Cruisingheights by Newsline

CONNECTING INDIA: TOP PRIORITY FOR aviation minister AJIT SINGH

Cruising heights www.cruisingheights.in

march 2013 I `90

whirlwind Despite hurdles, helicopter manufacturers look forward to high growth and brighter future

+ NO TAILWIND TO TAKE JET DEAL THRU

Is Etihad having second thoughts about the 24 per cent stake in Jet Airways?

MOTHER OF ALL MERGERS

AA-US Airways tie-up creates a behemoth in the US, but will it deliver?

editor-in-chief's note

What does one make of the Air Asia-Tatas JV?

o what does one he hold on to Gopi’s application when he is make of the exciting in the queue ahead of Tony? news that Air Asia ● As and when the airline commences operaand the House of Tatas will tions, there is little doubt that it will expand K Srinivasan finally launch an LCC in the market and also gobble some of the 11 India before the end of the year. Here a few per cent of Kingfisher traffic that has now first thoughts on the degone to the others, velopment. notably Indigo. ● There is now a new ● Will the others headache for Mr Nago in for FDI? Difresh Goyal. The last ficult to say. My time, the Tatas wanthunch is yes at least ed to start an airline one or two will try with Singapore Airand bolster their lines, Goyal was flanks with a dose too smart for them. of FDI. He had Mulayam ● Also, what will Singh at Defence, Mr Ajit Singh and Amar Singh by his the aircraft acquiside and Chand Ma- SPARRING PARTNERS: Jet chief Naresh Goyal and AirAsia sition committee hal Ibrahim at Civil boss Tony Fernandes of the Ministry of Aviation. That’s all Civil Aviation tell history now. The Tatas are wiser and Tony Tony Fernandes? How many aircraft he Fernandes is not SIA (with due respect to should acquire, what stations should he fly SIA and Changi Airport, the Singaporeans to and with what frequencies. My hunch have a reputation of chickening out at the is that the committee will come under fire slightest pressure). If anything he is a street sooner rather than later and they will have fighter who can take the fight deep into the to find a way of letting airlines run their opposition camp. So how is Jet Airways business. going to deal with them? ● Finally, how soon will Tony get to fly? ● How does Mr Ajit Singh now say ‘no’ to My guess is it will take a while for him. Captain Gopinath? Agreed the good CapHe hasn’t reckoned with the guile of Mr tain doesn’t have anything spectacular to Naresh Goyal. In his backyard, he is like show post the sale of Air Deccan to Vijay Shane Warne on a turning wicket. UnplayMallya, but there is nothing in the rules to able at the best of times. prevent him from obtaining another licence to start an airline as long as he completes all formalities. If the Air Asia-Tatas JV is cleared by the Foreign Investments Promotion Board (FIPB) and they apply for a licence, the Civil Aviation Minister will srini@newsline.in have to clear their application. So how can

Cruising Heights March 2013

iPads? Yes, no, maybe… US civil aviation regulator Federal Aviation Administration (FAA) is mulling over the unwarranted use of iPads and Kindles on flights. FAA regulations put the responsibility for Portable Electronic Devices (PED) control on aircraft operators which says, “No person may operate…any portable electronic device on… US-registered civil aircraft… (except) any portable electronic device that the operator of the aircraft has determined will not cause interference with the navigation or communication system of the aircraft on which it is to be used”. FAA, of late, has been finding it hard to give out explanations about the use of the electronic devices. New York Times recently reported that the FAA had ordered iPads and Kindles had to be turned off because they could interrupt a plane's electronics. The newspaper also reported that allowing iPads into the cockpit by the pilots could also pose serious danger. Other publications too have published similar reports undermining the use of iPads and smartphones on flights. What sparked the speculations? Are these speculations baseless, or credible? In a report in the New York Times, the FAA gave an explanation that a smartphone or tablet could interfere with the operations of a plane. While the good news is that FAA was finally reviewing its electronic devices policy, the report unveiled the findings by the National Aeronautics and Space Administration (NASA), which sends Americans into orbit. No factual proof that a consumer electronic device can mess up the safe operation of a plane were reported in the study. Earlier in December 2011, the FAA raised a few eyebrows while permitting American Airlines pilots to use iPads in the cockpit. The FAA allowed iPads to take the place of paper manuals and charts, and they could be used during take-offs and landings. The FAA contended that allowing two iPads in the cockpit was a significantly different scenario altogether than several passengers using several devices for longer periods of time.

contents

HOPPING AHEAD p30 Civil helicopter operations in India have taken a leap forward. Despite infrastructural difficulties, operations are touching areas such as Energy Sector/ Offshore Operations, Heli-Tourism, Shuttle Services, Helicopter Emergency Medical Services (HEMS), Disaster Management and Law Enforcement in a big way.

hemant rawat

Off the cuff

cover story

news digest

p26

Jet-Etihad deal is witnessing hiccups even as Emirates has urged India to allow more connectivity as the carrier seeks permission under the Air Services Agreement (ASA) to 54,200 seats a week.

Cruising Heights March 2013

Interview

p12

Civil Aviation Minister Ajit Singh in an interview talks about the current civil aviation scenario in the country besides spelling out his priorities and what the future holds for Indian civil aviation sector.

contents

cover story

hc tiwari

articles news views edits interviews clippings profiles news digest

CH Special

Cruising Heights

p40

Volume VII n No 10

State-owned carrier Air India is caught on the wrong foot again even as it started seeing a glimmer of hope. Reason: grounding of the Dreamliners. The plane was supposed to change the fortunes of the carrier but that dream has floundered.

Editor-in-Chief

K SRINIVASAN Managing Editor

TIRTHANKAR GHOSH Group Consulting Editor

R KRISHNAN

GENERAL AVIATION p49 Cargo

p63

Quikjet is optimistic about the future after weathering the first year. CEO of Quikjet Cargo, Capt Preetham Philip in an exclusive chat speaks his heart out about his ambition to provide a world class logistics service at competitive rates.

Air Works unveils plans for interior designing, restoration and refurbishment for next corporate aircraft, including rotary and fixed wings. Plus exclusive interview with Jean G Rosanvallon, President and CEO, Dassault Falcon, and Valdim Feldzer, Head of Communication, Dassault Falcon.

Consulting Editor

Nandu manjeshwar Senior Sub-Editor-cum-Reporter

punit mishra Chief Visualiser

ajay negi Designers

modassar nehal, Mohit kansal nagender dubey, chanderjeet Design Consultant

artworks Picture Editor

Pradeep chandra Photo Editor

HC Tiwari

SNIPPETS

p72

6. Name, Address of : individuals who own the newspaper and the or shareholders partners holding more than one per cent of the total capital

Rajiv Singh Director (Marketing)

New Delhi Monthly K. Srinivasan Yes Not Applicable

Rakesh gera Manager (PR)

Ashutosh Mishra Sr. Executive (Coordination)

Alka goswami

4C Pocket-IV, Mayur Vihar, Phase-I, Delhi-110091 K. Srinivasan Yes Not Applicable

Subscription

Ashna Pandit, Charu Sharma (9650433044)

IndiGo announces the launch of 14 new flights on its domestic network while Jet Airways posts a net profit of `85 crore for the quarter ended December 31, 2012.

4C Pocket-IV, Mayur Vihar, Phase-I, Delhi-110091 K. Srinivasan Yes Not Applicable 4C Pocket- IV, Mayur Vihar, Phase-I, Delhi-110091

CONNECTING INDIA: TOP PRIORITY FOR AVIATION MINISTER AJIT SINGH

CRUISING HEIGHTS

1. Renu Mittal 2. K. Srinivasan 4C Pocket-IV, Mayur Vihar, Phase-I, Delhi-91

www.cruisingheights.in

MARCH 2013 I `90

WHIRLWIND Despite hurdles, helicopter manufacturers look forward to high growth and brighter future

I, K. Srinivasan, hereby declare that the particulars given are true to the best of my knowledge and belief. Date: 1st March, 2013

hemant rawat Director (Admin & Corporate Affairs)

Form IV (See Rule 8) CRUISING HEIGHTS 1. Place of Publication : 2. Periodicity of Publication : 3. Printer’s Name : Whether Citizen of India? : (If foreigner, state the : country of origin) Address : 4. Publisher’s Name : Whether Citizen of India? : (If foreigner, state the : country of origin) Address : 5. Editor’s Name : Whether Citizen of India? : (If foreigner, state the : country of origin) Address :

Staff Photographer

Sd/K. Srinivasan Publisher

NO TAILWIND TO TAKE JET DEAL THRU

Is Etihad having second thoughts about the 24 per cent stake in Jet Airways?

MOTHER OF ALL MERGERS

AA-US Airways tie-up creates a behemoth in the US, but will it deliver?

cover

design: artworks photo: eurocopter

The total number of pages in this issue: 76+4

Cruising Heights March 2013

Executive Director

renu mittal For advertising and sales enquiries, please contact:

+91-9810030533, 9810159332 Editorial & Marketing office: Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013, Tel: +91-11-41033381-82 All information in Cruising Heights is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/ views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase- I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase- I, New Delhi-110020.

“ periscope

A grey area “Our next focus is on providing air connectivity to remote areas by developing low cost airports and encourage the growth of regional airlines.” Ajit Singh, Civil Aviation Minister on the need to provide air connectivity to remote areas of the country

Peace of mind “Setting up of an Essential Air Services Fund (EASF) for providing funding support to small (Tier 3/4) airports and airlines operating there can be a big boost to the aviation sector.”

letters to editor

The best and brightest on show (February 2013) article was written AERO INDIA in the right perspective. Aero India is arguably the biggest air show SHOWTIME! 2013 in Asia and attracts major players from the world. And Aero India 2013 too proved quite a success as almost the entire international aviation manufacturing fraternity came down to Bengaluru. With more than 600 companies participating along with delegations from 78 countries, the show also witnessed the participation of China for the first time. It also saw most of the global defence vendors including Boeing, Lockheed Martin, Eurofighter and Saab exhibiting their products. Ram Sahni, Ludhiana SPECIAL ON AIRPORTS AUTHORITY OF INDIA

Pg 47

CRUISING HEIGHTS www.cruisingheights.in

BIZJETS LOOK FOR BIG BUSINESS

The presence of a growing number of high net worth individuals in the country is reason enough for aircraft-makers to be optimistic.

Amber Dubey, Partner and Head-Aviation, KPMG, on creating a fund to provide support to airports and airlines

FEBRUARY 2013 I `90

Flying high “After catering to defence sector needs all these years, now we are exploring civilian sector through civil aviation. Immediate priority for us is to build a 90-seater regional aircraft.”

REACHING FOR THE SKIES

With opportunities aplenty amidst a booming economy, the civil helicopter sector is all set for big-time growth.

The story Chennai’s ready and willing (February 2013) was interesting to read. The new terminal and the facilities at Chennai Airport will definitely pave the way for better connectivity in the region. With its opening, Chennai Airport will become an international gateway and air hub for South India. Kudos to the Airports Authority of India (AAI) for bringing up Chennai airport. The airports in India provide a lifeline to civil aviation in India and Chennai airport exemplifies that. The terminals which have been equipped with state-of-the-art facilities for comfort and convenience of passengers will surely put Chennai airport in the top league. Amit Singh, Chennai Reaching for the skies (February 2013) was a comprehensive story on the evolution of civil helicopter operations in India. The history of the civil helicopter industry in India can be traced back to 1953 when the first civil registered helicopter flew in the country even though the growth of civil helicopters have been sluggish for various reasons. The foundation of Pawan Hans Helicopters Limited (PHHL) in 1986 was one of the milestones in helicopter operations in the country. On the flipside, one major concern is that there is no flying training institute for training civil helicopter pilots in the country. Neelam Sethi, Gaya

R K Tyagi, Chairman, HAL on developing a 90-seater civil aircraft with private participation under a jv model

Why not? “We are working with the regulatory agencies. We are confident about the safety of the aircraft. We are focussed on getting the plane back in the air.” Dinesh Keskar, Boeing's Vice-president for sales in Asia Pacific-India on the revival of Dreamliner planes

Under (close) scrutiny “We know from intelligence that terrorists see the US as the gold standard of aviation security, because of all the layers.” John Pistole, TSA Administrator John Pistole on the effectiveness of aviation security in US

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

Cruising Heights March 2013

Fast forward “Today, London Heathrow and Paris are ahead of us and with the growth that we have seen last year; we should take anybody next year or two years maximum.” Sheikh Ahmed bin Saeed Al Maktoum, Dubai Airports Chairman on Dubai airport

A list of the world’s safest airlines was recently unveiled by the Germany-based Jet Airliner Crash Data Evaluation Centre (JACDEC). Interestingly, not one North American carrier made it to the top 10. Carriers in the Asia-Pacific region dominated the upper part of the list. According to the JACDEC, there were some airlines that performed better than others in 2012. Carriers in Europe, New Zealand and Hong Kong scored the highest in terms of safety. Cathay Pacific ranked third, followed by Emirates and Etihad Airways. When it came to airlines from North America, it was low-cost carriers, not national airlines, which cracked the list's top 10 ranking. The Evaluation Center Safety Index took into account how long the airlines had been operating, the time since the airline lost its last aircraft, as well as the total number of aircraft destroyed since 1983. The centre estimated its annual rankings based on aircraft loss accidents and serious incidents over the past

30 years. The resulting index relates that information to the Revenue per Passenger Kilometer (rpk) garnered by the airline over the same period. JACDEC counted 496 casualties on commercial passenger flights in 2012, two less than 2011. Here is the list of top 10: 1. Finnair 2. Air New Zealand 3. Cathay Pacific 4. Emirates 5. Etihad Airways 6. Eva Air 7. TAP Portugal 8. Hainan Airlines 9. Virgin Australia 10. British Airways

cold stats

Ushering safe journey

Looking glass

A battery, a battery! My kingdom for a battery

Trials and tribulations “Airlines fail because ego comes in the way of wisdom. As any business matures, not just the airline industry, it tends to move away from the basics.” Aditya Ghosh, President and Executive Director, Indigo Airlines advising Indian carriers on the business strategies

Trust me! “Very important for Air India to start from scratch, completely change the way you think.” Masaru Onishi, Chairman of Japan Airlines (JAL) giving a piece of advice to Air India to counter the challenges

Cruising Heights March 2013

NEWSMAKER

nnounced coincidentally on February 14, 2013, the $11 billion marriage between US Airways and American Airlines has created one of the biggest airlines in the world that is headquartered in Dallas-Fort Worth. Almost all the carriers in the US have gone through Chapter 11 bankruptcies and come back: US Airways for example, has been through Chapter 11 twice, while United and Delta once each. The recent merger — or reverse takeover, according to the Economist, by the much smaller US Airways — came after the fourth successive year of losses by American Airlines. Even so, the merged carrier now touches a whopping 218 destinations spanning across the US. Internationally, the carrier has connected to 9 destinations in Canada, 20 in Mexico, 10 in Central America, 21 in South America, 32 in the Caribbean, five in Asia Pacific and 21 in Europe and the Middle East. Incidentally, the merged airline does not fly to any Indian or Middle East destinations (the only ‘Middle Eastern’ station that it touches is Tel Aviv). Bloomberg reported that in 2012, American (including American Eagle) had a global capacity of 167 billion air seat miles while US Airways had 40 billion air seat miles. The domestic market share of American (January to September 2012) was 16.2 per cent while US Airways was 7.5 per cent (the others like United’s marketshare was 21.7 per cent and that of Delta was 20.5 per cent). In the domestic market, American would benefit from the merger in the eastern United States: many of its loyal passengers have gone away to Delta and United.

GIANT OF A US Airways American Airlines

 

Asia/Pacific 5 Destinations 8 Routes

 

Mexico 20 Destinations 42 Routes

Central America  10 Destinations  22 Routes

WINNERS Fleet

The total number of planes of the merged entity would be a humongous 1511. There will be 801 narrowbodies (American’s 487 and US Airways’ 314), 147 widebodies (American’s 121 and US Airways’ 26) and 563 regional aircraft (American’s 281 and US Airways’ 282).

Canada 9 Destinations 30 Routes

Cruising Heights March 2013

Loyalty programme

US Airways (a Star Alliance member) will join oneworld (of which AA is a member) and certainly boost its small international route network. Before the merger, American Airlines had 71 mn frequent flyer members and US Airways 30 mn. This will shoot up to 101 mn against the 90 mn of Continental and 74 mn of Delta.

LOVE STORY

The Tom and

Doug story Europe/Middle East  21 Destinations  52 Routes

 

Caribbean 32 Destinations 93 Routes

Tom Horton (top, left) and Doug Parker (top, right) — both 51 years old — are friends and both have been in the aviation business for a long time. In the 80s, the two worked together as financial analysts at American Airlines’ Fort Worth headquarters till Parker moved to US Airways as CEO. Despite the similarities, the two are poles apart as personalities. Horton is the usual business executive who starts the day with a long run and cereals and peaches for breakfast. Parker, on the other hand, is gregarious and commands attention. While Parker is the CEO of the world’s largest airline, his friend Horton will serve as chairman for about a year and then move out of the company he has worked for nearly a quarter century.

South America 21 Destinations 34 Routes

LOSERS The new airline

In 2012, American had a loss of $130 mn but US Airways saw a profit of $534 mn. If the two were merged, the entity would have made a profit of $404 mn last year. However, before the merger, Parker had promised bonuses to the unions. Pilots, for example, will add $387 mn to the merged carrier’s payouts. US Airways pilots will make $272 million more a year.

Passengers

In most of the US Airways’ hub cities, flyers will have virtually no choice at all. Complaints will gain momentum till the systems work in tandem. In 2007, US Airways and America West flyers experienced frequent crashes in the reservation systems. Decrease in capacity prompts a carrier to charge more for the same flights.

Cruising Heights March 2013

aero india

“Our focus this year is on Civil Aviation Minister Ajit Singh lists out his priorities for 2013 to K Srinivasan in this one-on-one and express his optimism about the future of Air India On the airline business The fact is that this sector has changed so rapidly that all the old rules, regulations and way of working have to be changed and updated. The merger of Air India and Indian Airlines: at that point in time, it may have been a good decision but they did not carry it to the logical end. That created such bad blood within Air India. Moreover, other companies felt that the Aviation Minister was Air India’s minister. For example: they did not allow any other Indian carrier to fly to the Gulf (for a long time). A lot of things have to be changed and civil aviation’s role in the national economy has also changed: 10-15 years ago, it was just a rich men’s playing ground. Now, it is a vital sector for economic development. Connectivity is the issue and, in fact, if I may just digress from what you are asking, our focus this year is on connectivity because even in a small town for the upcoming businessman, time is money and that means he wants air connectivity. On Air India Air India is still our national carrier and lots of people, especially Indians settled abroad,

have very deep feelings about it. Let us hope it comes around. Things are changing slowly. Aviation is a service sector. In the service sector, what counts is the attitude of the person working there. You travel in an airplane: they have the same seats, same body, and you are cooped up there for 5-8 hours... It is the person who is serving you and how good you are that is critical. It is very difficult because in government, everybody is king himself. The customer is not the king. So that attitude has to change. Air India had eight strikes in four years. So, everybody took it for granted that if there was any problem, just go on a strike. They had somehow disconnected themselves from the fact that Air India is their employer. If it does not survive, they would not survive. That feeling was not there. Take the pilots’ strike. It was ill-advised, wrongly-timed, and they did not have the right issues but they were so overconfident. They did not even give notice. Unions have a very crucial role in any industry but they are supposed to be playing a mediating (role) between the management and the workers...But here, they acted in a confrontational mood with the management Cruising Heights March 2013

and that was the problem. And, of course, pilots are the most vital part of any airline. You cannot fly without them. But as I said, they chose the wrong time and the wrong issue and because of that, the strike did not succeed. We were able to implement the Dharmadhikari report that otherwise we would not have been able to implement. So, things and peoples’ attitude are also changing slowly. And I would not say that it was totally the pilots’ or the workers’ problem. Management had its role in the problem also because even now, sometimes, I feel that the communication that should be there between the pilots or the other employees and the management, is not there. On the management If things change, everybody’s outlook changes. Now, people are thinking that Air India will survive. Therefore, everybody’s outlook has changed. There have been tremendous changes. In October last year, the on-time (performance) was 69 per cent. Now, it is over 86 per cent. These are small things, but (this attitude) that it is the government’s com-

cover story investors… other airlines can invest. So, in Air India’s case, it is the government as the shareholder who did it. But his point is we do not get the bilaterals we apply for — the number of requests we make and the numbers that are approved do not match. Can they fly that many today? Let us say, 50,000 seats to UAE and 50,000 to India. They were using about 54 or something. And we were using only about 20. If we gave them 30,000 at one time; what would happen, would not there be chaos? Then he is looking just at his request. We have to look at all the other airlines. We cannot give just to Mr. Rahul Bhatia or IndiGo or SpiceJet all the rights. We have to gradually fill that gap. It has to be calibrated.

connectivity” pany, so it doesn’t matter what we do (has to change). It does not matter what we do — like everybody will upgrade the baggage allowance. I banned the upgrade of baggage allowance completely.

thing is signed and delivered, you cannot say it is done. But presently, Lufthansa also feels that they (Jet) are trying to tie up with Etihad. Air India is the only one then.

On Star Alliance I think things are working out now — in the last few months. See, the fact is that in Air India, there were frequent strikes and people were losing faith. Basically the issue was: Will it be there on time? And (this was true) especially on international flights where airlines make money on business class and first class. For those people who are coming so far or going that far, they have a total schedule laid out…Naturally, all other airlines also did not want to tie up. It will reflect on them also because when people buy a ticket, they do not care whether it is Air India or Lufthansa or whatever airline (they are flying on). Now they are coming around and things have improved. I cannot say when it will happen but recently Air India people had gone there, talked to them, and they are positive.

On Air India staffing It would be incorrect to say Air India is over-staffed — partly because we were doing ground handling and we were doing MRO. Now, we have made them subsidiaries. So now, out of about 27,000, 17,00018,000 will go there. It will just be pure airline business and then if you look at the numbers that Air France or British Airways (had), they had the same number of employees. (In) Air India, the problem is that at the lower levels the salaries are too high. And do not forget that Air India’s problems are that they bought all those planes; if they had leased them out and bought them progressively it would have been different. And the capitalisation of Air India is very low. Any airline in that situation where the number of employees and number of places they fly to, that capitalisation just isin’t enough. That equity ratio also was excused because of that.

What about Jet into Star Frankly, in today’s situation, Air India is the only one they can go with because Jet is tying up with Etihad. I mean unless every-

On the tango with Rahul Bhatia We gave them the bilaterals and what else did we do? I mean favour Air India, I do not know. All other airlines can get foreign Cruising Heights March 2013

He had also said that the goal posts had been moved far too often in FDI? That could be. When I became Minister, the talk had just started and the ministry had agreed for 26 per cent. We just made it 49 per cent. That is the only difference. They may not invest by 49 per cent to begin with but they feel 49 per cent gives a feeling that it is substantial. That was the only reason. And the fact is that FDI was already there. All we did was allow airlines to come in. I mean money is money. I mean some other company which has interest in some of the airlines could still invest 49 per cent. So how does it make any difference whether an airline invests directly or some airlines proxy invests? And if an airline invests because they have that management depth, it is a very technical thing. Many people think flying an airplane is just like taking a bus from one place to another. It is a very complicated business and very capital-intensive. Other airlines have management depth. They have that reach around the world. So, all that should help the local airlines. On aircraft acquisition. Why take it over? No, we have not taken it over. It always was the ministry’s function. And any committee in a ministry has only advisory role. You can name it anything. If a minister makes it, he can change it. So it is only advisory .They named it the empowered committee but it had no statutory powers. So, legally it was not empowered at all and what I have done was just streamline it. That was only a minor part of it. Laymen probably do not know but you will understand it, capacity is a very important thing and critical because margins are very thin. One storm like Sandy must have sent many airlines into the

aero india red. And overcapacity means a Kingfisherlike situation. If you want connectivity, how would you get that? No airline wants to fly to a small place. They all want to fly to metros. They only want to have one type of aircraft and IndiGo is an example. Their inventory costs are less. Their maintenance costs are less. So therefore, they do not want to fly. If you want connectivity, we have only two tools. One is the Route Dispersal Guideline and the second is Plane Acquisition...and they are the only ways we have to have connectivity. On their role in this process We will not dictate what planes they buy but we will look at the overall capacity and also whether they have the financial strength or what routes they would fly to. Do the airports have the capacity? We will take into account all those things. Otherwise what they were doing is in next ten years, they were going to buy 250 planes. That was just hype. Now, we want them to give us more realistic projections.

their quota of seat kms. They are all meeting the requirements but if you look at whether they have connected to the small cities, they have not. Bagdogra is not in North East. We have appointed Deloitte to look into it. The second thing is: Do we need to add towns like Gorakhpur, Muzaffarpur? Small towns make another category. Your complaint is that they have tweaked the system Yes and none of the companies — except one or two — got smaller planes too. See without that, you cannot have connectivity. Jet has very few. Kingfisher had most in fact. Now, SpiceJet is getting that for the last two years. And Jet because it acquired Sahara’s ATRs. But Air India does not have any (big) numbers (of small planes) really. As a national airline, they do not really have (small planes). I am asking them (to buy) because right now they have seven or eight and only three are working. Another problem in Air India is that a lot of planes are not working because they do not have the money to buy spare parts. We have put that on the priority that we pay (for the spare parts) first then (get into) other areas. Now see after the government has given the `7400 crores NCDs, I hope banks will be willing to lend us money also.

If you want connectivity, we have only two tools. One is the Route Dispersal Guideline and the second is Plane Acquisition...

But how can there be projections? India’s aviation growth story of over 25 per cent year-on-year through the latter half of the last decade was unreal! (Laughs) I only said more realistic. Remember, a projection can never be realistic. The growth, it was (there), yes, but then that sector was so suppressed before that. Nobody was paying any attention. We did not have world-class airports, nothing was there. Is it only to make the whole process more rational? See what has happened, we gave so many licences to regional airlines and they were not able to acquire those planes. None. Even these big airlines, they gave projections for acquisition. It is required (since) they have to do the schedules. None of them have kept to that schedule. And in fact, I did not change it. A committee was formed under a Joint Secretary before I joined. They recommended all these things. What we have today — in fact for the last 10-15 years — is the North-East and J&K. But the problem there as I have found is that connectivity is not really being developed. What they really do is 10 per cent of seat/km. So they all fly to Bagdogra, they all fly to Guwahati and they complete

Airports Authority of India has also been on your radar — to privatise and modernize Not in that sense. What we said we will also allow PPP in smaller airports, but right now, their problem is different. They have a lot of airports (but) nobody is flying (from many of them). And the second thing is that Airports Authority functioning now is in two very distinct parts. One is ATC which is very highly technical and the second thing is construction and infrastructure creation. So they have to be separated. On the AAI Performance, are you happy? I think so. They have done a good job and what has helped them a lot is that in the last five years is that they got more than `5000 crores from DIAL and MIAL. That is the only reason they are able to bear all the losses. Your agenda for AAI See, if you look at that ATC aspect, there are lots of things they can do still because there is time between the plane taking off Cruising Heights March 2013

and others to start. Bombay airport is doing a great job in this regard inspite of the constricted space there. And with GAGAN’s implementation, even the time between two destinations — the flight time — should be less. So it should save fuel also. But they still have to do a lot of work there. That should keep them busy at least for couple of years. And on the airport side, yes, now they have built Kolkata. They have built Chennai. They have built Lucknow. They have built Varanasi. They have built Bhubaneshwar. Greenfield ones except the one in Arunachal, for which the Planning Commission is giving the money, the others are private. Goa is private and the one in Kerala (Kannur) is also private. We (AAI) have to also come up with low-cost, small airports so that things can be constructed quickly and it does not become that costly. Your agenda for the next two years Let me be a little realistic. Do not say two years, one year but till the elections. First, make this Civil Aviation and ATC Corporation and streamline them, Second: Connectivity and then to persuade the states to bring ATF prices in line with our neighbouring countries. Are you talking to the states? Baat chalti hai but in today’s fiscal situation it is very tough and we might say that it is a vital sector for growth but in their mindset, it is not so. It is still viewed as elitist. Mumbai airport is at a saturation point. It is a critical issue, too. First thing is to fill that gap. I met the Chief Minister (and told him) that if we can operationalise Juhu — of course, no independent operator can come — and give it to Mumbai Airport (MIAL)…(It can handle) A lot of traffic and small airplanes can be diverted there. What about the A380? Are you going to allow it? See, the problem is that one or two airports are equipped for it. The problem is that the number of passengers that will come at one time...Our baggage handling system will be tied up. What will happen to the other airlines, other flights at that point in time? That is one thing we have to consider. Do we have the infrastructure? On the Dreamliner Nothing new. They have not yet figured out what the problem is. Who knows how long it will take but I do believe it is only one of the two companies which make airliners and they have more than 800 on order. So I think they are too big to go under. They will find a solution.

end of the good

aero india special

No planes to fly

Kingfisher's fleet of 64 aircraft has gone down to almost 40. None of the planes can fly because they have been cannibalised. The 40-odd A320s and ATRs of Kingfisher Airlines can be seen parked across the key airports in the country and abroad. A number of the planes are leased and the lessors have been demanding the deregistration of the planes by the Directorate General of Civil Aviation ( (11 of Kingfisher's planes were deregistered in 2012). Once deregistered, the planes can be taken back by the lessors. The DGCA has also been told by the tax authorities that they have attached quite a few of the planes for non-payment of taxes by Kingfisher. In addition, a few airports too want to hold on to the planes because Kingfisher owes money to them. The non-deregistration of aircraft by the DGCA, according to industry-watchers, could put India's carriers in a tough spot since no lessors would be willing to lease planes in the future. The Indian and international airports that have Kingfisher planes parked in them are: Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata, Delhi, Istanbul and Zurich .

UB: Shareholding Ratio

Other: 41.39% UB Overseas: 2.72% Dr Vijay Mallya: 3.04% Kingfisher Finvest India: 12.75% United Breweries: 40.1%

UB City: NOT FOR SALE

UB City is home to India's first luxury mall as well as the headquarters of the UB Group's alcohol companies. UB Group was contemplating the sale of 50 per cent office space in one specific building to clear the dues incurred by the carrier but the sale has been delayed as of now.

