OUTLOOK SPECIAL CONTENTS
C R U I S I N G
H E I G H T S
M A R C H 2 0 1 2
inside HC TIWARI
16
ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST
MINISTERSPEAK 6 POLICIES AND MORE
FACING THE CHALLENGES HEAD-ON
INDIAN AVIATION CONTINUES TO GO THROUGH A UP-AND-DOWN RIDE. EVEN BEFORE THE INDUSTRY FORGOT THE DOWNTURN, CAME THE KNOCKOUT BLOWS: HIGH FUEL PRICES, HIGHER AIRPORT FEES AND MORE. TO TOP IT ALL, MOST AIRLINES ARE IN THE RED. THE GOVERNMENT HOWEVER HAS TAKEN A SERIES OF INITIATIVES TO HELP THE INDUSTRY RECOVER.
SECRETARYSPEAK 14 NEW MOVES
2 I CRUISING HEIGHTS I MARCH 2012
DR NASIM ZAIDI ON POLICIES TO WEATHER THE STORM
IATA VIEW 30 NEEDED: COOPERATION TONY TYLER SUGGESTS COOPERATION FOR INDUSTRY’S REVIVAL
CHAIRMANSPEAK 35 AAI: FLYING HIGH
V P AGRAWAL ON AAI’S INITIATIVES TO FACILITATE FLYERS AND CARGO
HC TIWARI
HC TIWARI
CIVIL AVIATION MINISTER’S VIEWS ON THE INDIAN AVIATION SCENARIO.
INDIAN AVIATION
OUTLOOK SPECIAL CONTENTS
C R U I S I N G
MRO 118 PATIENT EXPECTATION
H E I G H T S
TRAINING 144 MANPOWER OBSTACLE
A DETAILED LOOK AT THE MRO BUSINESS AND ITS FEASIBILITY IN INDIA
FOCUS ON PREPARATION OF QUALIFIED AVIATION PERSONNEL
M A R C H 2 0 1 2
CARGO 170 HIGH CARGO HOPES
AIR CARGO STAKEHOLDERS LOOK AT INFRASTRUCTURE INITIATIVES WITH OPTIMISM
CRUISING HEIGHTS Volume VI No 11
Editor-in-Chief
K SRINIVASAN Managing Editor
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Consulting Editor
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AIR INDIA
R KRISHNAN
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RUCHI SINHA Design
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PRADEEP CHANDRA
76
Photo Editor
HC TIWARI Photographer
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RAKESH GERA
FUTURE PERFECT INFRASTRUCTURE FOR THE WORLD
Manager (PR)
ASHUTOSH MISHRA
PRIVATELY-HELD AIRPORTS HAVE PROVEN TO FLYERS THAT INDIA MEANS WORLD-CLASS. LEAVING AIRPORTS LIKE DUBAI BEHIND, THESE AIRPORTS HAVE WON RANKINGS THAT THE COUNTRY CAN BE JUSTIFIABLY PROUD OF.
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RENU MITTAL
CRUISING HEIGHTS CIVIL AVIATION MINISTER AJIT SINGH ON HIS MINISTRY’S TOP PRIORITIES
OU TLOO K 201 2
www.cruisingheights.in I March 2012 I `90
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4C Pocket- IV, Mayur Vihar, Phase-I, Delhi-110091 : 4C Pocket- IV, Mayur Vihar, the Phase-I, Delhi-91 1. Renu Mittal 2. K. Srinivasan
6. Name, Address of individuals who own newspaper and the partners or shareholders holding more than one per cent of the total capital I, K. Srinivasan, hereby declare that the particulars given are true to the best of my knowledge and belief. Date: 1st March, 2012 sd/K. Srinivasan Publisher
4 I CRUISING HEIGHTS I MARCH 2012
well Fare e to th o
b Jumen Que190 Pg
Aviation ministry in fast forward mode Eye to future growth, government sets timeline for putting infrastructure in place.
