standardise training practices across airlines.
MORE CHOPPERS FOR PAWAN HANS
The government has approved purchase of seven Dauphin helicopters by Pawan Hans Helicopters for Rs 392.50 crore. The company had signed a memorandum of agreement with Francebased Eurocopter for seven Dauphin AS-365 N3 helicopters on March 4, 2009. The Cabinet Committee on Infrastructure also approved additional orders by Pawan Hans with Eurocopter as an option.
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operating profit of Rs 5.79 crore in 2007-08 converted to a huge operating loss of Rs 205.32 crore. While the actual variation was Rs 211.11 crore, it rose from Rs 1160.30 crore in 2007-08 to Rs 1416.35 crore in 200809 or an increase of Rs 256.05 crore or 22.7 per cent. The total expenses on the other hand rose to Rs 1756.64 crore in 200809 from Rs 1170.58 crore in 2007-08 or an increase of Rs 586.06 crore or by 50.7 per cent. Air India Express, therefore, saw its net losses zooming to Rs 339.60 crore in the financial year 2008-09. What actually stands out in sharp contrast to carriers like Air Arabia is the utilisation of their aircraft fleet on a daily basis. According to Air Arabia, is an LCC operating out of Sharjah to various international destinations, it utilises its Airbus A320 as much as 13.5 hours a day. In the case of Air India Express which also has brand new Boeing 737-800s, it has logged in daily average aircraft utilisation of only 9.38 hours in the financial year 2008-09. Recently, the management even added five Airbus A320 to the Air India Express fleet to deepen and widen its reach. But, what about aircraft utilisation which is the lifeline to any LCC business?
MoU WITH INDIA POST
Meanwhile, Pawan Hans has entered, into an MoU with India Post of the Department of Posts under the Ministry of Communication & IT to provide complete logistics solutions to Pawan Hans Helicopters Ltd (PHHL). The MoU was signed on December 21, 2009 by R K Tyagi, CMD, PHHL, and John Samuel, GM, Business Development, India Post. The MoU has been signed initially for a period of two years which is renewable on mutually acceptable terms and conditions for support within India and will be open for international logistics solutions also depending upon performance.
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IATA: Yes to Copenhagen, but more losses
WORLD LEADERS AT THE COPENHAGEN SUMMIT: Efforts to save planet Earth from emissions.
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he International Air Transport Association (IATA) has welcomed the Copenhagen Accord as an important step in the right direction for climate change. Aviation emissions were not addressed specifically in the Accord, a reflection of the pro-active measures the industry has taken to set challenging targets for itself, together with an aggressive strategy to achieve them. “We came to Copenhagen to be part of the deal and we were encouraged by the level of support for the industry’s global sectoral approach and targets. We will continue to press states to include these global targets in any future deal,” said Giovanni Bisignani, IATA’s Director General and CEO. “Airlines, airports, air navigation service providers and manufacturers are reinforced in their commitment: (1) to improve fuel efficiency by an average of 1.5 per cent per year to 2020; (2) to stabilize carbon emissions from 2020 with carbon-neutral growth; and, (3) to a net reduction in carbon emissions of 50 per cent by 2050 compared to 2005,” he added.
Annus Horribilis Meanwhile, the International Air Transport Association (IATA) revised
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its financial outlook for 2010 to an expected $5.6 billion global net loss, larger than the previously forecast loss of $3.8 billion. For 2009, IATA maintained its forecast of a $11 billion net loss. “The world’s airlines will lose $11.0 billion in 2009. We are ending an Annus Horribilis that brings to a close the 10 challenging years of an aviation Decennis Horribilis. Between 2000 and 2009, airlines lost $49.1 billion, which is an average of $5.0 billion per year,” said Bisignani. “The worst is likely behind us. For 2010, some key statistics are moving in the right direction. Demand will likely continue to improve and airlines are expected to drive down non-fuel unit costs by 1.3 per cent. But fuel costs are rising and yields are a continuing disaster. Airlines will remain firmly in the red in 2010 with $5.6 billion in losses,” said Bisignani. The forecast highlights include: Revenues: are expected to rise by $22 billion (4.9 per cent) to $478 billion in 2010, compared to 2009. However, revenues remain $57 billion (-11 per cent) below the peak of $535 billion in 2008 and $30 billion
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below 2007 when passenger traffic was at similar levels to what is expected in 2010. Passenger Demand: Following a decline of 4.1 per cent in 2009, passenger traffic is expected to grow by 4.5 per cent in 2010 (stronger than the previously forecast 3.2 per cent in September). A total of 2.28 billion people are expected to fly in 2010, bringing total passenger numbers back in line with the peak recorded in 2007. Cargo Demand: Cargo demand is expected to grow by 7 per cent to 37.7 million tonnes in 2010 (stronger than the previously forecast 5 per cent in September), following a 13 per cent decline in 2009. Total freight volumes will remain 10 per cent below the 41.8 million tonne peak recorded in 2007. Cargo demand is rising faster than world trade as depleted inventories are rebuilt. Once the inventory cycle completes, growth is expected to fall back in line with world trade. (See also page 48) Yields: In 2009, passenger and cargo yields plummeted by 12 per cent and 15 per cent respectively. Cargo yields are expected to improve by 0.9 per cent in 2010. But passenger yields are not expected to improve from their extraordinary low level. This is being driven by two factors: excess capacity in the market and reduced corporate travel budgets. Capacity adjustments in 2009 were made at the expense of lower aircraft utilisation (down 6 per cent). An additional 1300 aircraft due for delivery in 2010 will contribute to 2.8 per cent global capacity growth, putting continuing pressure on yields. On top of this, corporate travel buyers have adjusted their budgets to reflect lower premium fare levels. Fuel: An average oil price of $75.0 per barrel (Brent) is expected in 2010, up considerably from the $61.8 average expected for 2009. As a percentage of operating costs, fuel will be 26 per cent in 2010. This is considerably lower than the 32 per cent of operating costs that fuel comprised in 2008, but twice the 13 per cent of operating costs that fuel represented in 2001-2002.
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he Second India-US Aviation Partnership Summit was held in Washington (December 7, 2009 - December 9, 2009). A high-powered Indian delegation including a sizeable contingent from the Airports Authority of India (AAI) was in Washington for the two-day
India-US aviation summit brings cooperation Environmental Best Practices, Aviation Training in India were some of the key focus areas of the summit. The high-level interaction between the top aviation officials of the two countries in this second edition of the summit saw the absence of Civil Aviation Minister Praful Patel who did not attend the Washington event because Parliament was in session. However, his US counterpart Ray LaHood did attend the event and underscored the import that was attached to it. According to DG Naseem Zaidi of the DGCA, “The event was businesslike and purposeful and most
event. The Indian delegation was led by the Secretary Civil Aviation Madhavan Nambiar and included the Director General of Civil Aviation, Dr Naseem Zaidi and the Chairman of Airports Authority of India, V P Agrawal. Over 200 representatives of over READY TO FACE CHALLENGES: (Top) V P Agrawal, Chairman, 80 companies partici- AAI; (above) Dr Naseem Zaidi, Director General, DGCA and pated in the summit in Naresh Goyal, Chairman, Jet Airways; and (below) Meera Shankar, Indian Ambassador to the US. addition to government delegations. useful.” He added that the The summit included sessions on cooperation between the aviation different aspects of the civil aviation authorities of the two countries across sector, the opportunities and chal- the board was something that had to lenges it faces. On the airport sector, be seen to be believed. sessions included ongoing and future Civil Aviation Secretary projects of the AAI pertaining to air Madhavan Nambiar said: “Capacity safety, efficiency and future air navi- building is a vital need for Indian gation systems, development and organisations. Through projects modernization. The summit also covered issues pertaining to airport infrastructure development and financing with inputs from the AAI, the Federal Aviation Authority (FAA) and major private sector players. The oversight role of the Directorate General of Civil Aviation (DGCA), Aviation Security, Aviation
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under the Joint Aviation Steering Committee and the Aviation Cooperation Programme (ACP), I am sure both countries would proactively execute the activities identified in supporting civil aviation objectives.” Some significant initiatives are controller training, air traffic flow management planning, capacity analysis of India’s airspace and cooperation in establishing proper regulatory framework. Sharing of information, knowledge and harmonization of systems would result in aviation appropriate solutions in the best interests of the industry and the country. Adoption of best international practices was the best way forward, he said. In all these initiatives, “we look forward to working together in the civil aviation sector to increase the trade between our countries and developing a framework for cooperation in this crucial sector that will push technology innovation and collaboration including promotion of growth and job creation. We, in India, remain committed to protect and further strengthen the ideals of peace, harmony and social cooperation, which are the cornerstones of stability and progress of any nation,” said Nambiar. Acting Director of the US Trade and Development Agency (USTDA), Leocadia I Zak, noted that “this summit follows on the heels of a very
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important visit by Prime Minister Manmohan Singh to Washington”, during which both Dr Singh and President Obama had “emphasised the importance of economic cooperation between our peoples not only as a means to speed economic recovery but also, in Prime Minister Singh’s words, to promote ‘a deeper and better understanding between our countries’,” she pointed out. “Perhaps one of the best examples of economic cooperation and also people-to-people cooperation is the USIndia Aviation Cooperation Program that was launched at the First Summit in 2007,” she said, and explained that it “provides a forum for dialogue and a mechanism by which the members can highlight specific areas of bilateral technical cooperation, including appropriate training programmes and technical activities”. The three-day summit, specifically organised to promote advanced US technical approaches and collaboration in India’s burgeoning aviation market, was permeated by dialogues on key issues related to air traffic management and control, aviation security and airspace utilization throughout India. FAA Chief Randy Babbitt said that “this is a wonderful opportunity for the FAA and the United States to continue the open dialogue that we have established with our partners in India”. He also said, “We have a lot of ambitious goals — we have very willing partners — and it’s a wonderful relationship based on the mutual respect that we’ve developed for each other over the years,” he said. Babbitt acknowledged that “we have a lot of challenging issues before us, a lot of very complex technology to deploy, and with our mutual work together and assistance, I think we are going to achieve some pretty fantastic advances in aviation.” AAI Chairman V P Agrawal said that the summit had “been most useful not just for the range of the debate and discussion, but the opportunity for my colleagues in the AAI to interact closely with their US counterparts in understanding how they dealt with issues at their end and to further strength our relationship”.
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The Dreamliner takes off
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inally after years of sweat and toil and a few years of delay, the Dreamliner or the Boeing 787 took to the air on December 15. As it took off before more than 12,000 employees and guests from Paine Field in Everett, Washington, the flight was the beginning of a flight test programme that will see six airplanes flying nearly around the clock and around the globe, with the airplane’s first delivery scheduled for fourth quarter 2010. After approximately three hours of flying the Dreamliner landed Seattle’s Boeing Field. 787 Chief Pilot Mike Carriker and Capt. Randy Neville tested some of the airplane’s systems and structures, as onboard equipment recorded and transmitted real-time data to a flight-test team at Boeing Field. The airplane flew at an altitude of 13,200 feet (4,023 meters) and an air speed of 180 knots, or about 207 miles (333 kilometers) per hour, customary on a first flight. Powered by two Rolls-Royce Trent 1000 engines, the first Boeing 787 will be joined in the flight test programme in the coming months by five other 787s, including two that will be powered by General Electric GEnx engines. These are the reasons even nonaviation nerds might care: The 787 is made up of 50 per cent composite material. The 787’s composite body is one solid structure and with fewer weak points. For example, the Boeing 747 requires about a million holes to be drilled in its fuselage, but the 787 requires less than 10,000. Boeing has designed this aircraft to bring back the joy in flying. There is revolutionary lighting and more space CRUISING HEIGHTS January 2010
for people and luggage. The aircraft has the largest windows in any passenger jetliner. This will provide a more open feel and give everyone a view to the outside. There are also no sunshades, but just a button which will cause the window to tint and block out the sun, but still have some ability to see outside. The humidity level during flight will be higher, due to the composite materials that won’t rust. This will increase the comfort level for the passengers and reduce jet lag. With the 787’s range and ability to land at smaller airports, it will reduce the need for airlines to use hub systems and allow them to provide more non-stop flights. Due to more efficient engines and less weight, the 787 will reduce fuel consumption and carbon emissions by about 20 per cent. Yet it still is able to go Mach .85, about the speed of its bigger siblings the 777 and 747. But all this will come to naught, if the supply chain that Boeing has set up across the world flops. To ensure it doesn’t, Boeing has now embedded staff in suppliers and “risk partners” around the world. It is likely to produce a dozen planes a month through 2011 and 2012 and even a minor slippage could be disastrous. Boeing will deliver its first 787 Dreamliner in India during the second quarter of 2011. The aircraft will be delivered to Air India, which has ordered 27 Dreamliners. Jet Airways (India) Ltd. — with its order for 10 aircraft — is the only other Indian airline to have ordered the Dreamliner.
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Indian aviation’s three
fundamental problems Naresh Goyal
While the global aviation sector is slowly making a recovery from the worst-ever economic crisis, the one in India is still grappling with widespread losses. Even so, Naresh Goyal is optimistic about the future of the Indian aviation industry, as he told leaders of the US and Indian business communities during the recent US-India Aviation Partnership Summit in Washington. Excerpts from his speech:
I
If India’s economic progress is to proceed on a firm footing, its civil aviation infrastructure must continue in tandem to grow, expand and get stronger
t is indeed a great privilege to stand among the leaders of the US and Indian business communities, especially those from the aviation industry, and have the opportunity to speak about the Indian aviation industry and the mutually beneficial relationships that it has developed with its friends and colleagues in the US civil aviation sector. During the recent visit of the Indian Prime Minister to the United States, President Barrack Obama and Dr Manmohan Singh reemphasised the close relationship between the two democracies and where Prime Minister stated that India attaches “high priority, greater maturity, depth and mutuality of interests” to its relations with the US. As two countries go through what has been the worst economic crisis faced by the world, we hope that the business partnerships the United States and India are building, will become an epitome for other countries to emulate, favourably influence the economic destiny, and create jobs that the world needs urgently. We at Jet Airways commit ourselves to be at the forefront of this effort. Jet Airways, in its own way, has played a role in enhancing the business ties between India and the US, not merely in adding to the travel opportunities and promoting tourism between the two countries, but also in being a significant customer of Boeing aircraft and General Electric engines. Furthermore, we have developed close commercial ties through code sharing arrangements with major US carriers. The role that aviation industry plays in this era of globalisation needs no special emphasis as the rapid technological developments in all its facets are clearly visible. However, aviation’s global economic impact is estimated at approximately one trillion dollars and is
expected to grow by over 70 per cent over the next decade. With the liberalisation of the Indian civil aviation sector starting in the early 1990s, the aviation industry in India has undergone rapid transformation. India has been more liberal than any other in the granting of traffic rights to international airlines. Over the last decade, till the onset of the economic meltdown, roughly 18 months back, the air travel market in India had grown at one of the highest rates in the world. And what is more remarkable is that the air travel market in India has grown at a much faster rate than the growth of country’s GDP. Statistics available showed that over the eight years lasting from 2001-02 through 2007-08, the domestic air traffic in India has grown 19.8 per cent per year on the average. We anticipate the same to continue in 2009-2010. The recession, which has widely been
BUILDING RELATIONS: (L-R) Dr Manmohan Singh, Prime Minister meeting Barack Obama, US President at White House, Washington on November 24, 2009.
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SO MUCH TO ACCOMPLISH:: Praful Patel, Minister, Civil Aviation has lots of challenges to meet.