Endless list: SBI, the leader of the consortium of lenders, has the maximum exposure with `1,600 crore, followed by Punjab National Bank with `800 crore, IDBI Bank `800 crore, Bank of India `650 crore and Bank of Baroda `550 crore. Other banks like United Bank of India has `430 crore, Central Bank of India (`410 crore), Uco Bank (`320 crore), Corporation Bank (`310 62

Cruising Heights March 2013

times?

Thank you, Kingfisher

The withdrawal of Kingfisher’s 126 flying slots for international flights to eight destinations — UK (seven flights), the UAE (21 flights a week), Thailand (21 flights), Nepal (seven), Bangladesh (14), Sri Lanka (35), Hong Kong (14) and Singapore (7) — has released approximately 25,000 seats per week for use by other Indian carriers. India lost 9 per cent of its airline seat capacity as a result of Kingfisher suspending operations since October 1, 2012, when its 66-aircraft fleet was grounded.

Employees: Abou t 4,500 still on the rol ls

Airbus A319133ACJ (Airbus Corporate Jet) The aircraft, when purchased in 2006, was estimated to be worth $61,093,550 - its standard equipment costing $33,321,040 and customised equipment $27,772,510. In addition to its hefty price tag, the annual operational cost of an ACJ319 is typically upwards of `10 crore.

Kingfisher Vi `860719968 lla, Goa: Costs around

ss: mpre ian E ,244,453 d n I t Yach nd `4,081 arou s t s Co

crore), State Bank of Mysore, (`150 crore), Indian Overseas Bank (`140 crore), Federal Bank (`90 crore), Punjab & Sind Bank (`60 crore) and Axis Bank (`50 crore). Lenders outside the consortium are Srei Infrastructure Finance (`430 crore), Jammu & Kashmir Bank (`80 crore) and Oriental Bank of Commerce (`50 crore). Cruising Heights July 2012

news digest

oneworld serves best wines oneworld alliance and many of its member airlines were recognised for the wines served in-flight. For the fourth year running oneworld has been selected as the best alliance for the wines served in-flight by its member airlines in the latest Cellars in the Sky Awards, run by Business Traveller magazine, in association with the International Wine Challenge. In December, oneworld retained for the second year running the equivalent title presented in the USA, as Best Airline Alliance in Global Traveller magazine’s Wines on the Wing awards. oneworld is also current holder of three of the leading awards presented to airline alliances overall — from Global Traveler, World Travel Awards and Australian Business Traveller.

Bruce Ashby

oneworld's members flew high in the Cellars in the Sky airline award categories, taking first prizes in seven of the 13 categories, along with 12 runners-up placings, with a further two taken by member-elect Qatar Airways. Airlines in the Star Alliance achieved five first prizes and four runnersup placings, while SkyTeam members achieved one first position and two runnersup. It is the 28th year that Cellars in the Sky Awards have been presented. A panel of four leading experts blind-tasted hundreds of wines served on long haul flights by 33 airlines from around the world.

Malaysian is now in oneworld Malaysia Airlines is now officially a part of oneworld, adding one of Asia’s leading airlines to the global airline alliance that aims to be the first choice for frequent international travellers the world over. From its first flight on February 1, 2013, the national airline of Malaysia has started offering oneworld’s full range of services and benefits. Another key focus flight for the airline was the first departure by the first of its

aircraft featuring the full oneworld livery – an A330-300 operating the Kuala LumpurMelbourne flight. For Malaysia Airlines, joining oneworld completed yet another successful phase of its business plan. Becoming part of the world’s premier global airline alliance will strengthen its competitiveness, enabling it to offer customers an unrivalled alliance global network served by partners including some of the best and biggest airlines in the world.

SkyTeam unveils fare promotion SkyTeam recently launched a fare promotion for customers planning a Round the World trip in 2013. With 1,000 destinations to choose from, globetrotters can take advantage of a 10 per cent discount off SkyTeam’s lowest economy class Round the World fare. The promotion is valid on tickets of up to 26,000 miles purchased from February 1 until March 31, 2013. Tickets must be purchased seven days ahead of travel. To help customers maximise their travel options, SkyTeam has enhanced its Round the World planning tool on skyteam.com. This

easy-to-use, online service helps customers select flights for their ideal journey. Once customers have built an itinerary, they can share it with Facebook friends by posting their travel plans directly on their walls. “Top of our Facebook customers’ travel wish-lists for 2013 are exciting cities such as Rio de Janeiro, London, New York, Beijing and Sydney, all of which are within easy reach from every continent thanks to the combined route maps of our 19 members,” said Jerome d’Anglejan, Director-Sales, SkyTeam.

C o d e s h a r e American joins hands with Alaska American Airlines and Alaska Airlines recently unveiled that the two airlines have renewed their ties by adding new codeshare routes that will offer customers even more choices and benefits when travelling throughout the US. The codeshare agreement will allow American to place its code on 22 new Alaska routes that provide Bay Area travellers with access to Hawai and will increase the options for transcontinental flights for travellers in the Pacific Northwest and San Diego to Bos-

ton, Washington and Orlando. Under the agreement, Alaska will place its code on 19 American routes, which will provide better access for Alaska customers on flights between Los Angeles and US cities such as Washington, Orlando and Houston. Additionally, Alaska customers will gain better access between the Pacific Northwest and 11 new cities throughout Texas via American's Dallas/Fort Worth hub. In all, Alaska customers will gain access to 13 new destinations. Cruising Heights March 2013

JetBlue signs code JetBlue Airways and Asiana Airlines recently joined hands to connect each other’s networks while ushering new flight options to flyers between Asia and the Americas. Through the arrangement, travellers can book single-ticket travel combining flights on both carriers and enjoy one-stop baggage check-in when they transfer between the airlines at New York’s John F Kennedy International Airport and Los Angeles International Airport, Los Angeles. “Asiana is one of the world’s top names in the airline industry,” said Scott

Star’s new lounge at Buenos Aires Star Alliance and local ground handling company CrossRacer recently opened a new lounge at Buenos Aires International Airport for the exclusive use of customers travelling on Star Alliance member carrier flights. First and Business Class passengers as well as Star Alliance Gold Card Holders have access to this new 450 square metre facility which is located on the second level of the new Terminal B. The new Buenos Aires Lounge has been designed in a way that creates a unique local flavour and largely uses materials sourced from Argentina. The light decor and variety of seating spaces

create a relaxing and functional environment for guests to work, socialise, refresh, sit back, eat and relax. Customers can

choose from areas with large armchairs and couches with cushions, swivel chairs and low tables, Butterfly chairs and ottomans, or typical country armchairs with movable tables. A selection of local and international newspapers and magazines will be available, as well as several televisions. The food area offers a range of complimentary soft drinks and alcoholic beverages, coffee and tea, as well as a variety of hot and cold snacks. Customers can enjoy their food and drink while socialising at a large communal table or, for a more intimate atmosphere, make use of small bar tables reminiscent of Buenos Aires cafes, or in the general seating areas of the lounge.

Fast-track security lane, courtesy SkyTeam

New airport for SkyTeam

A new SkyPriority fast-track security lane recently opened at Tokyo’s Narita International Airport, offering SkyTeam’s premium customers a speedier airport experience from checking-in. The dedicated security lane is located behind an easily identifiable SkyPriority-branded wall. Available exclusively to Elite Plus, First and Business Class customers flying from Terminal 1-North, it is one of a number of benefits available as part of SkyTeam’s alliance-wide SkyPriority initiative: red carpet treatment for top customers. SkyPriority was launched at Narita in March last year. In addition to fast-track

SkyTeam member carriers are planning to move to the new airport in Daxing, Beijing. SkyTeam members currently operate out of Beijing Capital Airport. The new airport is expected to be completed by October 2017 and the formal operations are planned to begin in 2018. According to reports, SkyTeam’s Managing Director Michael Wisbrun has discussed the plan to move to the new airport with the Civil Aviation AdminMichael Wisbrun istration (CAA) of China. China’s SkyTeam members — including China Southern Airlines, China Eastern Airlines and Xiamen Airlines — currently operate in Beijing Capital Airport’s Terminal 2. The new airport will have six runways for civilian use and will be located in southern Beijing’s Daxing district. It has not officially been given a name yet.

share with Asiana Resnick, JetBlue’s Director-Airline Partnerships. “We’re pleased to partner with them to provide more options to our customers to destinations throughout Asia Pacific. Their product and service will match what our customers have come to expect from us.” Young Heon Kim, Asiana Senior Vice-President of regional headquarters, Americas, added, “Asiana Airlines is proud to start the journey with our newest partner, JetBlue. Our partnerships will surely open doors to many destinations that the combined route networks now serve.”

security clearance, eligible customers enjoy priority services such as: dedicated checkin desks; priority boarding and baggage collection and priority at transfer and ticket desks. With SkyPriority, SkyTeam is the only airline alliance to deliver consistent priority airport services across the globe. By the end of 2013, the programme will be rolled-out to all of SkyTeam’s 1,000 destinations worldwide. “Our new SkyPriority security entrance is the first-of-its-kind in SkyTeam’s global network and we’re delighted to offer our top customers at Narita a quicker and easier journey through the airport,” said Gordon Humpherys, SkyTeam’s Vice President, Airport Services.

JAL and S7 unveils codeshare Japan Airlines (JAL) and S7 Airlines (S7) recently entered into a codeshare pact with each other for the first time and commenced codeshare flights from January 30, 2013. JAL operates a non-stop service three times a week between Tokyo (Narita) and Moscow (Domodedovo). In addition to that, JAL will expand its network with the addition of the two Russian cities of Khabarovsk and Vladivostok, with this new codeshare Cruising Heights March 2013

arrangement placing the ‘JL’ flight marker on direct flights operated by S7 between Tokyo (Narita) and the two cities. S7 will also begin marketing several JAL-operated flights between Narita and key domestic points in Japan from February 15, 2013. In addition to the reciprocal mileage programme tie-up existing between the two airlines, JAL and S7 will strengthen their cooperation further with this new codeshare agreement.

news digest

Akbar on Heathrow board

Akbar Al Baker

Akbar Al Baker, CEO of Qatar Airways, was recently appointed as Non-executive Director on the board of Heathrow Airport Holdings. Al Baker along with Ali Bouzarif will take up seats on the board of the holding company behind the world’s busiest airport, following Qatar Holding’s 20 per cent investment in the company. Al Baker has been a strong supporter of Heathrow. In October 2012, he called on the UK government to urgently address capacity constraints at the airport to avoid a catastrophic situation for the country’s economy. Al Baker had said, “The third runway debate was not an option, but a necessity to overcome the capacity crunch Britain’s premier airport was currently facing. Heathrow is bursting at the seams and has already reached a critical point.”

Air navigation gets more push International Civil Aviation Organization (ICAO) and Civil Air Navigation Services Organisation (CANSO) entered into a pact to jointly pursue opportunities to increase air navigation safety worldwide. ICAO President Roberto Kobeh Gonzalez and CANSO Director General Jeff Poole signed the Memorandum of Cooperation (MoC) at the recent World Air Traffic Management Congress event. “The establishment of this framework is an important step in helping CANSO and ICAO achieve the highest levels of aviation safety worldwide,” said Gonzalez. “This priority knows no borders and these types of collaborative data sharing and risk mitigation efforts are essential to helping states and industries proactively identify and address safety threats.” “CANSO and ICAO are committed to lifting further the level of safety performance by working closely together and sharing our experience and information,” said CANSO Director General Jeff Poole. “ICAO’s support is particularly important and the signing of this MoC is a concrete example of CANSO’s partnership approach in action and our determination to deliver real value.”

Better aerodynamics, Sharks could turn around the fate of aviation industry in the future. The ocean's oldest predator, the shark, the aviation industry believes could hold the key to cutting energy consumption. In this regard, Lufthansa announced that two of its Airbus A340-300 jets would try out the practical feasibility of shark skin in flights this summer. As a result, new types of coating are being painted on to the fuselages and wing edges of aircraft for the two-year trials. Fraunhofer Institute for Manufacturing Technology and Advanced Materials (FAM), Bremen, Germany has developed a new state-of-the-art polish made from the skins of fast-swimming sharks. Volkmar Stenzel, the project's Head at the Fraunhofer Institute said, “Sheets of plastic imitation shark skin were glued to

Bahrain Air closes down Bahrain Air recently closed operations saying that it could not pay back financial losses amassed in relation to the volatile political and security situation in Bahrain. “If you have not completed your journey, you will regrettably have to make your own arrangements and purchase new tickets if necessary. This effectively strangles the airline by simultaneously requesting payments and reducing its ability to generate the necessary revenues both to make

these payments and to sustain long term profitability. He (Bahrain's Minister of Transportation, Kamal Ahmed) has shown no inclination to provide a meaningful solution,” a statement from the airline said. Bahrain Air entered voluntary insolvency forcing its immediate closure and potentially leaving hundreds of passengers stranded, with tickets dated after February 12 unable to be used or transferred to another airline.

Towards in-flight booze ban The Russian government may clamp down In-flight drinks due to a spate of brawls involving drunken passengers. The state has witnessed several fights leading to forced landings because of inebriated passengers. Recent footage included shots of a man butting a steward during one flight and a fight among passengers queuing for the toilet during another have surfaced in the media. In a third incident, a man was tied to his seat and his mouth taped shut after passengers got fed up with his loud, Cruising Heights March 2013

drunken blabbering. “We would like to prepare it (the legislation) before the end of this session,” said Vitaly Yefimov, the first Deputy Chairman of the Duma's transport committee. “Changes are needed to end such uproar on planes.”

courtesy Shark skins

the aircraft’s exterior. But the foil had major disadvantages: it was rather heavy and the added weight cancelled out the amount of fuel that could be saved. Another problem was that aircraft had to be stripped of their paint and recoated every five years and that was just not possible with these foils,” he added. Denis Darracq, Head of Research and Flight Physics Technology, Airbus said, “The trials on Lufthansa jets represent the last phase before possible industrial application.”

‘Single European Sky Effort is deficient’ Tony Tyler, Director General-CEO of the International Air Transport Association (IATA), said that the establishment of a Single European Sky remained deficient and that there had not been much progress. “There is precious little harmonisation or interoperability between different air navigation service providers (ANSPs),” Tyler said speaking at the World ATM Congress in Madrid. “Europe, which is supposed to have been moving toward a Single European Sky for almost 20 years, continues to have significant fragmentation and significant resistance to change… Notoriously, Europe’s ANSPs fought to water down already weak costefficiency targets, and then failed to reach even these modest goals.” Tyler also said planning and investment decisions for ATC modernisation and cost-benefit analyses should involve airlines. He said the IATA wanted to work with ANSPs to set modernisation priorities under the International Civil Aviation Organisation (ICAO) framework of aviation system block upgrades — sets of capabilities meant to imTony Tyler prove operational performance as needed.

Aiming for the skies Airport projects in Gulf countries are on an upward spiral. A look at the major developments by Gulf countries: Bahrain: The Bahrain Airport Company intends to launch an expansion of Bahrain International Airport. Under the current plan, the airport’s capacity would expand to 13.5 million passengers per year. Kuwait: Kuwait plans to spend $6bn to expand the airport's capacity from six million passengers per year to 20 million passengers per year. Oman: Oman is in the midst of major expansion programmes at two of its international airports, Muscat and Salalah. Qatar: Qatar has announced that it will open a new airport on April 1.

FAA-AESA pushes for green fuel Federal Aviation Administration (FAA) and Aviation Safety and Security Agency (AESA) of Spain recently signed a declaration of cooperation to encourage the development and use of sustainable alternative aviation fuel in US and Spain. The declaration was signed by Carey Fagan, FAA Execu-

A380 flying palace sold

Saudi Arabia: Saudi Arabia is spending between $10bn and $15bn on building and upgrading its airports by 2020. UAE: Dubai is spending $7.8bn under its Strategic Plan 2020 with the aim of boosting the capacity of Dubai International to 90 million by 2018. tive Director for International Affairs and Isabel Maestre Moreno, Director, AESA. “The US is committed to making aviation as clean and as energy efficient as possible, as part of our NextGen air traffic modernisation goals,” said Deputy Secretary of Transportation John D Porcari. “Spain also has an ambitious and innovative alternative jet fuels R&D programme, the involvement of all the key stakeholders, and the agricultural resources to support aviation biofuel production,” he said. Cruising Heights March 2013

Saudi billionaire Prince Alwaleed bin Talal has sold his yet-to-bedelivered Airbus A380, dubbed ‘the flying Alwaleed bin Talal palace’, according to the Chief Financial Officer of Kingdom Holding Company, Shadi Sadeek Sanbar. “It was sold in the second half of last year,” Shadi Sanbar was quoted as saying. “We can’t disclose any details whatsoever because of confidentiality agreements we have with the parties.” The superjumbo accommodates two Rolls-Royce cars and a number of horses. The A380 is power-driven by four Rolls-Royce Trent 900 engines allowing the plane to fly a top speed of Mach 0.96 or 1,020 kmh, with a maximum service ceiling of 43,028 feet. The aircraft's commercial configuration has a passenger capacity for 525 people, which increases to 853 in an all economy class mode. Alwaleed owns 95 per cent of Kingdom Holding. He is the largest individual shareholder in Citigroup, and also holds stakes in News Corp, EuroDisney, Apple, Time Warner and 4 per cent of Twitter as well other investments in Saudi Arabia and across the Arab world.

news digest

$130,000 uthep ing

d Ad

e mb

fine

United Airlines was recently slapped a fine of whopping $130,000 for failing to apprise passengers that they could exit a plane that was delayed in Chicago for nearly five hours. The fine is the result of federal regulations that ask airlines to give passengers on international flights the opportunity to leave a plane that is delayed on the tarmac for at least four hours. If the delayed plane remains parked at the gate, airlines must give passengers the opportunity to exit every 30 minutes. The United flight, departing Chicago's O'Hare International Airport for Tokyo's Narita International Airport, pulled away from the gate at 12:28 p.m. but

100,000

plants haven

Changi Airport is flooring travellers with an exceptional range of plants. The airport recently unveiled a garden with more than 100,000 plants. Khaja Nazimuddeen, Senior Managerâ&#x20AC;&#x201D;Airport Operations, Changi Airport said that was extraordinary for most airports to focus resources on gardens in airports, "Space is a luxury that we can utilise in airports. We've been greening Changi Airport since the first terminal opened in 1981, so it has become our signature now." Most of the 200 plant species are being grown in-house at a nursery. Plants such as sunflowers, mast trees and climbers, are being developed and acclimatised to suit the indoors.

returned nearly two hours later because of mechanical problems. It carried 357 passengers. According to the US Department of Transportation, the doors of the plane were opened for 45 minutes starting at 2:25 pm but were closed again for more than two hours until the flight was cancelled at 5:22 pm because of further mechanical problems. The federal agency said United failed to announce to passengers that they had the right to leave the plane. While in a statement, the airline clarified, "We are committed to complying with the tarmac delay regulations, and we continue to improve our procedures."

$10

bn for the world's biggest airport

It's official. Istanbul will have the world's biggest airport. A $10 billion tender was recently issued ahead of the city hosting the 2020 Olympics and Paralympics in the future. The six-runway airport, will be constructed on 77 million square metres of land in the ArnavutkĂśy district of Istanbul and eventually be capable of handling 150 million passengers per year. Once developed, the airport will be twice the size of Heathrow, currently the world's biggest international airport, and would position Turkey to become a major hub for traffic between Asia, Europe and Africa.

$465

crore investment

Heathrow recently unveiled plans to invest $4,645,947,804 in Britain's hub airport in a five-year plan. The scheme which requires approval from regulators would be one of the largest private-sector investments in UK infrastructure. Plans include extending Terminal 2, building more self-service check-in and baggage drop-off kiosks, adding more rapid transport pods to link car parks to terminals and upgrading stands and taxiways to accommodate more A380s. Heathrow will also fund part of the Crossrail project which will link the airport to the City of London. The company is asking regulators to approve plans for a gradual increase in the fees it charges airlines to be phased in over the period 2014 to 2019 when the work will take place.

Cruising Heights March 2013

4,000 Sheikh Ahmad Bin Saeed al Maktoum

$39

billion push for economy According to Sheikh Ahmad Bin Saeed al Maktoum, President of Dubai Civil Aviation, the aviation sector now contributes more than $39.47 billion to the UAE's economy, or 14.7 per cent to the national GDP. "This contribution is projected to grow further in the coming years and as such justifies the country's huge investment in airports and airline networks," Sheikh Ahmed said. According to the reports, Dubai is currently executing its planned investment of $7.73 billion to implement the fourth phase of Dubai Airport's expansion and increase its capacity to over 90 million passengers annually to meet the future growth needs.

20,000

jobs cut

Spain's Iberia airlines recently put up the notice to cut 4,000 jobs. London-based International Airlines Group (IAG) in a statement informed its employees, trade unions and the Spanish Employment Ministry that it had started the formal process of collective redundancy. "This is part of Iberia's transformation plan to introduce permanent structural changes across the airline to stem its losses enabling it to grow profitably in the future," International Airlines Group said. Earlier, Iberia presented its workers with options for reducing the effects of the lay-offs, such as pay cuts, wage freezes and changes aimed at increasing productivity and flexibility.

5,000

employees' struggle 5,000 Air India employees' fate has been left in the lurch. Reason: they have yet to receive their transfer orders to the newlycreated subsidiary, Air India Engineering Services Limited (AIESL)). "The management had issued transfer orders to around 5,000 employees belonging to the engineering services. However, they have yet to accept these orders, citing lack of clarity on service rules," Air India sources was quoted as saying. "The situation has become more challenging for

the airline management as even the 1,000 non-technical staff, who were told to join AIESL on deputation from February 1, have also not accepted the orders citing similar reasons. There can't be two rules for one entity. This is ridiculous that while a majority of the engineering services employees have been transferred, almost 20 per cent of them have been sent on deputation."

problems for Berlin airport

Berlin's much-delayed new airport has been stalled due to rather unusual problems. Inspectors have numbered some 20,000 construction flaws in the new Berlin airport. The flaws range from small items such as broken tiles up to more-serious issues such as faulty ventilation. According to a local newspaper, tens of thousands of issues have so far been discovered, ranging from faulty exhaust ventilation systems to broken tiles. Rainer Bomba of the Federal Transport Ministry, Germany was quoted as saying that his priority was absolute transparency and that he wanted not just disasters but the construction process. Cruising Heights March 2013

news digest

No Ta-Ta this time E ven before the AirAsia-Tata deal could be announced, the naysayers came out into the open with a host of arguments on why everything was wrong with the deal. The deal was not in keeping with the government’s Foreign direct investment (FDI) proposal that was announced in September 2012 for the aviation sector. Why, these naysayers point out, even Civil Aviation Minister Ajit Singh has gone on record to say, “We are not giving licences for Greenfield airlines. As of now, FDI (foreign direct investment) in aviation can come only through existing airlines (and not for the establishment of new airlines).” The point of contention: whether to allow Air Asia piggybacking on the Tatas to come in. AirAsia Berhad through its investment arm, AirAsia Investment Ltd (AAIL) has submitted an application to the Foreign Investment Promotion Board (FIPB) to invest 49 per cent in a joint venture with Tata Sons and Arun Bhatia of Telestra Tradeplace Pvt. Ltd. The holding in the JV: AirAsia 49 per cent, Tatas 30 per cent, and Arun Bhatia 21 per cent. Indeed, the government’s decision to allow FDI in existing airlines was conceived as a shot in the arm for bleeding domestic airlines. By proxy, the move was intended to boost the morale of banks that have been scalded by the Kingfisher and Paramount sagas. In fact, when the approval was given for the policy, the press statement had said there has been “a need to consider financing options available for private airlines in the country, for their operations and service upgradation and to enable them to compete with other global carriers. Denial of access to foreign capital could result in the collapse

Cyrus Mistry

Tony Fernandes

Arun Bhatia

Hindu, “Businesses put of many of our domestic airhow they stack-up themselves out of busilines, creating a systemic risk ness, not the competition. If for financial institutions and 30% an airline is rightly capia vital gap in the country’s Tata Sons talised, follows the right infrastructure.” 49% 21% business model and the The monies that would AirAsia Telstra right people are running be brought in by foreign it, there should be no Greenfield airlines would problem. It is a question certainly not better the presof finding the right structure ent condition of our carriers — Source: Reports and partners.” He emphasised most are bleeding — continues the that “we have chosen excellent partners. argument of the naysayers. They contend We strongly believe that the current envithat these carriers would bring in cash and ronment is perfect to introduce AirAsia’s expertise that the domestic carriers do not low fares which stimulate travel and grow have. Result: carriers across the board will the market.” suffer including those like Jet Airways and According to Corrine Png, analyst SpiceJet that have seen glimmers of finanwith J P Morgan Securities Singapore, Air cial stability. And now that Jet has been Asia’s entry into India spells doom for Inworking on the deal with Etihad — held up, dian carriers. “With traffic under pressure, apparently because of the flip-flop in the it would be challenging to sustain higher government’s FDI in civil aviation policy yields. The entry of new players could put — would the India model of Air Asia be pressure on pricing,” Png wrote in her rewelcome? port. Worse still is the fact that Air Asia will Everyone in the industry knows that first enter the usually crowded routes: Tony AirAsia’s operations are considered to be Fernandes is reported to have said that he 30 per cent lower than our LCCs, thanks will be using A320s with 200 seats each. largely due to the use of low-cost termiSince, the country has around 40 airports nals by Air Asia and cheaper ATF. That where these planes can land, it is quite apwill certainly provide Air Asia the muscle parent that the metro and Tier-1 cities will to counter our IndiGo, SpiceJet and GoAir. be wooed by Air Asia. As AirAsia chief Tony Fernandes told The

amul

It must also be remembered that Air Asia entered nine Indian markets in late 2008 but had to stop services from Delhi, Mumbai because of high airport costs. Will that deter Tony Fernandes? It does not seem so since for the moment. In a conference call with the Financial Express, Fernandes said: “Our start date depends on the approvals from the Indian regulator but we would like to start as soon as possible. We would start with four planes and 300 people and expand it further. The Indian rules, which does not allow us to fly international till five years of flying in the domestic sector is complete and we will wait till then.” He is also keen to touch Delhi. He mentioned to Financial Express, “There are issues with high Aviation Turbine Fuel cost and airport charges but we have heard the government talking on doing something on bringing down the ATF prices. On the airport charges, Delhi and Mumbai are expensive airports. Nothing much can be done about the Mumbai airport but we could convince the Delhi airport to start a new low-cost terminal.” Looking at it from the flyer’s viewpoint, the coming in of India Air Asia will bring lower fares and, of course, more choices. Commenting about the low fares and the competition that it would create, Fernandes told The Hindu, “I think we can give a fair competition. Irrational

competition has gone out of the Indian market. Now there are sensible businessmen running the aviation business sensibly.” In another interview with The Economic Times, an upbeat Fernandes spoke about the conducive environment that had prompted him to start the venture. “First,” he said, “there are a billion people in India. Second, a million people travel in trains. And third, there is a big potential in underdeveloped routes. We have been studying the Indian markets for the past three years and we feel now is the right time.” According to a section of the press, there is bound to be opposition to the Air Asia-Tata tango from the likes of heavyweights like Jet Airways and IndiGo as well as SpiceJet. Each one will move to obstruct the entrance. But then, the question arises: Why was the joint venture application submitted at all? After all, the Tatas, Arun Bhatia and Tony Fernandes were all aware of the hurdles they would have to tackle. To put the record straight, the Tatas have lost out twice. Reports in the media indicate that the target of the joint venture is SpiceJet. The Tatas have a small stake in the carrier (it had around 6 per cent stake but it is down to less than 0.5 per cent now). In addition, the theory goes on to mention that Tony Fernandes is well known to Ananda Krishnan, Chairman of Maxis and Astro that are supposedly linked to the owner of SpiceJet, Kalanithi Maran. The idea that SpiceJet is the focus of the JV has gained momentum because the carrier needs to buy 15 more Q400 Bombardiers for which it has no finances. The Marans, it

pioneer's advice

he pioneer of low-cost air travel in India, Capt G R Gopinath, outlined four strategies for Tony Fernandes’ success. In a column in Business Today magazine, Capt Gopinath said Air Asia would have to innovate and in the ‘toughest’ Indian Capt Gopinath aviation market, Air Asia would have to be “ruthlessly efficient and innovative, and design a fare structure that will appeal to the middle class”. The second plank of the strategy was for Air Asia to bring in reforms in the aviation sector that still runs on rules that date back to 1937. Capt Gopinath mentioned in the column that reforms had be ushered in that would make the sector ‘vibrant’. The third part of the strategy for success would be to increase connectivity and open new destinations. As a new airline, it will try to connect new city pairs that will in turn boost the local economy. This part of the strategy should appeal to Civil Aviation Minister Ajit Singh who has made connectivity his top priority for this year. The last point, Capt Gopi said was for AirAsia to create a ‘a new market’. The airline should work out a pricing policy that will encourage and prompt people to fly. After all, AirAsia’s tag line is, ‘Now everyone can fly’. is believed, wants to opt out of the aviation business. Whatever the outcome of the joint venture, it will be quite a while before Air Asia starts. To begin with, it will have to get an air operator’s permit. Add to that is the fact that it will have to also acquire the green signal to import aircraft and if one goes by what Civil Aviation Minister Ajit Singh said (see interview on Pages 12-14 in this issue), Air Asia has to work really hard to prove that it needs to bring in planes for its business. People in the know say that getting the act together will take Air Asia at least a year. For the moment, however, Air Asia and Tony Fernandes have been receiving laudatory messages on Facebook for the joint venture. One such, shows the Amul advertisement and goes on to comment that Tony Fernandes and the Tatas should have come much earlier. Till then, the likes of Kingfisher and the others would do well to work on getting foreign investors. n