Given the physical reach and spread of India as well as the size of its population, the present air travel market has still an awful lot of distance to travel before reaching saturation 26
described as the worst for the aviation industry in living memory, has now started showing clear signs of recovery. And this was highlighted in the analysis presented by Chief Economist of IATA to the organisation’s Board of Governors at Montreal. The report stated that though uneven, economic recovery measured by the indices of industrial production has started in both the developing and the developed economies. Both the business travel and freight traffic by air has started showing an upswing. Yields are improving and load factors have slowly started climbing back to pre-recession levels. While capacity curtailed during the recession has not been restored so far though fleet size has started growing again. Airlines have also raised cash from the capital market, largely as debt. However, the analysis also pointed out that the world’s major economies continue to show several signs of weaknesses in terms of level of household debts, shortage of capital, etc. and due to increasing demand for oil, jet fuel prices continue to be remain under pressure. Consequently, 2010 will almost certainly, continue to be a difficult year for the industry, though there are clear signs of the beginnings of recovery. CRUISING HEIGHTS January 2010
It is quite interesting to know that the Indian aviation industry alone, which contributes not more than 2.5 per cent of the estimated 1.7 billion passengers who travel by air globally, is estimated to account for as much as 19 per cent of the global loss. That’s why people may rightly wonder — how could such an insignificant portion of the global aviation industry cause so much financial loss? In my opinion, there are three fundamental problems the Indian aviation industry suffers from and are contributing heavily to its current unsustainable state. First is the high input cost. Aviation turbine fuel is heavily taxed because of the differing fiscal policies of the various state governments which the central government has been unable to homogenise. New and additional airport charges are progressively being introduced and levied by the new private airport owners. Add to these the high pay and allowances the airlines are forced to pay its staff due to the severe shortage of trained and experienced personnel, especially pilots and engineers. The second major problem is the substantial volume of excess capacity that is flooding the Indian market. Estimates indicate that despite some cut-backs in capacity in 2008-09
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as a consequence of the economic slowdown, there is still anywhere from 25 to 30 per cent excess capacity in the Indian domestic market today. This serious mismatch between supply and demand has resulted in the airlines adopting unhealthy market practices and offering fares that do not cover their costs. What is happening in India today is a perfect recipe for economic disaster. The third problem that requires to be tackled on a priority basis is the lack of adequate infrastructure and navigational equipment constraints at Indian airports. These problems have grown manifold with the rapid growth in traffic and number of carriers and flights. The picture here, however, is somewhat brighter compared to the other problems that have mentioned above. The Government of India has pro-actively taken major steps to improve the facilities by privatising several major airports and facilitated major investments by the Airports Authority of India. So, in this area atleast there is light at the end of the tunnel. As is true in other industries where overcrowding is observed and excessive supply has made the players indulge in cut-throat competition, eventual financial failure and consolidation will also take place in the aviation industry. Perhaps, it is only a matter of time before one or the other of the several airlines in India will start looking for a suitable partner to combine with or just fold their tent and quit when they run out of gas completely. The picture of aviation industry which I have painted above is not at all pretty. Because what I prefer is to first know and understand the negatives before start accentuating the positives. Consequently, let me assure you that notwithstanding the somewhat dark and gloomy picture that I seem to have painted above, I am nevertheless extremely optimistic about the future of the Indian aviation industry. Without any doubt, there is vital link between the growth of the Indian economy and its civil aviation industry. If India’s economic progress is to proceed on a firm footing, its civil aviation infrastructure must in tandem continue to grow, expand and get stronger as well. The highway system in India will take a long time to grow and crisscross the country. The railways are slow and do not reach all the many growing cities of the country. And maritime transportation is virtually non-existent. It, therefore, follows that the civil aviation of the country is a vital economic resource not only for its development but also for its security. It is to put it simply, indispensable. Finally, it is worth remembering that given the physical reach and spread of India as well as the size of its population, the present air travel market has still an awful lot of distance to travel before it reaches saturation point. Air travel today engages only a small proportion of the Indian population of which about 300 million are classified as middle
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class. Moreover 70 per cent of the total population is under 35 years of age. These are very significant statistics that will determine the demand for air travel. Hence, the future growth potential is still immense. Another important aspect of the Indian aviation market is the young age of the new airlines, their lean fleets and young work force. Given their youth and the absence of deeply embedded infrastructure costs like most legacy airlines have, the Indian airlines are able to navigate through these turbulent times and rapidly react to the changing demands of what has today become an almost totally price-driven market. The major full-service carriers like Jet Airways and Kingfisher, have converted around two-thirds of their capacities into low-fares services and successfully captured market shares away from their low-fares competitors and benefitted from it. Recently released data by the Airports Authority of India show that the passenger and cargo volumes in the country are on an upward trend in both the domestic and international markets. This fact has been validated by the economists of IATA who in their recent report stated that the volume of world trade has risen atleast ten basis points from the early part of 2009. They have also found that the number of premium passengers has been on the uptick. In addition, the Government of India has announced plans to invest $9 billion to modernise existing airports by 2010 and to develop around 300 unused airstrips. Going back to the start, business between India and the US is entering a new era of co-operation under the leadership of Barrack Obama and Dr Manmohan Singh. Increasingly, American companies are joining with their Indian counterparts to work in energy renewal, environmental technologies, life sciences, bio-informatics, nano-technology and the creative industries. All are areas where our innovative strengths can combine to maintain the competitiveness of our joint economies in the future. And aviation is one such major area. Concluding with my personal belief, I would like to say that since I started dreaming about setting up my own airline and filling up what I perceived to be a vacant space in the civil aviation industry in India, it has always been my burning desire that the airline I create would be the Indian instrument to match the highest standards in the industry. I believe that in some measure Jet Airways and its service offerings have already demonstrated to the world that India can deliver a product that can favourably compare with the best in its industry. Jet Airways has also shown that it can compete with the large and well-established airlines on equal terms wherever they are found. We will continue in this quest and relentlessly pursue our goal until one day we truly become one of the best five airlines in the world. (Naresh Goyal is Chairman, Jet Airways.) CRUISING HEIGHTS January 2010
Government of India has pro-actively taken major steps to improve the facilities by privatising several major airports and facilitated major investments by the Airports Authority of India 27
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SPECIAL REPORT
Braving the tough times Troubled by dwindling revenues, the AAI’s plans to modernise and upgrade 35 non-metro airports has received a setback, reports R Krishnan.
T
he sharp downturn in the aviation business world over has had its effect on the Airports Authority of India (AAI) as well. If one looks at the financial profile of AAI for the last five years (2004-05 to 2008-09) some of these aspects hit the eye directly. The primary or main functions of the AAI include control and management of Indian air space; provision of communication, navigational and surveillance aids; operation, maintenance and upgradation of operational areas namely runways, aprons, taxiways, etc. design, development, operation and maintenance of passenger terminals and development and management of cargo terminals. AAI has been consistently making profits and its profit after tax during 200708 touched Rs 1981.87 crore which fell sharply to Rs 687.21 crore in 2008-09 due to the economic downturn. This may go down even further in the current fiscal, 2009-10. Overall, if we look at the revenue earnings, they rose from Rs 2997.41 crore
in 2004-05 to Rs 3490.46 crore in 200506, Rs 3726.23 crore in 2006-07 and peaked at Rs 4289.21 crore in the boom year of 2007-08 before falling steeply as a consequence of the global economic melt-
down to Rs 4185.95 crore in 2008-09. These figures show that while the revenue earnings fell by a mere Rs 104 crore, the profit after tax in comparison dropped by nearly four times at Rs 394
GREAT BEGINNING: At the inauguration of the new International Terminal Building at Jaipur Airport. Seen in the photograph are Rajasthan Tourism Minister Bina Kak, Chief Minister Ashok Gehlot and Civil Aviation Minister Praful Patel.
“The seed of modernisation has started to germinate” The year that has gone by has been a momentous one for Airports Authority Chairman V P Agrawal. He slipped into the Chairman’s shoes at a very crucial juncture. In this interview with CRUISING H EIGHTS , he points out how he managed to weather the economic downturn and look ahead. : As you complete one year in office, how do you look back at the last 12 months? What have been the high points and where do you think more efforts need to be put in. : The past one year has indeed been challenging and exciting. I say this because it is in this period that the seed of mordernisation that we had sown started to germinate and the project got completed at 21 airports (nine non-metro and 12 other airports). As regards the other projects, they too, are in a critical phase which demands
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proper monitoring. Frankly, I have had the distinct advantage of having been in the organisation for over two decades and as such was aware of most developments. Thus, it will be appreciated that I could get on with the task and contribute meaningfully. The high point was that I had to go through the worst period as far as the economy was concerned due to the meltdown which adversely affected the infrastructure sector and our revenue generation resources. Timely action and being alert about the situation paid us the dividends in the form of marginalising the effect to a large degree. As for the second part of your question, suffice to say that the aviation industry is such that one cannot and should not pinpoint any aspect where much more needs to be put in. In my view all aspects are as important and CRUISING HEIGHTS January 2010
there is always scope for improvement and also, ensuring that complacency is not allowed to creep in. One of the main issues for the AAI in 2009 has been finances. How do you hope to improve the financial position to meet your requirements over the next 12 months? AAI planned to incur an expenditure of Rs 2822.50 crore in 2009-10 (RE) and Rs 3380.00 crores in 2010-11 (BE) for upgradation of various airport infrastructure and air traffic services. The financing of the above expenditure is mainly through internal resources and a small portion through budgetary support and the balance (Rs1200 core in 200910 and Rs 1600 crore in 2010-11) through market borrowings. However, the following steps have been taken to improve the financial position of AAI:
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crore. Overall, the profit after tax for the five years was as follows: Rs 325.38 crore in 2004-05; Rs 717.62 crore in 2005-06; Rs 859.85 crore in 2006-07; Rs 1081.87 crore in 2007-08 and Rs 687.21 crore in 2008-09. During the same time, the capital expenditure rose from Rs 2312.58 crore in 2004-05 to Rs 2236.03 crore in 2005-06; dropped to Rs 2196.90 crore in 2006-07, rose to Rs 2549.84 crore in 2007-08 and further to Rs 3070.23 crore in 2008-09. The fall in capital expenditure in the two years virtually corresponds to the PPP process leading to the takeover of Delhi and Mumbai airports by the GMR and GVK groups. It is only a coincidence as there were other reasons for the contraction of the capital expenditure. Again, 2006 was also the year when the Ministry of Civil Aviation announced that AAI would take up the modernisation of 35 non-metros of which 24 would be taken up immediately. A budget of Rs 12,000 crore was earmarked for the modernisation of the non-metro airports. Now, the whole project is stuck because of want of funds though some of the non-metro airports airside and terminals have been completed. AAI manages 127 airports in India of which 16 are international, eight are customs airports, 24 civil enclaves and 79 are domestic airports. There are six airports where only CNS/ATM services are provided. Of the six metro airports only Chennai Award of Ground Handling con-
tracts at Chennai and Kolkata airports in addition to select other international airports; Royalty from flight kitchen operators operating at the airports; Action in hand for city side development of select non-metro airports; Sought approval of the Government to levy UDF at select non-metro airports to bridge the viability gap; Strict follow-up on recovery of dues from debtors especially from airlines and other oil companies; However, borrowing is inevitable and action is in hand to procure the same at the best competitive rate. What is the real position on UDF. How soon are you going to implement it and in which airports? UDF has already been approved for Jaipur Airport (Rs 150 per domestic passenger and Rs 1,000 per International Passenger) and is being made effective from January 1, 2010. In respect of six airports (Udaipur, Amritsar, Varanasi, Trichy, Vizag and Mangalore), it is under consideration by the
This is what the check-in area in the departure concourse will look like at the Chennai Airport.
and Kolkata airports are with AAI. But AAI, however, holds 26 per cent equity in the now-being-modernised Delhi and Mumbai airports and 13 per cent each stakes in the Greenfield airports at Hyderabad and Bengaluru. On the issue of modernisation and upgradation of the 35 non-metro airports, AAI is facing serious funds shortage as a result of which crucial upgrade of some of these airports has been delayed. The AAI approached the Planning Commis-
sion, through the Ministry of Civil Aviation, seeking to raise nearly between Rs 5,000 crore and Rs 6,000 crore tax-free bonds to finance its non-metro airport upgrades. The Planning Commission, however, rejected the request and AAI is now trying other avenues to raise money. Since it was a debt-free company it had no problem. But due to so-called reasons of fiscal prudence, the Planning Commission as well as the Ministry of Finance rejected the idea of AAI to raise money
government and for two airports, it is under consideration of AERA (Trivandrum and Ahmedabad). How has 2009 been for aircargo and how have Indian airports handled the recessionary trends? There has been an upward trend in international cargo averaging 11 per cent till 2007-08. Though the upward trend continued in 2008-09, due to the recession there was a decline of 0.3 per cent. Domestic cargo also showed a positive trend averaging 7.5 per cent till 2007-08. However, in 2008-09, it showed a decline of -2.8 per cent. What are the aircargo targets for 2010: domestic and international? As per the study and projections, there will be cargo growth of six per cent in the year 2010-11. Subsequently, cargo growth of eight per cent on the international sector and six per cent on the domestic sector has been worked into the future growth up to 2016-17. CRUISING HEIGHTS January 2010
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SPECIAL REPORT
AAI pays dividend despite economic slowdown T
he Airports Authority of India (AAI) is a Miniratna Category-I organisation of the Ministry of Civil Aviation and it has been making profits since its inception. For the financial year 200809, in spite of the economic slowdown, AAI earned revenue of Rs 4185.95 crores and profit before tax of Rs 1115.72 crores and profit after tax of Rs 687.21 crores. The organisation paid a dividend of Rs 137.40 crores to the Government of India. This includes Rs 100 crores as Interim Dividend and Rs 37.40 crores as Final Dividend. In the process of modernising its airport terminals, passengers facilities and Air Traffic and Navigational Aids, AAI spent a sum of Rs 2547.57 crores in the year 200809 which is also the highest Capital Expenditure incurred so far by AAI. A cheque for the Final Dividend of Rs 37.40 crores was presented to the Minister of Civil Aviation (see photograph) by V P Agrawal, Chairman, AAI, in the presence through tax free bonds. The first consequence of this is the proposal for levying Airport Development Fee and User Development Fee has acquired great urgency. The matter is already pending with AERA. Separately, AAI which spent $600,000 to hire an ICAO consultant to prepare a report for the proposed Greenfield airport at Sriperumbudur near Chennai is also gathering speed. The latest from AAI is that it may approach the Japanese Bank for International Cooperation (JBIC) which has funded the Delhi Metro. It is learnt that AAI will use the ICAO-sponsored report for the Greenfield Sriperumbudur airport as an evidence of its sound status before the JBIC while requesting for a loan. Alternatively, AAI will also approach other financial institutions in the US and EU. Apart from seeking to levy ADF and UDF, there is also a possibility of aeronau-
of M Madhavan Nambiar, Secretary, Civil Aviation. Other senior officials from the Ministry and AAI were also present.
tical charges being hiked by AAI. But the last-mentioned idea may not be easy to implement considering the dire financial straits of Indian carriers. Apart from the non-metro airports, the sudden doubling of anticipated investment (to nearly Rs 5,000 crore) for the proposed modernsiation of Chennai and Kolkata airport has queered the pitch for AAI which in the past lived entirely on the profits made by Delhi and Mumbai airport besides Hyderabad and Bengaluru. It must be stated here that Chennai Airport of late, has been seeing a serious pickup in traffic and soon may displace other southern airports. AAI has begun implementing performance-based navigation in Chennai from October 22, 2009. AAI has been approached by many important Gulfbased carriers, primarily Emirates, with a proposal to make Chennai as an Emirates hub. However, the long-term forecast does
Artist’s impression of the cityside view of Kolkata Airport.
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not sound great for Chennai as AAI has dropped the idea of building a second parallel runway in Chennai as land is not available. But the real story as you know is the pressure from the Chennai family for the proposed Greenfield Sriperumbudur airport where at informal levels there is already a battle as to whether it should be called Anna airport or Rajiv Gandhi airport for he was assassinated there. And should the Sriperumbudur airport come up after, say five years, AAI could think of splitting the domestic and international traffic between the two: Sriperumbudur for international and Chennai for domestic. But such a business model is sure to destroy both the airports. As of now the idea is to have a PPP for Sriperumbudur. In fact, these issues are making it difficult for AAI to raise money from the international market, be it JBIC or any other global financial institution or bank. The way the aviation business is now dropping, any investor will want to be assured of returns and repayment of money. AAI officials talking about the financial flowchart said it was impossible for them to predict. One needs to see the financials given in the opening paras in this context. I remember of being told that private airlines like Kingfisher owed money to private airport developers, both in Hyderabad and Bengaluru. But the story of AAI is even worse. As of September 30, 2009, all airlines together owed AAI a sum of Rs 920 crore of which NACIL or the combined Air India and Indian Airlines owe a massive Rs 600 crore to AAI by way of parking, landing, navigation fees, etc.
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There is now an effort to find out as to how much of these dues are for Delhi, Mumbai, Hyderabad and Bengaluru and the period or year since it is owed to demarcate the pre-PPP or handing over to private developers and post-PPP or after handing over to private developers of these airports. AAI has drawn up plans to upgrade CNS/ATM infrastructure both in terms of additional provision for equipment and upgradation of technology including automation and shifting from groundbased navigation to satellite-based navigation. CNS/ATM facilities, additions and up-gradation include Advanced Surface Movement and Guidance Control System (ASMGCS) at Delhi, CAT-II ILS on Runway-19L with RVR Equipment at Kolkata, ILS at Chennai Runway 25, Raipur, Bhavnagar, Dimapur and Mangalore, DVO at Tirupati, replacement and upgradation of ATC automation systems at Delhi and Mumbai, upgradation of Low Speed Circuits to High Speed Circuits at 13 airports, introduction of Repetitive Flight Management Software (RPL), GAGAN Project, Provision of CNS facilities for new Hyderabad and Bengaluru international airports, ASMGCS for Mumbai, Chennai and Kolkata airports, ASR/MSSR for IGI, Cochin and Amritsar airports and procurement of seven MSSRs besides planning to provide dedicated satellite communication network (VSAT) at 80 stations and Integrated ATS Automation System for Chennai and Kolkata airports. Air Traffic Towers at 45 airports will be automated. AAI is planning to spend Rs 1,000 crore over a period of time on these activities. On the issue of cityside development of the 35 non-metro airports, the earlier tender called for Amritsar and Udaipur airport in which three parties had been shortlisted led by ADAG(Anil Dhirubhai Ambani Group) has been scrapped. AAI is now going to do all the work relating to the airside as well as the terminal attached to each of the 35 non-metro airports. However, the cityside will be offered to the private sector on a competitive bid basis. Recently, AAI had decided to call for bids for two of these important non-metro airports. It was, however, advised by the Ministry of Civil Aviation to invite bids for at least eight airports simultaneously instead of only two at a time to save time and expedite the work on cityside development. But it remains to be seen how many private sector parties will be interested in developing the cityside in these airports. It is worth mentioning here that recently the Rajasthan government, after Ashok Gehlot took over as the Chief Minister, submitted a proposal to the Ministry of Civil Aviation to construct a brand new
FUTURE PLANS: Artist’s impression of the proposed Amritsar airport.
On the issue of modernisation and up-gradation of the 35 non-metro airports, AAI is facing serious funds shortage as a result of which crucial upgrade of some of these airports has been delayed CRUISING HEIGHTS January 2010
Greenfield all-weather international airport at Pali which is about 40 kilometres from Jaipur. Asked why Jaipur was being relegated, an official said that at present Jaipur Airport can only take narrow body aircraft like Boeing 737 and Airbus A320. It cannot take Boeing 777s or 747 because the length of the runway was short. AAI was not able to extend the runway from the present 9,000 feet to required 12,000 feet because land was not available. This matter was discussed internally in Rajasthan government later the state moved a proposal to the Ministry of Civil Aviation (MoCA) which in turn asked the AAI to study the feasibility. After discussions, AAI gave it in writing to MoCA and also the state government that there was no objection to building a brand new Greenfield Airport at Pali which would be an international airport and traffic would be shifted to the new airport as and when it was ready. Unlike the Chennai and Sriperumbudur example, the airport at Pali would gain more prominence over time than the present international airport at Jaipur if the current plans of the MoCA and Rajasthan Government come to its logical conclusion. There is a message for Delhi Airport in this. At present big international carriers drop Jaipur-bound passengers at Delhi, who in turn then fly to the pink city from Delhi. Should Pali Airport have all the facilities like Delhi, then bigger charter flights can even fly long distances and directly to Jaipur. One is only looking futuristic and, perhaps, you may like to see it that way from DIAL’s future business prospects. Nearly 5,000 acres of land is being acquired for this project of which nearly 2,000 acres will be some kind of indus trial estate.
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CHRONICLE
THIS WAS
2009
MORE MISSES THAN HITS: THAT SUMS UP AVIATION 2009. LOSSES AROUND THE WORLD WITH, PERHAPS, INDIAN CARRIERS TOPPING THE LIST; PILOTS STRIKING AND VENTURING OUT FROM THE COCKPIT TO SHOW THE MUSCLES; A COUPLE OF CRASHES, DESPITE ALL… THERE WAS HOPE AROUND THE WORLD. A FLASHBACK...
1
2
JANUARY
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V P Agrawal takes over as Chairman, Airports Authority of India. Punj Lloyd bags Rs 264 cr contract to build Sikkim’s Airport Project. AAI plans to set up second airport in Orissa. Jet Airways holds talks with airlines for leasing out aircraft. AAI faces the problem of absorbing 4,000 employees who it had sent on deputation to GMR and GVK. Nagpur airport unveils plans for major renovation. DIAL conceives airport development fee to be levied. Air India introduces flight specific fare. Boeing signs land lease agreement for MRO in Nagpur. Pilot Chesley Sullenberger of U S Airways saves the life of all 155 people on board by safely landing the plane. CRUISING HEIGHTS January 2010
FEBRUARY
Centre for perishable cargo at CIAL inaugurated. Air Works sets up $25mn MRO facility in Hosur (Karnataka). Aerospace Processing India (API) announces the opening of its processing facility in Belgaum. Boeing delivers first 777 Freighter to Air France. New Srinagar airport terminal is inaugurated. Bhoomipujan of new terminal buildings at Mumbai airport. Inauguration of new terminal buildings at Indore, Bhopal, Raipur, Ranchi, Amritsar, Dehradun, Jaipur, Vadodara, Surat, Visakhapatnam, Tiruchirappalli and Goa airports. Symbolic handing over of Nagpur Airport by AAI to Maharashtra Airport Development Company (MADC). Domestic departure Terminal 1D at Delhi airport is inaugurated. Bhoomipujan for the development of new Greenfield airport at Pakyong, Sikkim, and inauguration of new terminal building at Dibrugarh airport.
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MAY
3
MARCH
Jetlite launches daily Kozhikode-Mumbai service. Air India launches daily flights to Chicago and Newark from Delhi and Mumbai via Frankfurt (FF). Seventh ‘Routes Asia’ conference from March 29 to 31, 2009, takes place at Hyderabad. Boeing launches engineering centre in Bengaluru.
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JUNE
4
Capt G R Gopinath unveils his Deccan 360 cargo airline, the first Indian air freight services company. Praful Patel takes charge as Minister for Civil Aviation. Chennai Airport launches Performance-Based Navigation system. P S Nair takes over as CEO of DIAL (Delhi International Airport Private Limited). Air Works gets DGCA nod to carry out maintenance of Boeing 737s. DGCA plans to make reporting flight data mandatory for airlines operating in India. Arvind Jadhav is new NACIL (National Aviation Company of India) chairman.
APRIL
Delhi airport’s brand new domestic departure Terminal 1D starts operation. Civil Aviation Minister Praful Patel contests from Gondia (Maharashtra) for the Lok Sabha elections and wins. Air India Cargo wins Cargo Airline of the Year award at the 26th Cargo Airline of the Year Award function in London.
7
DGCA signs Aviation Cooperation Programme (ACP) with US. 65th IATA (International Air Transport Association) Annual General Meeting in Kuala Lumpur, Malaysia. Paris Air Show 2009 at Le Bourget. Air India seeks Rs 10,000 cr bailout from the central government. Goverment approves filling up of 700 posts in DGCA. Air France Flight 447 crashes into the Atlantic Ocean, killing 216 passengers and 12 crew members. A Yemeni passenger plane, an Airbus 310, crashes in the Indian Ocean near the Comoros archipelago. Only one of the 153 people on board survives.
JULY
After many broken JVs, Changi makes first investment in Bengal Aerotropolis Project limited. The first Committee of Secretaries (CoS) meeting to assess the fate of Air India. Civil Aviation Ministry signs a MoU with IATA for skill development.
CRUISING HEIGHTS January 2010
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CHRONICLE
8
AUGUST
The Federation of Indian Airlines (FIA), the representative body of ten private airlines, called off its proposed strike, announced earlier to protest against high airport charges and high taxation on ATF prices. To help ailing Air India tide over financial crisis, civil aviation ministry proposes to Parliamentarians to travel only by the national carrier. The Andhra Pradesh Government decides to develop four regional Greenfield airports under the public-private participation (PPP) mode. Ground-handling policy receives a jolt: groundhandling services at airports would restrict passenger check-in, baggage screening and refueling. US grants Rs 2.4 cr to the Directorate General of Civil Aviation (DGCA) to help update the country’s standards and regulations governing helicopter operations. Air India announces launching of its low-cost domestic operations from September. The Delhi High Court, while dismissing a public interest petition, rules that the collection of airport development fee (ADF) from passengers is not an irregularity on the part of the Airports Authority of India (AAI) and passengers have to pay airport development fee.
9 11
10
OCTOBER
Qatar Airlines’ test flight from London Gatwick to Doha with biofuel. Air India becomes official partner airline of Commonwealth Games.
SEPTEMBER
FAST (Foundation for Aviation and Sustainable Tourism) organises two-day Air Transport Symposium with the active support of MoCA, AAI, Air India, DGCA and Pawan Hans Helicopters Ltd. ICAO President Roberto Kobeh Gonzalez visits India. Mysore airport inaugurated. Indian government decides to launch its e-passport initiative and the Passport Seva Project next year.
NOVEMBER
34
Deccan 360 hub launched in Nagpur. ICAO announces that Mervyn G Fernando from the Air Navigation Commission (ANC), will take on the role of President of ICAO on January 1, 2010. India witnessed 30 per cent increase in foreign air travellers, says Praful Patel, Civil Aviation Minister. Air India shelves plans for low-cost carrier. Patel announces ‘in principle’ approval for 12 Greenfield airports. India would infuse equity of Rs 800 crore in Air India by December, says Patel. Also says that six out of eight Indian carriers have posted losses. 11th Dubai Air Show from November 15-19, 2009, takes place at Airport Expo, Dubai.
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DECEMBER
Air India incurs a loss of Rs 7,226 crore during last two fiscals (Rs 2,226.16 crore in 2007-08 and Rs 5,000 crore approximately during 2008-09), according to Civil Aviation Minister Praful Patel. Airbus reports 31 cancellations out of 225 jet orders in the first 11 months of 2009, while Boeing notches 204 orders against 111 cancellations. 36th Air Cargo Agents Association of India (ACAAI) Convention takes place at Goa. Boeing 787 — the Dreamliner — takes off for the first time.
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COVER STORY
INDEED, CORPORATE SOCIAL RESPONSIBILITY INITIATIVES BY AVIATION MAJORS IN THE COUNTRY, CAN REALLY BE TERMED MANNA FROM THE HEAVENS. THEIR MOVES RANGE FROM BUILDING HOSPITALS FOR HIVINFECTED KIDS TO TEACHING CHILDREN HOW TO CROSS STREETS IN METRO CITIES. THEY ARE DOING ALL THIS SIMPLY BECAUSE THEY WANT TO PAY BACK TO THE SOCIETY, AS TIRTHANKAR GHOSH FOUND OUT.
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Manna from the
heavens
I
t’s 6.45 am on Sunday November1, 2009. Sébastien Guyot and Jorrit Van Opstall are starting to sweat. Both colleagues at New Delhi’s Air France-KLM office — Guyot is Commercial Director while Van Opstall is Finance Controller — are not tense thinking about how to maintain the healthy passenger loads or an even healthier figure on the account books the carrier has been getting. Instead, they are tense waiting for their 30-odd colleagues to get ready with their Ts for the seven-km Delhi half-marathon. The cold morning air does little to lessen the tension but both Guyot and Van Opstall are happy with the response from their colleagues. For each one of them taking part in the run, Air France-KLM has offered Rs 1,000 which will go to run a school for kids who work in roadside teashops. The amount collected may be small. It does not matter if they win or loose. All that really matters is taking part. Pieter de Mann, General Manager, Air France-KLM for India, Bangladesh, Bhutan, Sri Lanka and The Maldives, recounts the run with a touch of pride. All over the world, airlines, like most big corporations, are playing an active role to pay back to society in what is today recognised as Corporate Social Responsibility (CSR). de Mann, putting it rather succinctly says, “We operate around the globe and also in India. What we are trying to do, is that CRUISING HEIGHTS January 2010
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COVER STORY wherever possible, we give something back to the society. It’s not only a question of taking. Of course, the airline industry is not doing very well at this time. As everybody knows, airlines are bleeding …Notwithstanding that, we still feel that we can make positive impact on the environment. Recently, KLM operated a flight with bio fuel with passengers on board — a first in the world. In the sustainability index, Air France-KLM has scored number one for being environmental pro. We are very much in front of the environmental issue. That is one chapter.” “The humanitarian chapter is another aspect,” says de Mann, adding, “We ask our passengers to contribute — and it is not just their spare change. We ask them to put their credit card number down and often ask them to give their frequent flier miles back to us for our children’s projects. Through the funds assembled, we have given computers to schools in Africa, while in East Africa we are building an elementary school…” Indeed, corporate entities, big and small, have been supporting financially, and paying lip service to philanthropy and public service. However, in the prevailing era, they can no longer be content with just sitting back and enjoying the profits. Lee Scot, Former CEO, Wal-Mart Stores Inc. had said some time ago, “We thought we could sit in Bentonville, take care of customers, take care of associates — and the world would leave us alone… It doesn’t work that way anymore.” CRUISING HEIGHTS found that the country’s aviation business and those connected with it are increasingly seeing social responsibility as a strategic imperative.
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We operate around the globe and also in India. What we are trying to do is that wherever possible, we give something back to the society. All members of Air France KLM are showing interest and are part of the initiatives. — Pieter de Mann General Manager Air France-KLM India, Bangladesh, Bhutan, Sri Lanka and The Maldives LET’S DANCE: Kingfisher organised a dance programme for underprivileged kids in Kolkata just before the Dream Flight.
CRUISING HEIGHTS January 2010
While Air France-KLM funds schools for the less-privileged, others like Jet Airways and Kingfisher Airlines organise air-trips for children who have never seen the insides of an airplane. The Bangalore International Airport, for example, recently held a competition for young architects while the GMR Varalakshami Foundation, the Corporate Social Responsibility arm of the GMR Group (of the Delhi and Hyderabad International Airports), pursues its mandate to develop social infrastructure and enhance the quality of life of communities — through focusing on education, health, hygiene and sanitation; empowerment and livelihoods, and community development — around the locations where the group has its presence. Obviously, there is something behind these CSR initiatives. On one hand, these moves make good headlines, while on the other; it is a realisation that aviation and airport majors are “indebted” not only to those who own them but also to fliers, end-users and even the community. Today, there are more constituents than the usual shareholders and the GMR Varalakshami Foundation’s mission makes that amply clear, “Corporates have a special and continuing responsibility towards the society. The grim reality in India is that millions of people lack basic amenities and live in abject poverty — a situation that cannot be redressed by the government alone. The business sector needs to understand its corporate-social responsibility and work towards making a difference to society.” In the United States where community work is held in high esteem and often used by corporate giants to get back into the “eyes” of people, especially in these days
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of scandals, the situation in India is different. It is certainly more than public relations. CRUISING HEIGHTS found out that the country’s domestic carriers and airports have taken it upon themselves to address the concerns of its users as well as employees. Perhaps, what is more important is the fact that the demand to ‘set the world right’ is emanating from within the corporate walls. Employees are seeking more from their jobs than just 9-to-5 working hours. Says de Mann, “We have all kinds of charities that are initiated by our staff, with or without the support of the mother organisation. There is an employer-employee drive to get the humanitarian plans off the ground. Our crew carries around the world lots of toys and clothing for poor children. We can zoom in, we can zoom out; we can keep it (the aid given) big, we can keep it small.” In short, employees are trying to marry their work and non work lives. If the company gives them a chance to do that, then they’re happier. Perhaps, that is why companies are putting the social responsibility concept into their culture. Express giant FedEx, for example, believes that there is a motive behind CSR. Taarek Hinedi, Managing Director-Operations-India, FedEx Express, says that the organisation is committed to being a great place to work, a thoughtful steward of the environment and a caring citizen in the communities where it operates. As an organisation, FedEx strives to contribute to the community by identifying and understanding issues related to people in every market. Says Hinedi, “The foundation for CSR initiatives is strongly complimented by FedEx’s philosophy called ‘People-Service-Profit’ (PSP). The idea behind PSP is that if people i.e. employees when treated well, will in turn provide outstanding service, resulting in excellent customer satisfaction that will generate profits which FedEx can continue investing in new opportunities for employees and innovative solutions for customers.” Hinedi elaborated on how the PSP philosophy translated to the FedEx mission: The employer of choice by making employees proud of the company they work for and involved in community projects and events; The neighbour of choice by giving back to the communities where it operates; and, The carrier of choice by making customers aware of the extra effort FedEx makes to pay back to the society. This philosophy led FedEx to leverage its core competencies to contribute positively to the community. It has joined
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THE MAHARAJA’S RANKED SUBJECTS
FROM OUR FILES: 2007’s Rank and Bolt award winners pose with former President APJ Kalam and Praful Patel, Minister, Civil Aviation after the award ceremony in Mumbai.
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otwithstanding the troubled times it is undergoing, national carrier Air India has continued to forge ahead with its Corporate Social Responsibility. Few know about the carrier’s involvement in another CSR initiative, quite different from many others. Without much hullabaloo — according to a policy decision, the awards are not advertised — under the aegis of its Reaching Out Project, Air India promotes the concept of responsible and active citizenship and practical ways and means of preserving the environment through a recognition programme aimed at the student (our future) and the teacher (the custodian of our future). Known as the Rank and Bolt awards — the last took place in Mumbai last year in January — it highlights the work of students and teachers. RANK and BOLT, in fact, are acronyms: While RANK stands for Race for Awareness and Knowledge, BOLT is Broad Outlook Learner-Teacher. According to Jitender Bhargava, Executive Director-Corporate Communications, Air India, students and teachers benefit from this programme. “There are several ways that students and teachers benefit,” he told CRUISING HEIGHTS. “They can do so through handson creation of awareness of the duties and responsibilities of an active citizen and work on practical ways to work for the preservation of the environment where both students and teachers come up with practical ideas.” Perhaps, what is most important is that Air India goes to the districts to choose students and teachers through a
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multi-layered selection process which involves the active participation of media partners in every state of the country. The role of the media partner enables the people of the state to know about the awards. In the past two years, Members of Parliament, Chief Justices and Judges of High Courts, Vice Chancellors, officers from the Civil Services, thespians, actors and directors, outstanding achievers, entrepreneurs and path breakers from several walks of life have formed the 35member panel of judges, to make the selections. Once the selections are made, and Bhargava made it quite clear that “students and teachers from all sectors are measured by the same yardstick”, the award-winners are sent to Singapore. “There are four reasons why we have chosen Singapore as the destination for the ambassadorial visit,” said Bhargava. The city-state is the only country in the world where four distinct communities live as one; where the practice of civic responsibilities is a national credo; the city is an emerging centre of higher learning in the world; and it has taken giant strides in the area of reusing, recycling and reducing. “The objective is to open the windows of the minds of the impressionable to not what the nation can do but what the individual can contribute and take action to convert his/her own home into a Singapore.” Bhargava had many stories about the Rank and Bolt winners but Air India’s crowning achievement was when “we learnt that one of our BOLT award winners was appointed as a Vice Chancellor!”.
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COVER STORY
CSR TARGET: REDUCE CO2
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he humanitarian Corporate Social Responsibility initiatives by aviation majors are relatively little known when they are compared to the moves aimed at helping develop a global policy for tackling aviation emissions. An industry-wide body known as the Aviation Global Deal (AGD) Group has been formed to counter the emission issues. According to estimates, the airline industry accounts for barely two per cent of the world's carbon emissions. Even so, the aviation sector is going all out to reduce emission levels as part of its CSR programme and its commitment to protect further deterioration of the environment. Among the international airlines in the AGD is Qatar Airways. The others in the group are a few international carriers, the UK-based airports operator BAA and the international non-government organisation, The Climate Group. The aim is to chalk out a policy and create awareness about the emission problems. The AGD Group supports the work of international bodies which have been given the responsibility by the United Nations to find appropriate hands with several social organisations to drive its CSR initiatives in the country with one of the foremost being Safe Kids in India. The move — to spread awareness and promote child and pedestrian safety — launched with Safe Kids Worldwide is geared to prepare communities for the growing number of vehicles they can expect with economic growth. Along with India, the countries targeted include Brazil, Canada, China, South Korea, Philippines
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measures to reduce aviation emissions. These include the International Air Transport Association's Joint Task Force (IATA); International Civil Aviation Organisation (ICAO); and Group on International Aviation and Climate Change (GIACC). The AGD Group has put forward a global agreement covering carbon dioxide emissions from all international air transport providers. Net emissions reductions will be achieved by setting a global emissions reduction target for the sector and allocating allowances to airlines, which they can top up, if necessary, through the purchase of carbon credits. The AGD wants an international body to administer the system. These CSR initiatives are compiled by FTSE4Good, managed by the FTSE Group based in London. The group puts together global responsible investment indices by selecting companies that meet strict criteria relating to corporate responsibility on environmental and social issues. In order to be included in the list, companies are selected to complete a detailed questionnaire covering the management of their sustainability impacts.