news digest

No tail wind to take the deal through

n the February issue of Cruising Heights, the various aspects of the JetEtihad deal and its imminent sealing had been mentioned. But, even as we go to press, the deal is nowhere near a conclusion. The delay does not indicate that foreign investors have suddenly become wary about investing in India. The story stated what could be expected from Etihad Airways’ 24 per cent investment in Jet Airways — based on what the former had done in a similar situation in other carriers while picking up a stake though it differed in size from airline to airline. Since India is a class apart from all such joint ventures in terms of size of its travel market both within and outside, and considering the fact that Jet Airways is a leading carrier, the markets in general and the aviation industry in particular, considered it a done deal. But this was not to be — at least for now — until some fears which Etihad has harboured were clearly allayed at the highest level of policy-making in India. The conclusion of the stake sale agreement has been delayed as the Abu Dhabi-based carrier wanted the government of India’s assurance on its investment in India. This demand came after India and the UAE — Abu Dhabi is one of the emirates — had, in principle, agreed on a bilateral investment promotion and protection agreement to boost the two-way trade. A meeting to this effect had taken place in Abu Dhabi in midFebruary 2013 where India was represented

by Minister of Commerce and Industry Anand Sharma. Etihad Airways Chairman Hamed bin Zayed al Nahayan told reporters on the sidelines of that meeting that Etihad needed to revise the proposed deal and it was soon to say when a final agreement would be inked. That very day Jet scrips in the Bombay Stock Exchange tanked by 7.7 per cent to `570.75 though it is a different matter that Jet responded by announcing the ‘mother of all sales’ by setting aside nearly a million-and-a-half seats on domestic sectors (twice that announced by SpiceJet) at prices between `2250 and `3870 for travel up to December 31, 2013. While there may be no direct connection between what Sheikh Hamed said and what Jet did, the fact remains that Jet of late was finding its domestic marketshare shrinking in favour of IndiGo, SpiceJet and even Air India. The whole deal had as a basis — among other factors — a booming domestic traffic by Jet which could serve Etihad for its Sixth Freedom and beyond. This argument, perhaps, may seem to be true on the surface but there were other issues as well that needed immediate resolution. That is what the Abu Dhabi-based airlne seemed to have suggested. Anand Sharma had, at the meeting on trade and investment in Abu Dhabi, said: “We talked about the need to have an investment protection agreement. We have in principle agreed for that and it will be expeditiously

jet-etihad deal

Cruising Heights March 2013

concluded. I have assured them that within the limit of our laws, India will protect investment.” Etihad’s fears rose from the losses suffered by another UAE company, Etisalat, in its investment in the Indian mobile telephony company Swan Telecom promoted by DB Realty and for which Etisalat had paid `4000 crore to pick up 45 per cent stake. This was part of the infamous Indian 2G Scam story where the Supreme Court put its foot down and cancelled all the licences and ordered a re-auction of the 2G spectrum. Besides Etisalat, Sistema of Russia which offered services under the MTS brand after buying a stake in Shyam Telecom of India and Norwegian telecom company Telenor picked up to 74 per cent equity in the mobile telephony company promoted originally by real estate major Unitech. All the foreign investors in these ventures lost their original investment running into thousands of crores of rupees. Russia had also stated that it would challenge India under the bilateral investment protection guarantee scheme to recover its investment though not much had been heard of it. But the fact remained that foreign investors had indeed become jittery about the safety of their investment. It was perhaps a coincidence that around the time when the Abu Dhabi trade and investment meet was going on, news broke that the Supreme Court had categorically stated that all such mobile phone companies that had become the subject matter of focus in the 2G

scam and had not participated in the subsequent re-auction of 2G spectrum should close down shop. On one day nearly 18 million cellular phone connections in Mumbai went silent when Telenor’s UNINOR closed operations in that city. All affected customers of Uninor were advised to apply under the Mobile Number Portability facility to choose alternative service providers. Other than securing its own investment in India, Etihad Airways had other issues that were more in the nature of sharing and participation in the management of Jet Airways. At the meeting, when asked how soon the deal with Jet Airways would be signed, Hamed al Nahayan said, “It is too early to decide. We need to talk with India about other issues including this”. At one point of time, it looked as if the deal had been done. On January 31, 2013, a top team from Etihad visited Delhi and met Civil Aviation Minister Ajit Singh, Finance Minister P Chidambaram besides Commerce and Industry Minister Anand Sharma. The CEO of Etihad, James Hogan, said: “Due diligence was on and its findings would be presented to the airline board in a week and then a decision would be taken”. Perhaps, it was in keeping with this mood that Ajit Singh, before leaving for Chennai to inaugurate the city’s new airport terminal, pointed out that an agreement between Jet Airways and Etihad would be signed by mid-February. Instead, we saw a meeting taking place in Abu Dhabi on those dates and the hosts seeking a guarantee on their foreign investment. Again when he was asked if the final agreement would be signed in March or April of 2013, Hamed al Nahayan said, “I don’t know. We need to revise it and it is too early to decide.”

When the news about the deal broke, it was widely believed that Etihad would pick up 24 per cent stake in Jet for a consideration of around US$330 million or nearly `1850 crore. Hamed is not only the Chairman of Etihad but also the Managing Director of Sovereign Fund Abu Dhabi Investment Authority. During the trade and investment meet, he is reported to have indicated that the Authority could invest up to two billion US dollars in India on various projects, subject to India providing investment protection and its guarantee. Perhaps, the Etihad deal could be a part of it. Even if was outside, it did not in any way dilute the demand for investment guarantee. What else did Etihad want in its deal with Jet? Sources say that Etihad wanted to virtually take over the management of the Indian carrier as it would then only help in really meshing Jet’s operations with its own in a seamless fashion. Under the Indian FDI rules for aviation, it is mandatory that the company is managed by an Indian majority board that obviously Etihad with its 24 per cent stake was not violating. It would not have crossed the line even if it increased its

stake to 49 per cent that is permissible under the amended FDI rules for foreign carriers buying into Indian carriers. People in the know of the deal said Etihad wanted the crucial or critical posts of CEO and CFO of Jet Airways for its own nominees, besides four seats on the Board of Directors of Jet Airways which is still 80 per cent owned by Tail Winds registered in the Isle of Man, a tax haven. Tail Winds is fully owned by Naresh Goyal, Chairman of Jet Airways. Sources said Naresh Goyal was not keen to offer the positions of CEO and CFO to Etihad and instead wanted to offer the post of Chief Operating Officer (COO) and Chief Strategy Officer (CSO). Should that happen, the present management in Jet could be the subject of a shakeup and a few of the present expats could be replaced by new ones. In fact, the Jet Airways board which was to meet to consider the offer from Etihad formally decided to postpone it as the latter had yet to complete its due diligence. Once that was done, the report would have to be formally considered by the Etihad Board and then an offer made to Jet Airways.

HOLDING TALKS: Etihad Airways' President-CEO James Hogan and Jet Airways Chiarman meeting Commerce and Industry Minister Anand Sharma to discuss Etihad-Jet deal

Cruising Heights March 2013

news digest

ABOVE GROUND LEVEL  DIAL launches virtual shopping wall

HomeShop18 in association with Delhi International Airport Ltd (DIAL)

FLYERS DELIGHT: 'Scan N Shop' installed at Delhi airport

recently introduced Virtual Shopping Wall. Named 'Scan N Shop', the Wall offers premium merchandise to consumers at Terminal 3 (T3) domestic side of New Delhi's IGI Airport (IGIA). With this, passengers will get an innovative shopping experience: they will be able to view a range of products like consumer electronics, mobiles, tablets, clothing, accessories, fashion jewellery, perfumes, etc on dynamic screens. Scan N Shop flyers will be able to order by simply scanning the QR code displayed against each item or over the phone at the call centre. HomeShop18 has also enabled convenient cash on delivery payment methods to drive trials and will follow it up with mobile payments subsequently.

Low-cost airports on the anvil

The government is considering to develop low-cost airports in smaller cities. Civil Aviation Minister Ajit Singh said there was a need for more airports to keep pace with the rise in passenger traffic. “These airports will be simple facilities, not architectural marvels. It can either be developed as new airports or will be built alongside existing airports,” said S Machendranathan, Additional Secretary, Civil Aviation. “The low cost airports can be developed in small towns like Puducherry or Salem. We are yet to finalise a model but are considering different options. The aim is to promote regional airlines using small aircraft.” The Planning Commission had earlier noted that the growth in passenger and cargo traffic required significant investments in new airports and revamping of existing ones. There is also a need to improve road and sea links as well as better airspace management.

“It is too early to decide. We need to talk with India about other issues. We need to revise it and it is too early to decide. ”

“Due diligence was on and its findings would be presented to the airline board and a decision taken.”

Hamed al Nahayan

James Hogan

Chairman, Etihad

CEO, Etihad

“We talked about the need to have an investment protection agreement. We have agreed for that. ” Anand Sharma

Minister of Commerce and Industry

Etihad was launched in 2003 and today code-numbered flights. However, this operates to all continents, perhaps, with requires permission from the DGCA and the exception of South America. It has a the Ministry of Civil Aviation and may not fleet of 70 widebody Airbus and Boeing be easy to come by considering the protests aircraft and 90 more aircraft on firm order launched by the likes of Air India that had basis of which 10 are Airbus A 380 super initially expressed its serious reservations jumbos. Jet Airways, on the other hand, has over the deal. This, however, was rejected 99 aircraft which fly to 73 domestic and by Ajit Singh. 20 international destinations. Incidentally, The real wait could also be due to the when Jet started in May 1993, it had fornew bilateral talks that India will have with eign investment from Kuwait Airways and UAE on a new revised Air Services AgreeGulf Air of 20 per cent ment (ASA) or bilaterals each in Tail Winds. Afafter the five-year term ter foreign carriers were of the earlier one signed It may be of interprohibited to hold equity in 2008 expires in May est to many to in domestic Indian carri2013 when the Gulf carriers in late 1996, Jet sold ers like Emirates, Etihad, know that when off its FDI stake in April Gulf Air, etc. will get Etihad was set up, 1997. It may be of interto know the increase in est to many to know that weekly seat entitlements it sought technical when Etihad was set up, and number of flights and other expertise besides the permission to it sought technical and other expertise from Jet hike capacities. Suppose from Jet Airways Airways which Naresh the bilateral does not alwhich Naresh Goyal low any more increase Goyal readily provided. The FDI rule changes in and remains frozen at readily provided. India allowing foreign the 2008 level, then the airlines to pick up stake carriers will mount yet in Indian domestic carriers once again reanother diplomatic offensive with friendly vived Naresh Goyal’s past memories with insiders as happened in UPA-I in 2008. only the partner changing from Kuwait and So, whether it is codeshare or new ASAs, Gulf to Abu Dhabi. any investor would prefer to wait. Etihad, People in the know said that the goingsas on date, has rights to fly into and fly out on in the Jet-Etihad deal was only posturof 11 Indian destinations. At a parallel leving and would be resolved subject to the el, Naresh Goyal is busy restructuring Tail over-arching investment protection guaranWinds which is fully owned by him. If evtee, that in any case can only be provided erything goes as per plan, then in Phase One by the Indian Government. There was also of the post-investment JV, a joint team of another issue of code-sharing which could Jet and Etihad will take care of issues such strengthen the deal as it would enable Jet as assets and fleet integration and in Phase Airways to offer more seats to foreign desTwo, the more important issue of balance tinations on Etihad flights under the same sheet. n Cruising Heights March 2013

ABOVE GROUND LEVEL  MIAL bags Golden Peacock

Mumbai International Airport Ltd (MIAL) recently bagged the ‘Golden

Quibbling over seats

mirates has become a little uneasy as it feels there has been a long delay in meeting its request by Indian authorities. The Dubai-based airlines President Tim Clark said Emirates wanted far more access to India than it has been allowed at present. Speaking at the launch of the new concourse dedicated to the Airbus A 380 at Dubai International Airport, he said the number of seats Emirates can offer to India each week and the number of flights that can be mounted have been capped. Describing the move as regrettable, he said Emirates could offer Indians connectivity to many more destinations that are not available from India at present. Emirates has permission under the Air Services Agreement (ASA) to 54,200 seats a week through 185 flights from 10 Indian cities. These figures were given approval in 2008 and have remained so for the last five years. Emirates now wants to increase the weekly seats to one lakh or double the current entitlement. Along with this, it also wants to increase the ports of call to 15 or 16 Indian cities. India is expected to be one of the fastest-growing markets but is currently underserved. Sensing the vast growth potential of air travel in India, the airline said 11 per cent of Emirates’ total global network capacity is deployed in India and with no increase in entitlements in the country by way of increased bilateral, the carrier recorded a marginal growth in 2011-12. Obviously, Emirates wanted to be on its own instead of following Etihad by partnering an Indian carrier. “Emirates has much going with its own fleet expansion programme and there was no plan to seek any part acquisition of an airlines in line with the new FDI policy in India.” Emirates massive fleet acquisition plan was largely based on continuous and rising number of Indians (that is majority) fol-

lowed by other countries in the Gulf, South Asia and South East Asia to provide the feeds. At the new concourse in Dubai, there are 20 major parking stands for Airbus A 380 super jumbos alone. All Emirates does is collect passengers from various countries and fly them to Dubai and then fly them out to various destinations. The carrier does so utilising its Sixth Freedom rights. It is understandable that travellers from east of Dubai or UAE provide the feed to Europe, North America or South America. What is surprising is the push Emirates and its other Gulf flying cousins are doing in terms of picking up the same passengers from the east and flying them further to the east: the Pacific, Japan and Australia. This is, in addition, to the traffic they carry from the West and bring them to their home hub at Dubai and then fly East and the Far East. It was quite obvious that Emirates also planned its massive fleet acquisition in mid-2005 and 2006 to cater to the projected increase in demand from its various destination points as Dubai has little domestic traffic. Even at that time, Emirates did indicate that it was quite upbeat about the massive potential for air traffic into and out of India. That there has been no growth in it after what was agreed upon by Praful Patel, the then Civil Aviation Minister, has become a matter of great grief to it. Along with Lufthansa, Emirates has also been seeking approval from Indian authorities to bring it’s A380s. Sensing the mood in the Indian Government which is struggling to meet its fiscal crisis besides that of Air India, it is unlikely that there will be any major upward revision in seat entitlements to Gulf carriers or any others. Perhaps, the government will wait till it sees India’s own carriers increase the utilisation of bilateral entitlements to various points including to the Gulf and Middle East. n Cruising Heights March 2013

SERENE ENVIRONS: Planes lined up at apron in Mumbai airport

Peacock National Quality Award 2012’. The award lauds MIAL’s efforts and contribution in raising standards in quality service. Commenting on the occasion, Rajeev Jain, CEO, MIAL said that the award was a true testament to “MIAL’s unrelenting commitment towards quality service and a recognition of the same offered by CSIA”. The Golden Peacock Awards is a set of prestigious national and global awards designed to improve productivity and quality in organisations. In 2011, CSIA won a special commendation for Golden Peacock Occupational Health and Safety Award.

Karnataka to open Greenfield airports

Karnataka Chief Minister Jagadish Shettar recently announced that two Greenfield airports set up under the public private partnership (PPP) model in Karnataka will be opened for commercial use by Jagadish Shettar July this year. Shettar said, “Besides these two minor airports, the state government has also initiated steps to modernise and expand the existing airport at Hubli. The government has recently acquired 615 acres of land for the same and handed over to the Airports Authority of India (AAI). As many as five new minor airports are being developed in the state to give boost to the air travel.” As part of Vision 2020, Karnataka has initiated steps to develop airstrips in all the district headquarters. The state government is also developing an international level aerospace park spread over 1,000 acres near Bengaluru International Airport at Devanahalli, according to Shettar.

cover story

Ready, willing and able The country’s helicopter market has the potential to grow manifold. That was the kind of enthusiasm shown by the world’s top chopper manufacturers who were at the recent Aero India 2013. However, it will take quite a while for the numbers to grow, as K Srinivasan found out.

t is a reflection of the times that three of the four helicopter majors had their CEOs in person at Aero India 2013. There was Geoff Hoon the ubiquitous CEO of Agusta Westland’s International Sales, there was Mick Maurer, CEO of Sikorsky Aircraft and there was Eurocopter President & CEO, Lutz Bertling. The only one who wasn’t there was John Garrison of Bell. Never mind, though, he had just been into Delhi some months back expanding the India office, ramping up the work force and making it plain that it was a market that mattered. And if you take the number two at Rosoboronexport who was plumping for Russian helicopters, you can visualise how seriously all of them view the Indian market. “It’s the sort of market where the pot of gold, if you will, is just around the corner.” The armed forces have a huge tenders on wait, the paramilitary forces are queuing up to pick up choppers, the police force is anxious to acquire them and, slowly but surely, even tourism and Emergency Medical Services (EMS) are getting a solid look in.

So, why then such measly numbers? Eurocopter has continued to lead the Indian market in 2012. It captured, according to the company, “a 70 per cent share of the new civilian helicopter bookings and 43 per cent of registered deliveries”. And pray how much were they. Twelve, that’s right 12! No disrespect to Eurocopter, perhaps, privately they too will moan at the great opportunities that the sub-continent presents but refuses to translate into solid numbers. When you compare this booking with the number of helicopters a city like Sao Paulo in Brazil — over 600 machines — has, you wonder what’s wrong and why ? But they were gentle, Eurocopter said, further in its release: This represents a 70 per cent market share for the two-year-old Indian subsidiary in a fledging civilian helicopter market that is making steady progress as the country begins to realise the potential and benefits of helicopter operations.”

What will slowly but surely unshackle the helicopter Cruising Heights March 2013

FLYING HIGH: An AgustaWestland Aw119 chopper. The chopper will be produced by the joint venture firm between AgustaWestland and the Tatas, Indian Rotorcraft

sector is the fact that internal security concerns will inevitably flood India Cruising Heights March 2013

cover story On the deliveries front, EuIn 2010, Tata Sons formed a rocopter was again the leader JV company called Indian Rotorwith a total of six registered hecraft Ltd with AgustaWestland, licopter deliveries for an overall an Anglo-Italian helicopter firm 43 per cent market share. What owned by Italy’s Finmeccanica it meant was that the total chopto make helicopters in India. The pers delivered in India last year Tata group has a 74 per cent state was not even one per state! For a stake in the venture. The company Geoff Hoon Lutz Bertling Mick Maurer MD, International President & CEO country with a 1.2 billion populaPresident, Sikorsky is slated to commence production Business Eurocopter Aircraft Corporation tion, complex topography, mind of helicopters by 2014 in HyderAgustaWestland boggling homeland security issues, medical abad, using AgustaWestland’s technology. issues and sundry other natural upheavals, (Separately, however, AgustaWestland has tions in India. The firm order for the initial this was simply unacceptable. been caught up in a recent bribery scandal batch of seven Eurocopter EC135s was “Eurocopter has a 50-plus year relaover helicopter purchases by India.) signed by the two companies in the prestionship with India, and the Eurocopter In“I think what is really important is ence of French President Francois Holdia affiliate’s performance last year underthat we develop our joint venture with lande. “As the EC135 is a global reference scores the value of our company’s ability to Tata. I was here last year to participate in in helicopter emergency medical services, provide proximity services to meet customa ground-breaking ceremony in Hyderabad it is highly appropriate that Aviators will iners’ needs,” explained Eurocopter President and the ground really did need breaking. It troduce such operations in India with these & CEO Lutz Bertling. “We will continue was very hard. But we had some very rugextremely capable helicopters,” Norbert developing our presence in this market, ged Tata spades that did the job — so that’s Ducrot, Eurocopter’s Senior Vice President building on the strengths of Eurocopter Insomething!” former UK Defence Secretary for Asia Pacific, had said at the time of the dia as the only full-fledged subsidiary to be Geoff Hoon who heads the international signing of the deal. The EC135 large, unobestablished in the country, with plans to exoperations of AugustaWestland said. structed cabin, oversized sliding side doors pand organically and through co-operations A year earlier, Sikorsky Aircraft Corp and rear clamshell doors enable rapid loadwith local partners.” and Tata Advanced Systems Ltd (74 per ing/unloading of patients and equipment Surely, one of the orders that Bertling cent stake) announced the setting up of a — even with the rotors turning — which had in mind was the one from Aviators: JV to manufacture aerospace components facilitates operations during time-critical seven Eurocopter EC135 aircraft for helifor Sikorsky in India. “It’s not so much emergency medical missions. copter emergency medical services operaContinued on Page 34

From Russia with helicopters “T his past year, Rosoboronexport signed contracts with India worth over $3.5 billion” Viktor Komardin (in the photo) told journalists before leaving Moscow to head the company's delegation

at the opening of the Aero India 2013. He said that the lion’s share of contracts with India were for Russian helicopters and related hardware. Rosoboronexport believes that the Ka-226T helicopter has particularly

Cruising Heights March 2013

good prospects of breaking into the Indian market. The company demonstrated its new range of light and medium multi-purpose helicopters, in particular the Ka-226T and the Mi-171A2, which over the next few years, could become the main Russian products in India’s increasingly active helicopter market. Russian Helicopters added that the light Ka-226T with a unique coaxial system of articulated rotors would take part in a tender for the supply of a large consignment of surveillance and reconnaissance helicopters for the Indian Air Force, and stood a very good chance of winning. In December 2012, Russian Helicopters and Elcom Systems signed an agreement to create a joint venture to assemble Russian helicopters in India, including the Ka-226T. Another interesting innovation that Russian Helicopters displayed at the exhibition was the modernised medium Mi-171A2, which incorporates the best features of its legendary predecessors, the Mi-8/17 and modifications, supplemented by the very latest technology. Today, India's fleet contains more than 200 Russian-made Mi-8/17 helicopters, and the need for this type of helicopter is still strong.

Bell keen for an India training facility Rishi K Malhotra, General Manager – India, Bell Helicopter, on the wide range on offer Bell Helicopter has several innovations to this need. Currently HATSOFF, an HALits name like the tilt-rotor chopper. What CAE joint venture facility in Bangalore, is are the future projects that you are workadequately equipped with a state-of-the-art ing on? Level D full flight simulator for the Bell Bell Helicopter has a range of products that 412 to meet expected demand requireoffer a great fit for India’s requirements. ments. For Bell Helicopter’s light single The Bell 407GX and 407AH (armed variand light twin products, customer pilots are ant) are made to operate in rugged condiregularly coming to our Customer Training tions at high altitude; the Bell 407 has landAcademy in Fort Worth, Texas, for initial ed at the high altitude of 23,000 ft. in the as well as recurrent training. However, with India Himalayas region. The AH-1Z and the projected rapid growth of these types in UH-1Y offer unmatched reliability in InIndia, we are looking at different options dia’s diverse geography and climate. Given for a training facility in India. India’s vast land mass, long coastal line and You are the market leader in India with a unique operational needs, the V-22 Osprey vast majority of civilian choppers of the offers exceptional multi-mission capabiliBell make. What are you doing to maintain ties for border protection and special misyour lead? sion operations. India is a very competitive marThe Bell 429 is truly tailorket, but the competition is not made for India. This new light The Bell much different here than in twin is already very popular 429 is truly tailorany other part of the world. with corporates as well as made for India. This Aside from HAL, we comcharter companies because new light twin is pete against the same comof the cabin comfort, low already very popular panies around the globe. It noise and fast cruise speed. with corporates as comes down to the products When India’s Gagan projwell as charter and services we offer and ect is commissioned later companies how we meet the customer’s this year, Bell 429 pilots will mission, which differentiates us be able to fly in low visibility from our competitors. conditions with utmost safety with the help of the Bell 429’s LPV capability You have a major service facility in Singa(hands off instrument approach capability). pore. Are you planning anything of the sort In 2012, Bell Helicopter unveiled the in India? 525 Relentless which defines new ‘Super Bell Helicopter has made some significant Medium’ product class, positioned at the investments in our Indian footprint over upper end of the Medium class market, the last few years. We started operations in providing game-changing capabilities. We India way back in 1995 with a small liaiare making steady progress towards a first son office in New Delhi. Today, we have flight in 2014 followed by an aggressive opened new offices in New Delhi, Bengaschedule for flight testing, certification and luru and Mumbai and have grown to more production. than 100 employees. Part of our global strategy is to look at joint Bell and Cessna One of the major problems for helicopter facilities to leverage capital and resources aviation in India is the dearth of pilots. What as we did in Singapore. We are continuing are you doing to improve the situation? Are to assess whether a joint MRO makes sense you planning chopper training academies in India. like the ones you have in China? A large number of highly experienced IndiTell us about the global technology cenan defence pilots are available for the comtre in Bengaluru. How does it support Bell mercial market to meet the current demand. worldwide? HAL has also set up a helicopter training The technology center located in Bengaluacademy in Bengaluru for ab-initio trainru called Textron India Pvt. Ltd. is a shared ing and has the capability to meet current Textron facility that provides high-tech enindustry requirements. We recognise the gineering and technological solutions for need for type training and recurrent trainmany Textron business units. Bell Heliing for various Bell models in India and copter has over 125 engineers with varying we are assessing the right model to address Cruising Heights March 2013

expertise including design, analysis, modelling, simulation, systems engineering, mechanical engineering, manufacturing engineering, sourcing and quality assurance. This cross-functional team supports all Bell production models, research and new product development. Tell us about your relationship with Bengaluru based Dynamatic Technologies (DTL)? We recently entered an agreement to explore establishing DTL as a second source for cabin assembly, airframe components, and details for the Bell 407. Work with DTL will begin early this year for price and delivery schedules, including procurement. The estimated business volume of the work proposed is approximately $243 million over a ten year period. What are your plans for other partnerships in India? India’s military helicopter requirements over the next ten years are tremendous. We see significant opportunities to enter the military space and these programmes will generate a large offset obligation. Bell Helicopter continues to assess potential manufacturing partnerships to assist in meeting these offset requirements and become potential suppliers for growing Asia Pacific and global demand for our products. n

cover story

Continued from Page 32 what you produce first, it’s about developing the partnership so that when the next opportunity arises, you know how to work together, you already have a relationship. So, now you can be that much faster and that much more capable of going after an opportunity or serving a customer’s needs,” said Mick Maurer. Clearly these are not off-the-cuff developments. Most of these companies, as one official explained, “are waiting for the starting gun to fire”. The point is, when will it indeed fire and will it at all? The disappointment is no surprise. If one looks at Indian aviation, its trajectory in the last close to eight years beginning 2005 has been an astonishing 25 per cent year-on-year. The number of aircraft that came into the country moved from the double digit into hundreds and for several years India was the fastest growing aviation market in the world. But none of that has converted into a lightning fast trajectory for the growth of choppers?

LIFE SAVER: Eurocopter chopper like the one in the photo will be seen in emergency medical services in the country soon; and (right) Arun Sharma, Managing Director, Aviators and Norbert Ducrot, Eurocopter Senior Vice President for Asia Pacific exchange MoU, while standing behind (from left) are: Nicole Bricq, the French Minister of Foreign Trade and Cuvillier, French Minister for Transport and Maritime Economy and the French President, Francois Hollande

Frankly the answer isn’t simple. It’s again a complex set of reasons. For starters, while air travel has now embraced the common man, helicopters continue to be viewed as elitist and a tool for the rich and the famous. And it doesn’t very much help when pockets of affluence like Bellary get the dubious distinction of having more than choppers than luxury cars with every compound being a proud owner of a chopper. Moreover, the flying regulations haven’t changed at the pace at which they should have. While the DGCA has modified many of

Most of these helicopter companies, as one official explained, “are waiting for the starting gun to fire”. The point is, when will it indeed fire and will it at all?

Cruising Heights March 2013

the antiquated regulatory provisions it is still impossible for anyone to simply take off as the crow flies. You still have to land and take off from airports unless you are a VVIP; you have to be monitored by the control tower and specified channels for easy flying are still to be notified. It’s something that doesn’t make for ease of use. If there is a silver lining that will slowly but surely unshackle this sector it is the fact that internal security concerns will inevitably flood India with choppers in the next decade. Almost every state government is working to create its own fleet of choppers to tackle a wide variety of law and order issues. The country’s para-military forces is also soon going to have its own chopper fleet and the anti-Naxal operations have only highlighted to need for a strong air fleet, particularly choppers to tackle the situation on the ground. While the Cabinet Committee on Security (CCS) has approved 23 choppers for anti-Naxal operations, so far only six to

Growth of ’copter industry is stable Air Vice Marshall (Retd) A J S Walia, Sikorsky's Executive Vice President, India and South Asia, on the partnership with Tata and transfer of technology issues How is the partnership with Tata to make helicopter cabins and aircraft components coming along? Sikorsky has two facilities in Hyderabad, in partnership with Tata Group. One is Tata Advanced Systems Limited (TASL) for manufacturing S-92 helicopter cabins and the other is Tara, a JV with Tata Group for manufacturing over 4,000 components which can be used for both fixed-wing and rotary-wing aircraft. Both these facilities are moving as per

the roadmap laid down and are an outstanding reflection of Sikorsky-Tata group relationship. In fact, I would say they highlight Indo–US joint cooperation in aerospace engineering. The first ‘made in India S-92 cabin’ was delivered to Sikorsky in October 2011, which has since been integrated with other components. India has had reservations in the past with regard to Transfer of Technology (ToT) from American companies. What are your views on ToT and industrial cooperation opportunities?

Sikorsky does see opportunities for industrial cooperation in India. Our partnership with the Tata group is an ideal reflection of the industrial cooperation. Sikorsky would be happy to take the discussion forward on ToT, industrial partnership with interested companies including Defence Public Sector Undertakings (DPSU) to augment and enhance their aerospace manufacturing capabilities. Sikorsky is projecting double-digit growth in 2014-16. How much of that will be military and how much of it will be generated in India? All I can say at this point is that the growth of the helicopter industry is very good and stable and India would certainly add to the overall global growth. How are you planning to contribute to the training needs of the Indian chopper market? As we continue to grow, we will certainly explore the option to invest in training infrastructure in India. Sikorsky believes in a being a global company — globally spread local company. n

seven have been provided by the IAF to the forces. The IAF received repeated reminders from the Ministry of Home Affairs but cried off citing shortage of rotary-wing assets for its own operations in the northern and north-eastern sectors. The Indo-Tibetan Border Police (ITBP), deployed along the borders with China, has also sought a fleet of five choppers to be stationed at the icy heights of Ladakh along the Line of Actual Control (LAC). The Sashastra Seema Bal (SSB), the Delhi Police and the Central Industrial Security Force (CISF) have also requested the government to provide them choppers and their proposals are at various stages of scrutiny by the Government of India. It is natural that as the forces get involved in operations, they feel the requirement for particular assets as per their experience and they are justified in putting across their demands, senior Government officials said. The role of the CAPFs (Central Armed Police Force) has expanded in

the last few years and being engaged in all kinds of operations including counterinsurgency in Jammu and Kashmir and northeast and anti-Naxal operations in several states, it is high time that they be given these assets. Experts believe that the number of helicopters with India’s CAPFs and the respective home departments of various states will cross over 300 machines in the next decade. This would be hugely transformational to the helicopter industry in the country. For one, the DGCA would be forced to fast-track reforms for chopper flying. Most important, the present catchment area for pilots — the Indian Air force—will no longer be the sole source for chopper pilots. There will be a flood of young men and women willing to look at it as a fruitful and rewarding career. Considering that India has the backend in place (through Shaurya in Delhi who have a helicopter simulator at Safdarjung Airport) and The Helicopter Academy to Cruising Heights March 2013

Train by Simulation of Flying (HATSOFF) is a joint venture of Hindustan Aeronautics Limited (HAL) India and CAE. The HATSOFF Helicopter Training Centre offers a comprehensive turnkey facility for helicopter flight training on level D Simulator. Beginning in 2010, HATSOFF has started offering complete training solutions for the Bell 412, on the Eurocopter Dauphin, and both military and civil variants of the HAL-built Dhruv Advanced Light Helicopter. By the same yardstick the engineering and MRO facilities in India are top quality and with Pawan Hans setting up a fully integrated training institute in Mumbai for engineers it is only consolidating the base for the industry. All things going well, the Indian helicopter scene should be dramatically different in the next few years. And the chopper business? Our hunch is in the next decade, at least three manufacturers would be churning out rotary machines from their facilities in the sub-continent.n

Focus on â&#x20AC;&#x2DC;Copters

MHA wins the battle for UAVs As the Naxal threat spreads and anti-Naxal operations intensify, the Ministry of Home Affairs has started contemplating having its own mini Air Force so as to not be dependent on the whims of the IAF top brass and their perceptions of para-military forces' chopper requirements. A special report

he Home Ministry has prepared a note for the Cabinet Committee on Security (CCS) to procure a fleet of 24 choppers for its own air fleet in addition to the 12 Mi-17 V5 that the Border Security Force (BSF) would be getting from Russia and its existing inventory of six Mi-17s. The note has been approved by the Ministry of Defence (MoD) after consulting the IAF which also gave its nod for expanding the MHAâ&#x20AC;&#x2122;s aerial fleet. In view of the long spat between the MHA and the IAF, the MoD said it does not have any objections about the proposal. Now, the proposal would be given a final shape and placed before the CCS headed by Prime Minister Manmohan Singh for its final approval. The turf war for control over the choppers started late last year when the MHA started complaining to the Cabinet Secre-

tariat that IAF pilots were not fully supportive in carrying out casualty-evacuation and troop insertion operations of the Central Armed Police Forces (CAPF) in the Naxalaffected areas, officials in the know of the developments said. The genesis of the trouble lay in the fact that even though the CCS had approved 23 choppers for anti-Naxal operations, so far only six to seven have been provided by the IAF to the forces. The IAF received repeated reminders from the MHA but cited compulsions and shortage of rotary-wing assets for its own operations in the northern and north-eastern sectors. The air force went to the extent of saying that of it had to recall its fleet of choppers from the UN missions to perform its duties and to provide aerial support to the CAPF in anti-Naxal operations. Even after getting its choppers back from the UN mission, it continued to maintain six choppers in Raipur and Jagdalpur to support CAPF. Once the IAF started getting its Mi17V5 choppers in 2011, the MHA requested it to deploy its new machines in the area to carry out night-time operations. Its rejection by the IAF was not easily digested by the paramilitary top brass. At the moment, the MHA has got only five choppers under its command including the four with the CRPF and one helicopter with the BSF for anti-Naxal operations. The CRPF is believed to have told the Cabinet Secretariat that a minimum of 10 helicopters would be required in addition to the four already deployed in each Naxalinfested state for swift response to tackle the menace. The demand for choppers by the MHA will not end with the requirements of the Cruising Heights March 2013

CRPF alone. The BSF, that so far was the designated agency under the MHA to maintain choppers and fixed wing aircraft, has also sought more choppers for its operations along the Bangladesh border and a request has been sent by it in this regard. The Indo-Tibetan Border Police (ITBP), deployed along the borders with China, has also sought a fleet of five choppers to be stationed at the icy heights of Ladakh along the Line of Actual Control (LAC). The Sashastra Seema Bal (SSB), the Delhi Police and the Central Industrial Security Force (CISF) have also requested the government to provide them choppers and their proposals are at various stages of scrutiny by the Government of India. It is natural that as the forces get involved in operations, they feel the requirement for particular assets as per their experience and they are justified in putting across their, senior Government officials said. The role of the CAPFs has expanded in the last few years and being engaged in all kinds of operations including counterinsurgency in Jammu and Kashmir and northeast and anti-Naxal operations in several states, it is high time that they be given these assets. Defence Analyst Deba Mohanty said recently that the Army was given control of the attack chopper fleet as the government was convinced by their argument that they can be put to optimum utilisation to provide ground support by those who knew the situation and the requirements of the ground troops. In the case of para-military forces too, they are the ones who understand the situation and how to operate in thick forests and they should be provided these assets. n

special report

aero india 2013

Aviation rules I

t might not have been as energetic and lively as the earlier edition, but Aero India 2013 at the Yelahanka base at Bengaluru showcased to the world the capability of our industries to create a strong indigenous aviation production base. Perhaps, what was missing were the celebs. At the last show, there was Ratan Tata and actor Shahid Kapur: both had taken to the air. This time around, with no celebs around, the show had little glamour quotient and the shortfall — if there was any — was more than made up by the Sarangs, the Red Bulls and Russian Knights and an outing of our very own Rudra and the LCA Tejas. A toned down version of the earlier shows — primarily because there was no MMRCA contract and no displays by the contenders for the fighter aircraft — the tone of the latest show was set by Civil Aviation Minister Ajit Singh. Singh told exhibitors that Aero India 2013 offered a number of opportunities to private aviation companies. Suddenly, the primarily Air Force show shifted focus and latched on to the Indian civil aviation market that was growing at 15 per cent a year with domestic traffic touching 80 million per annum. On cue, Boeing rolled out projections: over the next 20 years, India would need 1,450 new airplanes worth $175 billion. And that was followed up biz jet makers, Brazil’s Embraer and France's Dassault Aviation among others who showed up with their luxury biz jets. The message was loud and clear: India was one of the top markets among the BRICS for these business jets. In the end, it was aviation that won the day and hearts. n

special report

Air India Turnaround blues

If the Maharaja’s dream of a revival was based partly on the Dreamliner, it has vanished — at least for the present. Even so, reports R Krishnan, the national carrier has charted out long-term plans to get back to the top of the charts. Above all, however, the health of the ailing airline will depend on its employees who must be ready to pitch in and make sacrifices

oes the recent increase in market share of Air India in the domestic skies suggest that Air India as a whole, including its international operations, is on a revival path and the TAP (turnaround plan) under implementation is going as per plan? The answer is both ‘Yes’ and ‘No’. ‘Yes’, because some of the parameters that determine the health of an airline is rosy after a very long time of stress and ‘No’ since the real challenge it is set to face could unsettle many of its early gains unless the airline employees are ready to sacrifice for the Maharaja. It must be made clear that by just transferring the head counts of Air India in its entirety from Air India as a flying entity to other SBUs like MRO and Ground Support or Ground Handling Division will only transfer the losses from one pocket to another. Were it not for the bailout by the government, the Maharaja would have remained with only a few clothes. The crux of Air India’s problem lies in its high cost which Minister of Civil Aviation Ajit Singh has realised. Following a recent review of the airline, he has set up a five-member committee headed by IIM Ahmedabad Professor Ravindra H Dholakia. The other members of this committee include Prabhat

Kumar, Joint Secretary, Ministry of Civil Aviation, Rajesh Agarwal, Director, Finance of ICRISAT (International Crops Research Institute for the Semi-Arid-Tropics), S Mukherjee, former Commercial Director and Inflight Services in-charge of Air India and Nasir Ali, Joint Managing Director of Air India. The committee will go into the expenses incurred by the airline and identify loopholes in the existing structure and functioning leading to wasteful expenses and plug them. The five member panel will analyse the utilisation of jet fuel which accounts for over 40 per cent of the total cost incurred by the airline as also the inventories of spare parts and suggest ways to optimise fuel usage and inventory management. The committee has been given two months to submit its report. However, it is expected to submit its interim recommendations that could be implemented by the stateowned carrier. Simply put, the committee is expected to suggest ways by which Air India’s cost of operations can be lowered by

HOPING FOR THE BEST: An Air India Dreamliner

Cruising Heights March 2013

better utilisation of its resources in line with the best global practices. This, the minister feels, will help to align the TAP and Financial Restructuring Plan (FRP) and restore Air India’s Maharaja days. There is optimism that after a prolonged weak performance and poor finances along with customer dissatisfaction, Air India seems to be turning around. The airline has been carrying more domestic passengers compared to the market leader of yesteryear, Jet Airways. From 15.4 per cent market share in April 2012, Air India’s domestic market share has risen to 21 per cent in November 2012. Some people describe this as the Kingfisher effect as Vijay Mallya’s Kingfisher Airlines is grounded resulting in reduced seat availability in the system. A question has been raised on why Jet Airways did not utilise the Kingfisher gap to its advantage. Critics respond saying that Jet Airways has actually shrunk its capacity in terms of Available Seat Kilometres (ASKMs) as it has sent away many of its

Cruising Heights March 2013

This decision came after the North Eastern Council (NEC) refused to pay the subvention for flights to North East that included Tezpur, Lilabari, Shillong, etc. We understand the NEC wants to call for bids and offer its subsidy to such carriers including the private ones who offer lower fares. This means that even in this sector Air India will begin to face competition which was earlier considered a safe haven. The North East operations which were otherwise thought to be loss-making were actually not so because of the subsidy Air India received and which was on a CostPlus basis. What all this means is the state-owned carrier is also sensitive to the market needs of budget travellers who have virtually overwhelmed the airline business in India. In such a situation how will Air India manage to get more of high yield customers to the front end of its plane is an issue that should engage everyone’s attention. Overall it will be worthwhile to illustrate two events of December 2012. During the

h c tiwari

hub. Part of this dream is coming true with Boeing 737-800s back to lessors pending Air India operating 90 flights a day from arrival and induction of new narrow body the national capital against 54 flights a year Boeing 737-800s. A part of its narrow bodago. The number of corporate clients of ies have also been deployed on the Gulf Air India has increased from 250 in 2011 route than being used for domestic connecto 1100 in 2012. Air India’s average yields tions. It seems Jet is working deliberately per passenger increased by 7.5 per cent to to consolidate its foreign operations and `8210 per passenger during April-Nointends to come back to recover its dovember 2011 to `8828 per pasmestic position. There is not only senger in April-November a fall in seat availability beAs for its 2012. While the domestic cause of Kingfisher Airlines’ international yield has gone up by absence but also reduced 18.4 per cent, the yield availability of Jet airways schedule, AI has on the international fleet even though there rescheduled some of sector rose by 8.5 per has been some marginal the flights timings and cent. It must be menincrease in the ASKMs also introduced aftertioned that the domesof Jet Konnect because noon flights to intertic and international of reduced business class national destinaaviation business are of and rise in economy seat tions. two different kinds. Howoffering. ever, the increase in corpoJet Airways and JetKonrate clients of Air India has made nect together offered ASKMs of it bold enough after a long time to be17,09,235 in May 2012 which dropped come bullish. What is inexplicable is why to 12,55,302 in September 2012 while Air India could not get high-end passengers Air India’s capacity stood at 11.38,300 in when it inducted in its fleet brand new wide September 2012. A part of the Air India reand narrow bodies. How is it that the older vival story includes aggressive cost-cutting planes are drawing higher revenue yield which is likely to result in the airline’s fipassengers now? nances improving in the coming fiscal year It will be pertinent to point out here 2013-14 along with EBITDA turning posithat the efforts of Air India to reconfigure tive in the current fiscal year 2012-13 itself. a fleet of 10 A320s to all economy class Air India’s CMD Rohit Nandan has stated might have helped to increase its market that the carrier is in a better position to take share. Air India also reduced business class on the competition and in evidence pointed seats in a few of its A321 from 20 to 12. out that on the Mumbai-Delhi route it is ofAt the same time, the carrier also reduced fering flights every hour till mid-morning its presence in some of the Category Two on a daily basis. routes where it had deployed nearly 20 to As for its international schedule, the 22 per cent of its capacity and which has state-owned airline has rescheduled some now come down to around 17 per cent. of the flights timings and also introduced afternoon flights to international destinations. About two years ago, it had announced grand plans of making Delhi its

special report

PLEASURABLE FLIGHT: Flyers on one of Air India's Dreamliner's domestic flights

winter session of Lok Sabha in December 2012, Finance Minister P Chidambaram during the winding up discussion on the supplementary demands for grants said he was not happy with the implementation of Air India’s TAP but was still injecting `2000 crore to keep the national carrier flying to check any spurt in fares. “As far as Air India is concerned there is a TAP. I am not happy with the way the plan has been implemented in the past. There have been several setbacks. But what do we do with Air India? Of the `32,210 crore additional expenditure under the first batch of supplementary demand for grants, `2000 crore was earmarked for equity infusion into Air India. If Air India is not kept afloat, what will happen is air fares will go up as other airline companies will simply push up their fares because so many seats will not be available and which is why we are providing `2000 crore to Air India.” To be fair to Air India, the Finance Minister also told the House that there has been some improvement in the third quarter and expressed hope that the management and the

t was an unkind cut and one that Air India will remember for a long time. One of the major spokes in the Maharaja’s turnaround plan had included the optimum utilisation of the six Dreamliner Boeing 787s but with the grounding of the 50odd planes all around the world by the US Federal Aviation Administration (FAA), because of battery problems, that was not to be. It was in September last year that Air India inducted the B787 in its fleet. The plane was initially used for domestic operations from Delhi to Bengaluru, Chennai and Kolkata but it started international flights to Paris, Frankfurt and Dubai. Since then, the carrier had seen a change for the

employees fully assist in the revival of Air India. He said the state owned airline had sustained losses of `5548.26 crore in 200809, `5552.44 crore in 2009-2010, `6865.17 crore in 2010-11 and `7853 crore in 201112. Chidambaram said there are airlines in the country and around the world running in profits and there was no reason why Air India should not be turned around. The Minister of State for Civil Aviation K.C.Venugopal told the Rajya Sabha during the same winter session of Parliament that Air India’s operating performance in AprilSeptember 2012 had improved. While the passenger revenue grew by `328.88 crore an improvement of 6.1 per cent, the yield also improved by `3.43 per kilometre to `4.31 per kilometre. The load factor rose from 69.3 per cent to 70.9 per cent. Even as the Finance Minister preferred to make his comments and the Minister of State for Civil Aviation laid down facts suggesting improvement, the Union Minister of Civil Aviation Ajit Singh told the 85th annual meeting of FICCI in December 2012 that everyone in the government thought they

photos: H c tiwari

were maharajas. Employees of Air India felt they were the damads (sons-in-law) of the Sarkar (government) and whatever happened to Air India they would not be affected. Ajit Singh said that in India no bank wanted to have an exposure in aviation sector. No bank wanted to lend money to the aviation sector even for working capital. Consequently, the aviation sector lost `10,000 crore last year and 6000 pilots were jobless. The average monthly revenue of Air India has been estimated for fiscal year 2012-13 at `1348 crore while the expenditure was at `1752 crore leaving a monthly gap of `404 crore, that according to Ajit Singh was unacceptable. Air India was trying to rationalise its head count. The airline had already undergone a debt restructuring which had reduced its interest burden by `1000 crore per year even as it was taking delivery of 27 Boeing 787 Dreamliner planes. The revenue stream expected from the deployment of the Dreamliners was a long term goal and would, therefore, take time. It

Shattered dream better in its financial status. The aircraft apparently brought in a revenue of `2 crore a day in October-December 2012 earning `172.7 crore from both domestic and international operations till the end of the last year. According to Boeing Commercial Airplane and also a senior executive of Air India, the Dreamliners should be back in operation in a few weeks time. A separate compensation may be at works. Boeing had reportedly offered to pay USD 650 million as compensation for the delayed delivery of Dreamliners Boeing 787 which were to be delivered in second half of 2008 but came in the last month of 2012. So far it had delivered 6 and was slated to deliver

Cruising Heights March 2013

three more before the grounding of entire 787 fleet worldwide on the order of FAA and NTSB. As for the compensation for the delayed deliveries, reports suggest that while half the amount would be notional as it would be adjusted towards cost escalation, the remaining half would be reduced from the price of each of the remaining Dreamliner to be delivered. The last of 27 787s ordered by Air India is slated for delivery in mid-2016. How important is Dreamliner for Air India could be gauged from a recent observation made by its top official at a recent meeting in New Delhi. This gentleman said Air India had always historically made losses on India-Paris and India-Frankfurt

routes notwithstanding deployment of then state of the art A 310s, Boeing 747s and Boeing 777s. It was for the first time literally in the history of Maharaja that it made profits after covering all costs on flights to Paris and Frankfurt from Delhi and Mumbai. He said this was one of the reasons for upbeat mood in the carrier but grounding of the fleet thrown the airline back to its frequent mood swings. As for Air India performance as a whole, the executive said while 70 per cent of its revenues came from international operations, 30 per cent came from domestic and the domestic operations was profitable and the entire loss was largely on foreign operations. He said should the battery problem in the Dreamliner be resolved it is quite possible that the airline will be put up a good show financially in

extras.mnginteractive.com

could also bring with its issues relating to pilots — particularly commander availability — as there had been an exodus of senior captains from Air India to various Gulf airlines. Between the time the merger came into effect in April 2007 and the fiscal ending March 31, 2012, the airline had sustained a loss of `28,000 crore and an accumulated debt of `43,000 crore. The debt had further risen to `47,226 crore by the end of July 2012. The government as part of its `30,000 crore TAP and FRP had pumped in crores into the airline besides underwriting the bond issue of `7400 crore which got fully subscribed in December 2012. During this revival plan period, Air India had done one good thing — put in place the crucial revenue management system and in the last one year this had helped boost the airline’s occupancy levels of flights and boosted yields. In short, Air India now knew how many of the seats were unoccupied across the system at the touch of a button. But this was only part of the story as the other important part of filling them by serious marketing efforts remained. Notwithstanding all this, Air India still managed to lower its operating loss by `550 crore in the first half of fiscal 2012-13 and expected to end the fiscal with positive EBITDA. However, much of this would depend upon its success in monetising the assets and lowering its fuel and wage bill. The TAP and FRP of `30,000 crore approved by the government included as stated earlier equity infusion, cash support, debt restructuring, etc. As part of this, the short term loans of Air India worth `10,000 crore had been converted into long term and the working capital loan of `7400 was

GROUNDED: The All Nippon Airways 787 aircraft at Takamatsu airport in Takamatsu, Japan, after it made an emergency landing on January 16, 2013. The flight landed at the airport owing to battery problems

converted into convertible bonds carrying a coupon rate of 11 per cent. All these steps had brought down the interest burden by `70 crore a month or nearly `840 crore and with the addition of some other adjustments, the saving on interest alone could be `1000 crore a year. However, with no change in the fuel bill burden and reduction of employee strength, the core issues continued to be attended and at least to meet such costs Air India would have to substantially increase its load factor and yields. But these two are subject to competition and, therefore, market forces. Will Air India be able to stand up to it? In order to meet this challenge it has

the coming months. But in saying so he also issued a caveat. He said much of the losses registered by Air India was largely due to the Sixth Freedom Rights enjoyed or used by the Gulf carriers like Emirates, Etihad and Qatar. They often operated OriginDestination flights and took passengers out of India for onward destination where the destination was other than India and therefore did not attract any negative provisions of bilateral air services agreement with India. It is not just Air India but even mega carriers in Europe have expressed serious apprehension at the rapid expansion of Gulf carriers who hardly have any domestic transportation being city-states like Singapore. Perhaps this was one of the reasons Air India had in mind when it expressed reservations on Jet Airways-Etihad deal.

Cruising Heights March 2013

adopted a two-pronged strategy: Transfer the MRO and Ground Handling business into separate business units (SBUs) and reduce the core airline employee strength to just about 9000. If it succeeds in doing these then the airline will be profitable but the two SBUs will face a financial crunch as it is not easy to make money in a competitive environment. Air India cannot get business by playing the ethnic card. It will have to get business from competing carriers — both domestic and foreign — offering engineering solutions and ground support or ground handling. Replying to a question in the Rajya Sabha, the Mininster of State for Civil Aviation K C Venugopal

Jet would also carry or funnel passengers from India to Abu Dhabi for onward flights by Etihad. Earlier Air India had protested the possibility of Jet Airways joining Star Alliance. May be that issue could naturally end as Etihad is not a member of Star Alliance and therefore a combined Etihad-Jet may have to look elsewhere if need be. This executive also said the biggest problem of Air India was huge bloated staff and huge payments to them. In this context, he said while the front end Air India staff who passengers meet at say Delhi or Mumbai received pay and allowances ranging between `60,000 and `80,000 per month compared to one third of it by competing private carriers in India be it full service or LCC. There was no way Air India could function profitably!.

special report

IN THE DOCK: Air India headquarters in Mumbai

the dues of its vendors. We do not know whether this includes or excludes the commitment Air India has given to state-owned oil marketing companies and to whom it had promised to clear the outstanding of `4,235 crore by April 2014 in order to get the similar discount on Aviation Turbine Fuel uplift like private carrier Jet Airways. At present Air India gets a discount of a little over `2000 per KL on ATF compared to `5000 Jet Airways gets and `8000 per KL some foreign carriers get. Air India after re-negotiating and re-assuring the oil companies that it will clear all the outstanding dues has, in turn, been promised that it will get similar discounts from February 2013. This assurance has apparently been given by Indian Oil Corporation that has told Air India that the same discounts enjoyed, perhaps, by Jet would be available to Air India provided the state-owned carrier agreed to buy 80 per cent of its fuel from the stateowned IOC without a tender process. Air India’s fuel bill by the end of March 2013 is expected to exceed `8000 crore. It will be clear in the next couple of months how things shape up for Air India considering the reluctance on the part of the Finance Ministry to loosen the purse strings. Also, a lot will depend on the kind of report the inter-ministerial committee will come up with on the wages and allow-

wikimedia.org

said as per route economics prepared for the April-October 2012 period, nearly 95 services of Air India were not even meeting the cash cost of operations. 82 flight services were meeting cash cost but not total cost while only 12 services were meeting the total cost. The aircraft to employee ratio at present of 1:237 would go down to 1:92 when MRO and Ground Handling divisions are hived off into SBUs. By the time the readers get this copy this would have become a reality. Even as Air India struggles to get on with its job, the Finance Ministry’s decision to cut back government spending could create new disturbances. It is now feared that the government’s infusion of `30,000 crore in Air India over a period of nine years beginning 2012-13 may not be fulfilled. The Gross Budgetary Support (GBS) to the Ministry of Civil Aviation during the 12th Five Year Plan will not be enough to fund Air India as envisaged earlier. As per TAP, government was to infuse `24,400 crore between 2012-13 and 201617. But the Planning Commission has reportedly approved a GBS of only `16,980 crore for the 12th Plan period. This will not be enough to take care of the committed infusion — leave alone other commitments made by Air India. For the Twelfth Plan of the total outlay of `49,000 crore envisaged, nearly `33,000 crore was to come by way of GBS. Now that this is not going to take place, what will happen to the equity infusion is the question that is being asked in aviation circles. As it is faced with a huge budget deficit, the government has already reportedly defaulted on equity infusion in the very first year 2012-13 of TAP. Against an expected infusion of `10,600 crore Air India has got `6000 crore and there is no commitment about the remainder. Perhaps, if one were to make a provision of `2000 crore as part of the supplementary demand for grants and referred to by the Finance Minister and on the assumption the figure of `6000 crore did not include this `2000 crore it would still leave a gap in equity infusion which is the mainstay of the debtequity ratio that empowers Air India to borrow at lower rates of interest with government guarantee as a further support. Does that mean Air India will be forced to borrow money again from mainly PSU banks at higher rates of interest? It has been reported that Air India is in the process of wanting to borrow `1700 crore to service part of

Cruising Heights March 2013

ance structure governing the licenced and non-licenced staff and the recommendation the Dholakia committee gives on costcutting. Pending all of these, Air India has board decided to expedite the process of monetization of its assets to raise money to pay off some of its debts. The asset monetisation is expected to give the airline at least `5000 crore and is expected to be completed by March 2016 or say three years from now. While this as part of the financial restructuring planning was expected to be completed in ten years, but in view of the urgency the management has compressed it to just under four years. To start with it is planned to raise `1200 crore in the coming fiscal 2013-14 `800 crore from the sale of four acres of land the airline has in New Delhi and the rest will come from the sale of flats and land in Mumbai, Chennai, Coimbatore and also in Hong Kong and Nairobi. Air India expects to raise `2000 crore through sale of assets in 2014-15 and the rest in the fiscal 2015-16. A three member oversight committee has been set up to oversee the sale of assets as part of monetisation process. The three members are Justice D M Dharmadhikari, former CAG V N Kaul and former CVC Pratyush Sinha. It has been decided to offer all assets — land and apartments — through an electronic auctioning process. CAPA’s view: In a recent report on Air India, CAPA has stated that though Air India has delivered a significant improvement in its operational and financial performance in fiscal 2012-13 due to improved market dynamics following the exit of Kingfisher Airlines, it was also due to committed approach of Air India management. But the losses still remained huge with no prospects of any immediate turnaround. Pricing discipline was the most significant contributor to the improved performance. Air India’s domestic market share rose from 14 per cent to 20 per cent in the last one year. The carrier may even report a small operating profit for fiscal ending March 2013 subject to the impact of Boeing 787 grounding and market condition in Q4 of 2013. Despite the improvement, there were deep structural issues that continue to be a bother. As a result in the five years from fiscal 2008 to fiscal 2012 the losses of Air India accumulated to $5.25 billion which is expected to go up by another $950 million in the current fiscal ending march 31, 2013. The bleeding international routes are accounting for 80 to 90 per cent of the losses made by Maharaja. n

aero engines

Rare trouble with 737NG engine oeing has alerted airlines about issues with the 737 Next Generation aircraft flying on the west coast of the United States. Some of the planes have experienced intermittent instances of engine instability while climbing after takeoff. More than the engine per se, fuel contamination is the leading suspect in the problems, which Boeing’s message described as “uncommanded engine oscillations”. The manufacturer said 32 such engine-instability events have happened in the past five years on the widely used single-aisle jets. In most cases the instability disappeared after a few seconds to a couple of minutes but because it has occurred several times coupled with two incidents suggesting greater complications, Boeing has decided to do a full investigation on the issue. In one of the cases, both engines on a jet were affected simultaneously. One engine recovered; the other had to be shut down. The plane turned back and landed safely. Boeing’s message to airlines said: “The investigation has narrowed the leading root cause to intermittent fuel contamination.” Under scrutiny, however, is not only the

ainonline.com

737 Trouble: 737 aircraft are having trouble with their engines which lead to failures and can be fatal for the aircraft. Boeing has decided to do a complete overhaul of the engines

fuel, but also the fuel control unit, supplied by Honeywell, and the engine itself, supplied by CFM International. “The engine, the fuel control unit, the fuel, it’s all part of a system,” said Boeing spokesman Mike Tull. “We’re looking at the whole system.” Engine supplier CFM in December last year recommended a software update to enhance throttle control. There have been no incidents since that update, Tull said. The Next Generation 737s make about 16,000 flights per day worldwide and have flown 23 million flights since the first of these engine-instability incidents was recorded in 2008. Boeing’s message said it is working closely on the problem with “the fuel supply chain” and had notified the Federal Aviation Administration (FAA). In such situations where a large number of airplanes are potentially affected, the FAA typically follows up with an Airworthiness Directive to make any Boeing recommendations mandatory.

C-17’s P&W engines clock 10 million P

pw.utc.com

Lifting Mammoth: Pratt & Whitney’s F117 engines have accumulated more than six million flight hours in support of worldwide air mobility missions

ratt & Whitney’s F117 engine, the exclusive power for the Boeing C-17 Globemaster III airlifter, recently exceeded 10 million engine flight hours. “This milestone is a testament to the reliability of the F117 engine,” said Bev Deachin, Vice President, Military Programmes and Customer Support, Pratt & Whitney. “The exceptional performance of our engines — in some of the harshest conditions — has helped the C-17 Globemaster III save countless lives in military, humanitarian and disaster relief missions around the world.” Since 2006, Pratt & Whitney’s F117 engines have accumulated more than six million flight hours in support of worldwide air mobility missions. To put this in perspective, it took 13 years of operational service for the engine to reach its first four million flight-hour milestone. This statistic reflects the C-17’s increased workload over the past several years. At the same time that the F117 has achieved 10 million flight hours, the company is also celebrating with Boeing 15 Cruising Heights March 2013

years of successful partnership on the performance-based logistics contract for the C-17. “Through Pratt & Whitney’s ongoing investment in product improvements and industry partnerships the engine continuously surpasses established goals of time on-wing and support turnaround time,” said Deachin. “The F117 engine can remain onwing for up to eight years between servicing visits, which lowers maintenance costs and provides outstanding mission readiness for C-17 customers.” The C-17 Globemaster III — the world’s premier heavy airlifter — is operated by four F117 engines, each rated at 40,440 pounds of thrust, enabling the C-17 transport to carry a payload of 164,900 pounds and fly 2,400 nautical miles without refueling. The F117-PW-100 first entered service in 1993. With more than 10 million hours of proven military service and 50 million hours in commercial use, the F117/ PW2040 has consistently proven itself as a world-class dependable engine.

coverengines story aero

EASA certification for A350 XWB Trent engine T

aeromorning.com

enviro.aero/flickr

airbus

Joint Co-operation: (Above) Rolls Royce’s Trent XWB engines for the A350-800 and A350-900 variants. (Top corner, left) Eric Schulz, President - Civil Large Engines, Rolls-Royce and (right) Didier Evrard, Airbus Executive Vice President - Head of A350 XWB Programme

he Airbus A350 XWB programme has achieved yet another important milestone with the European Aviation Safety Agency’s (EASA) award of the Engine Type Certification of the Rolls-Royce Trent XWB turbofan. EASA presented the certificate to Rolls-Royce at EASA’s headquarters in Cologne, Germany. This certification covers Trent XWB engines that will power the A350-800 and A350-900 variants. A higher thrust version of the Trent XWB is currently under development for the A350-1000. Eric Schulz, President, Civil Large Engines, Rolls-Royce, said: “We are very proud to have achieved this significant milestone on the road to the A350 XWB’s entry into service. I would like to thank Airbus for their support and all of our partners and employees who contributed to the design and certification of the engine. Test results show we have produced the world’s most efficient large civil aero engine and we now look forward to the first flight later this year.” Didier Evrard, Airbus’ Executive Vice President, Head of A350 XWB Programme said: “We congratulate our colleagues at Rolls-Royce on achieving this important

milestone for the A350 XWB programme with the EASA certification of the Trent XWB engine.” He adds: “These new engines together with the aircraft’s advanced aerodynamics and airframe technologies will bring our airline customers a 25 per cent step-improvement in fuel efficiency.” Certification confirms the engine has fulfilled EASA’s airworthiness requirements for flight and is the last major engine milestone prior to the first flight of A350-900 ‘MSN001’ later this year. The engines which will power that aircraft are now being prepared prior to installation of the fully integrated powerplant on the aircraft’s pylon. The Trent XWB has already powered a series of test flights on Airbus’ A380 Flying Test Bed (FTB) aircraft since February 2012.