The well-being of children led FedEx to launch ‘Smile Train’, the world’s largest cleft lip and palate charity CRUISING HEIGHTS January 2010
and the United States. Talking about the ‘Safe Kids Walk This Way’ programme that was launched with school children in Mumbai in 2007 Hinedi says, “As a vital part of this community, FedEx wants to make sure that children understand the importance of safety on the roads and footpaths. Our efforts with Safe Kids demonstrate our commitment to make a positive impact on the communities we serve. We have FedEx volunteers working to educate families, raise awareness and, in the end, save children from being injured or killed.” Since the launch of ‘Walk This Way’ in 2007, more than 90,000 school children across Mumbai have been reached. In 2009, Safe Kids Foundation extended the initiative to New Delhi. Other than teaching kids to walk carefully on roads, FedEx is well-known for bringing in ORBIS and its Flying Eye Hospital. It provides financial, logistical and operational support for the hospital, which is the world’s only DC-10 aircraft converted into a state-of-the-art teaching facility and ophthalmic surgical centre. In 2005, FedEx sponsored a one-week ORBIS training programme in Delhi on eye banking and corneal blindness for 65 local eye care professionals who were responsible for training other doctors, nurses and eye banking specialists to create a ripple effect that maximised the programme’s impact. In addition, more than 50 FedEx Express employees came out to support the blindness prevention programme. This was followed by the 2007 initiative when ORBIS, in association with FedEx, organised the Mumbai Flying Eye Hospital (FEH) programme where 66 children were screened for eye ailments. Of these 16 received surgical treatment. In addition, 47 FedEx employees assisted eye care workers from the city’s Lotus Eye Hospital to screen nearly 5,000 children at 11 eye camps set up in local schools. The well-being of children has led FedEx to launch ‘Smile Train’, the world’s largest cleft lip and palate charity. FedEx grant of $20,000 has assisted in providing free cleft treatment to more than 81,000 children in India and China in addition to free surgery for 80 kids in India and China. The express major has also organised AbilityFest 2007 and 2009: a unique and inspiring showcase of extraordinary films from around the world — films by, with and about people with disabilities — to integrate persons with disabilities in mainstream society. In the two versions of the fest, FedEx brought in movies from 24 different countries to Chennai. Hinedi’s organisation was one of the few that worked quietly with United Way in Mumbai, which has been helping
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restore the lives of families impacted by the 26/11 attacks in Mumbai. FedEx, in fact, has donated $25,000 to work out a need-based assistance programme in order to help the families mitigate the impact of loss incurred. Big ticket airline, Emirates, for example, has its Emirates Airline Foundation. Launched in February 2003, under the patronage of Ahmed bin Saeed AlMaktoum, Chairman, Emirates, the foundation strives to improve the quality of life for children, regardless of geographical, political, or religious boundaries, and to help them maintain or improve their human dignity. It is made up of volunteer employees and friends of the Emirates Group. A board of directors, made up of senior Emirates Group management, decides on projects for funding. Operations may be in association with existing projects or new start-up project and schemes and the funding is directed to key need areas such as food, medicines, housing and education. The goal is to use 95 per cent of donated funds exclusively for children, with five per cent allocated to out-ofpocket expenses. In October last year, the EmiratesCHES (Community Health Education Society) Home for HIV positive children was inaugurated in Chennai. The home, funded entirely by the Emirates Airline Foundation, houses more that 100 children infected with the virus. The foundation has also undertaken to fund the home for the next 20 years. The Emirates-CHES Home, built at a cost of $642,000, seeks to vastly improve the quality of life for the children and offer them schooling at the centre’s education unit. Speaking at the inauguration, Mohammed Al Khaja, Senior Vice President Safety and Standards, Emirates and Vice Chairman and Founding Member, Emirates Airline Foundation, said, “Our aim is to improve the quality of life for children across the globe, reducing suffering and disease. We believe we have a moral obligation to help the communities we fly to and we do this through projects like the Emirates CHES home.” Among the other charities that the Emirates foundation helps in India is the Emirates-AIM for Seva Student Home for Girls in Tamil Nadu. It is a hostel for girls living in remote areas with no access to schools. Donations of $70,000 funded the construction and upkeep for the next 20 years.
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FedEx is a steward of the environment and a caring citizen in the communities where it operates. The foundation for CSR initiatives is strongly complimented by FedEx’s philosophy — People-ServiceProfit (PSP). — Taarek Hinedi Managing Director Operations-India, FedEx Express
Some of Delhi’s street children who will be helped by Air France-KLM in cooperation with Plan International, a children’s development organisation.
CRUISING HEIGHTS January 2010
Forget the big guys, even a smaller player like Air Arabia, the low-cost international carrier from the Middle East, takes its CSR commitments seriously. Not only is it determined to provide affordable air travel but it also aims to actively engage with local communities to achieve better health and education for the underprivileged. In collaboration with Sharjah Charity International, the carrier has recently started Charity Cloud School in the Thrissur district of Kerala. The school, built as part of Air Arabia’s Charity Cloud project initiative that is driven by on-board passenger donations, is the company’s first community school project in India. The school offers quality education to children from the underprivileged sections of society. Speaking at the inauguration of the school, Abdulraoof Al Meer, President, Charity Cloud Committee, said, “We at Air Arabia believe in a positive and proactive engagement with society on development initiatives, as demonstrated through our Charity Cloud project. With the support of our passengers, we have been successful in growing and expanding the reach of our community initiatives to include different sections of society in various parts of the world. The opening of our Charity Cloud school is another accomplishment for us in this regard and our contribution to the local community here in Thrissur and for the people of Kerala.” Other than schools, carriers often take the CSR route to bring new experiences to the less-privileged. Jet Airways celebrated the last Children’s Day with an hour-long Flight of Fantasy — an initiative started by
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COVER STORY Jet Airways in 1997 — for less-privileged and special children, as part of its annual tradition. Nearly 100 children had the unique once-in-a-lifetime opportunity to experience the “joy of flying” onboard Jet Airways Boeing 737-800 NG aircraft — the flight operated in support of a number of non-governmental organisations. The children, who were taken on the flight assembled at the domestic terminal and were entertained with music, dance, and a variety of games with prizes. Among the special invitees were stars from the world of entertainment and films that made their day even more magical. A beaming Nikos Kardassis, Chief Executive Officer, Jet Airways, commented, “It is most gratifying to see smiles lighting up the little faces as the children look forward to an experience in the skies. Children’s Day is one such occasion for the young ones to cherish this memorable Flight of Fantasy.” Perhaps, what was most remarkable was the coming together of corporate entities to take part in the CSR activity. While senior Jet Airways cabin crew volunteered to participate onboard this unique flight on their day off, refreshments were provided by Taj SATS and the fuel for the flight was courtesy India Oil Corporation. The route navigation and landing charges were waived off by Mumbai International Airport Limited. In almost similar fashion, Kingfisher Airlines too operated a 60-minute Dream Flight for underprivileged children from several institutions in Chennai and Kolkata in 2008. These kids from Barbara Kelly
VisionAir, the first-of-its-kind student outreach, fits in with our inclusive approach by involving local community with the airport. The programme will open the doors to ideas, thoughts and suggestions for upcoming architects. — Marcel Hungerbuehler CEO Bangalore International Airport Ltd.
ARCHITECTS OF TOMORROW: BIAL’s VisionAir learners are looking forward for a better future.
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CRUISING HEIGHTS January 2010
Home, Rotary Nagar and Annai Illam, Melmaruvathur, CINI Asha, Anjuman Mufidul Islam, Missionaries of Charity, etc, were thrilled when they saw Konica Banerjee, well known Bengali movie star along with Kanimozhi, Rajya Sabha Member, Kollywood star Prakash Raj, Lok Sabha MP M Srinivasulu Reddy and others. While humanitarian projects constitute a major portion of any organisation’s CSR initiatives, often conscious moves are taken with an eye on the future. The Bangalore International Airport Limited (BIAL) recently reached out to the city’s future architects to offer a study programme on their future airport. Entitled VisionAir- Forward Looking, Inclusive and Engaging, BIAL took this up because the airport is a work in progress project which will go on for the next 15-20 years. The airport will house much more than what one sees today: from a second terminal and runway to a complete buzzing airport city. The airport project has provided an opportunity for the city’s future visionaries to learn and share ideas on how they would see the future public spaces at the airport. VisonAir is conceived on an inclusive approach. For the first time, an Indian airport opened its doors to ideas, thoughts and suggestions from the local next generation architects that may be considered to shape the future design of Bangalore’s expanding airport. The event was envisioned as a ‘knowledge sharing event’, though the designs submitted by the participants would probably not be included or replicated during the actual planning of the airport
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for various reasons including technical, feasibility and aesthetics. Speaking about VisionAir, Marcel Hungerbuehler, CEO, BIAL said, “This first of its kind student outreach fits in with our inclusive approach by involving local community with the airport.” The CEO hoped that the programme would open the doors to ideas, thoughts and suggestions from upcoming architects. Although the GMR Varalakshmi Foundation (GMRVF) has a presence around all the group’s business interests in India and Nepal including Rajam, Rajamundary, Ramdurg, Haliyal, Bangalore, Mangalore, Arunachal Pradesh, Himachal Pradesh, Chhatisgarh and Chandigarh, it continues to do substantial work at Delhi and Hyderabad near the airports. In Delhi, GMRVF started its activities in 2006 in the vicinity of the Indira Gandhi International (IGI) Airport. Mehramnagar near the airport and Savda Ghevra, a resettlement colony, were targeted by the foundation for its initial activities that included providing basic services like drinking water and healthcare facilities for the resettled people. Gradually, initiatives were taken for community-based interventions including empowerment and programmes for sustainable improvement in health, education and livelihood of the families living in these two resettlement colonies. GMR’s volunteers campaign extensively in the resettlement colony to enroll children in the existing government schools and provide the necessary support to the families for admission formalities. The foundation also conducts bridge courses for school dropouts and helps them take admissions in the classes appropriate for their age group. In addition GMRVF also runs ten batches of After School Learning Centres. Along with the academic support, extra co-curricular activities like quiz, movie shows, story-telling sessions, debates and creative writing competitions are also organised for complete mental development of the children. In Hyderabad, the GMRVF has similar programmes but has additionally, in a Public Private Partnership initiative with the government, built eight pay-and-use toilets in the city that attempt to set a new benchmark for public sanitation facilities. The foundation has also launched Empower, a unique initiative to enable marketing of hand-made products made by women from Self-Help Groups (SHGs). The GMR Hyderabad International Airport Limited (GHIAL) has provided shop space at the ‘Spirit of India’ section at the international departure of the airport to sell these products. Whether it is donations from passengers
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Bengali moviestar Konica Banerjee with a child on board Kingfisher’s Dream Flight.
It is most gratifying to see smiles lighting up the little faces as the children look forward to an experience in the skies. Children’s day is one such occasion for the young ones to cherish this memorable Flight of Fantasy. — Nikos Kardassis CEO Jet Airways
CRUISING HEIGHTS January 2010
or from the organisation, it is the channelling of funds that is most important. As Air France-KLM’s de Mann puts it, “We are an airline and our core activity is flying planes with cargo and passengers. We are not good being a charity organisation so we work worldwide with a number of charity organisations. In the case of India we are working with Plan India which has been here for years and is one of the bigger, wellknown international charity organisations.” Its latest move and one which collected a whopping Euro 300,000 will see a substantial amount coming to India. The collection, done through an auction of tickets for the first A380 flight by Air France from Paris to New York, would go towards humanitarian projects sponsored by the Air France Foundation. Commenting on the initiative, Pierre-Henri Gourgeon, Chief Executive Officer, Air France-KLM, said, “Since 1992, the Air France Corporate Foundation has supported over 500 projects in 67 countries in order to enable sick and disabled children, as well as those in great distress, to have access to education, leisure activities and culture. We believe it is important that the first Air France Airbus A380 flight should not simply symbolise a technological achievement at the service of our customers, but also an operation in support of those in distress.” Minutes before boarding the flight, the visibly moved CEO said, “On behalf of the Air France Foundation, I am delighted to announce that the proceeds from this operation amount to 300,000 Euros, which is far higher than we expected. So in addition to the three charities already chosen, the Air France Foundation has decided to select two new projects in Brazil and Madagascar.” A portion of the proceeds will be coming to Association Plan France, a project aimed at improving living conditions for at least 500 child workers in Delhi.
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COLUMN/CHOCKS OFF
Grounded again The new Ground Handling Policy continues to create controversies. Will it ever be implemented?
R Krishnan
Those wanting development of a strong airport infrastructure believe that the new GHP should be implemented as it is one of the important ingredients of new airport business plan 44
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y the time this issue hits the stand, we will know if the government has indeed summoned courage to implement the twice postponed two-year old Ground Handling Policy (GHP). As per the last revision in date, the new policy was to have come into force from January 1, 2010 after domestic airlines repeatedly protested that third party ground handling would cause unemployment and also jack up their costs at a time when they were cutting cost like mad. In October 2007, the Union Government, announcing a new GHP, said the policy would not be implemented for one year that is till December 2008 to give time to domestic airlines to make way for an alternative arrangement. Thus, it was to become effective from January 1, 2009. The big question, however, was if the government would yet again postpone its own GHP or dare to implement it. From the available information it seemed likely that government may once again postpone seeking refuge under technical reasons and health of domestic carriers that suffered due to ensuing economic downturn worldwide. Recently, Praful Patel, Minister, Civil Aviation, informed the Lok Sabha that the airline operators had expressed their concerns about the new GHP. He said that it was decided that the exit of nonentitled entities including domestic airlines would be implemented only after undertaking a comprehensive review and inter-ministerial consultation. Regarding the new GHP, the minister said for the metropolitan airports, some provisions were made— (i) the respective airport operator itself or its joint venture partner, (ii) Air India and its subsidiaries/joint venture companies specialised in ground handling services. Third party handling will also be permitted to these subsidiaries, (iii) any other ground handling service providers selected through competitive bidding process by the airport operator. I may recall here a statement attributed to M M Nambiar, Secretary, Civil Aviation on June 30, 2009 when last time the new policy was postponed. Nambiar told a financial daily that “We need to talk to all stakeholders including airport developers and airlines and make sure that the new GHP is the best for everyone. We will review it thoroughly before taking any further action”. At present, the GHP allows the domestic airlines to carryout on their own jobs such as passenger check-in, baggage and cargo handling, cleaning and refueling aircraft etc. Under the new GHP all these and much more will be provided by new ground handlers providing third party work. CRUISING HEIGHTS January 2010
But will the revival of the world economy partially in general and Indian economy in particular and which saw its GDP grow in the last quarter by 7.9 per cent not embolden the government to stick to its own GHP implementation time frame. The answer could be yes or no depending upon which side of the divide you are as the issue has clearly divided the policy makers. With the economy kick-starting again and passengers loads returning to some carriers and at least Jet Airways has confirmed it, they may all want this breather to continue further till they are able to recover the losses sustained over the last two years. This recovery may see carriers expanding their network. The airlines may want to convey a message — please hold back the new GHP for some more time till we get back on our feet again. As for airports, in any case a revival of airline business would mean more money for them once again. In any case they have already hiked recently the aeronautical charges over and above what was done in March 2009. But the new issue that is raising its head once again is whether the GHP story will become a yet another chicken and the egg story. Under the proposed new GHP regulation, airlines are not allowed to self-handle at these six metro airports as many of them do today. In any case no foreign carrier has been allowed to do self handling. Already there is a murmur of protest as to why should there be a special treatment for metro airports when security is an equally important objective at non-metro airports as well. CAPA (Centre for Asia Pacific Aviation) study showed that domestic airlines objected to the new GHP as they feel awarding their ground handling job to third party ground handlers would lead to (i) loss or dilution of control over service quality as airlines feel the first point of inter-face between passengers and airline staff is at the check in counter/gate and induction of a third party on airlines' behalf will dilute its USP; (ii) airlines stated that they are not too concerned about the impact of outsourcing ramp activities but were not willing to trade their USP like on-time performance which they fear could happen as one cannot expect the third party GH provider to treat all the airlines as their own respective staff would do; (iii) while airlines doing self-handling could cut cost on their own self-handling, this may not be the case when a third party is doing the job leading to rise in costs; and (iv) limiting the number of ground handlers to three is limiting competition. Incidentally what an airport operator or a ground handler can charge for various ground handling services is now an impor-
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tant matter awaiting examination and resolution by the newly set up AERA (Airport Economic Regulatory Authority). Independent ground handlers have stated that they will make huge investment in GH equipment to enhance service quality and efficiency. If airport infrastructure is expected to suck in a few billion dollars in investment then it will be total distortion if such investment is not made in ground handling a very crucial aspect of airport management which includes a drastic reduction in down time or turnaround time for aircraft and thereby increase the rate of aircraft movement. So this aspect of airport revenue stream cannot be wished away. But the real story that needs to be watched is how Air India will ultimately go ahead with its proposed JV with SATS subsidiary-SATS Investments Pte Ltd. It may be recalled that this JV was to be formally approved by AI management by September 2009 but certain outstanding issues and fear of such a decision being open to serious investigation by official agencies at a future date has forced the top AI management to keep away from signing the final agreement notwithstanding a ministerial okay. As per GHP of September 28, 2007 among others it was stipulated that subsidiary companies of NACIL or its JV is eligible to undertake GH services at all metro airports. Thus Air India had two options — (i) either to get GH done through its subsidiary Air India Air Transport Services Limited (AIATSL) or (ii) through its JV partner, SATS. In the first option the total revenue of approximately Rs 1,000 crore would remain with Air India, its unions have said. In the second option since SATS a 50-50 partner, 50 per cent of the revenue would go to SATS of course for which it has committed sizeable investment and excellent ground handling practices. But it has been pointed out that while the cabinet approval was for SATS which was conveyed in March 2009 by the Union Government, SATS had thereafter conveyed that they will not directly enter into a JV with NACIL but will do so through their subsidiary Singapore Investments Private Limited (SIPL). It then went on to establish SIPL with a share capital of two Singapore dollars in April 2009. But then SIPL had not participated in the tender process and therefore did not meet the tender norms. Moreover SIPL is not a fully owned subsidiary of SATS and SATS has only 51 per cent share holding in SIPL and who holds the remaining 49 per cent stake is not known. On October 9, 2009 SATS Board passed a resolution which said that SATS owned 51 per cent stake in SIPL and maintained complete silence on who held the balance. AI insiders-executives and unions-stated that if the interest of AI is to be ensured, then AIASTL can undertake to provide GH in all Indian airports and does not need any JV least of all from SATS. (After the AI debacle I wonder if AIASTL can convince anyone of its ability or efficiency). Even though none has objection to SATS per se, the suspicion on 49 per cent holding has created fear in
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NOTHING HAS CHANGED: Passengers queue up for security check, which under the new Ground Handling Policy will be a third party liability.
the minds of AI management. Moreover, it may be recalled that the way the Central Vigilance Commission (CVC) went after Telecom Minister Raja and the Department of Telecommunication on matters relating to 2G spectrum allocation a similar pursuit in AI JV for GH could be anticipated. Accordingly, the concerned file awaiting signing of agreement between AI and SATS or should we say revised agreement between AI and SIPL remains in a limbo. Against such a background should the ministry go ahead with the implementation of the new GHP then it will be seen as yet another step to emasculate AI. But then, can the private airport developers continue to pay for Air India's indecision, score self goal and dilute their own revenue stream. The GH story is likely to become spicier. AAI in October 2009, signed agreement with Bhadra International, a subsidiary of TDI, which has a JV with a Danish company to provide ground handling services at Chennai and Kolkata. Bhadra International agreed to a revenue share of 37.5 per cent with AAI for its GH mandate. But then AI and IA in the form of NACIL (a) and NACIL (i) were historically providing ground handling services in these two metro airports. Last year, ministry of civil aviation had cut the revenue share of 13 per cent which AI and IA were paying to AAI to five per cent due to the serious financial crisis of AI. Now for the same airports — Kolkata and Chennai the new ground handling agency Bhadra International has offered 37.5 per cent revenue share. Under such a situation how can AAI justify a revenue share of five per cent from NACIL! Does it mean AI will confine itself to only self-handling as a special case under the grandfather rights? So better watch out for the ground handling space that could witness some more fireworks in the near future. (Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.)
CRUISING HEIGHTS January 2010
For airports, revival of airline business would mean more money for them. They have already hiked the aeronautical charges over and above what was done in March 2009 45
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CRUISING HEIGHTS AIR CARGO & LOGISTICS
January 2010
ARYAN CARGO EXPRESS
New kid on the block
CAPT MUKUT PATHAK IS ALL SET TO START FREIGHTER OPERATIONS FROM INDIA TO FOREIGN DESTINATIONS FROM THE BEGINNING OF THIS YEAR.
CATHAY TRIMS ACAAI’S 36TH CAPACITY CONVENTION
GO FOR IT!
The Goa meet explored the dynamics of the changes that have taken place in the integrated logistics industry.
With effective techtools, the logistics industry could provide near-perfect services.
Cathay Pacific CEO Tony Tyler on how the carrier’s cargo division has managed to counter the economic downturn.
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LAST IN/FIRST OUT
TRENDS
IATA describes slow improvement RECENT figures put out by the International Air Transport Association (IATA) show that carriers in Asia-Pacific saw demand grew 1.9 per cent, while North and Latin American carriers saw 0.5 per cent and 6.7 per cent growth, respectively. Middle Eastern carriers saw 18.4 per cent increase in demand and European carriers saw the biggest weakness in demand with a fall of 11.3 per cent and African carriers saw demand decline 3.8 per cent. A structural weakness in the industry has been emphasised by this recession and the inability to merge across political borders has created a hyper-fragmented industry. The industry is financially sick, and the medicine of cross-border
consolidation is off limits due to an archaic regulatory structure, said Giovanni Bisignani, IATA’s Director General and CEO. Compared to September 2009, the figures reveal that while the demand for international cargo has increased 0.5 per cent, some regional carriers has seen drastic fall in their demands. “Adjusting costs and capacity to meet that reality will be challenging,” Bisignani said. “Market forces should guide our commercial operations. Instead the bilateral system, established in the 1940s, puts governments in control of which markets can be served and limits access to global capital with ownership restrictions. No other industry faces such regulatory manacles.”
THIS is one technology that will soon be adopted by most cargo terminals around the world. In a first of its kind move, Lufthansa Cargo, with the use of the latest x-ray technology in its security regime, has a created new scanning system where the entire contents of airfreight containers can be scanned at one go. Supplied by the Smiths Heimann company, the systems will be used in Frankfurt, while Munich and Johannesburg will help to enhance the efficiency of security screening of air cargo. The new equipment, with a tunnel size of 1.8 x 1.8 metres, scans the LD3 airfreight containers completely, without having to open them to x-ray individual shipments inside. In addition, the two generators can scan along the sides of the containers as well as from above. The new technology will enable Lufthansa Cargo to comply with US security requirements for air cargo thereby initiating 100 per cent
Integrators eager to get into Indian market FOLLOWING the footsteps of FedEx launching domestic services in India in the first half of November, other integrators — UPS, TNT and DHL — are also looking forward to boost their presence in a number of markets, notably major growth economies in Asia. Scott Davis, UPS CEO, during his recent visit to Singapore declared,“We’re strengthening ourselves in emerging markets — the Middle East,Asia — areas where we think we can invest and grow.” He went on to state that over the last ten years, the company had taken over more than 40 companies.“There are likely to be some more in 2010…China, India and Middle East are prime candidates for expansion,” he said. TNT, another integrator, enhanced its presence in September with the roll-out of its Storapart, multi-user storage facility network in India, which targets the service logistics sector. Upon the completion of the roll-out at the end of September, Onno Boots, regional MD of TNT Asia, announced that a high-growth strategy would be implemented in the country in 2010. Although DHL Global Forwarding has not indicated any expansion plans in India, but the management is bullish about the South Asian economy, albeit less than China. “Asia’s economics, particularly China and, to a lesser extent, India, will remain the centre of gravity for trade,” said Hermann Ude, the forwarder’s CEO.
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I am expecting recovery but slightly lower momentum in the Q1 and Q2 of 2010 with a stronger last half of 2009. What do we take away from this (recession) crisis — it has brought us all ‘down to ground’ reality and cleaned up the market, showing us who our true friends are!
Ram Menen
Divisional Senior Vice President Emirates Cargo, on life after recession.
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security screening of all inbound and outbound cargo on passenger aircraft to the USA from August 2010, whereas that regulation has been in force for 50 per cent of shipments since February 2009. “Our aim is to create a security regime that suits customers,” emphasises Lufthansa Cargo Security Chief Harald Zielinski. “We can guarantee top security standards at any one time only by investing consistently in innovative technology.With that approach, Lufthansa Cargo can entrench its position as industry leader in international airfreight security and offer its customers security at the cutting edge.”
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Ministry of Civil Aviation Government of India
Federation of Indian Chambers of Commerce and Industry
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CARGO
Wait for ACE Aryan's Capt Mukut Pathak hopes to conquer the international market with the launch of his global carrier, Aryan Cargo Express, in 2010. The experienced pilot has more than a few aces up his sleeve, as Tirthankar Ghosh found out. apt Mukut Pathak’s dream — one that he has been nurturing from 2007 — is nearing fruition. Aryan Cargo Express (ACE), the dedicated cargo airline that he heads as Chairman and Managing
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A330-200F that Capt Mukut Pathak will get in the later phase of operations of Aryan Cargo Express.
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Director, will start flying from around March-April 2010. ACE was scheduled to start operations last year but the ATF price hike and the global recession forced the carrier to reschedule its plans. Even today, as the air cargo industry slowly emerges
from the downturn, Capt Pathak is unfazed. Despite the low cargo figures, the ACE chief is optimistic about the immense potential and importance of cargo movement, in India and globally. A trained pilot, Capt
Pathak has seen Indian aviation from a ringside seat and knows exactly what he is talking about. He was part of the policy formation and decision-making body of Royal Airways (now Spicejet), Air Sahara (now Jetlite) and was also part of the startup team that launched Kingfisher Airlines. Aware that cargo is not glamorous, Capt Pathak mentioned that he “came into cargo because I thought that this particular aspect of aviation has not been properly tapped in India. I studied this particular line (of business)... China (and its aircargo industry) had been making a lot of news around 2005. I studied the Chinese model and found out what had been
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responsible for this kind of growth.” He wanted to replicate that. “I realised that there was a very strong case to set up a robust airline based out of India because this country is not just a very big market but its location is unique,” he said. He mentioned that a carrier based out of India would be able to provide a fantastic amount of connectivity within the Asia, Europe, Australia/ New Zealand and Africa areas. Clear about his business plan, Pathak wants to be in the market as a nonintegrated carrier of goods. ACE, said Capt Pathak, would have a unique position in the Indian market. As a dedicated cargo airline, “we will offer tailor-made services to our
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Capt Mukut Pathak Chairman and Managing Director, Aryan Cargo Express
I realised that there was a very strong case to set up a robust airline based out of India because this country is not just a very big market but its location is unique.
customers worldwide”. ACE wanted to have the first mover advantage in what it plans to do. That is, perhaps, why Capt Pathak and his team have kept themselves
away from getting into domestic operations. Said he: “You will not be able to make money in a purely domestic market operation. The moment you enter the
market, you will face competition. To begin with, there are the low-cost carriers, which will start selling their space at any cost. That,” according to Capt Pathak, “will create a kind of unhealthy competition in the domestic sphere. Result: the sustainability as a purely domestic operator will be in dire straits.” Capt Pathak’s nonintegrated model sticks to ACE’s core competence: running a safe and reliable airline. “We will provide airport-to-airport connectivity and for the last mile we will use services of large trucking companies, courier companies and freight forwarders. An integrated carrier provides connectivity
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‘By March ’11, expect cargo to reach ’08 high points’ Capt Mukut Pathak on why he delayed the launch of ACE and how he sees the market.
Q A
the levels of 2005. So, the industry has to first recover, go back to the peak of 2008 and then the real rise will start.
What are your projections? What we feel about the market is that in the months of January, February and March 2010, there will be more consolidation of rates. The yields will improve. The over-capacity which is in the market would even out and then from the month of April 2010 onwards, we will hit the lean season. In that lean season, we do not expect the yields and rates to fall as it did in 2009. The real rise will be seen from July-August 2010 onwards and we expect that January-March 2011 onwards we will reach the same point we were in 2008. If you look at the last 10-12 months in the air cargo industry, the drop in air cargo has been so severe that it has gone down to
Why did you choose to launch a global carrier when the trend is to launch domestic operations? I wanted to have the first mover advantage. In my opinion, the models that have been adopted till now in the country will not be successful. For a new startup, purely domestic cargo would require a lot of money. If you look at any other air cargo operator in the world — DHL, UPS, Blue Dart, TNT, etc — they were freight forwarders, courier/express companies before becoming what they are today. They had a large captive business of their own and then they came into the air segment. If you want to become a door-to-door operator and also include airport operations, you will require warehouses, vehicles, etc. At the end of the day you will require a very strong client base. Again at the end of the day if you are doing everything — collecting the goods, transporting and delivering it — yourself, then you will be in competition with someone else whether it is First Flight, DTDC or trucking companies.
:What has taken you so long to start operations? : We got our license and on April 4, the price of ATF crossed the $100 mark. After that you know what has happened to the world...the bottom seems to have fallen out. We decided this was not the right time. We did not want to launch at a time when air cargo was going down. So we decided to wait for very strong and positive signs in the market. Our internal projections are bang on target and we decided to delay the launch through January and February 2010.
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from B(usiness) to C(onsumer). ACE will be B-to-B and for a steady supply of goods, mentioned Capt Pathak, “we are talking to freight forwarders only”. Having done an in-depth study of the world market vis-à-vis India, ACE has charted out an initial blueprint. With a startup capital of Rs 100 crores, the three-partner ACE (the other two apart from Capt Mukut Pathak being Rishi Raj Singh Dungarpur and Colonel Vishnu Singh Rawal) plans to operate in Asia and Europe with two Airbus 310300Fs and later take on two MD-11s aircraft before moving on to using Airbus 330-200F planes. The carrier will be utilising its base in Delhi to the hilt. “We are almost at an equal distance from Europe and the Far East. This is an advantage for us since we will be able to move cargo from
CIS and European countries in the first phase. While the second phase of growth would connect the Far East, North Africa and Australia/ New Zealand, the third phase would see ACE furthering its operations to the Americas. When that does happen, ACE would become a global cargo carrier. ACE’s launch comes at a very crucial juncture. Capt Pathak is quite aware that industry is down and yields are under pressure in Europe and USA. At the same time, the air cargo segment is growing in Asia and that is where ACE’s main market would be. As for the Indian air cargo industry, it is preparing for a rebound of sorts in 2010. Data released by the Airports Authority of India (AAI) shows that domestic air freight has grown in double digits year on year since May 2009, and,
(Left) DIAL’s MD Kiran Kumar Grandhi and others take a look inside Deccan 360’s freighter.
China, South East Asia, the Far East and SAARC nations to Europe, the Middle East, North Africa and East Africa.” In addition to Delhi, Aryan Cargo will have two other hubs: at Bangkok and Sharjah. From these three centres, ACE would be serving the South Asian Association for Regional Cooperation nations (Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka, Maldives, Afghanistan and India) as well as South East Asia, China, West Asia, the
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export freight too has started growing marginally since August this year. However, some experts have pointed out that ACE could face challenges in the first few months of operation if it does not offer something different from the others. Capt Pathak takes that in his stride: “We will provide flexibility, reliability and above all with expertise. We will be bringing in superior service levels to the market and mind you everything will be done by Indians.”
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Tough and easy solutions The Goa convention of the Air Cargo Agents Association of India in December 2009 saw stalwarts from the cargo industry coming together to discuss threadbare the problems which have arisen in the wake of the recession among other serious issues affecting the business. A report from Tirthankar Ghosh. t was a mega event and one that the Air Cargo Agents Association of India (ACAAI) had been waiting for since the 2008 meet scheduled to be held at Bahrain had to be cancelled. The mood of the 36th ACAAI convention was set by Sunil Arora, Chairman of the Convention Committee. Welcoming the delegates to the convention, he pointed out that while on one hand, the convention was being held at Goa with its golden beaches — indicating warmth and hope — on the other was the hard fact of the global recession. Arora went on to say that though the industry is still in the clutches of the downturn, “we are looking ahead with a very optimistic
I
approach for the full revival of the economy and particularly the air freight business. The logistic service sector in India needs to keep pace with the
upgradation in service standards and technology to match global standards. Logistics has to be comprehensive in coverage, value addition is the mantra
The major problem faced by the air cargo industry was the Electronic Data Interchange system. Even after a decade, it had been a non-starter. change, and adapt to the needs and expectations of the now more and more aware customers.” He also mentioned that the industry needed “continuous
and higher benchmarking of service quality is now mandatory while accountability is the key aspect today.” What was urgently needed was
ACAAI Convention:Meet up to take logistics to a new world.
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modernisation and upgradation, he said. ACAAI President J Krishnan was more forthright. He said that a “decade of exuberant growth and heady profits have slipped away — and slipped away suddenly. Grand visions and erudite forecasts of the unending growth story for the past decade have parted ways to a more grim reality that has set in.” The picture was grim, said the ACAAI chief: “Be it among forwarders, carriers, custodians of the whole supply chain, all stands diluted. Truly it is the worst of times.” He was quick to issue a note of optimism when he mentioned that power of human ingenuity can never be underestimated: it has the capability to accept and climb out of a crisis. “Quick to observe, absorb and adapt to this changed scenario, our very presence during this flux also makes it the best of times.” The theme of the convention reflected this positive acceptance of the new world order and the answer that ACAAI saw was: integrated logistics. The President made it a point to mention the shoddy infrastructure that
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the air cargo industry has had to live with. Blaming the poor infrastructure as the most significant contributor to air cargo costs, Krishnan bluntly said: “Air cargo is time sensitive and given the large number of ICDs (Inland Container Depots) already available in various parts across our nation, there is no reason why cargo must seek its way to a metro airport for export or be cleared at metro airport for consumption at a distant state.” Infrastructure apart, the major problem faced by the air cargo industry all over the country was the Electronic Data Interchange (EDI) system. Even after a decade, it had been a nonstarter which led Krishnan to term it aptly as the Electronic Disaster of India. The introduction of IATA Resolution 815 was also highlighted by the ACAAI President. The introduction of the new resolution would have meant the formation of a Joint Council comprising six carriers and six ACAAI forwarders who would represent the interest of the Air Cargo Committee. The Joint Council had been fully empowered to establish and manage the new programme. A significant aspect of the new resolution is the recognition of the transition of the role of the “air cargo agent” into an “air cargo intermediary”. Krishnan pointed out that Resolution No 815, which recognised air cargo agents as intermediaries would have “signalled the best of times but unfortunately the asymmetry that has cropped up still leaves us where we were a few decades ago. ACAAI once again proclaims its commitment to move forward in a manner that benefits all parties,” he promised. The inaugural ceremony having set the tone for serious discussions, the six
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Cargo supply with customised and focused services could result in profitable business.
business seminars spread over three days of the convention saw eminent speakers from the government and the private sectors discussing the requirements of the country’s logistics industry. The first session on ‘Global recession: Impact on Indian exports’, comprised Rafeeque Ahmed, Chairman, Farida
Blasé Dsouza looked at the downturn as one which had presented great opportunities. Forwarders, he said, had become complete logistics service providers. The industry needed to change to the circumstance and forwarders would have to offer newer solutions if they wanted to survive in these recessionary times. Tulsi
Resolution No 815 would have signalled the best of times but unfortunately the asymmetry that has cropped up still left the industry where it was a few decades ago. Group, Blasé Dsouza from Ingram Micro, Tulsi Mirchandaney, Managing Director, Blue Dart and Asheesh Maroo, YES Bank. All of them provided insight on how the downturn had affected industry, especially the Medium and Small Manufacturing Enterprises (MSME) and other labourintensive sectors. The speakers mentioned that the new markets would be the ASEAN, West Asia, Brazil, Australia and South Africa.
Mirchandaney pointed out that customisation of goods and services had to be more focused. In the global market place, the smallest business aggregated over a large supply, could still be profitable, she said. The second session saw H S Rana, Executive Director Cargo, Air India, emphasising that the ground-handling facilities at airports, especially Mumbai airport, needed to be addressed. The lack of quality had affected service
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standards, she said. She touched upon tracking cargo, warehouse time factor and transshipment. Serge Trippet, director Cargo, Gulf Air, mentioned the new moves in air cargo like E-freight, Cargo 2000 and RFID and how these were helping in the movement of goods. Among the others who spoke were Keshav Tanna, former ACCAI President who spoke about Indian airports and Chris Remund, CEO, DHL Lemuir Logistics. While Tanna highlighted the problems faced by forwarders like warehousing, outdated handling equipment, EDI and lack of trained manpower, Remund spoke about increasing freight rates, diminishing volumes and cost pressures from customers that had affected profitability of forwarders. The Goa meet managed to bring to the fore — once again — the problems freight forwarders have been facing. It saw a meeting of minds on issues that have like aircargo remained in the background. It is now upto ACAAI to publicise these issues and ensure their logical conclusion if the industry has to move forward.