GE-Honda engine in production E-Honda Aircraft Company has announced that it has commenced production on the much-anticipated HondaJet, the world’s most advanced light jet. The company highlighted the testing milestones that have been successfully accomplished and is moving closer to certification and delivery which will be powered by GE Honda HF120 turbofan jet engines. HondaJet is the most advanced light business jet aircraft, with best-in-class advantages in performance, comfort, quality and the fastest, highest-flying, most quiet and most fuel-efficient in its class.

zooming ahead: Honda Jet, soon to be the world’s most advanced light jet is ready for final production and delivery. GEHonda HF120 engines is a joint venture between General Electic and Honda to power the latest Honda Jet

Cruising Heights March 2013

Sergey Ryabtsev

HondaJet incorporates many technological innovations in aviation design, including a unique over-the-wing engine-mount configuration that dramatically improves performance and fuel efficiency by reducing aerodynamic drag. This airframe design reduces cabin noise and ground-detected noise when overhead and allows for a more spacious cabin and greater cargo capacity. The HF120 engines have accumulated more than 5,500 hours and more than 7,500 cycles during development and certification testing

Ucheniitza/wikipedia

aviacaogeral.com

Rolls-Royce net profits up in 2012

Aircraft engine maker Rolls-Royce net profits surged last year, boosted by strong revenues and the sale of its stake in US-based International Aero Engines. Earnings after taxation soared to $3.537 billion, in 2012, compared with $1,111,061,806 in 2011, the firm announced in a results statement. “In the second half of the year, revenue growth increased as we delivered 23 percent more engines than in the first half. Margins improved, reflecting volume, mix, cost control and the IAE transaction,” said Chief Executive John Rishton. He added: “The strength of our order book demon-

strates the confidence our customers have in our products and services…Our priorities remain: delivering on the promises we have made; deciding where to grow and where not to; and improving financial performance.” In the first half, Rolls completed the sale of its 32.5 per cent holding in US-based joint venture International Aero Engines AG (IAE) to Pratt & Whitney — a division of United Technologies Corp — for $1.5 billion. IAE makes V2500 engines which power the Airbus A320 family of aircraft and the Boeing MD-90.

HAL for engines Hindustan Aeronautics Chairman R K Tyagi has announced that HAL would design and develop a 20 kN aeroengine. “It will be a great emerging market because in a few years, the aero-engine market in India is expected to be `2,50,000 crore.” HAL’s Director (Design & Development) T Suvarna Raju said the Bengaluru-headquartered defence PSU has the expertise of manufacturing engines under licence agreements and knows the technology involved. “HAL is venturing into creating a mid-segment engine which will be used either on trainers that we have or regional jets (aircraft) we are looking at,” he said. Raju said the preliminary design of this engine would be reviewed in September this year, and the prototype is planned to be tested in three years.

P&W engine for CSeries Bombardier Aerospace and Pratt & Whitney have announced that P&W has been awarded Transport Canada Certification for its Pure-Power Geared Turbofan engine PW1500G that will power Bom-

Pratt to woo jetliners United Technologies Corp’s Pratt & Whitney unit is all set to woo big jetliners with its new turbofan engine with a capacity to produce 100,000 pounds of thrust as it remains committed to develop a version of its newest engine for wide-body jets even after opting not to compete on Boeing’s latest 777 model. Pratt & Whitney skipped the so-called 777X, to focus on outfitting singleaisle planes with geared turbofan engines on some of the industry’s largest aircraft. P&W has invested heavily in technology for the wide-body thrust class and continues to work on geared turbofan architecture up to 100,000 pounds of thrust

as the geared turbofan engine uses a gearbox to let the fan in front and turbine in the rear spin run at different speeds, which the company says will boost fuel efficiency and reduce noises. Such an engine would need to be as much as eight times more powerful than the present Pratt & Whitney units producing 13,000 pounds of thrust. At present, General Electric GE90 (used on the 777), is the world’s biggest commercial jet engine, with as much as 115,000 pounds of thrust. Pratt & Whitney is the world’s second-largest maker of aircraft engines by sales, after GE and ahead of Rolls-Royce Holdings Plc. Cruising Heights March 2013

bardier’s CSeries aircraft. Pratt & Whitney conducted over 4,000 hours of rigorous engine testing since the initial engine began testing in September 2010. The PW1500G engine test programme included 340 hours of flight testing on P&W’s experimental 747 flight test airplane. Certification of the PW1500G engine is a significant milestone as quoted by Rob Dewar, Vice President, CSeries Bombardier Commercial Aircraft.

aero engines

TP400D engines issues

Grounded: Airbus Military A400M transport aircraft grounded due to engine failure and (inset) the TP400D engine which power the A400M aircraft

airbus

Icing on Tussle for Comac Honeywell engine Researchers are trying to find out ice crystal formation in a full-scale engine test facility at NASA’s Glenn Research Center. The tests are based on natural events of cloud formation, ingestion by an aircraft engine of ice crystals created by the cloud that can result in the reduction of engine power. This research is being carried

to gain an understanding of the ice crystal formation in a turbine engine. Aircraft routinely fly around the areas of deep convection that appear innocuous to pilots but have at times caused air data system instrument failures, engine power loss, and engine damage due to ice crystal formation in the engine. The impact of these events can range from an instrument malfunction, with no impact on the flight, to multi-engine flameout with subsequent restarts. The research is being carried out on Honeywell engines.

Pratt & Whitney is jostling with other companies to grab the contract to supply China’s planned C919 jet. United Technologies announced plans to build a new factory to manufacture fan blades and high pressure turbine disks for jet engines in Singapore, that seek to expand opportunities in the Asian-Pacific region. The company said they are in discussion with the Commercial Aircraft Corporation of China Ltd. (Comac) on possible collaboration. Pratt & Whitney earlier lost out to rival CFM International — a venture co-owned by General Electric and Rolls Royce to supply engines for the initial Hoping for More: A Comac C919 aircraft developed by China on display. The company has not yet decided on the aircraft engines and P&W is jostling with other companies to grab the contract

Cruising Heights March 2013

The Airbus Military A400M transport aircraft that was delayed partly because of the faults developed with the TP400D engines, built by a group that includes Rolls-Royce and Safran SA (Europrop International), will no longer be affected by difficulties with the turbo-propeller as the company has resolved the issue and is ready for further deployment into these aircraft. France is the lead customer and due to receive the first aircraft before mid-year. Engines for the first three A400Ms will need to be upgraded to introduce a gearbox fix. The modification became necessary because of a combination of factors, including a material flaw and strain placed on the gearbox by the massive eight-bladed propeller.

versions of Comac’s planned C919 jet, which will rival the Airbus A320 and Boeing 737 narrow-bodies that dominate the short-haul jetliner market. Comac expects the C919 to take its first flight by 2014, with deliveries starting in 2016. The Chinese manufacturer is also studying other models, including extended versions of the C919, as well as wide-body aircraft that could accommodate 200-400 passengers. The manufacturer has yet to decide on the engine suppliers for such aircraft. Pratt & Whitney’s planned investment in Singapore will add to its existing component repair facility and maintenance, repair and overhaul operations in Singapore. The company has also secured a position as one of two engine options on Airbus’s A320neo alongside CFM International.

business aviation

Business Aviation looks at

expanding horizons

Plush aircraft and an expanding market. That is what a recent PricewaterhouseCoopers report says about the business aviation sector in India and if the recent Aero India show at Bengaluru is any indicator, business aviation is spreading its wings in the country

he business jet market has witnessed four tough years but now it seems that the graph is moving up in the positive direction. India has 165 business jets at the moment. Around 40 per cent of the Indian fleet is more than 10 years old, a statistic in which aircraft makers smell business. A PricewaterhouseCoopers (PwC) report on India’s general aviation (GA) has pointed out that the market is expected to grow 10 per cent annually to cross `1,600 crore in the next five years, as nearly 300 business jets, 300 small aircraft and 250 helicopters are expected to be added to the present fleet by then. Leading business aircraft makers are positive that India and China will be able to accelerate the growth of business aviation. The plush Falcon 2000S was showcased at the air show for the first time. Swiss ultra luxury aircraft liner Vista jet, which had announced grand plans for India, also made its presence felt at Aero India. In fact, so important is the Indian market that Dassault Falcon’s President and Chief Executive Officer Jean G. Rosanvallon was present at the show and mentioned that all eyes were on the BRICS (Brazil, Russia, India, China

Up, up and up • Indian business aviation market expected to grow 10 per cent annually • To cross `1,600 crores in the next five years • Nearly 300 business jets, 300 small aircraft and 250 helicopters expected to be added by 2017 • GA will see `200 billion-plus investment flow during 12th Five Year Plan (2012-2017) Source: PwC report

and South Africa) market for business jets. Wichita-based aircraft manufacturer Cessna Aircraft sees growing demand in India for both the Caravan and Citation lines. The company had displayed a Caravan and Citation Mustang at the Bengaluru show. Cessna believes that applications for business aircraft there will increase in response to anticipated government reforms intended to improve infrastructure and free up market access. “India is expected to be among the world’s fastest growing economies this year and stands to benefit hugely from the

Spreading wings: The sophisticated interiors of a Dassault Falcon 7X

Cruising Heights March 2013

national expansion of business aviation, both for domestic and international travel,” said Bill Harris, Cessna Vice President of Sales for Asia and Asia-Pacific, at the show. “Cessna is optimistic that legislative and regulatory reforms this year will remove several barriers to India’s aircraft market development. Cessna is positioned to meet the country’s pent-up customer demand.” However, in this optimistic scenario, even though repetitive, it becomes indispensible to consider the issues plaguing business aviation. According to the PwC report: “The Indian GA market is small and under-developed as compared to its global peers. The US has around 5,110 active airports (the largest in the world) and the largest number of GA aircraft approximately more than 255,000. On the other hand, India has only around 150 active airports and approximately 700 GA aircraft. The movement for GA comprised a meagre 15 per cent of the total aircraft movement in the country.” Listing out one of the major challenges to the growth of the market — Uniform Import Duty on Private Aircraft — Vineet Phatak, Founder and MD, Invision Air, hoped that the government would be proactive in reducing the duty. “We hope the Uniform Import Duty is reduced to zero as it was many years ago. This will help to stimulate the industry. Equalising the duty level for private and commercial use of aircraft will simplify many processes and will allow for safer and more efficient operations of private jets in India.” In spite of these challenges, the Indian GA market is on the threshold of catapulting itself into the global arena. The PwC report says that more than `200 billion investment would flow into general aviation during the 12th Five Year Plan (2012-2017). “In anticipation of the growing opportunities in GA, manufacturers such as Cessna, Gulfstream and Bombardier are either setting up offices in the country or expanding their existing businesses.” 

business aviation

The Indian market is mature and smart Jean G Rosanvallon, President and CEO, Dassault Falcon, and Valdim Feldzer, Head of Communication, speak to K Srinivasan about the company’s growth in a mature Indian market, which is a good mix of the Falcon 2000, 900 and Falcon 7X, and how cautiously optimistic they are for 2013

h c tiwari

Business Aviation has gone through a slump and Indian business aviation growth hasn’t shown the trajectory that was expected. How do you look at the situation? Jean G Rosanvallon: It’s true that the last three years has been a kind of a plateau. We had a much better time from 2000-2008, but nevertheless the fundamentals remain. You know the size of the economy over the next ten years, the need for the entrepreneurs to travel quickly. That’s why it was an interesting first for us in 2011 when the four BRIC (Brazil, Russia, India and China) countries represented more than 50 per cent of our business, whereas traditionally, say for (the last) 40 years, the US was more than 60 per cent of the worldwide market. Progressively you know the world has become more global and we studied and worked very hard in India, Russia and Brazil. But that was 20 years ago and now

you can consider these markets very mature. And China, of course, is a much more recent evolution because you know our planned activity really started less than five years ago. So, it’s a different market but obviously it’s growing fast. Faster than India although India is an older market? We need to see about five or ten years. Short-term the answer is yes, but whether or not it will be sustained for the next five to ten years remains to be seen. Overall, when I look at the total market I think business aviation is recovering well. We clearly suffered a lot in 2009-10 and we started to see some recovery in 2011-12 and I am cautiously optimistic for 2013. You know the US economy really seems to be turning the corner and the outlook is good. Europe unfortunately it is taking more time to recover but between the recovering US market, the BRIC countries and the rest of the world

the businessmakers: Jean G Rosanvallon, President and CEO, Dassault Falcon (L), and Valdim Feldzer, Head of Communication (R), with Serge Dassault, Chairman of the Dassault Groupe in the centre

Cruising Heights March 2013

— I am fairly optimistic that our industry will do well. Dassault is the leader in India and in the world in general in the high-end segment… in the large cap long range airplane and fortunately for us that segment has suffered less than the smaller planes during the financial crisis. As I see it, general aviation would mean a two-three hour flight for most people, but an aircraft like the 7X that can criss-cross across continents should logically have few takers. How do you hope to sell them? Whether it’s the US, Europe or BRIC countries, domestic travel becomes really a small portion of the use of this plane. The real use is to go to London, to Japan; it is for transcontinental and international travel. The advantage of the Falcon is due to the technology: they are also very good to go into short haul in India and the next day do a long international flight. So the Indian

market being mature and smart, you know our difference in technology I think is a big argument to all of us to be number one, in the high-end segment. Valdim Feldzer: Business aviation is all about flexibility. Although they can fly six hours, on an average they fly three hours or two and a half hours, but the airplane is so designed that it can fly long haul and short haul in a very optimised manner. But isn’t the efficiency affected if it does two and half to three hours rather than seven hours? It is true that we burn a little more fuel during the climb but basically if you compare this model to the direct competition, the fuel saving can be as high as 30 or 40 per cent. But if you compare a Falcon 900LX to a G450 we burn about 40 per cent or less fuel than the G450. What is the reason behind this? The reason is that we have better aerodynamics, we have a lighter airplane because it’s built using military technology. We are the only manufacturer of business jets who also build some military fighters. So, we are, of course benefitting from this high technology coming from the military and when you compare the weight of the plane, the aerodynamics in the end, when you have everything, it can make a big difference. Something about your other aircraft… As we discussed, we focus on the high-end of the industry. The Falcon 2000S is a $2627 million high-end plane and the Falcon 7X sells for over $50 million. So, that’s really where we are focusing and where we have been successful again because of the overlap between the civil and military technology. You know that is really what has been the big factor for the success of the Falcon. What’s the mix in India? If you look at the 20 airplanes flying in India, it’s a good mix of the Falcon 2000 model, 900 and Falcon 7X. Are you looking at sourcing from India, considering that the military segment has won a big contract in India which will include offsets? You know the military contract Dassault is trying to win will include a lot of offsets and some of these offsets maybe also on the Falcon side. So, it’s a little too early to tell but I certainly know that’s something which is being explored. When will we come to know? I am not the most qualified to discuss in de-

tail the offset side. Clearly it’s a big item in the overall negotiation but then you know… How are your maintenance operations in India? You know because we’ve had this success from the sales standpoint, it’s absolutely necessary to build a strong system of service and we have two partners for service centres. We have our own engineers to strip off the plane and we also have a large inventory of spare parts in Chennai. When you add everything it’s a pretty strong network to support our customers in India. I remember seeing one of your advertisements that said a Dassault customer will never be without an aircraft. If there is maintenance on one, he gets another one. How does that work here? That is what we call an AOG (Aircraft On Ground) situation. We are really reacting throughout the system — whether we need a part from the factories — everybody is completely focussed to put the airplane back in the air very quickly and that’s a big reason why we continue to develop that network so that people can be helped very efficiently and very quickly. In effect barring any major issues, most aircraft would spend just a few hours on the ground in maintenance No that would be a perfect world. It may happen in a day or two, but the first thing you have is an excellent reliability and the typical reliability for the Falcon is 99.7 per cent. Any AOG is a rare break and sometimes it doesn’t even involve the airplane itself. Unfortunately, for instance, in airports we have a lot of incidents. Someone hitting your wing and that’s an AOG situation even though it’s not an aircraft issue but we have to deal with it — some way to help the customer very quickly. Every time I look at your aircraft, I feel you have reached a point from where there is little more to achieve. What next after the 7X? We will be celebrating this year the 50th anniversary of the first Falcon flight. If you look over the last 15 years in term of range, for instance, between the initial Falcon 20 and the Falcon 7X, you know the range has increased almost five-fold. If you look at the cabin size, it’s probably about three times. So that’s a long-term evolution of the business jet industry to have more Cruising Heights March 2013

capable international planes which means more range and more cabin space. You have got cabin space, efficiency and great engines, what next? Next you know, is like the Boeing and Airbus. You know there are still areas where maybe you can improve by 10 or 15 per cent your aerodynamics. The engine manufacturer keeps producing better and better and more efficient engines. So again if you look at the history of the aerospace industry — it’s constant improvement, continuous improvement. Valdim Feldzer: And big changes for the future in terms of environment and noise reduction, fuel consumption. We are just in the middle of a new evolution in business jets. We already have a lot of people who are working a looking ahead at twenty years from now. Jean G Rosanvallon: Most probably later this year, we will make an announcement about a brand new Falcon. Right now we have a codename for it — it’s called SMS. But you know we are working very hard on the project. We plan to have the first flight of the airplane by the end of 2014. And before the end of the year we will lift the secret and give all the details about the performance, the cabin and you will see that it’s another step in the evolution of the Falcon family. So that’s exciting. Your aircraft — its all Pratt and Whitney but just one Honeywell engine. What is the reason? Our relationship with Honeywell goes further back than Pratt and Whitney. We installed the first Pratt and Whitney engine on the new version of the 2000 when we decided to go for what we call the 2000 Classic to the 2000 EX, we switched from the GE-Honeywell engine to the Pratt engine. But when we started the Falcon 10, Falcon 15 and the Falcon 900, they were all Honeywell engines. Why did you change? At any given time, you know someone is developing a new engine which is more efficient, which is a better fit to go with your airplane. So we think Honeywell remains a great partner for us and you know we have the easy cockpit which is standardised throughout the family of airplanes. Honeywell and Pratt are two key partners for us. n

business aviation

Airbus hopes on rebound

New services for India by Empire Aviation

After a lean 2012, when Airbus Corporate Jets (ACJ) booked orders for two ACJ318s, two ACJ319s and a single ACJ330, handing over nine aircraft in total, the company is pinning hopes on the market rebound for 2013. It hopes for a stronger sales performance during the coming 12 months, including several ongoing governmental campaigns. François Chazelle, ACJ Vice-President, said the contests offer potential for sales right across its range. Moreover, ACJ intends to bolster its widebody sales through the disposal of a number of former Singapore Airlines A340-500 passenger jets, which are returning to Airbus as part of a deal for new A350s.

Empire Aviation (EA), a new private aviation specialist and a sister company of Dubai-based Empire Aviation Group — the Middle East’s leading private aviation company — announced the launch of its comprehensive range of business aviation services for private aircraft owners in India, at Aero India 2013. The one-stop shop approach covers aircraft sales, aircraft management, flight operations and charter. Empire Aviation took its first business jet under management in India in December 2012. The 2012 model Bombardier Challenger 300 is based at HAL Airport in Bengaluru, where EA opened its first office in India recently and where there is already a team of six aviation specialists on the ground. EA is currently in negotiations for a further three managed aircraft and plans to have five aircraft under management in India by mid 2013, with the team doubling in size over the same period. Paras Dhamecha, Executive Director at Empire Aviation, said: “The Indian

An Acropolis Airbus ACJ319 Lounge

Available in India, makeover for business jets

h c tiwari

In a unique initiative, Air Works India Engineering Pvt. Ltd. will now be offering comprehensive interior designing, restoration and refurbishment for corporate aircraft, including rotary and fixed wings. Within the next couple of years it will extend the same services to airlines with capabilities in cabin modification and upgrade, making it a one-stop solutions provider to general aviation and airlines in this part of the world. “Keeping up with this growing demand, production of aircraft are also expected to rise and aircraft require a full cabin modification or restoration every four to five years,” said Praveen Srivastava of the aircraft appearance division. According to Nick White, Vice-President, General Aviation, Air Works India, “This new service offering is the culmination of a vision to provide comprehensive and cost effective solution offering its Indian customers a choice not to go overseas.”

Vivek Gour, MD, Air Works

Mahindra Aerospace grows with light aircraft A new 270,000-sq-ft facility that will be used for manufacturing metal components, aircraft assemblies and aerostructures, is under preparation near Bengaluru by Mahindra Aerospace, the country’s only manufacturer of light aircraft for private/ utility use. The company is part of a public-private partnership with the Bengaluru-based government-backed National Aerospace Laboratories that is developing the CNM5

light utility aircraft. At present, this programme is seeking an Australian type certificate. Furthermore, Mahindra also is involved in developing the GippsAero GA10 single turboprop, which is due to complete certification in 2014. “We believe it will have a wider (market) reach because of its lower price, efficiency and in its use of jet fuel,” said Executive Director and Global CEO Arvind Mehra. Cruising Heights March 2013

AIDING BUSINESS AVIATION FLYERS: Empire Aviation Directors Steve Hartley and Paras Dhamecha

economy is proving robust and with more Indian companies globalising their operations, we see a healthy future demand for our services, where we can fill the gap for a professional management company, which can simplify the ownership process and experience for owners. This will also help further stimulate the market for business aviation.” The company is very optimistic about its prospects in the growing market.

Second Embraer Legacy 500 flies Embraer Executive Jets’ second Legacy 500 recently made its maiden flight, officially entering the flight test and certification programme. This development came after November’s successful maiden flight of the aircraft, the first, full fly-by-wire midsize business aircraft in the corporate aircraft industry. “The test programme is proceeding as planned and now that Serial Number Two has flown, the test campaign will accelerate for this break-through midsize jet,” said Ernest Edwards, President, Embraer Executive Jets. “The initial flight test feedback has been very favourable. The aircraft and systems overall performance is above expectation.” The Legacy 500 has flown more than 44 hours in 23 flights since its first flight on November 27, 2012. Initial envelope clearances, including flying qualities, systems evaluation and Engine/APU air starts, have been completed. In late January, the aircraft performed a series of natural stalls with expected results.

Net Express

Cruising heights

d i g i ta l t r e n d s f o r t r av e l l e r e x p e r i e n c e

Comprehensive travel app by MakeMyTrip

Indian airports move ahead with SITA The Airports Authority of India and SITA have come together to equip 25 airports with the global IT provider’s AirportConnect, Common-use Passenger Processing System and Common Use Self-Service (CUSS) kiosks

newsmakers: (L-R) Maneesh Jaikrishna, SITA Vice President, India and Subcontinent, AAI Chairman VP Agrawal and Hani El-Assaad, SITA President, Middle East, India and Africa, at the AAI, SITA press conference

t was a milestone event for the ITenabled modernisation of airports in India, that have long been lagging behind their international peers in technology, when the Airports Authority of India (AAI) recently announced that the global IT provider for the air transport industry, SITA would be equipping 25 airports with its common use passenger processing system. This means that the more than 50 million passengers that use these airports annually will enjoy more efficient check-in and boarding and have self-service kiosks available. Under this seven-year agreement, SITA will provide AirportConnect Open, the common-use passenger processing system that allows airports to maximise the use of check-in counters and gates. It would also supply 700 workstations together with Common Use Self-Service (CUSS) kiosks across 25 airports that include Chennai, Kolkata and Pune. Through shared use among all the airlines operating at the airports, SITA’s CUSS kiosks will offer multiple services Continued on Page 56

Cruising Heights March 2013

A new travel application, RoutePlanner, has been launched by online travel portal MakeMyTrip. The travel organiser integrates and displays connectivity options available between two locations, including flights, buses, trains and cabs. RoutePlanner allows users to view multiple routes for the same origin-destination pair. The application offers travel options across 4,300 cities, 2,300 flight routes, 65,000 bus routes, 9.7 lakh train routes and an extensive road network. Each route is ranked by an algorithm called ‘RouteRank’ which ranks the routes based on convenience, duration and price. Once a route is selected, RoutePlanner displays the best transport combinations down to the specific flight number, train name or bus operator with approximate fares.