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INTERVIEW
“We trimmed our capacity quite a lot because traffic has fallen” athay Pacific Airways recently released its combined Cathay Pacific and Dragonair traffic figures for October 2009 that showed cargo and mail tonnage down on the same month last year. The two airlines carried a total of 143,290 tonnes of cargo and mail in October, down 0.8 per cent from October 2008, while the cargo and mail load factor rose by 10.8 percentage points to 76.7 per cent. Tonnage has fallen by 11.1 per cent against a capacity reduction of 14 per cent. Cathay Pacific General Manager Cargo Sales and Marketing, Titus Diu said: “October was the best month of the year for our cargo business, with strong demand out of the key Hong Kong and Shanghai markets leading to high load factors, particularly to North America and Europe, and a welcome increase in yield.” While the figures have created optimism, the carrier has been going through a strict regimen of cost-saving measures. In response to deteriorating business conditions, the airline reduced cargo capacity by 11
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per cent from May. In addition, it also pushed back the establishment of its cargo terminal at the Hong Kong International Airport (HKIA). It will now be starting operations in 2013 instead of the second half of 2011 as CEO Tony Tyler told CRUISING HEIGHTS (see interview). In this telephonic interview from Hong Kong, Tony Tyler speaks about the carrier’s cargo section. : I wanted to ask you about your cargo business. The cargo market has nosedived and there were reports that you have grounded two freighters? : Well, we actually parked five 747 converted freighters and we have one leased out to our sister company in Hong Kong. We have also taken out of service completely several, I think, its five altogether Boeing 747 — 200 and 300 classic freighters.
Q A
Yes, In addition you have also postponed the Hong Kong freight terminal. That is correct we have deferred construction of that from the tentative opening in 2011 to 2013.
Cathay Pacific planes at Hong Kong Airport.
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mainly on the trans-Pacific routes because again the extra efficiency, the greater take-off weight and, therefore, better payload helps us particularly on the trans-Pacific flights.
What kind of an effect will this have on your cargo operations? Well it’s rather the other way around. It has gone down drastically? Well, because the cargo market has fallen so much that’s why we have taken this capacity out and if you look at the figures up to the end of August which is the latest — we haven’t yet published our September data, we’re about to do that — but if you look up to the end of August, our cargo traffic was down 12 per cent against the cargo capacity of down 13.9 per cent. So, we sort of trimmed our capacity down quite a lot because traffic has fallen. But you have ordered 777-300 extended range aircraft and 747-400 extended range freighters? Where would you use these? Our 777 is, of course, a passenger aircraft and they are mainly being deployed on trans-Pacific routes where the extra range and superb fuel efficiency plus of course the popularity with our passenger made some of the fares attractive and profitable proposition. The 747-400 ERFs are also deployed
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When will these be put into service? The 747 — 400 ERFs are already in service. All six of them. And the 747-8 freighters that we have on order. Of course, Boeing last week announced delays. So, now we will have to wait and see when they can deliver them now. When are they expected? Well it’s been really a bit of sliding, a movable feast as we say in the Catholic Church. Because (when) we originally ordered them, the first one would have been delivered by end of this year but they slipped it to next year and now who knows... Well then its blessing in disguise. Well, yes and no. I mean, the fact is, these are very efficient and good aircraft, while certainly as far as capacity is concerned we may not need them, the uncertainty of not knowing when they are arriving caused us to keep having to change our plans and that in turn poses additional costs of parking and reactivating aircraft, of being unable to commit to our customers, just exactly what capacity we will have, what price we can offer. So it’s been commercially very damaging to us. But all said I understand your point: it has meant reduction in capacity.
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Go for IT! The Indian logistics industry is sensing gain and growth. With effective tech-tools, the industry could ramp up to provide near-to-perfect services, writes Sumit Nadkar. ir cargo is at the heart of supply chains of many manufacturers and retailers. It offers the best option for quick transportation of high value and in demand products. The air cargo industry growth is driven by de-regulation and liberalisation of global markets. There are key world trade agreements and regional industry associations like EU, NAFTA, ASEAN and ACAAI, who are influencing and driving bold industry changes. According to Boeing’s recent forecast, “Air Cargo markets linked to Asia will continue to lead other markets through 2025, led by the highest growth in intra-Asia and domestic China traffic”. With double digit growth rates, USA/ Europe/Asia and intra-Asian markets are considered by far most dynamic. Despite predicted growth, there are myriad industry changes and pressing market demands that find air cargo agents struggling to deliver-on-time. In India’s growth story Air cargo industry is playing a significant role. However, compared to countries like China, Brazil and Middle-Eastern nations, India seems to be trailing behind. From the air cargo community point of viewthere are many road blocks to further progress that need careful review and full involvement of Government. What the community needs is a clear-cut policy about ground handling of cargo at the airports. It requires information management in systems and communication along with introduction of e-commerce as the only means of documentation and processing. Today many companies out source their logistics to remote locations, resulting in fast, frequent, and predictable transit between different parts of the world. A key to the success of globalisation lies in fast delivery of goods to the market. This is essential as with right process automation, even perishable commodities / periodicals can be delivered worldwide while still fresh / current. Coming of the ‘Montreal Protocol’ has allowed electronic trade between agents and airlines, thus reducing the paper clutter in the form of air waybills. The customers require real-time status update on their cargo consignment, which can be achieved only through automated tracking systems. Deregulation and open skies agreements have brought in fierce competition calling for integrated functioning between cargo agents and their
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The air cargo community needs a clear-cut policy on ground handling of cargo. It requires information management and introduction of e-commerce.
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trade partners. This requires frequent data exchange and interconnection capabilities. The supply chains require integrated multi-modal transport from pick-up to delivery that is facilitated by automation. Also, IATA initiative Cargo 2000 precedes the progress in customs area. As a result, customs authorities world over are in the process to automate clearance systems. However, this requires cargo management applications of the air cargo agent to seamlessly connect with different systems of the customs authorities. Even the e-commerce practices are well adapted in B2B and B2C segment. One of the primary requirements of online commerce is quick delivery and computerised tracking ability. The online market potential can only be tapped by well-integrated carriers and forwarders who provide a smooth experience, right from pick-up to delivery across multi-modal transport (air, sea, road and rail). Many such new demands on air cargo agents call for operational automation and real-time communication to ensure smooth cargo movement between multi-modal transport chains. Some of the comprehensive technology solutions that cater to various areas of air cargo supply chain include Cargo Community Platform, EDI Platform, Freight Management System, Integrated Accounting System, Warehouse Information System, Expert Cargo Ground Handling System, Container Management System, Custodian Management System, Web Based Software and SaaS models, Multimodal Mobility, RFID technology GPS-GIS Technology-TELEMATICS and Enterprise Wide Solutions Air cargo industry requires a platform that can be a “one-stop solution” that enables a stakeholder to communicate electronically with other stakeholders, optimise processes by incorporating single point information center, and provide inputs for tracing, planning, booking, online peer to peer communication and a platform to sell their services effectively by harnessing and adopting technology. Air cargo agents are working under constant pressures of SLA (Service Level Agreement) Compliance and Visibility. Due to Disparate IT Systems, communication with customers and trade partners is not only expensive but also ridden with complex and duplicate processes, resulting in inefficiency. Working with an EDI (Electronic
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Data Interchange) platform allows air cargo stakeholders in performing online bookings, generating and printing AWBs, E-transmission of documents, quick traceability of cargo and information, manifesting (EGM and IGM filing with Customs) and support multiple message formats (X400, SITA, XML, EDIFACT). Freight forwarders today need a system that offers enterprise-wide functionality along with scalability and security. Such a system should handle multi-currency operations, provide a realtime, single view across the globe, conform to different national legislations and customs requirements. At the same time it should have low cost of implementation and ownership. To address these concerns, freight forwarders need a freight management system that can be readily deployed internally for their operations. An integrated accounting system is a standalone system that can easily integrate with freight management system of a cargo agent and also interface with other logistics solutions. With such a system air cargo agent can have an application where they can capture all their payables and receivables. It helps in creating GL and other financial reports like-PandL statement, balance sheet, cash flow statement etc. A crucial part of the supply chain is warehouses and Warehouse Management Systems (WMS) are essential to control the movement and storage of materials within a warehouse and to process the associated transactions. Kale and Royal 4 Systems together provide the Warehouse Management System-WISE to fulfill the unique requirements of warehousing companies. Container Freight Stations (CFS) and Inland Container Depots (ICD) are complex operations. Transportation, warehousing, stuffing, tallying, yard management, repair and maintenance, terminal operation, etc. involves a lot of manual processes. Typical procedural hassles, painfully slow movement of cargo and containers, and quite often inaccuracies in planning and actual actions affect efficiency levels. A comprehensive web-based software solution built on ground reality can make these processes hassle free. The custodians’ processes at the airport terminal are mostly manual and do little to involve customers and other stakeholders in the air cargo value chain. This results in prolonged customs clearance that often leads to a loss of goodwill towards the custodian. What the custodians need is a cargo community portal where various authorised stakeholders can login and track the exact status of their consignments on a minute-to-minute basis. Such a system provides a common platform for the value chain participants to interact with each other and correct business inefficiencies by eliminating redundant processes. Along with such solution systems there are so many emerging technology trends that can be adapted to provide flawless services in time. Given the turbulent economy, On-demand
E-communication is the key to direct and fast access to the status of delivery services.
software (SaaS- software as a service) is the way to go for many large and medium scale companies, as it provides the flexibility to pay-as- you- go. The productivity gains associated with multimodal mobile systems that allow seamless use of multiple database systems, RFID, GPS, voice technology etc. are very strong. RFID is a mobile technology, wherein customers can keep track of a particular shipment. Besides time, position or destination of the shipment, if a shipment is carrying chemicals then you can also keep track of configurations and temperature etc. using RFID. As per Kale’s survey on ‘Technology Adoption in Indian Logistics Industry-2008’, nearly 80 per cent opined that they were interested in RFID technology and would like to use in future. TELEMATICS (the GPS-GIS Technology) devices allow drivers to browse the internet, send and receive e-mails, receive live traffic updates, listen to satellite radio, and perform various other activities hands-free. With the help of GPS, customers can know the exact position of their shipment. It also helps in locating a particular address. As per industry expert opinion, currently there is no industry level platform and each segment of the air cargo industry has its own EDI system, thereby fragmenting the EDI exchange process. These segments need to be integrated and a uniform standalone system, which is able to communicate effectively with each segment of the industry, needs to be put in place urgently. ACAAI is in the process of establishing such an industry platform and plans to introduce many such technology initiatives for the industry, by partnering with industry focussed IT providers. Such technology promises to inculcate industry best practices, as it is a by-product of joint efforts between industry stakeholders, industry associations and domain focussed technology partners. (The columnist is Head, Logistics-Special Business Unit, Kale Consultants Ltd.)
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There are plenty of technology trends emerging that can be adapted by the industry to provide flawless services in time.
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CARGO JOTTINGS
Topping India-UAE trade could face problems RECENT figures put out by the UAE Ministry of Foreign Affairs show that India was the UAE’s top trading partner last year with non-oil trade totalling $32.11bn. The UAE's imports from India amounted to $16.87bn in 2008. According to a leading daily, India’s two-way nonoil trade with the UAE rose a whopping 53.45 per cent year on year to $44.53bn for the fiscal year that ended March 2009, enabling the UAE to retain its status as India’s largest trading partner.
India’s imports from the UAE consist primarily of crude oil, petroleum products, raw pearls, precious metals, electrical machinery and equipment and iron and steel, the UAE-based daily reported. Today, however, the picture of trading between UAE and India is grim. The ongoing crisis in Dubai is certain to impact exports, remittances and real estate sectors in India and what may seem negligible at an international level may translate to significant damage for specific segments of the economy.
Headquarters of Abu Dhabi Ministry of Foreign Affairs
SpiceJet expands cargo operations SPICEJET recently expanded its network of domestic cargo operations with the launch of Kochi as a new sector. With this expansion, SpiceJet will provide cargo services from 14 cities, including Delhi, Mumbai, Kolkata, Chennai, Ahmedabad and Pune. On the launch, Samyukth Sridharan, Chief Commercial Officer said, “We are confident that the addition of Kochi will further strengthen our operations. We transport major commodities like garments, auto parts, pharma, flowers and shrimps and have carried more than 40,000 tonnes of cargo since May 2008. Currently, we carry an average of about 120 tonnes per day which we aim to increase to 150 tonnes per day in the near future.”
Paint the web Bright Blue REDEFINING modern day access management for small and medium commercial spaces, Ingersoll Rand Security Technologies recently launched Bright Blue in India under its international brand Schlage. The new electronic access management system is simple, secure and affordable and with its web-based access control allows users to access, manage and control any organisation’s points of entry from anywhere. The plug and play approach makes the access control system easy. Users can just connect Bright Blue to their existing network and it will allow them to be in control from anywhere where internet is accessible. Bright Blue lets facility managers add and delete cardholders, set up new doors, assign access based on time schedules and perform a host of other functions with surprising ease. At the launch in Mumbai, Delhi and Bangalore, Ingersoll Rand channel partners had an opportunity to experience the Bright Blue controller and its web enabled software first hand.
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Afghan apples for India EXPORT of apples from Afghanistan to India have resumed after nearly three decades. With the very first export consignment of 12 tonnes of apples to New Delhi, Afghanistan will now have an opportunity to explore international markets for its agricultural products and to encourage farmers to grow crops other than opium. In a press conference prior to the plane carrying apples took off for New Delhi, Afghanistan’s Agriculture Minister Mohammad Asif Rahimi said, “This is for the first time that we are exporting apples to India. This is a very major step to enhance our farmers’ economy. About 400 tonnes of apples will be shipped to India this season.” According to him, three tonnes of apples were flown in an Air India plane with further nine tonnes going by road through neighbouring Pakistan.
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AT A GLANCE
A pensioner’s ‘butting’ tale
A fatty click by flight
A pensioner John Gordon, 65, was carted off a packed plane, recently. Reason: the pensioner head butted an air stewardess during a holiday flight to Manchester. Gordon, who had been returning from a cruise, said he was stunned by what had happened and described the incident as a ‘storm in a tea cup’. He claimed that he was chatting to an air hostess and their heads accidentally touched when he
WHEN it comes to overweight fliers, the airline has little to say. But this time around, it was on the contrary when an American Airlines flight attendant reportedly took a photograph of an obese passenger trying to fit into an airplane seat to show what crews must deal against overweight fliers as reported by the Telegraph newspaper. According to the Telegraph, the picture was placed on an aviation blog. It wasn’t clear whether the man knew he was being photographed or whether the plane was able to
stood up. Gordon made the justification that he was quite big 6ft 3in and could only sit on the seat sideways. And while he was listening to classical music, this air stewardess pushed a trolley hitting his legs. Following that incident, he made a joke saying ‘maybe I’ll run you over’ and got up. As he did he touched her forehead and apologised straight away. Following the incident, he was also cross-examined by the police.
Pilot hijacking??? EVER heard of a pilot hijacking a plane? Well, that happened in a Kingfisher flight from Hong Kong to Mumbai when accidentally the alarm was triggered off by the pilot while switching communication frequencies with Air Traffic Control. The flight, IT 072, was putting down at Mumbai when the ATC heard a hijack call from the cockpit, which caused immediate terror in the tower and the airport. The pilot, though, cleared up after a couple of minutes that it was a false alarm. The flight made a precautionary landing. Sources said the pilot suspected a radio frequency failure and pressed the wrong button hurriedly.
A flight to jail PAUL Hoyland, 42, a passenger had a tough time on the Thomas Cook Manchester-to-Cuba flight in October 2008. As a matter of fact, Paul had little idea that the flight will land him into big trouble. However, it happened and he was jailed for eight months after a judge branded him ‘obnoxious, aggressive and intimidating.’ Paul Hoyland became the culprit when on the flight he was found gatecrashing the first class compartment. On the flight, cabin crew spotted him sneaking into the first class compartment and asking for coke and ice. Lisa Boocock, prosecuting, said the cabin staff became suspicious because
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the defendant appeared to be slightly drunk. And sentencing him Judge Jeffrey Lewis, said, “There’s just never any excuse for conduct of this kind. You were obnoxious, aggressive and intimidating. It is fair to say that you never in fact used, or threatened violence, but even your own daughter took refuge away from you. People like you, who behaved like you did, on board flights need to realise that the courts come down very heavily upon them. It is not simply the public being inconvenienced or having to endure your conduct. There is also an element of danger to all involved including the cabin crew and passengers.” CRUISING HEIGHTS January 2010
And this one, the spokesperson of the concerned airline had to say, “Soon after the landing the crew appears to have accidentally triggered a communication alert that indicates a Hijack situation. This happened while a transition was being made from one frequency to another. The crew promptly clarified the situation to the authorities and affirmed that all was normal so that any response triggers activated by this alert can be de-escalated. The situation is normal.’’
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Mid-flight born baby blues
take off with him half out of his seat. The photo apparently was snapped aboard a Boeing 757 and sent to blogger Kieran Daly, who writes for Flightglobal.com, the Telegraph stated. “This is sent to me with the absolute assurance that it’s a genuine picture taken by a flight attendant at American Airlines,” blogger Kieran Daly wrote. “The flight attendent took it to show her manager what was happening on the aircraft and why she was unhappy about it. Seems the guy paid for only one seat and the gate staff let him board.”
NOW, what happens when a passenger gives birth to a boy mid-flight! The plane is forced to divert. And this was exactly happened when Southwest Airlines plane which was heading to Salt Lake City and flying at 30,000 feet went into labour. The plane was immediately
No solace for this monk A monk wanted the solace in a bizarre way. On the flight of Kolkata-Gaya-Yangon Air India flight, a 45-year-old Buddhist monk Thunga went berserk when he promptly opened the emergency exit above the left wing seconds before the pilot was about to pull out of the parking bay. As the crew and other passengers watched in horror, the emergency chute rolled out. When the crew rushed to his seat, unfazed Thunga who was able to understand little Hindi or English told them that he was feeling “suffocated”. As a result, the plane was delayed by over seven hours. “When we asked him why he had opened the window, he said he was feeling suffocated. He even went through the safety manual before doing this. But he was not aware that opening the window could lead to such a safety hazard and delay the flight,” quoted an airline official. Both the commander and co-pilot rushed out of the cockpit to check on the passenger. Outside though, things were in a flux. Panic-stricken security men and airline officials had cordoned off the aircraft. Following procedure, all passengers were asked to deplane. The window was brought back and attached to its frame. The air pressure inside the cabin was then checked before seeking clearance from the Director General of Civil Aviation (DGCA).
From sex romp to community work LISA Robertson had it all while serving as a flight attendant. A former flight attendant who gained world wide media attention allegedly for her sex romp with the English Patient star, Ralph Fiennes in an aeroplane toilet two years ago was again in news. Lisa Robertson has been ordered to perform 100 hours of community service for failing to disclose that she was paid $200,000 by the Nine Network to reveal her mile-high tryst with British actor Ralph Fiennes.
hived off to Denver and two doctors travelling on the plane came to the passenger’s assistance. But the child couldn’t hold back and the doctors helped deliver the baby after moving the woman to the rear galley just before the jet touched down.
Illustrations by Rajeev Kumar
attendant
The Melbourne Magistrates’ Court was told Robertson’s encounter with Fiennes gained her world-wide media attention. Magistrate Phillip Goldberg told her during the court hearing, “But since that time your life has spiralled downwards.” Robertson, a former NSW police officer and Qantas airline stewardess, started abusing alcohol after the incident and she had suffered from depression and anxiety, he said. While she initially denied the affair, Robertson admitted to the sexual encounter in paid-for interviews with a British newspaper and Australian current affairs program 60 Minutes. Interestingly, She will be back in court on December 17 on four separate assault charges related to an incident outside a Melbourne restaurant earlier this year, the newspaper reported.
Flight attendants ran wild THE Air Marshal was caught on the wrong foot when a flight attendant deliberately smashed a beverage cart into him. This all happened in Delta Air Lines. “Trouble between the flight attendant and the air marshals — armed plainclothes officers who work in a division of the US Department of Homeland Security — first began on a flight from Atlanta to Austria,” said attorney John AB Ayoub of Ayoub & Mansour, who filed the complaint on behalf of Air Marshal. “Before the flight, this flight attendant came up to these marshals and said something to effect of, ‘I don’t like air marshals on my flights; you’re not real passengers, just stay out my way,” said Ayoub. Lamberson, US Air Marshal and Hentges, who has filed an affidavit backing up his colleague’s account, were sitting across from each other, said Ayoub, “and this flight attendant keeps elbowing them and bumping into them with her cart. So on the flight back to Atlanta, she actually rammed the beverage cart into his knee so hard that it came off the floor. Lamberson only realised how badly he was hurt, said Ayoub, when he attempted to deplane and had to be helped into the terminal. “That was his last flight ever,” added Ayoub. Lamberson subsequently underwent surgery that involved growing new cartilage in a laboratory and inserting it into his knee, he said.
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DOMESTIC AIRLINES Jet is ‘best long haul airline’ JET Airways has received the “Best Long Haul Airline” award from Brussels at the recent TM Travel Awards ceremony in Antwerp with nearly 800 leading Belgian travel agents participated in the voting ceremony to elect a winner in each category. Emmanuel Menu, Vice President, Jet Airways Continental Europe, said, “The Jet Airways intercontinental hub between Europe, India, Africa and North America became a reality in 2007. With our extensive code share agreements with Brussels Airlines and the cooperation of Brussels Airport flying with Jet Airways is an unrivalled experience. Jet Airways offers Emmanuel Menu superior quality services which has created a benchmark in the Belgian travel industry and has been the key to its success, this second award only confirms it!” Pax traffic picks up in November: Jet Airways has reported a 33 per cent increase in its domestic passenger traffic for November compared with the corresponding period last year. The airlines’ international passenger traffic registered a growth of 19 per cent on a seat factor of 81.9 per cent during the corresponding period. JetLite, the wholly owned subsidiary of Jet Airways, also saw passenger traffic increasing by 22 per cent and a seat factor of 76.7 per cent. Nikos Kardassis, Chief Executive Officer, Jet Airways, said, “Our improved performance in November 2009 is largely due to the contributions of our team of highly dedicated professionals and the coming together of a series of strategic restructuring initiatives being implemented by the airline over the last year, including a series of route rationalisations, trimming of strategic costs, streamlining of processes, addition of new routes and an enhanced customer experience.” JetPrivilege partners with TripAdvisor: Jet Airways’ JetPrivilege has entered into a partnership with TripAdvisor. With this partnership, JetPrivilege members can post hotel reviews on the TripAdvisor India website — www.tripadvisor.in, and earn JPMiles upto 4,000 base JPMiles from now until the end of 2010. Once the reviews are published on the TripAdvisor
website, JPMiles will be automatically credited to the member’s JetPrivilege account. In addition, with a minimum of ten reviews published during each time frame through 2010, five members stand a chance to win 5,000 bonus JPMiles each. Sudheer Raghavan, Chief Commercial Officer, Jet Airways, said, “It is our endeavour to introduce innovative and customercentric initiatives that ensure memorable and comfortable travel experience of our JetPrivilege members. This new tie-up with TripAdvisor offers our valuable members the twin opportunity to plan their holidays, as well as earn JPMiles.” In addition to the on-line booking engine, the carrier offers features like ‘manage my booking’ and ‘PNR status’ on its website.
SpiceJet claims high pax numbers BASED on the statistics released by the Directorate General of Civil Aviation (January- September 2009), SpiceJet flew more passengers per departure than any other domestic airline. Sanjay Aggarwal, CEO, SpiceJet Ltd said, “Our safe, reliable and ontime service, thoughtful connections, highly trained, efficient and warm staff continues to ensure that each of our six million passengers are looked after well.” “Our customers continue to be the core of everything we do. Based on their feedback, we have introduced new services like sale of hot beverage and hot kathi rolls on board. Our customers have also recognised our services by voting us among the Top Ten Budget Airlines in Asia,” he added. In the quarterly results announced recently, SpiceJet reported great operational results versus the same quarter last year. It has carried twice the number of passengers with a 19 point improvement in load factor and generated 31 per cent more revenue. In addition, despite the global economic downturn, SpiceJet has shown growth in recent months. During the first seven months of the current year, SpiceJet’s passenger traffic grew 14 per cent compared to a five per cent decline in the overall Indian domestic traffic.
Bird Academy distributes certificates BIRD Group’s The Bird Academy organised a Certificate Award Ceremony on November21, 2009 for its students who successfully completed the IATA certified courses viz., IATA GDS Fares and Ticketing, IATA/ UFTAA Foundation and IATA/UFTAA Consultant. The occasion was marked with the presence of Radha Bhatia, Chairperson, Bird Group, S Chandra, Chief mentor, Bird Academy, and Anju Varma, Manager; along with the faculty members. Radha Bhatia while addressing the students, said, “Training has been very dear to me and it has been my constant effort to be an active participant in the field of education. Bird Academy has always aimed at delivering high quality learning and equips the students with highly relevant professional knowledge and facilitates skill development of human resource in the rapidly growing aviation, travel and tourism industry”.
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Radha Bhatia, Chairperson, Bird Group, with students of the Bird Academy.
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SpiceJet is fog-ready: SpiceJet is well-prepared to deal with any fog-related delays during the winters. It will provide snacks in the event of a long delay, accommodation to transit passengers in case they have to spend the night in the connecting city, real-time information on flight through an Interactive Voice Response system, frequent SMS updates and personal calls with status updates. Announcing the fog plan, Samyukth Sridharan, Chief Commercial Officer, SpiceJet Ltd said, “We are ready with a comprehensive fog plan to assist our customers and make their travel comfortable. We request that while booking, passengers make sure to give only their current contact information so that we can reach them if needed. It is also advisable to call the customer care numbers prior to leaving for the airport so that passengers can minimize unnecessary wait at the airport. While we cannot predict fog, we will do everything possible to make your travel as smooth as possible.” 60-day offer on 60th Republic day: SpiceJet recently announced special 60-day offer for defence, paramilitary personnel and their families on the occasion of 60th Republic Day, with 100 per cent discount on base fare. Announcing the offer, Samyukth Sridharan, Chief Commercial Officer, SpiceJet said, “This plan, we believe, will help our defence personnel to plan their personal travel in advance and help them to connect with their friends and families easily. This offer is a small gesture from SpiceJet to recognise the immense contributions of our defence personnel to the society.” Booking is open on www.spicejet.com and tickets purchased are valid for travel from January 26 to March 26, 2010. Going digital: SpiceJet has appointed i-Vista Digital Solutions to handle its online marketing initiatives. i-Vista will conceptualise, design and develop online initiatives for the airline. Confirming the development, Anish Srikrishna, Senior VP and Head of Marketing, SpiceJet Ltd, said, “We at SpiceJet believe that online engagement with our customers is the key to our success. We wish to enhance our online presence to build our brand, understand our customers and drive more traffic to our site. i-Vista Digital Solutions has the relevant expertise in digital brand building and marketing and can offer creative and technology solutions for our current needs. We are happy to have them as our partners.” Narayan Rajan, CEO, i-Vista SoluAnish Srikrishna tions, commented, “We won the SpiceJet business because of our ability to deliver advanced solutions in the Internet space. We help our customers leverage the power of the internet and leave an indelible impression through our unique and well-rounded approach to the business. Our solutions for SpiceJet range from a variety of brand building activities, social media strategy and comprehensive analytics to help the airline achieve their mission.” SpiceJet emerges as best employer brand: SpiceJet has conferred the Best Employer Brand Award —Airlines and Aviation at the fourth Employer Branding Awards — Regional Round by the Employer Branding Institute of India. The award ceremony was held in Novotel and HICC Complex, Hyderabad on the December 4, 2009. Receiving the award, Mandeep Baweja, Head-Human Resources said, “The award is a reflection of our value system. We are focused on providing safe, reliable and quality service to our customers and an enriching cum fun work environment for our employees. Our philosophy has always been that happy employees create happy customers and consequently, a
GHIAL, ACI World in training pact
GMR Hyderabad International Airport Limited (GHIAL) and the Geneva-based Airports Council International (ACI) have signed an agreement for appointment of GMR Aviation Academy as a global training hub for the Asia-Pacific region. The agreement was signed in Hyderabad by Kiran Grandhi, Business Chairman, Airports, GMR Group and Angela Gittens, Director General, ACI World. Through this agreement, GMR Aviation Academy will facilitate ACI’s training opportunities to help develop managerial and operational standards. ACI has 1,700 member airports. Commenting on the occasion, GHIAL CEO P Sripathy said: “Considering that other such training hubs within Asia-Pacific are located in Dubai, Incheon in South Korea and Kuala Lumpur in Malaysia, GMR Aviation Academy will provide a training venue, not just for the professionals in India but also for those in the SAARC countries.”
Angela Gittens,ACI World and Kiran Kumar Grandhi, Chairman Airports, GMR Group, signing the training pact that will be helpful in developing managerial and operational standards.
healthy business. It is this positive attitude of our people and the support we receive from our customers that makes Spicejet a winning organisation.” The award in general recognises India’s Best Employers for excellence in talent management, HR strategy, application of IT, innovation in recruitment, innovation in retention strategy, innovation in career development and global HR strategy.
Mandeep Baweja, HR Head, Spicejet receiving the Best Employer Brand Award at Novotel and HICC Complex, Hyderabad.
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Delhi’s dream airport coming DELHI’S dream of having a world class airport will soon be a reality. Praful Patel and Delhi CM Sheila Dikshit visited the project site of Terminal 3 at IGI Airport and witnessed the modernisation progress. The infrastructure facilities of Terminal 3 (T3) will be ready by March 2010 after which the ORAT (Operational Readiness and Airport Transfer) trials will be carried out for three months. The Terminal will be ready for commercial operations in July 2010. During their visit the check-in counters in the Departure level were inaugurated. Terminal 3 will boast 170 check in counters spread over six islands. The pace of work at the Indira Gandhi International (IGI) Airport’s new integrated passenger terminal building (Terminal 3) being carried out by Delhi Sheila Dikshit, Chief Minister, Delhi cuts the ribbon to inaugurate the check-in counters at the departure level in Terminal 3. Beside her is Praful Patel, Minister, Civil Aviation and International Airport (P) Limited (DIAL) (second from right) Kiran Kumar Grandhi, Chairman - Airports, GMR Group. was also checked out by a team of senior government officials comprising M M Nambiar, Secretary, Min- nical aspects of the construction work. istry of Civil Aviation; Dr Naseem Zaidi, Director General of For this project, DIAL’s focus is not only on improving the Civil Aviation; senior officials of AAI; officials of Delhi Govern- ambience of existing terminal facilities, reliability of electronic ment, National Highway Authority and mechanical systems and concenof India, PWD, Delhi Transco Limittrating on service orientation by trained and Delhi Jal Board. ing all airport staff, but also in creating The official team expressed their a unique terminal which is an experisatisfaction over the progress report ence in itself. presented by DIAL. To assess the According to DIAL officials, the status of work, the team visited the infrastructure facilities of Terminal 3 departure ramp, forecourt, eight lane will be ready by March 2010 after drop-off zone, greeters’ area, apron which the ORAT (Operational Readiarea and taxiways. In addition, the ness and Airport Transfer) trials will be group took keen interest in the carried out for three months. The Terprogress of development work and minal will be ready for commercial also enquired about the various tech- Creative visualisation of Terminal 3 at IGI airport. operations in July 2010.
Air India wins prize for energy efficiency AIR India has been awarded the first prize in the general category of the National Energy Conservation Awards 2009, insti-
APPRECIATION FOR CONSERVATION: Indian Power Minister Sushil Kumar Shinde, presenting the award to Harpreet A De Singh.
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tuted by the Bureau of Energy Efficiency and the Ministry of Power, on December 14 at Vigyan Bhawan, New Delhi. The award has been given to Air India for its efforts at maximising fuel savings and reducing carbon emissions. The prize was presented by Sushilkumar Shinde, Union Minister of Power to Harpreet A De Singh, General ManagerQMS and Training, Air India. The Steering Committee for Green Initiatives set up in Air India, monitors all issues of operational efficiency, fuel management and emission reduction. Air India extends to Shillong: Alliance Air, the wholly owned subsidiary of Air India, has started operations with six flights a week (except Friday) from the Umroi airport on the outskirts of Shillong. ATR aircraft serves this route with the capacity of 45 passengers. To work out the modalities for operating the new route, Arvind Jhadav Chairman and Managing Director, Air India met DD Lapang, Meghalaya Chief Minister in the capital where the proposal was worked out. In addition, other matters like setting up of the Air India Call Centre and Air India International Academy for Aviation Services, routes connecting Tura in West Garo Hills district are being followed up with the Ministry of Civil Aviation.
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INTERNATIONAL AIRLINES Emirates sponsors Twenty20 tournament in Dubai EXTENDING its association with cricket, Emirates, the official partner of the International Cricket Council (ICC) and the title sponsor of Indian Premier League (IPL) team, Kings XI Punjab, will now sponsor the Arabian Cricket Challenge (ARCH), the twenty20 format cricket tournament held in Dubai. As part of its association, Emirates will fly some of the team members of Kings XI Punjab, including Yuvraj Singh, Brett Lee, Mahela Jayawardene and Kumar Sangakarra to Dubai to participate in the tournament. To signal the change in format after two years as a 50-over
FOURS AND SIXES AT THE SEVENS: Emirates’ twenty20 series will have big names from the world of cricket.
tournament, the event has been renamed Emirates Airline Twenty20 and will also have a new home — The Sevens — Emirates’ dedicated sporting facility, which is set to unveil cricket pitches and a pavilion in the New Year. Emirates announces flights to Amsterdam: With the expansion of its 23rd route into Europe, Emirates has announced a daily, non-stop service from Dubai to Amsterdam — with effect from May 1, 2010. Following Durban, Luanda and Tokyo, this is the fourth destination announced this year by the airline. Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said, “Amsterdam is already an important offline market for Emirates and we know there is significant passenger traffic heading from Amsterdam to Dubai and onto Africa, the Indian Subcontinent, Asia and the Far East. This is also a major freight hub and one of the world’s renowned flower centres. The daily passenger flight will allow us to bolster our cargo offering by making use of the belly hold capacity.” The new European service comes on the back of exclusive lounge openings in Dusseldorf, Hamburg and Manchester and extra frequencies to Rome, building up to a double daily in February.
Jet starts new services JET has started direct services on the Dhaka -Mumbai - Dhaka sectors, aboard its state-of-the-art Boeing 737-800 aircraft from December 23, 2009. On the introduction of the service, Nikos Kardassis, Act-
ing CEO, Jet Airways said, "Jet Airways offers travellers seamless connections to several destinations across India…The launch of our new Dhaka - Mumbai service will thus connect Dhaka to the world, via Mumbai, while further enhancing air connectivity on the busy India-Bangladesh sector." In addition to this, Jet Airways introduces its third daily service to Doha with the introduction of its services on the Delhi-Doha sector. The service will be effective from January 21, 2010. The airline currently flies daily to Doha from Mumbai and Kochi respectively. "Doha has been among the more popular destinations in Jet Airways' international network, and the airline's services to and from India to the capital of Qatar have been much appreciated by travellers," said Kardassis. In addition to Doha, Jet Airways flies from India to eight destinations in the Gulf, including Kuwait, Bahrain, Muscat, Abu Dhabi, Dubai, Jeddah, Sharjah and Riyadh.