INSIDE

interview IBS's VK Mathews speaks about next generation airlines and their growth

fRANKFURT LEADS IN SELF-SERVICE Germany’s busiest airport leads the way for self-service

DFW's new mobile app Mobile app for smartphones gives customers latest information

Net Express

d i g i t a l

t r e n d s

f o r

t r a v e l l e r

e x p e r i e n c e

“New generation airlines may grow 15 per cent” V K Mathews, Executive Chairman, IBS, provider of IT consultancy to the travel, transportation and logistics (TTL) industry, believes that the next generation systems are the ones which are actually helping airlines, and the new generation airlines will witness commendable growth as they are able to utilise their assets to the maximum with IT and social media. Tirthankar Ghosh recently spoke to him at Trivandrum. A whole lot of things have changed since the time we met last year. Then, we were in the midst of recession and that was the time when a number of industry stakeholders said that IT would help the industry to become more efficient — thereby cut costs — and ride out the recession. Absolutely, I cannot agree more. If you look at the aviation industry growth — if you call it post-recession — now, our projection is that the passenger business will grow about 4 per cent per annum and cargo would be around 4 per cent to 5 per cent per annum, still nominal growth. But what is interesting is that the new generation airlines will grow or are expected to grow about 15 per cent. That means the ones like IndiGo and SpiceJet (or what is commonly known as): the low cost. I would rather not call them low cost because that is a wrong reflection. I would call them new generation airlines because low cost does not mean low service quality. What is service quality? Service quality is not just the food and beverage served onboard, the on-time

departure reliability, the safety records and the network — all of that contributes to the product quality basically. So, if you look at airlines like JetBlue, or at the airlines in Japan like StarFlyer or our own IndiGo; all of them, according to me, are high quality, new generation airlines and they are able to operate very slickly because they all have very smart systems. They are able to utilise their assets to the maximum. You know in reality, one of the ways in which airlines compete and win is because they have lower price. But lower price is only okay if your cost is low. Many airlines in their eagerness, you call it low cost to the customer but for them, they blink. So, to actually keep the cost below your price and compete and succeed, you need to have exceedingly great systems to actually help you improve your efficiency, asset utilisation, and also mobilise traffic and mobilise revenue. Mobilise revenue is different from getting revenue. What it means is that if I know that my particular sector goes 70 per Cruising Heights March 2013

cent load factor and my break-even is 75. So, how do I push that 70 to 75 without really reducing the yield that you otherwise get. So for all of that, it would require IT systems which can implement some of the commercial policies and the strategies. Do you understand? So I fully agree that the next generation systems are the ones which are actually helping airlines; there are airlines that are succeeding whilst a lot of airlines do lose. There are also airlines that make good profits…AirAsia is an example. Southwest is another example: it is an airline that has never lost money in their almost 35 years of existence except for one quarter. But most of the older airlines use legacy systems… That is where the opportunity comes to organisations like IBS. Now if you take the case of one of the oldest airlines is Qantas, a very old airline. TransAsia is another old airline. All Nippon Airways is a very old airline. All these airlines are progressively

d i g i t a l

t r e n d s

f o r

getting rid of their legacy applications and bringing in agile, new applications which will help them improve the efficiencies. Significantly, it will improve the efficiencies and also it will help them create new markets and provide that differentiated customer experience. How can you mobilise the revenue? Think of a situation: During weekends, Trivandrum-Bengaluru flights go at 60 per cent load and I want to increase it to 80 per cent. I am willing to forgo my 100 per cent seats assuming 100 seats are there. A total of 60 seats are booked and I have 40 seats left over. A vacant seat is a lost opportunity for me. So if I can sell 20 seats and I give 20 seats free, it is still okay because there is no cost increase. There may be a nominal cost increase — may be a fraction of it — especially it was increase on the fuel, otherwise nothing else. Now, if I say during the weekends along with husband and wife, two children below the age of 16 go free, the price (for a ticket) is still `4000 only, you can mobilise loads. But, of course, you really need to have customer relationship management and you really need to reach out this message and we want to very slickly implement because I do not want this (move) to erode my otherwise 60 per cent seats. These are the areas where we (from IBS) will be play to wonderfully well and they (will) give the ancillary revenue that we actually get. Would not that be difficult for IBS, a core system player, to get into the social media — that is what will bring the 40 per cent passengers… That is what our systems do today. Are you not diluting your core focus? See inventory management, yes you need to do. But how inventory management is going to be implemented when you have multiple channels or revenue management implemented when you have got dimensions on which new dimensions about which you never thought of (have arisen), you need to actually look at that and need to bring in so that you always remain at the forefront of innovation. We still cooperate. We have 11 lines of business, airline passenger services, fares and departure control, reservations, customer relationship and loyalty management, travel and cruise management, engineering maintenance, flight operations, crew operations, airport operations, cargo operations… we have hospitality distribution, we have oil and gas; all of these are core. But we also need to look at the other areas (social media). The difference is this, this iPhone or your Samsung smartphone does not have any technology which did not exist 10 years

t r a v e l l e r

e x p e r i e n c e

back except that the way in which users can use it has changed. So the user experience, that last mile tweak is required for you to achieve market share. Similarly, unless we understand what the customer experience will be in two or three years... Most of the people are going to be using a handset and they will not be calling up a travel agent, forget it. So, I need to know who are the potential customers and I need to give push information to them. How will I push? And again the question is what is going to be an airline business 10 years from now? So all of that is what we at IBS Solutions is supposed to be doing. My dream of virtual airlines is what is actually coming to a reality. See, they do it in many different ways because it is not an easy thing to implement. For example, because of the powerful unions and things like that, you know, it is very difficult. Well, how is British Airways doing it? They created International Airlines Group as a holding company. So, Iberia became a part of it, British Airways became a part of it, bmi is now part of it, and they will add more and more. They will respect individual contracts but they will actually say: ‘We will respect all your contracts. BA (pilots) get more money than bmi…I will maintain it. But you will become the pilots of IAG, the holding company.’ So, the advantage is that they can fly together 1000 planes. So there is an economies of scale created. The flying of the planes is going to be done by IAG. But I maintain British Airways brand. Somebody else maintains the Iberia and the bmi brands. And, finally at some point in time, I would like to actually sell that IAG part. So all I create as a separate

“ My dream of virtual airlines is what is actually coming to a reality. See, they do it in many different ways because it is not an easy thing to implement.” V K Mathews

Executive Chairman, IBS Cruising Heights March 2013

Net Express

entity. And what do I do? People ask me to fly planes and I fly planes and I am great in flying planes because I have the best set of planes and I fly 5000 planes. Between any centres I operate. And I will configure it for 2 class or 3 class, whatever you want on a single class. You can subscribe to it. So in other words, we are driving economies of scale. Now if you want to operate like that within that compartmentalisation, you need to have systems which will maintain British Airways services, Iberia services and so on. These are the things that we do. How important will social media become in the next few years? I think why it is becoming important is see the world has changed and many occasions, the good thing and the bad thing about the world’s change is that it is pretty much cyclical. Few things get repeated. The fundamentals of human relationship and the fundamentals of professional things have not changed. The fundamentals have not changed. The way in which it manifests has changed. Say, 50 years back, as an airline company, we knew all our customers. A travel agent knew a customer’s family. There was a relationship. Then everything became process-oriented and now we do not know our customers. We have come to the stage where we do not know the customer. Now, social media is bringing in that social relationship even when you are growing big. So how do you become social at this large scale? I think it (social media) will play a very important role. I will give you a very simple example. Suppose IBM is conducting a big conference in Bali at one of the hotels and people are going there. So I will be able to… if I am from the airline I will be able to know very well that there are 200 friends of these people (attending the conference) going. We will be able to actually say that your friends are going to Bali and would you also like to? Do you want to it? How you can proactively reach out to people? How you are able to connect to your customers even in such a massive kind of a permutation and combination. These are some of the things. I think the very, very simple thing (about social media) from your Facebook would be: you should be able to make a booking. From your Facebook, you have seen that your friend is going somewhere and if he asks you if you would be interested in going with him during the weekend, you should be able to actually make a booking. And if my airline is going to be present there, then I have a very good chance. And if I am also able to tell him that the best price to the place is this and ‘X’ airline is offering it...So, there is huge relevance in all of that. n

d i g i t a l

Continued from Page 53 to passengers and will allow these airports to increase capacity during surges in traffic. This flexibility will avoid the need to invest in fixed check-in areas. Commenting on the tie-up, V P Agrawal, Chairman, Airports Authority of India, said: “This strategic partnership with SITA is part of our Airports Modernisation Plan which includes the new state-of-the-art terminals like Chennai, Kolkata, Bhubaneswar, Raipur, Ranchi, Indore, Chandigarh and Pune. We have identified Chennai

t r e n d s

f o r

and Kolkata airports as having great potential to become major hubs serving many international airlines. Working together with SITA we have devised a solution that provides India’s airports with world-class technology to provide flexibility to airports and airlines in enhancing passenger facilitation. We were pleased to agree on a revenue-sharing model and are confident that this partnership with SITA will assist the future growth of Indian aviation.” Hani El-Assaad, SITA President, Middle East, India and Africa, said: “SITA’s

flydubai offers digital newspapers

rience.com avelexpe futuretr

long-standing role in India’s aviation industry continues and we look forward to developing the industry in line with global standards so that India’s hundreds of millions of passengers that fly each year enjoy a world-class experience.” Maneesh Jaikrishna, SITA Vice President, India and Subcontinent, said: “This project by AAI includes the largest multiairport implementation of passenger systems in the country and will bring benefits to all stakeholders including airlines and passengers.” n

Self-service, bag-drop maximum at Frankfurt Frankfurt am Main, Germany’s busiest airport, with over 57 mn passengers flying to 264 destinations in 113 countries, leads the way for self-service with the use of self-bag-drops as well as self-service check-ins, according self-dependEnt: A passenger using the self-service kiosk to the 2012 SITA/Air at Frankfurt airport Transport World Passenger Self-Service Survey. However, because Frankfurt is so advanced in its use of kiosks and web check-ins, interest in the use of mobile phone functionality is generally lower than global averages. On the day of the survey, 45 per cent of its passengers used a staffed bagdrop station, compared to 32 per cent surveyed at airports across the rest of the world. For unstaffed bag-drop, Frankfurt is also ahead of the curve; 7 per cent of passengers used the service which is the highest rate recorded in the survey and double the global average. Likewise, 76 per cent of passengers at Frankfurt had used self-service check-in, compared to 68 per cent elsewhere. This explains why passengers at Frankfurt rate check-in and bag drop as less stressful than passengers do at other airports. Some 44 per cent of passengers check-in via their mobiles occasionally or frequently.

DFW airport releases new mobile app

e x p e r i e n c e

airportsinternational.com

In a breakthrough move in airline entertainment, flydubai has linked up with futuretravelexperience.com in-flight solutions specialist DTI Solutions to offer passengers daily updated digital newspapers. The airline’s touch-screen entertainment systems, that integrates PressReader by NewspaperDirect, provides access to more than 45 newspapers from around the world. flydubai CEO Ghaith Al Ghaith explained: “Daily news consumption trends have shifted since the introduction of smartphones and personal electronic devices, and passengers now expect to be able to read their favourite newspapers electronically onboard. Offering daily newspaper updates digitally is a real logistical challenge for airlines, and flydubai is proud to be the first to provide this enhanced passenger experience.” Patrick Préfontaine, President of DTI Solutions, added: “eReader solutions are strategic for airlines to provide passengers with relevant and engaging content, while benefiting from the noted advantages of digital content such as weight and cost reductions compared to paper-based media onboard.”

Dallas/Fort Worth (DFW) International Airport has launched its official mobile app for smartphones, giving customers the latest information and updates about flights, parking, shops, restaurants and airport services at their fingertips. The DFW Airport mobile app, which was developed with a considerable amount of feedback from DFW customers, is now available as a free download at the iTunes App Store, Google’s Android Play Store and BlackBerry App World. Passengers will be at ease with the app providing handheld information

t r a v e l l e r

and updates about flight connections, shops, restaurants, and local amenities of the Best International Gateway into the United States. From DFW International, the frequent connections allow passengers to reach their desired destination within 4 hours’ flight time, the app’s launch aims to ease the passengers’ travels, The new app reinforces PC World Magazine recently ranking DFW International as the #1 Tech-Friendly airport in the United States. The DFW Airport mobile app represents a breakthrough in the way our customers can navigate DFW Airport,” said Jeff Fegan, Chief Executive Officer of DFW.. Cruising Heights March 2013

New mobile app, website by Qatar Thanks to the new mobile application for Android, BlackBerry and iPhone devices by Qatar Airways’, travellers will now be able to search for and book flights, check flight status and fol- superior technology: low travel alerts. In Qatar's new mobile app and addition, the booking website is a boon for customers process can be accelerated for the Privilege Card frequent flyer programme members if they log in with their membership number. Akbar Al Baker, Chief Executive Officer, Qatar Airways, said: “We are continually looking for ways to bring new and exciting services to our customers.” mysuburbannews.com.au

Net Express

A i r p o r t s

A u t h o r i t y

INSIDE

Off to a flying start Vice President inaugurates new terminal building at Chennai airport

p58

o f

I n d i a

AAI again registers profits For financial year 2011-12, AAI earned a revenue of `5879 crore

p59

NSCBI airport: New terminal floors flyers

he new modernised and upgraded Netaji Subhash Chandra Bose International Airport (NSCBIA) at Kolkata, India’s gateway to the East, was inaugurated by the President of India, Pranab Mukherjee, on January 20, 2012. Speaking on the occasion, the President said the new Kolkata Airport Terminal was an example of how the public sector in India could also create a world-class facility. Since Kolkata was the gateway to the east, the airport, said the President, could play an important role in India’s ‘Look East’ policy, especially in view of the directional change in international trade from the west to the east. Echoing the same sentiments, Airports Authority of India (AAI) Chairman V P Agrawal said that the terminal had all the facilities that any other terminal anywhere in the world had. “It is designed to ensure it will be able to handle the needs of the city for next 40 years. More than 4,000 workers worked day and night for the new building at a frantic pace to finish the magnificent glass and steel structure spread over 1,89,815 square metres at the cost of `2,325 crore.” The annual traffic anticipated — once fully operational at its rated capacity — is 20 million of which the international terminal will be saturated by 2023-24 and domestic passenger traffic by 201920. But considering the present passenger traffic handled of 9 million against the designed capacity of 5 million, it looks like Kolkata airport will be able to handle much more than the 20 million capacity as the

existing domestic terminal will remain functional for some more time in addition to the new one. On the departure side of the new terminal, there will be 128 checkin counters based on the concept of CUTE or Common User Terminal Equipment covering both domestic and international terminals, respectively. There will be 28 immigration counters in the international terminal besides 21 security gates with frisking booths and 33 such security gates with frisking booths in the domestic terminal. On the arrival side, there will be 40 immigration counters. Further, there will be three and six conveyor belts, on the international departure and arrival side, respectively. On the domestic side, there will be five conveyor belts on the departure side and 10 on the arrival side. In addition to the 18 aerobridges, on the international side, there will be 13 elevators,

DEDICATING TO THE NATION: (L-R) V P Agrawal, Chairman, AAI; Ajit Singh, Minister of Civil Aviation; M K Narayanan, Governor, West Bengal; Pranab Mukherjee, President; Mamata Banerjee, CM, West Bengal; K C Venugopal, Minister of State for Civil Aviation; MP Prof Saugata Ray and Civil Aviation Secretary K M Shrivastava during the inauguration of the new terminal at NSCBI airport

Cruising Heights March 2013

New ATC tower

AAI keeps on upgrading airports to provide the latest state-of-the-art facilities to air travellers and airlines operating from various airports across the nation. This is an ongoing process in AAI. Recently, the construction of a new Air Traffic Control (ATC) tower at a total cost of `240 crores at Kolkata airport was sanctioned. The height of the tower would be around 86 metres. The new ATC tower has become more essential as some areas of apron and taxiway of the airport’s new integrated passenger terminal building are out of present tower’s visual coverage. This facility would enable traffic controllers to have a 360 degree view of operations at the airport (both the city and air side). 8 escalators and 6 travelators. On the domestic side there will be 14 elevators, 8 escalators and 7 travellators. Another highlight of the Kolkata airport modernisation is that in the new integrated terminal complex, a budget hotel is being incorporated where the rooms look into arrival hall. Just outside the airport complex it is proposed to set up a five star hotel. Besides, the airport project also envisages an 18-acre piece of land where the operator will undertake commercial development either through Build-OperateTransfer (BOT) or Build-Own-OperateTransfer (BOOT) or any of its variants. The commercial complex will have a huge convention centre, shopping malls, etc. As for car parking, apart from 1,250 car underground parking, there will be provision to park another 2,000 cars over ground. n

aai update

Chennai ushers new terminal

he Vice President of India, M Hamid Ansari, recently inaugurated the newly-built international and domestic terminals at Chennai airport. The Vice President said that Chennai Airport was the premier international gateway and the air hub for South India, besides being the third busiest airport in the country. The importance of Chennai as a national and international destination was well established. It had attained greater importance in view of India’s ‘Look East’ Policy due to which greater economic and commercial integration with countries of East Asia and South East Asia was taking

OPENING SOUTHERN DOORS: Vice President of India Mohd Hamid Ansari inaugurating the newlybuilt International and Domestic Terminals and upgraded airside facilities at Chennai Airport on January 31, 2013. The Governor of Tamil Nadu, Dr K Rosaiah, Minister for Civil Aviation, Ajit Singh, the Minister of State for Civil Aviation, K C Venugopal, and AAI Chairman V P Agrawal are also seen

Puducherry airport gets new terminal building

he new terminal building of Puducherry Airport was inaugurated by Minister of Civil Aviation Ajit Singh on February 9, 2013 in the presence of Dr Iqbal Singh, Lt Governor, Puducherry, N Rangasamy, Chief Minister, Puducherry, V Narayanasamy, Union Minister of State, Ministry of Personnel, Public Grievance and Pensions, K C Venugopal, Union Minister of State for Civil Aviation and other dignitaries. This building is spread over an area of 2,350 sq mt capable of handling

peak hour requirement of 75 arriving and 75 departing passengers with annual handling capacity of 1.2 lakh passengers with state-of-the-art-facilities. Speaking on this occasion, Minister of Civil Aviation said that he was happy to know that the Airports Authority of India had taken up the development and modernisation of airports on a war-footing. He wished the AAI all success in its endeavours to build state-of-the-art airport infrastructure in the country. n

SPREADING WINGS: Ajit Singh, Minister of Civil Aviation with Dr Iqbal Singh, Lt Governer, Puducherry, lighting the lamp during the inauguration of new terminal building at Puducherry Airport. Also seen in the picture are N Rangasamy, CM of Puducherry, V Narayanasamy, Minister of State in the Ministry of Personnel, Public Grievances and Pensions and K C Venugopal, Minister of State for Civil Aviation

Cruising Heights March 2013

place at a rapid pace. Consequently, passenger and freight traffic to and from these countries was bound to rise in the future. With Chennai being the natural gateway due to its geographical proximity, the upgrade and modernisation of the airport was a timely and appropriate initiative. He said that the existing terminals had a capacity to handle six million domestic and three million international passengers. With the upgrade and expansion, the new international and domestic terminals could handle an additional four million international and 10 million domestic passengers per annum. These terminals had also been equipped with state-of-the-art facilities for comfort and convenience of passengers. The international terminal, which was twice commissioned — once in April 1989 and later upgraded in May 2003 — is spread over 42,870 square metres with an annual passenger handling capacity of three million. The airport, however, handled 4.25 million passengers in 201011. During peak hours, it has a handling capacity of 1200 in the departure hall and 750 in the arrival hall and another 350 in the transit hall. It has four baggage conveyor belts and 44 check-in counters besides nine arrival counters for customs and 22 arrival immigration counters as against two departure Customs and 16 departure immigration counters. The new domestic integrated terminal building with its three-level structure has an area of 72,614 sq mt. It has a provision for seven gates, two hardstand hold rooms and 52 check-in counters excluding eight e-ticketing counters. The international terminal building with also a three-level structure is of 60,528 square metres and has a provision for two gates with multiple hardstand hold rooms, 52 check-in counters excluding eight counters for e-ticketing. Besides, the international terminal has 18 immigration and four Customs counters for departure passengers. Both the terminals are equipped with a sophisticated in-line baggage handling system that is capable of Level-4 security screening system. The system consists of five departure conveyors including rejected baggage conveyor. There are four arrival carousels in the domestic section and three in the international terminal. The total length of the conveyor is 3500 metres and the system can handle 1250 pieces of baggage per hour. n

aai update

AAI ensures sustainable development

hrough sustainable development projects/activities, AAI has been contributing towards control of environmental pollution both directly as well as indirectly. In the operation of airports/ buildings, a lot of power is used which contributes to environmental pollution. In recent years, AAI has taken up many initiatives towards sustainable development: • Use of all electrical appliances conforming to Bureau of Energy Efficiency (BEE) with rating 4 star and above. • Occupancy sensors, timers to shut off lights automatically.

• Building Management System (BMS) being implemented in new projects, where new terminals have been constructed/under progress. This will help to make optimum use of energy to meet functional requirement/energy demand. • Energy efficient chillers and variable speed drives are being used to improve mechanical efficiency of air-conditioning plants, air handling units, pumps, etc. • Energy-efficient fluorescent lamps are being used. For indoor lighting, use of LED lamps, which is more energy efficient and has longer life, is proposed for new projects. • Automatic sliding doors and air curtains are being used to reduce air-conditioning loss. • Machine room-less elevators are used at airports which conserve

ENGINEERING CHANGE: Inside view of Trivandrum airport

MoCA welcomes newly-inducted officers

N Shrivastava, Secretary, Ministion facilities also. On the occasion, Arun try of Civil Aviation, inaugurated Mishra, Directorate General of Civil Aviaa training programme at the Indition (DGCA), Rohit Nandan, Chairman an Aviation Academy (IAA), New Delhi, and Managing Director, Air India and for the officers at the induction level in Anil Shrivastava, Joint Secretary, MoCA the Ministry of Civil Aviation (MoCA). were also present. n The programme is the first-of-its-kind with a view to impart training among civil aviation personnel and is aimed to sensitise them to meet the challenges of the growing civil aviation sector in India and discharge their functions most effectively. A group of 20 officers of Ministry of Civil Aviation participated in the programme that STARTING NEW INNINGS: Newly inducted officers posing included visits to aviafor a group photograph with senior officials of MoCA

Cruising Heights March 2013

approximately 40 per cent energy as compared to conventional elevators. • Escalators are provided at airports with sensors to save energy. • Replacement of taxiway and apron edge lights with LED lights at Indore, Guwahati and Jaipur airports. • Baggage Conveyor System with sensor for baggage location and occupancy provided for automatic stopping of baggage system. The above initiatives will go a long way towards AAI’s preparedness to address issues relating to environment to give pollution free India to new generation in the time to come. n

AAI rakes in big profits again A

irports Authority of India (AAI) has been making profits since its inception. For financial year 2011-12, AAI earned a revenue of `5879 crore (previous year being `5139 crore) and profit before tax `1364 crore (previous year was `1346 crore) and has paid dividend of `171.90 crore higher than the previous year’s dividend of `169.30 crore to the government of India. In the process of modernising its airports, terminal buildings, passenger facilities and air traffic and navigational aids, AAI spent a sum of `2095 crore in the year 2011-12 (previous years, it was `2503 crore). The cheque for the dividend of `171.90 crore was presented to the Minister of Civil Aviation by V P Agrawal, Chairman, AAI, in the presence of Secretary, Civil Aviation and other senior officials of the Ministry and the AAI. n

TAKING PRIDE: V P Agrawal, Chairman, AAI, handing over the cheque of dividend of `171.90 crore to Minister of Civil Aviation, Ajit Singh (in centre). Also seen in the picture is 59 K N Srivastava, Secretary, Civil Aviation

aai update

AAI participates in World ATM Congress A

GLOBAL VISION: (L-R) V Somansundaram, Member (ANS), AAI; Ben Vogel, Editor, Jane’s Airport Review Magazine; P K Kapoor, ED (IT) and G S Bawa, GM (PR) at the AAI Pavillion in World ATM Congress

irports Authority of India (AAI) recently participated in the World ATM Congress 2013 at Madrid, Spain from February 12 to 14, 2013. The World ATM Congress, an international event was organised by the global ATM Industry, and it was also the first major industry gathering following the ICAO 12th Air Navigation Congress in November, 2012. AAI set up its stall in the exhibition depicting development and growth in the Air Navigation System (ANS) and airport infrastructure development. AAI’s delegation was led by V Somasundaram, Member (ANS), and included P K Kapoor, Executive Director (IT), G S Bawa, GM (PR), A K Dutta, GM (ATM), S K Bhattacharya, GM (CNS), S Swaminathan, JGM (ATM) and Vineet Gera, AGM (GAGAN). There were maximum footfalls in the Indian pavilion at Madrid, Spain. n

Amritsar airport unveils dedicated helpdesk

ri Guru Ram Das Jee International Airport in Amritsar recently unveiled a dedicated helpdesk that will function round-the-clock to assist domestic and international travellers. This is the first-of-its-kind initiative at any

airport run by the Airports Authority of India (AAI). Navneet Singh of Orango Solutions, (the company which has the helpdesk project) said, “Travellers will be able to get any information related to flights,

customs and immigration among others through a single window system of helpline and helpdesk.” “Amritsar international airport is the most important airport in North India after New Delhi airport, as it caters to travellers from Punjab, Jammu and Kashmir and even from parts of Himachal Pradesh like Kangra valley. The helpdesk here will have information about all flights under one roof. Anyone coming to the airport from far-off places may check in advance the likely flight take-off time in case of dense fog or other circumstances before starting for the airport,” Singh asserted. He added, “Moreover, there have been issues of passengers bringing in goods like TVs, larger than the allowed size, and being subjected to heavy penalty. The helpline will cater to all such customs queries, where travellers can plan what they can carry from abroad. In case the helpline does not have specific information about something, it will assist a traveller by supplying the contact number of concerned authority.” “The upcoming helpdesk will be very useful for visitors as they would get all sorts of information related to their travel,” said Airport Director Suneel Dutt. n CALM AMBIENCE: Passenger concourse area in passenger terminal building at Amritsar airport

Cruising Heights March 2013

A i r

C a r g o

L o g i s t i c s

Cruising heights www.cruisingheights.in | March 2013

Lone Ranger

Grit, determination and a desire to serve a quality product has helped the Capt Preetham Philip-led Quikjet Cargo Airlines continue to fly alone in a field quite a few have abandoned.

No rosy skies for forwarders

Celebi ready for high stakes

DIAL initiates cargo village move

Rose shipments abroad went up but flowers brought tears for domestic carriers

Celebi has lined up investment of $75.2 million for Indian ground handling and air cargo operations.

The vision is to establish the Indira Gandhi International Airport as the cargo gateway of the country.

Last in/first out

Freight floundered in 2012

ontreal-based Airports Council International (ACI) has reported that while some of the world’s top airfreight hubs had increased volume in 2012 such as Hong Kong with 2.2 per cent, and Memphis with 2.5 per cent, 57 per cent of the top 30 airfreight airports had volume declines. An overall decline of -1.3 per cent was registered in air

freight for the month of December. Europe, Latin AmericaCaribbean, North America and Asia-Pacific experienced declines of -2.7 per cent, -2.6 per cent, -1.5 per cent and -1.2 per cent, respectively. While the world’s top air freight hubs, Hong Kong (HKG) and Memphis (MEM), achieved growth of +2.2 per cent and +2.5 per cent, respectively, 57 per cent of the top 30 airports in terms

TRENDS

of air freight volume were in decline in 2012. ACI World’s Economics Director Rafael Echevarne commented, “Although we saw slightly lower year-overyear growth rates in passenger traffic in 2012 from month to month as compared to 2011, the overall result for the year was in line with ACI forecasts, which factored in the slowdown in certain European and North American markets. Air freight had mixed results throughout 2012 with some months posting modest gains while other months posted declines. Amid the significant downside risks in the Euro area and the fiscal deadlock in the United States throughout the year, growth in air freight came to an overall halt in 2012. As the global economy and international trade picks up steam we are optimistic to see higher growth rates for both passenger and freight traffic in 2013.”

Pain for Indian carriers

eports point out that though rose shipments from India went up by 15 per cent this year with demand rising from the traditional markets of the US, Europe, Australia, West Asia and Japan, it has not been good for domestic air carriers. Air India and Jet Airways transported a bulk of the fresh flowers to Europe in the last fortnight before Valentine’s Day but the tonnages were much lower than the foreign carriers. The reason is that Indian carriers lack the network and belly space. A Jet Airways spokesperson was quoted saying that the carrier had uplifted 30 tonnes of cut flowers on its Mumbai - London flights and 9.5 tonnes of flowers on the Mumbai - Brussels flights. Air India was reported to have carried 25 tonnes of flowers on its Mumbai-

London flights. In comparison, Lufthansa Cargo announced it had flown one thousand tonnes of roses from Kenya, Ecuador and Colombia and had even brought in additional freighters to meet the demand. Saudia, for example, operated four extra freighter flights from Nairobi to Amsterdam to meet the extra demand for flower shipments. The total capacity moved by Saudia was 1,000 tonnes for flowers into the European market during the “particular peak window”.

“This year it will be about ‘doing more with less’. It will no doubt be a tough year, but air cargo tends to be cyclical and our industry is good at digging deep and weathering the storms… The air cargo supply chain still needs to focus on improving productivity and reducing costs.”



Patrick Murray

Head of Worldwide Cargo Distribution, CALOGI

Cruising Heights March 2013

The Air Cargo Logistics Promotion Board (ACLPB), an inter-ministerial group designed to support the country’s air cargo operations, is scheduled to sort out inter-ministerial issues and to coordinate with state governments on handling of air cargo.

The ACLPB was set up soon after the International Air Transport Association (IATA) recent projection that placed India among the top five fastest-growing airfreight markets in the world. The IATA said that by 2016 India would be processing 1.6 million tonnes of cargo annually. Prompted by the projection for growth — 6 per cent, year-on-year over a five-year period — the Ministry of Civil Aviation’s working group on airfreight and express services recommended the establishment of the ACLPB. The first meeting of the board, chaired by Civil Aviation Secretary, had discussed several areas of concern relating to air cargo, especially missing and non-traceable cargo in domestic airports. In fact, the second meeting too is expected to discuss and resolve inter-ministerial issues and to coordinate with State governments as well as find out means to iron out infrastructure bottlenecks, regulatory hurdles and issues related to the automation of the industry.

cargo

ON TIME: Drilling equipment being unloaded from the Quikjet Cargo ATR at Colombo

Jet quick, jet sure

Call him a Lone Ranger or Captain Courageous but Captain Preetham Philip and his Quikjet Cargo has been able to weather the first year. It has not been easy, as Tirthankar Ghosh found out, but with a tight ship — there are only 47 employees — Quikjet is optimistic about the future. Cruising Heights March 2013

aptain Preetham Philip has often been described in the country’s aviation industry as a whizkid. He is a route planner par excellence (he was COO Aviation at Deccan Cargo & Express Logistics Private Limited and Deputy COO of Air Deccan, India’s first low cost carrier) and was known for his efforts to take Air Deccan to the furthest corners of the country. Today, as CEO of Quikjet Cargo, his ambition is to provide a world class logistics service at competitive rates that can match the most professional services globally. And that, exactly, is what he has been doing for the past one year. Quikjet started services in February 2012. Philip knows that he and Quikjet Cargo are both being watched closely by stakeholders: his success will once again emphasise the fact that domestic air cargo holds promise and possibly encourage entrepreneurs to invest or start carriers. After all, circumstances have made Quikjet Cargo the lone air cargo carrier in the country. The other domestic player is Blue Dart, but it is an altogether different league since it is a courier and integrated express package distribution company. There were others that tried — there was Capt G R Gopinath’s Deccan Cargo & Express Logistics Private Limited and Capt Mukut Pathak’s Aryan Cargo Express — but they failed to take off. The Indian market, according to Capt ‘Lone Ranger’ Philip, is a challenging one. “There are no two ways about it — because cargo is ancillary revenue on a scheduled carrier’s belly space.” The second part of the challenging situation is that the success of airfreight really is on time-definite perishables. “Our understanding in the industry is that it has not yet moved to a stage where time-definite delivery is critical,” said Philip. However, when consumers want time-definite deliveries, there is a price challenge since Quikjet Cargo is in competition with small time courier companies. “There is definitely a pressure on pricing but we have managed to actually pick up some locations in the North-east because of the constraints of connectivity. Philip agreed that though Quikjet has “managed to establish ourselves in that region, it is not attractive in the sense that it is going to be a money-making proposition. It is okay that it covers some of our costs but it is not the future,” said Philip. The future, emphasised Philip, is really in trying to establish a good network. It will be more to service the numerous courier companies and “invite them to try and see how they can grow their business into a time-definite guaranteed service level business”. Comparing conditions between India and the US, Capt Philip said “the challenge

cargo What kind of flights are you doing? Right now, we are flying Kolkata, Agartala and Imphal — more Agartala than Imphal. We do quite lot of other business… we get a fair amount of work from the oil industry. We have done a sizable amount of movement last year for the shrimp industry — moving shrimps from Surat to Vishakhapatnam — which was very successful both for us and the shrimp farmers. The unfortunate part is that the shrimp market for the year collapsed. In fact, the shrimp season has started again and there is a lot of pressure on us to support Bangladesh, Cox’s Bazar and Jessore because they heard of our (Surat-Vishakhapatnam) success. So I think almost daily we get queries but that is a challenge; can we go at least for two months into Dhaka and come back? You cannot just fly, go there, and come back. It does not make business sense although it is only an hour’s flying time. The cost of going into Bangladesh is quite high.

we are looking for financial resources.

How do you see 2013 for Quikjet? I think this year is going to be a very interesting year for the cargo industry itself. Interesting in the sense that we have to counter prices and counter growth. I think there is great opportunity for people like us. We want to provide a quality product. We need somebody on the other side like UPS, FedEx, TNT to want that quality. Only then will there be demand for us. I think that is also important because e-commerce is dependent on service levels that meet the expectation of the consumers. That is why I said it is going to be an interesting year. We are at this moment quite upbeat on some possible relationships with a couple of integrators... getting that two or three base customers in place. We hope and we believe, by the middle of this year that should finalise. If that happens, I think we will make a difference to this industry because we are a neutral operator.