Asiana Airlines and Abacus partnership turns 18 ABACUS International has signed their third joint venture with one of Korea’s leading airlines, Asiana Airlines. The first JV was signed in 1991 when Abacus established its National Marketing Company in Korea. The new third joint venture will see Abacus and Asiana partnering for a further ten years through to December 2019. This means that travel agents in Korea are confident of continued access to Abacus’ unparalleled content of airlines, hotel properties and car rental companies. Robert Bailey, President and Chief Executive Officer of Abacus International explained the background to this successful partnership, “As our existing joint venture turns 18 we are reminded of how our partnership has gone from strength to strength. Now entering adulthood, we hope that this joint venture will continue to reap mutual benefits for both Asiana Airlines and Abacus International. Throughout the time that we have been active in Korea, Asiana Airlines has been consistently supportive of Abacus and this is something which we are most appreciative.” Speaking about the new joint venture, Young-Doo Yoon, President and COO, Asiana Airlines said, “The signing of this new joint venture has proved that we really do view Abacus not simply as a service provider, but as a strategic partner, helping us to grow our bookings at a phenomenal rate over the last few years. This is a trend we are confident of seeing continue, helping travel agents to access full information and best rates through Abacus’ innovative and easy-to-use solutions.”
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Virgin Atlantic unveils new clubhouse CREATED by London-based FDArchitecture, the Gatwick Clubhouse, which has undergone complete refurbishment, is all set to offer a welcoming atmosphere that enables Upper Class and Gold Card passengers the opportunity to relax before flying. Covering 795 sq m with seating capacity of 130, the Clubhouse offers a choice of different areas for different needs. Whether travellers want to read newspapers, settle down to brunch or catch up with the internet before they jet off, the new lounge has it all. Among the new range of facilities is the Cowshed Spa, designed to offer a haven of tranquility. Here travellers can experience a variety of treatments ranging from a gentle massage to manicures and pedicures. Steve Ridgway, Chief Executive, Virgin Atlantic, said, “Our award-winning Clubhouses have always led the industry by offering luxury and innovation, and now we have introduced some of the best elements of our flagship Heathrow Clubhouse, such as the luxurious Cowshed spa, at Gatwick.” Jeremy Brown, Senior Design Manager said, “The
Ethiopian congratulates B787 on its first flight ATO Girma Wake, Chief Executive Officer, Ethiopian Airlines sent a congratulatory message to The Boeing Company in Seattle, marking the high profile launch event of Boeing 787 — The Dreamliner, on December 15, 2009. Expressing his warm sentiment of joy and optimism on the successful launch of the Dreamliner, he said, “Ethiopian has always been and continues to be a strong supporter of the B787 program beginning from the date of its design inception all the way to where it is now. On behalf of the entire force of Ethiopian and myself, I convey my sincere congratulations to the Boeing Global Team of men and women who have worked hard to turn the long awaited program
design of the Gatwick Clubhouse perfectly captures Virgin Atlantic’s ethos; it is sophisticated, stylish, and entertaining. We know our customers will have a unique and memorable experience.” into reality”. Dreamliner — the newest member of the Boeing’s commercial jetliners took off from Washington at 10:27 am and after three hours of safe flying it landed safely at 1:33 pm at the Seattle’s Boeing Field. The flight marks the beginning of a flight test program that will see six airplanes flying nearly around the clock and around the globe. The technologicallyadvanced 787 will use 20 per cent less fuel than today’s airplanes of comparable size, provide airlines with up to 45 per cent more cargo revenue capacity and present passengers with innovations that include a new interior environment with cleaner air, larger windows, more stowage space, improved lighting and other passenger preferred conveniences.
Air Astana aims growth in Asia WITH focus on leisure and extensive tours, Air Astana, the national carrier of Kazakhstan is optimistic for healthy performance on the Delhi-Almaty route this year. Richard Ledger, Director (sales), Air Astana said, “We have been approaching key companies in India and already achieved some success. A couple of large incentive groups will be travelling to Kazakhstan in the next two months. That’s the way to increase traffic between both countries and we will continue to identify these opportunities,” he added. However, there is no expansion plan and the carrier is just concentrating to develop the route density by increasing frequency on the present route. Also, Air Astana is aiming for regional dominance in the Central Asian region. Ledger said that being the strongest carrier in the region the airlines was intended to operate the home market strategy around the bordering country like Western China, Kyrgyzstan, Uzbekistan, Tajikistan and Russia.
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Richard Ledger, Director (sales), Air Astana lighting the lamp at fourth Kazakhstan-India Travel and Tourism Fair, New delhi.
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KLM unveils Economy Comfort zone
KLM Royal Dutch Airlines has launched its new Economy Comfort zone, which offers some additional luxuries for people travelling in economy class. To promote its new offering, KLM hosted a special event at Schiphol Airport in Amsterdam that featured a spectacular ‘gliding act’ performed by the magician Ramana. The stunt was arranged to tie in with the airline’s new advertising campaign, which shows passengers sitting in invisible seats and seemingly floating in mid-air. With Economy Comfort, passengers will be able to enjoy 10cm more leg room in a seat that reclines twice as far as the standard option. Located in the front section of the economy cabin, the new area allows them to disembark first. Service and meals will be the same in the new zone as in KLM’s standard economy cabin. The airline revealed that more than 1,500 Economy Comfort seats will be available every day to passengers willing to pay additional fees ranging from EUR80 to EUR150. Bookings can be made via ‘manage my booking’ tab on www.klm.com or telephone reservation.
Cathay Pacific to launch direct flights to Milan CATHAY Pacific is all set to launch scheduled services between Hong Kong and Milan on March 28, 2010. The new four-times-weekly service will be operated by a Boeing 777-300ER featuring the airline’s acclaimed three-class inflight product. The latest addition to network will increase the airline’s presence in Europe and provide passengers with greater flexibility for travel between Italy and Hong Kong and to other destinations in Asia and Australia. Tony Tyler, Chief Executive, Cathay Pacific said, “We are very excited to launch a new service to this dynamic city, and we expect it to help Milan to develop quickly as a prime des-
tination for business and leisure travellers from this part of the world. This is the only direct service between these two major commercial cities and our strong network will enable us to offer great connections for travellers from northern Italy through the superb Hong Kong hub.” The airline currently operates a daily passenger service to Rome and a six-times-weekly freighter service to Milan, and will offer a total of 11 passenger flights to and from Italy each week when Milan launches as a passenger destination.
Lufthansa gives gourmet Christmas treat THIS Christmas, Lufthansa passengers draped into festive mood with traditional Christmas food on the in-flight menu along with various Christmas goodies and seasonal decorations. Roast goose with red cabbage and potato dumplings and herb crumble were served on long-haul flights to first and business class passengers, while on all long European routes, the classic roast goose was served in Business Class. The entrée is a venison pyramid with chanterelles and Wall- Lufthansa is all set for Xmas celebrations. dorf salad. Rounding off the menu is a Printen gingerbread mousse with a dusting of cinnamon and fig sauce. Upto the second day of Christmas, the cabin crew were handing out around 61,000 truffle chocolates; 370,000 chocolate Santa Clauses; 270,000 snowmen; one million mini-gingerbreads and 580,000 Christmas pralines and furthermore, 850 Advent wreathes enhanced the festive spirit. In addition, from mid-December, tiny tots were given a small elk to cuddle as a Xmas toy on all routes and in all classes.
India enjoys vintage wine THE wait came to an end when Beaujolais Nouveau was the cynosure of all eyes. The latest new vintage brought into India by Air France, was launched in an event organised by Air France, Atout France (the French tourist office) and the Shangri La’s-Eros Hotel in New Delhi. The wine was uncorked by Pieter de Man, General Manager, Air France-KLM. Speaking on the occasion, Pieter de Man said, “Air France is privileged to bring in the tradition of uncorking the new harvest of Beaujolais Nouveau every year to India. With festivals all across the world celebrating the arrival of this new wine; we are very excited that our customers in India can enjoy the new vintage — Beaujolais Nouveau during the festive season.” Made of handpicked Gamay grapes, the Beaujolais Nouveau is red wine that wears the fruity flavours and marks the celebration of a new harvest season. Even “Beaujolais Day” or “Beaujolais Nouveau Day” sees heavy participation worldwide, with races to get the first bottles of the vintage to different countries.
‘WINE’ING HARD: (above) Air France brings Beaujolais Nouveau vintage red wine to India; (along side) People at the launch party enjoying the wine.
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Air Arabia flies to celebrate
OBSERVING the strong demand for service to Goa in festive season, Air Arabia offered an addition of eight flights to the popular coastal state over the holiday season. “Meeting the needs of our customers is the highest priority at Air Arabia,” said AK Nizar, Head of Commercial Department, Air Arabia. “Therefore, in line with the high level of demand we have experienced for service to the Indian State of Goa, we are pleased to announce that we will offer eight additional flights — at very convenient times — over the upcoming holiday period. We encourage all Air Arabia passengers to avail of this opportunity soon, as seating remains limited.” On December 17, 23, 24 and 30, 2009, the additional flights were in operation to cover the year end celebrations in Goa. The carrier is also offering supplementary flights to Goa from January 4-7, 2010. In addition, Air Arabia offers visitors from Goa to Sharjah a convenient tourist visa service to visit their family and friends based in the United Arab Emirates.
growth for SMEs by focusing on tangible and human connections. 50 SMEs will be awarded grants giving them free travel for one year to support their business and seek out new opportunities. After its launch in the US, the UK, Hong Kong, South Africa and the United Arab Emirates, the programme has now made its foray in India. The scheme was launched with the support of cricketer Sourav Ganguly, Dr Indu Shahani, the Sheriff of Mumbai and well-known businessman, Suhel Seth.
AirAsia celebrates new Kochi-Kuala Lumpur route AIRASIA, the leading low-cost carrier, recently celebrated the launch of its Kochi — Kuala Lumpur route. Kochi, Kerala is one of the airline’s latest Indian destinations which opened for sale recently, alongside Kolkata and Thiruvananthapuram (Trivandrum). The occasion was graced by Anuar Kasman, Consul General — Malaysia, Southern India based in Chennai and was accompanied by Kathleen Tan, Regional Head — Commercial, AirAsia. Also present on the occassion were tourism delegates, hoteliers, travel agents, airport authorities and other distinguished guests and media. Reinforcing the commitment to expand its Indian network, AirAsia launched three new routes from Kuala Lumpur to Kolkata, Kochi and Trivandrum which opened for sale on October 15, 2009. Since the opening of these routes less than two months ago, AirAsia has experienced an overwhelming response of nearly 100,000 seats sold. It is noteworthy to highlight that AirAsia is the only airline from Kuala Lumpur which is servicing the flight to Kochi with direct daily flights. Kathleen Tan said, “With Kochi now added to our extensive network, AirAsia is unlocking the potential of international air
BA and Amadeus extends long-term agreement
Amadeus, the global distributor of technology and solutions for the travel and tourism industry and British Airways (BA), have announced a three-year extension of their content agreement, thus, taking it up to 2013. The renewed agreement guarantees full-content access to Amadeus users worldwide, ensuring travel agents have access to the same range of fares through Amadeus as they would through the airline's website. “It has been our endeavour to provide the widest scope of integrated content to our partners and our relationship with carriers such as British Airways is a step towards this effort. Full content agreements with carriers are a significant part of our ongoing mission of providing our partners with stability and clear long-term planning”, said Ankur Bhatia, Managing Director, Amadeus India. The full range of British Airways’ fares, schedules and inventory made available through the Amadeus system will be the same as those offered through any direct or indirect channel, distribution provider or website. John Mornement, Head of selling and distribution at British Airways, said, “Amadeus is a trusted and important distribution channel and we are delighted to have reached an agreement that continues to give Amadeus agents worldwide access to our fares and which reduces our distribution costs.” BA takes lead to push travel business: AS the global economic downturn saw business travel budgets slashed by more than 56 per cent over the last 12 months, British Airways (BA) has announced the launch of BA Business Opportunity Grants across India as part of the airline’s commitment to help India’s more than 13 million SMEs (Small to Medium Sized Enterprises) and to stimulate local business. BA Business Opportunity Grants is designed to drive business
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Kathleen Tan, Regional Head of Commercial of AirAsia Group presenting a memento to Anuar Kasman, The Consul General of Malaysia for Southern India based in Chennai, flanked by AirAsia cabin crew.
travel from Kuala Lumpur to Southern India and its surrounding areas. We are thrilled to be serving Kochi direct, a huge market that no other airline is serving directly. With the commencement of this direct service to Kuala Lumpur, the people of Kerala and India can now use Kochi as a gateway to our extensive route network to ASEAN and beyond. Since opening of the route, we have noticed a strong pick-up with over 82 per cent load factor recorded. We have sold approximately 35,000 seats for the Kochi — Kuala Lumpur route.” Adding further she said, “We are looking into expanding our route network in India and opening-up the market. Amongst the destinations which are on our network radar are Chennai, Hyderabad, Bengaluru and Mumbai.”
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Oman Air flies with new services
THE national carrier of the Sultanate of Oman — OMAN Air —flying to ten destinations in India has come up with some new products and services. The carrier is contemplating of including more flights to the existing routes which have been observed with high traffic growth. The expansion plan is in line with the brand new A330 and B787 — The Dreamliner and the narrow body 737-800. The carrier that flies to Delhi, Mumbai, Lucknow, Chennai, Calicut, Bangalore, Hyderabad, Cochin, Trivandrum and Jaipur, recently introduced free chauffer service for all business class passengers arriving and departing from all the Indian airports and at all Oman's destinations. Besides it, to the new destinations — Frankfurt, Paris and Munich — where it recently started operations — has offered attractive fares. For the customers worldwide, carrier’s Sindbad Frequent Flier programme features attractive offers which present an array of offers with its business associates and other partner airlines.
Carriers see 2010 as the year of growth
AFTER the forecast by The International Civil Aviation Organisation (ICAO) of a steady recovery of 3.3 per cent for the airline industry in 2010, foreign carriers such as Lufthansa, Swiss International Airlines and Singapore Airlines plan to add flights to-and-fro Indian destinations. As the world economy returns to the growth path and with air traffic starting to pick up in the emerging economies, foreign airlines have plans to adjust the capacity factor on their network by deploying additional capacity on routes where demand has improved. Axel Hilgers, Director (South Asia), Lufthansa said, “Now, we are seeing the number of passengers as well as yield going up. Booking trends for the January-March 2010 period seem quite positive. We see a minimum 5-10 per cent growth in traffic next year.” The carrier, which operates six flights in a week from Bangalore, is planning to convert it into daily service by adding one more to the schedule. There are plans of increasing the number of economy seats on PuneFrankfurt route. Its affiliate Swiss International Airlines and Austrian Airlines would also increase their flight frequencies to Delhi and Mumbai. Pointing out the actual picture of airline industry this year, ICAO World Headquarters. Kapil Kaul, India Head, Centre for Asia Pacific Aviation (CAPA) said that while the volume of air traffic would go up from the third quarter onwards, there would be a significant fall in revenue per seat in the next fiscal. Therefore, while losses would come down, airlines were not expected to start making profits. Reinforcing the point, a Singapore Airlines spokesperson pointed out that the airline will only manage to contain its losses next year, as its yield will continue to be low. The airline plans to
increase its total weekly flights to 14 each from Delhi and Mumbai from the existing 11 flights. “Bigger carriers want to have a greater market share by introducing additional flights. Their idea is to corner smaller airlines, which can not sustain high losses. While we plan for the mediumterm, bigger carriers plan for the long run,” he said.
A double for Malaysia Airlines IT is a double celebration for Malaysia Airlines as it has been awarded the ‘five-star airline’ status for the fifth consecutive year and the ‘World’s Best Cabin Staff’ for the seventh time by Skytrax, a UK based organisation, with 20 years experience in airline research. Tengku Dato’ Azmil Zahruddin, Managing Director and CEOMalaysia Airlines said, “This is great news, particularly in today’s tough environment where all employees have been working very hard to deliver products and services that matter to the customer. What matters to them, matters to us. This recognition will spur us to intensify our efforts to improve our products and services. Our cabin crew has done a stellar job.” The CEO also mentioned that the airline would be taking delivery of the new 737-800 Boeing Sky Interior by the end of 2010. Customers would then enjoy better ambience, higher ceilings, mood lighting, in-flight entertainment on every business and economy class.
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Up in the Air with Clooney!
t’s the story of a road warrior where three hundred and twenty-two days are spent travelling, leaving “fortythree miserable days at home” in Omaha and who is globetrotting, thereby firing people and getting the dirty work done on behalf of others. As this George Clooney starrer Up in the Air — opens at Christmas time around the world, it has already struck an emotional chord with viewers in North America and Europe. Withering under the economic downslide of the past 18 months, Clooney’s globetrotting to sack people on behalf of companies and individuals who don’t have the heart to do it themselves. A memorable quote from the film goes, “The slower we move, the faster we die. We are not swans. We’re sharks.” The Wall Street Journal had a philosophical opinion on the movie to offer, “Up in the Air isn’t just about a corporate gypsy living out of a roll-aboard and addicted to the perks and privileges of elite level status in travel programmes. It’s about the ethos of corporations firing employees after years of service. It’s about a younger generation, raised over a computer keyboard, that can end a relationship with a ‘Dear John’ text message or dismiss a worker through a video conference call. And more than that, the movie is about
human relations — what we need and want in both our work and personal lives. It’s about the choices we make even when we think we aren’t making choices.” The film has been nominated for six Golden Globes and is likely to get several Oscar nominations as well. However, it may end being referred to as the film that prompted bachelor Clooney to introduce his girlfriend Elisabetta Canalis to his mother.
REAL LIFE: George Clooney walked the red carpet with two beautiful women at the LA premiere of his new movie Up in the Air: Elisabetta Canalis on one arm and his mother, former beauty queen Nina Warren, on the other.
IN REEL: Stills from Clooney’s upcoming film, ‘Up in the Air’ released worldwide at Christmas.
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BUILDING THE FUTURE… COMING UP AT CHENNAI AND KOLKATA…
THE NEWEST PASSENGER TERMINALS COMING UP AT CHENNAI AND KOLKATA WILL ALSO BE THE MOST CONVENIENT. SO WHY WAIT?
Airports Authority of India Committed to provide comfort and convenience to air travellers around the country
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