Similar air cargo outfits have had to close down because of lack of finances. How is it with Quikjet? At the moment because funding is actually a part of the business plan, it is not a constraint. That is the reason we are very risk averse: we would not go and launch a network and burn the cash that we have. Launching a network is a way of getting customers on board because everybody tells you, ‘Do you have a Bombay–Delhi flight? If you have, then I will give you loan.’ Or, ‘You first start Bombay–Delhi, then I will give you business’. It is a chickenQuikjet CEO Captain and-egg story here. We do not want to burn that cash Philip on the year unless the customer signs on the dotted line. That is how we function. We do not want to get into a situation where ahead for the carrier

“There is great opportunity for people like us”

is similar to the one that was faced in US long back: nobody wants to commit unless you have a network”. To set up a network without a commitment from a customer is an expensive business. The challenge really, said Philip, is “how do we get the few large customers or base customers on board to try and establish a network. We are working to establish that because if we do not establish the network then there is no future in the industry,” he said. There is demand, agreed Philip, but “air cargo has barely witnessed any activity”. In addition, the paucity of freighters in the country has led forwarders to go for belly space in passenger planes and that is not good “for time critical shipments or movement of dangerous goods”, said Philip. The cargo capacity in passenger planes as part of belly capacity is around 13 to 15 MT (baggage space does not exceed two to three MT). According to the Ministry of Civil Aviation forecast, the total cargo throughput at Indian airports will grow 7.6 times in the next 20 years (CAGR of 11.2). Domestic cargo throughput is expected to grow 7.8 times in the next 20 years (CAGR of 10.4 per cent) while international cargo throughput is expected to grow 7.5 times in the next 20 years (CAGR of 11.7 per cent). CEO Philip has been clear in his

approach and that is quite apparent. His core competency being aviation, Quikjet’s business model does not include air cargo and door-to-door services. The focus is simply point to point delivery. The company picks up shipments from integrators and delivers them to different airports. Charter and lease services are also available with a scheduled network. A keen watcher of the air cargo industry, Captain Philip said that the industry will see two-three things happening. “For the growth of the country, time-definite logistics is critical because we have to go into Just In Time. You cannot have inventory sitting on the shelf. You cannot have trucks leaving and coming 10 days or 15 days later, stuck at all the check posts. So time-definite is critical if we want to do business in this nation internationally.” Simultaneously, costs have to come down. He pointed out that while one passenger turnaround used to be `3500 in a class of aircraft, “we pay almost about `50,000 for the same turnaround”. Airport royalty, said Captain Philip, was 31 per cent and went on to add, that with “12.3 per cent service tax, it would total up to nearly 45 per cent of unwanted costs”. The real challenge in air cargo is the price, said Captain Philip. He is competCruising Heights March 2013

Captain Preetham Philip

ing directly against belly space on passenger flights that is priced at `25 per kg and less. While that is ancillary revenue for a scheduled carrier, “it is my primary source of revenue and only source of revenue”, for Quikjet. At one point of time, he mentioned, aviation was a premium segment in the country. Today, it is the need of the hour. “Time is critical for everything. Time is money and it is time,” he emphasised, “people looked at it holistically like that”. He felt that there would be pressure from the industry “because it is not just couriers that need to go on time. There is premium airfreight which needs to go from probably one manufacturing plant to fit into another assembly line at a different location which needs to go like clockwork. I think this is going to put pressure on the industry to say, ‘Listen, we need this kind of service’”. Industry apart, the Quikjet chief mentioned the Inter-Ministerial Air Cargo Logistic Board set up by the Ministry of Civil Aviation. The Board would lay down the policy guidelines for establishment of air cargo facilities at airports and also set performance standards relating to the quality of service in the air cargo logistic supply chain. The policy was there, agreed Capt Philip, but the situation on the ground was something else.

Graph 10 : Cargo forecast for the 20 year period 2010-11 to 2030-31 Domestic Cargo

International Cargo

12 10

Airbus

7.5 times

7.8 times

4 times

MoCA

6.1 times

10.1 times

8.5 times

“Let us talk about Mumbai,” he said. “As far as Mumbai domestic cargo is concerned, you have to plan for an additional two hours transport time because the warehouse is not located near the airport. Is it friendly,” he asked. Kolkata too does not have adequate domestic cargo facilities. One cannot expect each operator to go and set up a facility at these stations (Mumbai, Kolkata, etc). “The infrastructure must be there. Yes, there are very positive policies coming. There are very positive outputs but I think it needs to be also more grounded from a realistic perspective,” he said with finality. The infrastructure at airports, said Captain Philip, is far from ready. “The unfortunate situation is that the infrastructure and the delays associated with the lack of infrastructure, is expensive too.” He went on to give an example: Loading a 7-ton aircraft takes four hours when it should normally take under 40 minutes. “That is challenging… extremely challenging,” he said in exasperation. “Unfortunately, the infrastructure supports international cargo considerably than domestic”. While that is good, domestic is neglected, he said. Unlike others in the business who want to fly abroad, Philip has no such desires. His target is the domestic market. The COO says that Quikjet’s focus would be on “the domestic market initially”. He goes on to point out that the carrier does not have “plans to go to international destinations at this time, but will be offering domestic coverage for global air cargo companies”. Operating with only one aircraft for the past one year, Quikjet has received permission to import a second one. “We are now approaching the Ministry of Civil Aviation for the import of two larger B737s,” said Capt Philip. The single ATR offering a payload of 8000-kg is now used to connect Kolkata and the North-east four times a week. Later, Quikjet wants to “develop Hyderabad as our hub considering the infrastructure”. Untouched by Capt, Gopinath’s business model that included air cargo and doorto-door services, Quikjet’s Philip insists that his business will be on airline connections. “We are only service providers,” he said, and added, “we will provide the aviation segment. We are not going to get into the door-to-door business although the ideal scenario would be an end-to-end solution”. Quite aware of the fact that end-to-end solution providers have had to shut down their businesses, Capt Philip said that in India, aviation is challenging for most people. “We know that few people have experimented on it and not been able to cope. We know aviation; so we want to give airport-to-airport transport as a solution which is an essential

AAI

Source: Airbus Global Market Forecast 2010-2029, AAI, MoCA Estimates Note: Number of times indicated in the graph pertains to the growth in 20 years from the level of 2010-11

tool for integrators,” he said. The carrier then will pick up shipments from integrators and deliver them to different destinations. According to Quikjet officials, the company had been assured of sufficient tonnages from the integrators. Charter and lease services will be available simultaneously with a scheduled network, said Philip. The integrators and charters will “assure cargo and we will assure them prompt delivery,” he emphasised. Would Quikjet think of setting up an air

The future, emphasised Quikjet CEO Capt Philip, is really in trying to establish a good network. It will be more to service the numerous courier companies and "invite them to try and see how they can grow their business into a time-definite guaranteed service level business". Cruising Heights March 2013

network? “That is precisely the challenge,” said Capt Philip. According to him, customers were all poised to take the services but not commit themselves to Quikjet and say, ‘Get the aircraft, I am ready to give you five tons a day between Point A and Point B at this price.’ It is a situation where you have to work with customers and say, we are happy to provide the solution… we are happy to bear this cost. “Right now,” said Capt Philip, “we are not at that stage but we have got two — three people who are 80 per cent with us and saying, ‘Yes, I am willing to go with Quikjet.” One of his future sources would be e-commerce, which is “really growing”. He pointed out, “If you look at the numbers of their growth month on month, it has been amazing. In fact, the numbers have gone through the roof six months down the line,” he said. As for the future, the veteran Captain Philips said two things could happen. It is either going to be a year when lots of changes will take place with practical difficulties actually being addressed by the government bringing about a huge boost to the industry, or on the other hand, there will be such pressure that operating dedicated freighters would be a difficult proposition. Leaving fuel prices aside, the government could help by bettering the infrastructure.”That is all within their powers. It is all reasonable. It is easy for the Emirates or Etihads coming in and taking away cargo. It is so much more challenging for us domestic players,” said Capt Preetham Philip. n

cargo

“Ours is a differentiator approach” Çelebi has operated and upgraded the Brownfield cargo terminal at the Indira Gandhi International Airport since 2009. Rajesh Goel, CEO, Çelebi Delhi Cargo Terminal Management India, tells Tirthankar Ghosh that Celebi has been able to offer something new in the market. Excerpts: Çelebi has been in India for quite some time. As far as air cargo is concerned, how has the journey been? Çelebi Delhi Cargo Terminal Management was founded in November 2009 when Çelebi Aviation Holding was awarded the concession by the airport's operator, Delhi International Airport Private Ltd (DIAL) for providing cargo handling services at New Delhi Indira Gandhi International Airport (IGI). As per the concession Çelebi was entrusted to develop, modernise, finance and operate the existing cargo terminal for a period of 25 years. There are a few advantages as well as disadvantages associated with any Brownfield terminal. The most important advantage is the legacy it carries. By virtue of it being a running terminal, we had the requisite experience in terms of manpower who were well aware of the processes and procedures. Second, there was a readymade infrastructure available with us. But it became a challenge, when as a part of our concession, we were given the responsibility to modernise, upgrade and renovate the terminal and transform it into a world class facility. We had to plan all our developments in a manner that our operation remained uninterrupted. With the new expert management, there were huge expectations from the trade. To handle the situation efficiently, we prepared a phase-wise modernisation plan. Our teams worked in tandem to convert the plan into reality and as of now, we have completed most of our renovation. We are proud of the improvements and can strongly state that we have transformed this Brownfield terminal into a

high growth: Inside the Çelebi Cargo terminal at Delhi.

world-class facility. Çelebi has successfully managed one of the most dynamic environments in the recent past arising from a change in the terminal’s management, change in regulatory processes, Customs system upgradation, unprecedented growth in cargo volumes in 2010-11 followed by a slump due to the global meltdown and has been fulfilling all its business obligations without exception. What are the processes you have established to become a “no-problem service provider”? Our cargo facilities in India and globally continue to strive towards excellence. Customer satisfaction has always been the key goal for us. We ensure that all our endeavours are focussed on bringing about developments and improvements in every aspect of our operation that helps us handle all forms of air cargo products more efficiently to increase customer satisfaction. Çelebi has undertaken the renovation of the Brownfield cargo terminal at the Indira Gandhi International Airport in Delhi and has brought in state-of-the-art equipment and technological advancements. Further, to ensure immediate grievance redressal, we have also established a CRM system, which has resulted in quick redressal and resolution of issues. There are a few areas of focus where Çelebi continues to improve upon and these are: process re-engineering (both on city side, warehouse operation as well as apron Cruising Heights March 2013

side), upgradation of IT system, training of our employees, conducting workshops for industry leaders (in various product segments to appraise them about our plans), etc. These initiatives have helped us not only to retain larger share of market but have helped the trade as a whole. How much has the tonnage handled by Çelebi gone up? In FY 2011-12, Çelebi Delhi Cargo Terminal handled approximately 371,000 MT of international cargo annually. Export including perishables contributed to approx 196,300 MT and import contribution was about 174,700 MT. Considering the fact that FY 2010-11 was an exceptional year in terms of cargo throughput, we cannot compare FY 2011-12 with FY 2010-11 to assess an actual growth rate, but if we consider the volumes of the terminal before takeover by Çelebi, then we have definitely seen a noticeable increase in volumes. What are the special features about the Çelebi-managed Delhi air cargo terminal? With Çelebi’s growing size, the infrastructural facilities offered at Çelebi Delhi Cargo Terminal have also improved according to changing times. These perpetual developments make service providers different from any other. Çelebi has taken various innovative steps to ensure smooth operational services such as rationalisation of truck management processes, increased the flexibility of its export cargo acceptance hours, creation of a security zone incorporating a variety of measures, introduction of new loading/unloading equipments, battery

Celebi

looks to India

tilla Korkmazoglu believes that the turnaround in the economy will happen soon. As President of Ground Services and Global Business Management, Çelebi Aviation Holding, Korkmazoglu’s words carry weight. His comments came during the Air Cargo Agents Association of India (ACAAI) conference that took place in Istanbul at the end of December last year. Actively involved in two of India’s top airports — Delhi and Mumbai — along with a few airports around the world, Celebi is acutely aware of the market trends. Çelebi has been in India for quite a few years and is aware of the challenges: Infrastructure bottlenecks, regulatory processes, paucity of skilled manpower, hesitancy to adopt e-freight, high prices of jet aviation fuel, unorganised forwarder structure, etc. Even so, Korkmazoglu mentioned that Celebi had set in motion a “process development and modernisation” plan for the Delhi cargo terminal: renovation of the old cargo terminal has transformed a 30-yearold facility with 70,000 sq m of space into a quality cargo terminal. With the introduction of a vehicle management system along with an increase in the export-processing hours, the Delhi ter-

operated forklifts, advanced TLX machines and introduction of euro pallets. Further in order to achieve excellence, the company has adopted two-point strategy. One is to focus on people and continue to help them in upgrading their skills and equip them in managing a fast-changing business environment. Second, our focus is to bring in a differentiator approach. Unless we offer something new in the market, there will not be any difference between us and the competitor. What is the amount of investment done by Çelebi for air cargo facilities in Delhi and elsewhere? Çelebi Delhi Cargo Terminal has undertaken the entire renovation of the cargo complex at the IGI Airport in Delhi and has gone a long way in transforming this Brownfield facility to a state-of-the-art facility. Çelebi has already invested over $50 mn at Delhi airport in creating/upgrading the existing infrastructure. We are open to more investment as and when the need arises. Our modernisation plans have had a positive impact on the entire chain and this has been appreciated by all the stakeholders in various forums as well as different industry body meetings. The modernisation plan doesn’t mean only building the walls or the floor but it is a lot more than this. So besides the physi-

minal has seen a rise in tonnages. Simultaneously, security in storage areas have been installed and environment-friendly loading, unloading, and handling equipment have been brought in. All this has led to the cargo handling tonnage going up significantly. In the new environment, the Çelebi terminal at Delhi has space for storage of hazardous material as well as medical supplies. Korkmazoglu mentioned that Çelebi was involved in a number of process development projects that will enhance “our ability to provide even better service for heat-sensitive goods”. The aim is to create a cold chain involving refrigerated trucks, containers and dollies in order to cope with Delhi's climate, where the ambient temperature in summer shoots up to more than 50 degrees Celsius. In addition, Çelebi's wanted to create a “thermal security blanket” that would protect heat-sensitive cargo like medical supplies and pharmaceuticals during transport. The success of the Delhi Cargo Terminal has prompted Çelebi to bid for national and international cargo handling contracts at Mumbai's Chhatrapati Shivaji International Airport, where it presently provides ground handling services. cal infrastructure, we have also invested a lot of money in equipment. The investment in infrastructure has helped us to enhance the capacity by almost 100 per cent. Our capacity till last year was approx 350,000 MT of cargo, which now has gone up to 700,000 MT. The excess capacity will now be used for industry-specific zones such as Pharma Zone, Expedited Delivery, Extended Express Terminal, Transhipment Cargo, etc. Çelebi as an organization is taking a step forward to look beyond the traditional revenue streams and working on different strategies to further bolster its revenue.

“Our modernisation plans have had a positive impact on the entire chain and this has been appreciated by all the stakeholders in various forums.” Rajesh Goel

CEO, Çelebi Delhi Cargo Terminal Management India

Cruising Heights March 2013

What are the infrastructure problems faced by Çelebi in India? One of the biggest challenges was managing the Brownfield terminal because the scope of modernising the terminal was within the four walls that were given to us. All our efforts and plans to carry out new designs, deployment of new equipment had to be done within the existing structure while at the same time managing uninterrupted movement of goods. However, Çelebi has always been optimistic about the growth of the company as well as the industry. In addition to our current investments and projects, we are planning to grow and are looking at opportunities to expand further in India as well. n

cargo jottings At last, a cargo village in Delhi

The operator of the country’s busiest airport, Delhi International Airport Limited (DIAL) has issued a Public Notice inviting Expression of Interest (EoI) from interested parties for the development of a Cargo Village. CATERING CARGO NEEDS: An artist impression of upcoming cargo village at Delhi airport Delhi Airport’s plan to set up the cargo village is in continuation with its philosophy to develop Terminal 3 as an ‘Aviation Hub’ for the country. “DIAL wants to establish the Delhi airport as the cargo gateway of India. This is in accordance with its larger plan to develop Terminal 3 as an aviation hub. We have identified areas for cargo infrastructure for both first and second tier layer of overall air cargo supply chain,” a DIAL spokesperson said. In keeping with that, operator GMR has identified areas for world class cargo infrastructure for both the first tier and the second tier layers of the overall air cargo supply chain. While the Cargo Terminal Operator and the airlines form the first tier of stakeholders, the freight forwarders and 3PL players form the second tier in the overall air cargo supply chain. The airport’s Cargo Village will form the second tier layer in line with international practices. It will facilitate the air cargo trade and offer freight forwarders with on-airport warehousing and office facility. In fact, the cargo village would secure an efficient transfer to and from the Cargo Terminals with faster processing efficiency. According to officials conversant with the EoI, the cargo village will have a total area measuring around 1,59,000 square meters. The location of the village will be in close proximity of the cargo terminals, enabling freight forwarders to secure efficient transfers and make better product offers to the end-customer. Delhi Airport handled around 5,70,000 MT cargo in 2011-12. It has a strong network of 54 International, five domestic airlines and freighters from a dozen-odd airlines. Both the terminals will be able to handle more than 2.3 Mn tons cargo per annum. Stakeholders are hoping that once the Delhi Cargo Village is established, it will set the ball rolling not only for other airports but move the respective ministries to facilitate services round the clock. As of now, the Customs department, for example, does not work round the clock as far as cargo clearance is concerned.

Chennai airport: Cargo gets boost

Air cargo operations at Chennai airport might be handed over to a private company in the proposed second phase of the airport’s modernisation plan. “We are open to the idea of outsourcing the entire air cargo operations in the second phase when a new cargo facility is to be built in the old terminal,” said G K Chaukiyal, Member (Operations), Airports Authority of India. “We will give the land while the build, own and transfer operator will take care of the construction and operation of the cargo terminal.” The outsourcing plan has been advocated by the Centre for Asia Pacific Aviation (CAPA). “We will look at the report in a couple of weeks. If approved, we will go ahead with the outsourcing plan,” he said. “AAI will also review the master plan of the Chennai airport. The Chennai airport’s capacity is to handle 11 lakh tonnes of cargo per year. However, only one third of it is being utilised.”

Schiphol handles Valentines’ flower rush

Amsterdam Airport Schiphol found itself right at the heart of this year's pre-Valentine's Day rush, as growers in Africa hurried to get their roses into the shops in time for February 14. The airport's usual 26 weekly freighter flights from Nairobi were not enough to cope with the huge influx of extra flower traffic; 800 tonnes of additional inbound freighter capacity was added — an increase of 30 per cent. FULLY LOADED: Container Rose sales through Amsterdam's packed with roses in Martinair world-famous giant flower auction Cargo freighter at Schiphol house, FloraHolland, increased two airport. and half times in the week up to Valentines Day, reaching an estimated 100 million stems; 70 per cent of these were imported by air freight, and a total of 85 million stems were then re-exported by truck and air. Said Schiphol Cargo Business Development Director Bart Pouwels, who is the airport's perishables, “Schiphol remains at the centre of cut flower imports into Europe, and its impressive collective resources really come into their own during major annual events like St. Valentine's Day, when speed of cargo processing is critical to product condition.”

Tiruchi Airport betters cargo tonnages

Tiruchi Airport recently witnessed cargo exports of 300 tonnes for a month for the first time, up from the monthly average of about 200 tonnes. According to reports, the rise in exports have come in the wake of the increase in the uplift capacity from Tiruchi after Tiger Airways started carrying cargo to Singapore in September. After

Jodhpur gets Blue Dart’s push

Blue Dart recently inaugurated an Area Office cum Service Centre in Jodhpur, Rajasthan. With this Service Centre, Blue Dart has strengthened its network in Rajasthan. This is Blue Dart’s first owned set-up in Jodhpur. Being present in Jodhpur for the past 20 years, Blue Dart will, through this launch, have a direct presence in the city. This strategic decision is in line with the company’s strong focus on Tier II and III towns, which are emerging as important nodes of production, consumption and distribution. Commenting on the launch, Sukhwinder Singh, Regional Head-North, Blue Dart Express, said, “Jodhpur underlines the significance of our focus on reach expansion in Tier II and III locations where the next level of growth is anticipated. We are glad that the economic development of the city is on a fast track owing to which we foresee good volume of business.”

ONE MORE IN THE KITTY: Sukhwinder Singh, Regional Head - North, Blue Dart Express inaugurating the Area Office cum Service Centre at Jodhpur.

Cruising Heights March 2013

CEVA unveils centre of logistics excellence

beauty at night: Outside facade of Mangalore airport

Sri Lankan Airlines, Air Asia and Mihin Lanka, Tiger Airways was the fourth major airline to lift cargo from the city. The total available uplift capacity of the airlines for cargo from the city is around 300 to 350 tonnes a month. Sources were quoted as saying that perishables, mainly vegetables and flowers, accounted for nearly 90 per cent of the cargo exports from Tiruchi with cotton fabrics, personal effects and household goods constituting the remaining 10 per cent. Apart from the increase in uplift capacity, the rise in exports was also attributed to the processing facility at the airport cargo complex from morning till night on all days. About 15 new exporters have also started sending their consignments.

CEVA Logistics announced the opening of its first centre of logistics excellence in Jacksonville, Florida, US. The Centre demonstrates ‘real world’ logistics innovation through supply chain optimisation and enhanced visibility, integrated services and technology solutions to power supply chain efficiency and allows organisations to see impeccably executed supply chains in action. Services provided at the centre include solutions design and engineering, managed transportation services, global supply chain solutions, transportation procurement, rail fueling services and a number of supporting services such as quality, safety and logistics operations excellence. “Customers today want increased agility while lowering supply chain costs,” said Inna Kuznetsova, Chief Commercial Officer, CEVA. “They are looking for ways to enhance control and visibility to optimise their supply chains end-to-end. CEVA’s new Centre of Logistics Excellence addresses these needs with a holistic approach and a full range of services and solutions, including access to world-class technology and supply chain management engineering, provided by subject matter experts.

Emirates honours cargo agents

Emirates SkyCargo recently hosted a special event at the Taj Hari Mahal in Jodhpur to recognise its top agents for their efforts and achievements that have contributed to the airline’s outstanding

Air cargo complex coming at Mangalore

Mangalore airport is gearing up to get an air cargo complex. According to sources, the Department of Customs has notified the air cargo complex at Mangalore airport. J T Radhakrishna, Airport Director, Mangalore airport, said, “Infrastructure is ready at the airport for the establishment of an air cargo complex.” Mohammed Ameen, President of the Kanara Chamber of Commerce and Industry (KCCI), said, “KCCI has been demanding this facility at Mangalore airport for a long time. With this notification, flow of air cargo from Mangalore airport to various overseas destinations will begin. This will encourage exporters and manufacturers of consumable items. The notification will help export agricultural, horticultural and fisheries products from Mangalore and strengthen the economy.” M R Vasudeva, Co-ordinator, Karnataka NRI Forum, Mangalore, pointed out that the notification would permit import and export from Mangalore airport. “Till now, it was not allowed at the airport. Now, the Customs Department has to bestow custodianship of cargo on some agency.”

Providing faster aid together

Lufthansa Cargo is engaging in close cooperation in future with the alliance of Germany’s relief coalition Aktion Deutschland Hilft in order to facilitate fast delivery of relief supplies in devastating humanitarian catastrophes. Representatives of those organisations penned a cooperation agreement at Frankfurt Airport. Patron of the cooperation project is Germany’s Federal Transport Minister Dr Peter Ramsauer. “In natural catastrophes be they devastating earthquakes, tsunamis or tornados, the paramount priority is to save human lives — every hour counts, especially in organising humanitarian logistics,” pointedly remarked Rudi Frick, Chairman of Aktion Deutschland Hilft. Ramsauer welcomed the accord, “Logistics plays a key role in humanitarian aid. This cooperation is, therefore, good news from Germany to the victims of catastrophes, wherever they occur in the world, and signals that German logistics providers are measuring up to their corporate responsibilities.”

SAY CHEESE! Cargo agents from Mumbai posing for a group photograph

performance in the past year. The airline congratulated the top performing cargo agents from Mumbai, Delhi, Kolkata and Ahmedabad at the gala dinner for their dedication throughout the year, contributing to the growing success of Emirates SkyCargo. “Agents are vitally important to us — their success is a key part of our success at Emirates SkyCargo. Working as partners, they form an integral part of our overall accomplishment in achieving growth across all of the markets that we operate in,” said Pradeep Kumar, Emirates’ Senior Vice President, Cargo-Revenue Optimisation. “We would like to take this opportunity to thank all of our agents for their invaluable contribution to our business. It is due to their consistent efforts that we have are in such a prominent and well regarded position in the industry today.” Emirates SkyCargo carries over 1,500 tonnes of cargo weekly from Mumbai, Delhi, Kolkata and Ahmedabad, including leather goods, pharmaceuticals, ready-made garments, textiles, electronics, engineering goods, spare parts, valuables and perishables. Additionally, the airline operates two weekly freighter flights, with a capacity of over 200 tonnes on the Dubai-Mumbai-Dubai and Dubai-Chennai-Hong Kong-Dubai routes. Overall, the airline carries more than 3,000 tonnes of cargo from India across the Emirates SkyCargo network, worldwide every week.

Cruising Heights March 2013

globetrotting n  Under mysterious circumstances

n  A litmus test

Strange things happen on flights. And this time a mother was completely taken by surprise when she found a strange pill bottle in her son's suitcase while unpacking her family's luggage after a recent trip to Florida. Michelle Isban and husband Eric Isban checked and flew their bags on a JetBlue flight from West Palm Beach, Florida, US, back to Westchester County Airport, New York, US. When they returned home, Michelle Isban said she found what appeared to be a prescription drug bottle with a worn-off label in her four-year-old son's bag. “My concern is: are our bags safe?" asked Michelle Isban. “We're send-

Believe it or not, some baby bottles and a faulty screening machine caused temporary closure of a security stop at Newark Liberty International Airport, US. The incident came to the light after a couple and their toddler had already gone through the checkpoint. Security officials found the equipment that screens liquids had malfunctioned and the baby bottles hadn't been properly screened. As a result, the family was located and brought back to the checkpoint to have the bottles and their luggage re-screened. And the checkpoint was closed for approximately 30 minutes.

ing them on the airlines thinking it'll get to where it's going, and nothing's missing but something's added.”

n  What can I say?

n  Absolutely not!

A plane flew on a wing and a prayer. The strange incident occurred when a Boeing 737 pilot was locked out of the cockpit and his first officer was later found sleeping at the controls. The pilot went out of the cockpit to take a bathroom break about 2½ hours into the flight. After a short while when the pilot returned he used an intercom to ask his first officer to open the door. There was no answer. In the end, the pilot alerted the crew and was able to open the door himself when he found the first officer snoozing. “It's a serious incident,” said Wim van der Weegen, Dutch Safety Board, Netherlands. “What makes it serious is the combination of the pilot being unable to access the cockpit and the first officer being asleep. By serious incident, I mean the flight was in danger. The Dutch Safety Board will decide whether to open its own inquiry when the airline's investigation is finished.”

Who would have thought that a family of three could create so much of nuisance that a flight would have to be grounded? The amusing incident happened on a Dominican Republic bound flight. Three passengers who refused to stop smoking were ultimately off-loaded from flight. Police met the plane at the airport, got on the plane and arrested the three passengers. “It appeared to be a father, a mother and a son. The parents appear to be in their 50s. The son, I believe, is around 22 or so,” said acting Inspector Paul Simons who carried out the arrest. “A 16-year-old was reportedly also travelling with the family but was not arrested.” Daryl McWilliams, Sunwing Vacations spokesman, told CTV News that the family’s behaviour went way beyond stubborn when they were confronted by other passengers and crew members. “Not knowing where they were disposed of prevented us from checking whether they had been extinguished properly,” McWilliams said, adding that the fire risk together with the family’s offensive behaviour, made for a very, very serious misdemeanour.

Cruising Heights March 2013

n  Act your age! A major fight occurred on a flight from Thailand after one rebuked the other's children for troubling him. The two passengers punched each other on the Orient Thai Airlines flight. They were apprehended when the flight disembarked at Hong Kong International Airport. The story goes like this: Ho was apparently disturbed by the children of the other man, named Leung, 47, about two hours into the

n 

flight from Bangkok. The youngsters were sitting next to Ho, who rebuked the children for their conduct. Leung safeguarded his children and told the older man he had no right to accuse them. The quarrel became more heated and blows were exchanged, causing passengers nearby to flee their seats. Flight attendants failed to settle the argument and called police. Police entered the aircraft as soon as it landed and arrested the pair for assault.

Life in the fast lane ?

It was one of the strangest crash-landings that ever happened. A family taking a pleasure flight for a birthday treat ended up crash landing while capturing the whole scary incident on film. Amazingly all five people on board the light aircraft, including a seven-month-old baby, escaped injury. Jonathan and Kara Fielding, and their seven-month-old son were able to walk away from the wreckage. The pilot Lynn Godsell, who is a friend of the family, was also uninjured as the Cessna 175 slammed into the ground. The story goes like this: Jonathan booked the pleasure flight as a birthday pres-

ent for his wife while his mother-in-law also went along on the ride. They flew around over the snow-covered fields above Cache County in Utah, US when the plane developed engine trouble. Jonathan kept his video camera running thereby capturing all the moments. The engine meanwhile suddenly shut down. “Just got a prayer in our heart. I think we’re gonna be just fine,” Jonathan said on the film. “We’re going to land in a field, right here. I knew that we’d be fine.”

n  ‘I am free’ n  A money-spinner This is really funny! A Guatemalan woman was caught at Panama's international airport, US as she tried to get into the country with more than $31,000 in cash hidden in her stomach. The 44-year-old, whose identity was withheld, was apprehended after police carried out an X-ray of the woman who was displaying doubtful behaviour. At least 39 different packets that had been in her stomach were recovered by police, that together totalled a sum of $31,200.

In a mid-flight shock, a man intimidated his fellow passengers with the slogan on his T-shirt. The slogan read: “My name is Inigo Montoya. You killed my father. Prepare to die”. The passengers seeing the message got scared and told the cabin crew they felt threatened by the T-shirt’s message. Mullins said he had no other T-shirt to change into, adding that a flight attendant went to find something for him to wear but did not return. Mullins said, “The flight attendant said to me: 'Are you able to remove it because some of the passengers are quite intimidated by it'. I thought it was all a bit silly. The person next to me was laughing, because they knew the movie. The whole experience was a bit over the top, but also a bit comical.” Meanwhile Qantas, the carrier involved, said, “Qantas does have dress standards for passengers travelling on our aircraft... particularly for slogans which other passengers may find offensive or threatening.” Cruising Heights March 2013

snippets

domestic Airlines

IndiGo in fast forward mode

Establishing the growing importance of the emerging domestic sectors including the North-Eastern market, IndiGo has announced the launch of 14 new flights on its domestic network. The airlines will now operate its first new daily non-stop flight between Bengaluru and Guwahati and between Bengaluru and Agartala via Guwahati. Additionally, 6E will operate its seventh daily flight between Bengaluru and Mumbai, sixth daily non-stop flight between Hyderabad and Bengaluru, fourth daily non-stop flight between Ahmedabad and Mumbai. Speaking about the launch of new flights, Aditya Ghosh, President, IndiGo said, “We are absolutely delighted to announce 6E’s first new daily non-stop flight between Bengaluru and Guwahati; Between Bengaluru and Agartala via Guwahati. Besides corporate travellers, these new flights will allow many students based in the North East to travel to key metros at low fares. IndiGo will also operate its new additional flights between Bengaluru and Mumbai, Ahmedabad and Mumbai, Hyderabad and Bengaluru.

IndiGo also recently launched fourth daily and direct flight between Bengaluru and Kolkata, a new daily and direct flight between Bengaluru and Goa and a new daily flight between Kolkata and Goa via Bengaluru. IndiGo will also fly new daily and direct flights connecting Chennai and Singapore, new daily and direct flights connecting Trivandrum with Dubai and its second daily and direct flight between Mumbai and Dubai. Most trusted airline: Indigo Airlines has been rated as the most trusted airline in the country by the Brand Trust Report, India Study 2013, an annual study published by Trust Research Advisory that ranks India's Most Trusted Brands on the basis of a primary research in 61 trust attributes conducted in 16 cities. The study generates three million datapoints and 19000 unique brands. Of the 11 airlines listed in this category, Indigo Airlines became India's Most Trusted Airline in its debut listing. The LCC has a 28 per cent lead over second ranked Air India, which fell from the top slot it held last year. With a gap of 164 per cent from the second ranked, is Jet Airways ranked the third Most Trusted Airline in India. However, among India's 1100 Most Trusted, Jet is listed 387th, taking a beating of 150 trust ranks across all brands. Announcing these results, Sachin Bhosle, Research Head, Trust Research Advisory said, “Trust is a dynamic entity and its quotient depends on the action and communication that each brand engages in. Indigo’s consistency of performance has generated a dependability by even business travellers. In the shake-up that the aviation sector is witnessing, Brand Trust will a key differentiator that will determine success for the airline.”

GoAir gets Sharklet-equipped A320 `85 crore profit for Jet in Q3 Wadia Group-owned GoAir has taken delivery of its first Sharklet-equipped A320 aircraft financed by ACG (Aviation Capital Group) under a sale and leaseback arrangement which will see the aircraft added to ACG's growing portfolio of Airbus A320 family aircraft. The aircraft is part of an order placed by GoAir for 20 A320neo in 2006. So far, 13 aircraft have been delivered to GoAir making the first Sharklet-equipped A320 the 14th to join the fleet. All subsequent seven deliveries will be equipped with Sharklets. “We already operate one of the youngest and most fuel-efficient aircraft fleets anywhere in the world and the introduction of the Sharklet will add further efficiency. Our investment in the every latest technology like Sharklets, and also the A320neo, is a demonstration of our commitment to our customers and to the growth of our valued airline,” said Giorgio De Roni, GoAir CEO. “The Sharklets deliver up to four per cent fuel burn reduction on longer sectors, and this translates into impressive cost savings,” said John Leahy, Chief Operating Officer – Customers. “GoAir passengers can also be confident that on board their Sharklet equipped A320s, they’ll be flying the world’s greenest single aisle aircraft.”

FORGING AHEAD: Jet Airways has raked in big profits in the last quarter.

As a result of rising air fares and lower expenses, Jet Airways posted a net profit of ` 85 crore for the quarter ended December 31, 2012, against a net loss of `101 crore in the corresponding period last year. Total income from operations rose nearly seven per cent to `4,206 crore. “The combined impact of higher yields and lower costs has resulted in significantly lowering the breakeven seat factor levels in the business. This is despite the slowdown in traffic growth, higher fuel prices and impact of a weak rupee against the US dollar,” Nikos Kardassis, Chief Executive Officer, Jet Airways said. Aviation fuel cost fell three per cent to `1,688 crore on a yearon-year basis, while gross yields per passenger grew 18.6 per cent for the third quarter of this fiscal. However, aircraft lease rentals during the period went up to `306 crore.

Cruising Heights March 2013

international airlines policy improves our product proposition in the ever-changing Amadeus’ Altéa suite for SriLankan gage Emirates, Formula One partner The national carrier of Sri Lanka, SriLankan Airlines, and the Amadeus IT Group, have entered an agreement that will see the airline migrate to Amadeus’ full Altéa suite by 2014. The deal, which is the first-ofits-kind for Amadeus in the Indian subcontinent, will enable both SriLankan Airlines and its sister airline, Mihin Lanka, to adopt Amadeus’ next generation IT suite in order to manage its mission-critical reservations, ticketing, inventory and departure control processes. At the same time, the agreement between SriLankan and Amadeus will help facilitate the airline’s entry into the oneworld global alliance. Under the terms of the agreement, the two companies will work in close co-operation to begin the migration process from SriLankan’s existing passenger service system to Altéa, with the first phase of the migration, covering the reservations, inventory and ticketing modules, scheduled to be completed this year. Migration to the Altéa departure control system module is planned to commence in the first half of 2014. Kaplia Chandrasena, Director/Chief Executive Officer, SriLankan Airlines commented: “Implementing Amadeus’ Altéa suite is crucial to the evolution and expansion of SriLankan Airlines and our inclusion within the oneworld global alliance. The Altéa suite will truly modernise our IT processes, enhancing our service provision, whilst enabling us to become a more ‘customer-centric’ carrier than ever before.” David Brett, President Amadeus Asia Pacific, said: “As an ever greater number of people fly from and within Asia Pacific destinations, their demands and expectations are going to increase accordingly. Amadeus' strategic direction is to provide the solutions airlines require to meet the current and future requirements of an increasingly discerning and demanding travelling public. We’re delighted to support SriLankan Airlines as one of the most progressive airlines in the region.”

Baggage allowances by Malaysia

Malaysia Airlines recently announced an additional 10 kilograms free checked baggage allowance and reduced excess baggage charges for travel in all classes. These apply to all travel from this date irrespective of tickets issued earlier reflecting the original

lower free allowance. The national carrier of Malaysia is introducing these benefits on all its flights involving the weight system concept for checked baggage, except for travel to and from Los Angeles where the charges are based on the piece system. Malaysia Airlines’ Regional Senior Vice President for Middle East and South Asia Azahar Hamid said, “The revised checked bag(Continued on Page 74)

OFF TO THE AIR: Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline & Group and Bernie Ecclestone, Chief Executive Officer of the Formula One group announcing a five year agreement appointing Emirates as a Global Partner of Formula 1 starting with the imminent 2013 season. The press conference took place at Emirates' headquarters in Dubai

Emirates and the Formula One group have announced a five year agreement appointing Emirates as a Global Partner of Formula 1 starting with the imminent 2013 season. The announcement was made by Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group and Bernie Ecclestone, Chief Executive Officer of the Formula One group. Emirates will have a strong branding presence at 15 races on the 2013 FIA Formula One World Championship calendar across Europe, Asia, Australasia, North America and South America. Starting at the Grand Prix in Malaysia (March 22-24, 2013), the distinctive Fly Emirates branding will be seen at historic circuits such as Silverstone in Great Britain, Monza in Italy and Interlagos in Sao Paolo, Brazil. “This is an exciting global opportunity to align two world leading brands. The ambition, cutting-edge technological standards and worldwide reach of Formula One go hand in hand with Emirates’ vision and ambition,” said Sheikh Ahmed. Platinum for Emirates frequenters: Emirates Skywards, the award-winning frequent flyer programme of Emirates Airline, recently announced its new offering with the introduction of ‘Platinum’, a new tier which sits above Blue, Silver and Gold. The Platinum tier has been developed to offer additional benefits to members who have earned over 150,000 miles. “The new tier is designed to show our most valued customers how important they are to Emirates and to offer greater recognition and benefits to those who choose to fly with us on such a frequent basis. On top of our superior product, world-class service and fast expanding network in six continents with 18 new destinations opened in the last 15 months and two new destinations, Algiers and Haneda, to be added soon, the new Emirates Skywards Platinum tier is definitely another reason to make Emirates the airline of choice.” said Thierry Antinori, Emirates’ Executive Vice President, Passenger Sales Worldwide. Platinum members will receive exclusive benefits such as First Class check-in, baggage delivery and access to the First Class lounges in Dubai with a guest.

Cruising Heights March 2013

snippets

BA recognises trade partners

British Airways recently hosted an exclusive evening dedicated to its trade partners to celebrate and recognise their commitment in the past year. The trade event, which was hosted by British Airways in New Delhi, witnessed the airline playing host to a cross section of its partners to express appreciation for their support as well as to recognise efforts of the best performing partners in 2012. Christopher Fordyce, Regional Commercial Manager- South Asia, British Airways, said, “India is British Airways’ second biggest market outside the UK and we believe that the trade partners are our valuable extensions to the Indian market. This celebration strengthens our relationship as well as creates better customer experience.” The event was an opportunity for the airline to bond and interact with its partners, as well as foster networking opportunities amongst those who were present. Select nominees of best performing trade partners included - Akbar Travels, BalmerLawrie& Co Ltd, IshTarvels and Tours, Travel Boutique Online, Sebator Travels, Air Cruise Travels, Uniglobe Travel World, American Express India Pvt Ltd, Kouni Business Travels, Riya Tours and Travels, (Continued from Page 73) competitive landscape of the commercial aviation industry. This is also in line with our Business Plan strategy of ‘Winning Back Customers’.” Under the new baggage guidelines all adult and child passengers will enjoy 30, 40, and 50 kilograms free baggage allowance respectively for travel on economy, business and first class. Awards for wines: Malaysia Airlines bagged three prestigious accolades at the recently-held ‘Cellars in the Sky 2012’ awards event at the Dorchester Hotel, London. The Malaysian national carrier bagged the first prize in two categories, Best First Class Cellar and Best First Class Red Wine for Schubert Marion's Vineyard Pinot Noir, 2010, Wairarapa, Martinborough, New Zealand. In addition, the airlines emerged as the runner-up in the Best First Class Sparkling category for Champagne Dom Pérignon, 2003, France. Malaysia Airlines decides on its wines for inflight service by first sourcing from various reputable brands, and then conducting a blindtasting by a panel of wine experts and sommeliers, frequent travellers, food and beverage professionals, as well as Malaysia Airlines’ Wine Ambassadors, the airlines very own cabin crew members. The selected premium wines are offered to passengers on all Malaysia Airlines’ international routes covering London, Paris, Amsterdam, Frankfurt, Los Angeles and major cities in Australia, New Zealand, North Asia and South Asia.

Accelya manages bmi regional

bmi regional, the British regional airline, has outsourced its passenger revenue accounting, sales audit, refunds, card billing and chargeback processing to Accelya, solutions provider to the airline and travel industry. “When bmi regional became independent from the bmi Group in June 2012, we needed a partner

HAPPY GET-TOGETHER: Christopher Fordyce, Regional Commercial Manager, South Asia- British Airways (Centre) at the British Airways trade event

Senator Travels, Incentive Destinations among others. BA transforms tea in air: British Airways and Twinings are promising to transform tea in the air. With research to prove that taste can be reduced by up to 30 per cent at 35,000 feet, the airline commissioned Twinings to come up with a teabag that would taste as good in the sky as it does on the ground. who could provide us with solutions to our financial requirements within a very tight timescale. Accelya delivered to our needs for both card processing and revenue accounting and enabled us to focus on the key business processes, knowing the areas outsourced to Accelya were in good hands,” said Cathal O’Connell, Chief Executive - bmi regional. Accelya’s financial solutions will enable bmi regional to streamline their critical financial processes, support decision making with accurate and timely revenue reporting, identify sales errors and frauds, centralise and standardise card processes, streamline and speed up chargeback process, manage refunds effectively, speed up industry compliance like SIS and PCI DSS, get single-vendor ac-

Cathay enhances Mumbai-Hong Cathay Pacific has introduced its new Premium Economy Class cabin on the Mumbai-Hong Kong route. Along with the product enhancement, Cathay Pacific will also increase the number of flights between Mumbai and Hong Kong, operating 10 weekly nonstop flights between the two cities from April 2, 2013. The airlines’ new Premium Economy Class was designed with the entire customer experience in mind. It features a quieter, more spacious cabin than the traditional Economy Class with between 26 and 34 seats per aircraft. The seat pitch is 38 inches — six inches more than Economy Class — and the seat itself is wider and has a bigger recline. It has a large meal table, cocktail table, footrest, a 10.6-inch personal television, an in-seat power outlet, a multi-port connector for personal devices and extra personal stowage space. Business class between Hyderabad-HK: Cathay Pacific Airways has introduced the airline’s award-winning new Business Class cabin and its new Premium Economy Class cabin on the Hyderabad and Hong Kong route. Following the recent launch of flights from this city, Hyderabad will now offer a three-class configuration — new Business Class, Premium Economy Class and the new long-haul Economy Class for passengers travelling to Hong Kong

Cruising Heights March 2013

countability, and reduce cost of operations. Speaking on the occasion, Neela Bhattacherjee, Head – Airlines SBU, Accelya Kale said, “We are glad to have partnered with bmi regional to streamline and manage their critical financial processes. With our integrated financial solutions - across passenger revenue accounting, card management, audit and refunds - bmi regional has been able to start operations quickly. We look forward to a long term relationship with them.”

Air Arabia 2012 passengers surge ADDING ON TO THE NUMBERS: Air Arabia planes lined up at one of the airports.

Air Arabia, the first and largest low-cost carrier (LCC) in the Middle East and North Africa, today reported that it carried a record 5,301,484 passengers in 2012, a 13 per cent growth compared to the previous year. In 2012, the airline has launched flights from its primary hub in Sharjah to 9 new destinations — Kazan, Taif, Salalah, Ufa, Odessa, Erbil, Astana, Basra and Rostov. The airline also increased frequencies to many exiting routes such as Moscow, Riyadh, Jeddah, Dammam, Doha, Kuwait and Najaf as well as Karachi, Peshawar and Delhi. In addition, the airline has continued its expansion from its hubs in Morocco and Egypt reaching a global network of 82 cities.

Kong route

Making Life convenient: (L-R) Anand Yedery, Area Sales Manager, Cathay Pacific, Charlie Stewart Cox, GM-South Asia, Middle East and Africa, Cathay Pacific and Rakesh Raicar, Regional Sales and Marketing Manager, Cathay Pacific

from February 1, 2013. The airline’s new Business Class cabin is the result of a genuine collaboration between its customers and the Cathay Pacific team.

“Air Arabia continues to witness significant year-on-year growth in passenger numbers, and this demonstrates the growing popularity of the airlines value for money services,” said Adel Ali, Group Chief Executive Officer, Air Arabia. “As a pioneer in the low-cost space, we will continue to set the standard for the lowcost travel segment, offering great fares to an ever growing range of destinations.”

Etihad reintroduces business class

Etihad Airways, the national airline of the United Arab Emirates, has returned to a two-class A320 aircraft on its service between Abu Dhabi and Thiruvananthapuram. The daily flights will each feature 16 Pearl Business Class seats with electronically controlled recline and lumbar support, a personal in-built seat massager, generous leg and foot rest extensions, individual PC power supplies, 10.6 inch touch screens and in-arm meal tables. Pearl Business Class guests travelling on this route will be treated to new chef-inspired culinary signature menus on board amenities, lounge and frequent flyer benefits. Neerja Bhatia, Etihad Airways’ General Manager in India said: “Thiruvananthapuram is one of the fastest growing cities in Kerala and serves as a major trade and business hub. Since 2007 we have carried more than 450,000 passengers on this route. The Pearl Business Class experience was reintroduced to cater to growing business, corporate and high-end leisure demand to Abu Dhabi and beyond to our fast-expanding global network.”

Delta, Starwood new partnership

Delta Air Lines, and Starwood Hotels and Resorts Worldwide, Inc. have announced a comprehensive new partnership that offers exclusive new benefits to Delta SkyMiles Medallion members and Starwood Preferred Guest (SPG) elite members. Crossover Rewards allows Delta and Starwood elites to share programme benefits and earn more miles and Starpoints. SkyMiles Diamond and Platinum Medallion members will have access to added benefits including priority check-in, 4 pm late checkout and free in-room internet access when staying at Starwood Hotels and Resorts. All Delta Medallion members also will earn one mile per dollar spent on eligible room rates when staying with Starwood in addition to the Starpoints usually earned for their stay. In turn, SPG Platinum members will receive one free checked bag, priority check-in and priority boarding when flying Delta. SPG elite members will earn one Starpoint per dollar spent on eligible flights in addition to the miles usually earned for their flight. “Crossover Rewards allows Starwood and Delta to extend loyalty outside of our hotels and beyond the window seat by giving our respective elite members reciprocal benefits and earning power,” said Frits van Paasschen, president and CEO of Starwood. “This enriches the experience for our most valuable travelers, and gives both Delta and Starwood an opportunity to target frequent travellers who aren’t already part of our programmes, enabling us to capture greater share of the global, high-end traveller.” “Crossover Rewards is another example of Delta’s commitment to making the travel experience more beneficial and enjoyable for our customers,” said Tim Mapes, Delta’s Senior Vice President, Marketing. “For our loyal customers, hotel accommodations are a vital component of the travel experience, which makes this new alliance with an innovative brand like Starwood a strategic addition to the SkyMiles programme.”

Cruising Heights March 2013

snippets

TRAVEL & TOURISM

IRCTC’s Executive Lounge at NDLS

way travel by railways is viewed in the country. Spread across a 300-square-metre area with a seating caIRCTC Travellers’ Executive Lounge at the New Delhi pacity for 125 pax, the lounge located opposite Tourist FacilitaRailway Station, built on the concept of airport lounges, has set tion Centre in the concourse near platform No 16 at New Delhi a milestone in rail travel. It is equipped with some first-ever faRailway Station, is accessible to all passengers. cilities at any railway station across The services of the lounge are the country. available to all travelling passengers With complimentary facilities at a nominal entry fee of `300. The and services such as Vegetarian / Nonentry fee includes the usage of the Vegetarian buffet; snacks, tea/coffee above complimentary facilities as a and soft beverages; 24-hours wi-fi fapart of the package for a period of cility; luggage racks; wheel chairs; re3 hours. Further, if the passenger cliners for night time relaxation; telewishes to extend the stay, `125 is visions for train information display charged for every additional hour. as well as news and sports updates; The additional services such as the Business Centre; lockers; newspapers Wash and change, Business centre and magazines; shoe shiners and usand the retail convenience store are age of clean toilets and urinals; the LUXURY AT ITS BEST: An inside view of the Executive Lounge of chargeable as per usage by the pasExecutive Lounge is set to change the IRCTC. sengers.

Lite Bite, Devyani get F&B contract

Lite Bite Food Pvt Ltd and Devyani International Limited recently bagged the award of the food and beverage concessions to operate at the “all new" Terminal 2 at the Chhatrapati Shivaji International Airport (CSIA) in Mumbai. The awards were announced by the GVK-led consortium managed Mumbai International Airport Pvt Ltd (MIAL), managed by GVK-led consortium. Package 1 comprising a total of 21 outlets which includes the International Security Hold Area (SHA) Food-court along with the domestic SHA departure non-food court outlets was awarded to Lite Bite Foods. Package 2 comprising a total of 23 outlets which includes the Domestic SHA Food court along with the International SHA non-food court outlets was awarded to Devyani. Meanwhile, Package 3 comprising a total of 9 outlets located pre-SHA and at arrivals (primarily catering to meeters and greeters) was awarded to Lite Bite. Each package has been awarded for a period of 11years.

5 Star GRIHA for ITC Grand Chola

GREAT RECOGNITION: Nakul Anand (second from right) receiving the GRIHA recognition from Hon' ble President of India, Shri Pranab Mukherjee

ITC Hotels recently secured a 5 Star Green Rating for Integrated Habitat Assessment (GRIHA), the highest national rating for Green Buildings, for ITC Grand Chola, the 600-key luxury hotel in Chennai. The hotel is the first in India to garner 91 points and secure the 5-star rating from the Association for Development and Research of Sustainable Habitats (ADaRSH) through GRIHA. This recogni-

tion was presented by the President of India, Pranab Mukherjee, to Nakul Anand, Executive Director, ITC Ltd, at the recently-held annual National Conference on Green Design at the Vigyan Bhavan. GRIHA, a Green Building design evaluation system, is the National Rating System of India conceived by TERI (The Energy and Resources Institute) and developed jointly with the Ministry of New and Renewable Energy (MNRE), Government of India. ITC Grand Chola was rated on 34 criteria, categorised under various sections including site selection and site planning, conservation and efficient utilisation of resources, building operation and maintenance and innovation points. Each criterion has a number of points assigned to it and a building is required to score a minimum of 50 points for certification. GRIHA awards different levels of certification (1 to 5 stars) based on the score.

InterGlobe, ResNet World partner

InterGlobe Technology Quotient, a strategic business unit of InterGlobe Enterprises and the official distributor of Travelport Galileo and Travelport Worldspan, through Calleo Distribution Technologies recently announced their partnership with ResNet World, to launch an exciting promotion for travel agents. This promotion will be running till May 14, 2013 and will offer travel agents the opportunity to avail special rates and incentives on participating hotels of Resnet World on the Travelport Worldspan and Travelport Galileo platform. Talking about the association, Sandeep Dwivedi, Chief Commercial Officer, InterGlobe Technology Quotient said, “The new promotional offer in association with ResNet World is a testament to our commitment towards providing unique and exclusive benefits to travel agents. This promotional idea not only empowers the travel agents with convenient means to book ResNet World hotels at special rates but would also help them provide a wide range of choices to the end consumers.”

Hilton Garden Inn Gurgaon opens

Hilton Worldwide recently announced the opening of Hilton Garden Inn Gurgaon Baani Square. This is the second Hilton Garden Inn brand hotel in the country. With this opening, Hilton Worldwide

Cruising Heights March 2013

now managed seven hotels in Delhi NCR. Operated by Hilton Worldwide and owned by the Baani Group, Hilton Garden Inn Gurgaon Baani Square is strategically located near the prime corporate, commercial and residential districts, including Infocity, Unitech Cyber Park, Sohna Road and Nirvana. The hotel is a 10-minute drive (eight kilometres) from DLF Cyber City, the central business hub in Gurgaon. Shopping at the malls on MG Road and entertainment at the Kingdom of Dreams are nearby. The 201-room Hilton Garden Inn Gurgaon Baani Square features the brand’s signature offerings that include complimentary internet access; 24-hour complimentary business centre facilities; complimentary remote printing service from the guestroom to the business centre and the 24-hour Pavilion Pantry convenience mart.

Royal Orchid celebrates growth

Chender Baljee, Managing Director, Royal Orchid Hotels recently hosted an exclusive event celebrating the group’s unparalleled growth to an impressive 24 hotels across 16 citLEADING FROM THE FRONT: Royal Orchid Hotels ies. has branched out to most of the cities in India Royal Orchid Hotels is one of India’s fastest growing hotel chains and currently operates hotels in Ahmedabad, Bengaluru, Baroda, Chandigarh, Delhi, Goa, Hospet, Hyderabad, Jaipur, Mahabaleshwar, Mumbai, Mysore, Mussoorie, Pune, Shimoga and Vadodara.

Gold Leaf for Vasundhra Sarovar

Vasundhra Sarovar Premiere in Vayalar, Kerala, recently received the prestigious Golden Leaf Award instituted by The Indian Institute of Architects (IIA) and Asian Paints Royale, Kerala Chapter. This award was given to Vasundhra Sarovar Premiere for its interiors (non residential) and is noteworthy as IIA is not only the national body of architects in India but is also associated with international organizations of architects.

Commenting on the award, Anil Madhok, Managing Director, Sarovar Hotels said, “We would like to thank Indian Institute of Architects for conferring the award to Vasundhra Sarovar Premiere and recognising the WELL-DESERVED: Vasundhra Sarovar Preefforts put in by our team miere has earned laurels for its efforts. to create a resort reflecting the traditional temple architecture of Kerala ”.

Most romantic hotels revealed

TripAdvisor, the world’s largest travel site, recently announced the winners of its 2013 Travellers’ Choice Awards for the most Romantic hotels based on millions of valuable reviews and opinions from travellers around the world. This year, Rajasthan tops as the state with the most number of romantic hotels followed by last year’s winner Kerala. Interestingly, hotels from Tamil Nadu made a glittering debut on the list this year with two hotels from the state ranked at number eight and nine. Taj Lake Palace (Udaipur), regains its place of pride as the top romantic hotel this year, after falling down to number 4 in the list last year. Other than Taj Lake Palace, Honeymoon Inn Manali is the other property which has been consistently on the list for the last three years, making them both enduring romantic escapes.

Second Starbucks outlet at T-3

With the launch of Starbuck’s second outlet, passengers travelling through Delhi International Airport’s T-3, both domestic and international sides, will now get the opportunity to taste Starbucks’ coffee every time they fly. Commenting on the launch, I. Prabhakara Rao, CEO, Delhi International Airport (P) Limited stated, “It reinforces our association with world’s top-most brands at India’s largest retail and hospitality space spanning over 30,000 sq.metre at any airport in India. Today, Delhi airport houses over 500 brands from across the world. We are committed to provide our passengers a different experience and turn their journey memorable.”

Turkish associates with ‘Louis Philippe Cup 2013’

As a curtain raiser to every major four-day professional tourHockey team Captain Ashish Ballal and top ranked lady golfer Gauri nament, the $200,000 second edition Monga. of Louis Philippe Cup, India’s preOther top professional golfers who mier pro team golf event kicked off played were Jeev Milkha Singh, Gawith the Turkish Airlines Celebrity ganjeet Bhullar, Anirban Lahiri, Jyoti Pro-Am played over 18 holes where Randhawa and Rahil Gangjee. celebrity amateur golfers teed off with Turkish Airlines gave away prizes star studded line up of top professionto the amateur golfers for their peral golfers. formance on the opening day. In the Among those seen swinging on the celebrity section R Madhavan who greens included Film actor and avid had an outstanding performance was golfer Madhavan, former cricketer felicitated By Turkish airlines small Kapil Dev, cricketers Syed Kirmani, aircraft model and a trophy. Turkish Madan Lal and Murali Kartik, shooter Airlines also organised celebrity PRO Mansher Singh, comedian Papa CJ, AM gala lunch and a lucky draw for cricket commentators Charu Sharma IN JUBILANT MOOD: Jeev Milkha Singh and R Madhavan with the winning a free return ticket to any desand Nikhil Chopra, former Indian Turkish Airlines PRO AM trophy tination in Europe. Cruising Heights March 2013

Back page

Abracadabra... Here’s an airport!

elcome to the future! This is one distant dream but it remains locked in controversy. However, it might turn out to be London’s new £50bn four-runway airport and transport hub on reclaimed marshland on the Isle of Grain in Kent. This futuristic ambition for a ‘Boris Island’ airport in the Thames Estuary is witnessing heavy opposition. Concept designs of the site have been unveiled by a leading architect, Lord Foster, the man behind major construction projects including Hong Kong’s Chek Lap Kok airport and Beijing’s Terminal 3. It is claimed that London Mayor Boris Johnson -- who is a supporter of the project and believes that capacity-constrained Heathrow airport is diverting economic growth to Frankfurt, Paris and Amsterdam Airports, which have multiple runways — has seen the proposal. Britian’s ministers have been under intense pressure from business to approve a third runway at Heathrow, Britain's only international hub airport, but the issue has led to bitter in-fighting within the Tory party. Moreover, the coalition government had warned in August 2012 that London

Heathrow, Gatwick and Stansted airports will reach full capacity by 2030. Supporters of the idea say the Thames hub would boost trade links with the world and relieve the traffic burden on congested airports in the South-East, where extra runways have been ruled out by the government. The airport would be connected to London by high-speed rail. The London Britannia Airport airport would be able to handle 150 million passengers a year: double the passenger traffic served at Heathrow Airport, which is running at 99 per cent capacity. The design includes four floating runways tethered to the sea bed. New runways could be floated as required — allowing for future expansion to accommodate six landing strips.

Cruising Heights March 2013

Passengers would check in and arrive at terminals on the land. Two would be located to the north and south of the estuary and a third central London terminal is proposed between Canary Wharf and the Olympic Park. The Thames hub would use tidal power to generate energy and flights would take-off and land over water, reducing noise levels and allowing flights to operate around-the-clock. Heathrow Airport would close under the scheme and become a new eco-city and ‘the largest urban expansion project in Europe’, with housing for around 300,000 people. However, the stumbling blocks are many and Medway Council in Kent claimed that Lord Foster’s proposed site was one of the worst places for anyone to build a new airport. Also, the plan was previously called “the latest in a long list of pie in the sky schemes that have been put forward for an airport” by Councillor Rodney Chambers, the leader of the council. There is also opposition from local residents and the Royal Society for the Protection of Birds (RSPB), which cites environmental concerns and the area’s rich bird life. Transport Secretary Patrick McLoughlin said: “This is a very difficult debate, but the reality is that since the 1960s Britain has failed to keep pace with international competitors in addressing long-term aviation capacity and connectivity needs.” n