Mounting losses and rising operation costs have virtually crippled Indian aviation and apart from a helpful government, the saving grace is passenger growth. Can the sector look to make a fresh start?
Ground Handling: No show yet The GH policy has seen a see-saw battle between the government and private carriers.
Plus:
Wooing passengers, airport style
From Dakotas to Dreamliners
Tony Tyler pushes for cooperation
COVER DESIGN: RUCHI SINHA NUMBER OF PAGES IN THIS ISSUE: COVER+203
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EDITOR-IN-CHIEF’S NOTE
See, read, decide…
W
India Aviation 2012 — the third edition of the biggest Civil Aviation show in the sub continent — is another example of this pro-active attitude of the civil aviation sector to give the industry a global fillip
hen the aviation fraternity gathered in Hyderabad two years back in 2010, K Srinivasan the West had just got into recession mode; there were dark clouds on the horizon, Indian aviation was sputtering, Air India was on life support and the general mood was gloomy. Two years later, if anything has changed, it’s for the worse, you can add a dash of doom to the gloom, one more airline — Kingfisher — is now waiting for someone to switch on the ventilator and the rest of the industry is going through its own convulsions and balance sheet woes. The only exception, atleast in the sub-continent, is IndiGo and they must actually be worried at all the envious looks coming their way! Clearly, the airlines aren’t outside the Intensive Care Unit, because the government was sleeping or didn’t provide them good medical attention. If anything the policy tweaks and the federal intervention in the aviation business in the last 10 years has been nothing but remarkable — completely veered to providing better and better regulatory mechanism for airlines and even airports. India Aviation 2012 — the third edition of the biggest Civil Aviation show in the sub continent — is another example of this pro-active attitude of the civil aviation sector to give the industry a global fillip. So, why it is that Indian aviation continues to flounder and go through regular periodic seizures? There are myriad reasons for this, but this may perhaps, not be the occasion to debate them. Maybe some other time. But it would be fair to say that most of the issues do not require external intervention. If FDI has come in at a time when Indian aviation is at its lowest ebb, it is because the airlines lobbied vigorously for and against it in the halcyon days
when Jet was riding at `1500-plus and Kingfisher too was in the high 80s. Similarly, their running battle with airports is the stuff of legends. They want to self-handle, they want low charges, they want deferred payment terms and they want world-class service. The airports, meanwhile, fight charges they were exorbitant in their costs and India will price itself out of the aviation business with these landing and parking charges. All these are issues that will surely be discussed and debated at Hyderabad when the fraternity gathers for the air show. The irony is many of these were discussed and debated when we were all at Hyderabad two years back. All of them continue to be relevant even today because the discourse didn’t produce ay solutions or forward movement! On our part we have put together a comprehensive package of pieces on literally every spectrum of the industry. You have the pros and you have the cons and you will have enough material to make a considered choice. The danger of such an ambitious attempt is sometimes one can package too much fact, figures and interesting material to chew upon. But my point is it is better to package too much rather than too little. After all, that’s what a collector’s issue is all about. We have had a great time putting this package together. We hope you will enjoy reading it.
srini@newsline.in
MARCH 2012 I CRUISING HEIGHTS I 5
OUTLOOK SPECIAL INTERVIEW
C R U I S I N G
H E I G H T S
M A R C H 2 0 1 2
“There is a tremendous growth expected in this sector. It is growing at a brisk rate...” AJIT SINGH ON TACKLING PROBLEMS FACING THE INDIAN AVIATION SECTOR.
H C TIWARI
INTERVIEW
“
Air India’s Dreamliners will take time to be here. Therefore, why should we let foreign carriers alone benefit? Private airlines can utilise that capacity.”
C
Ajit Singh, Civil Aviation Minister compromise, DGCA will not compromise and the Ministry will not compromise.
ivil Aviation Minister Ajit Singh has stepped into the portals of Rajiv Gandhi Bhavan at, perhaps, the most crucial moment in the history of Indian aviation. He has to battle against heavy odds — high fuel prices, a floundering Air India, high passenger volumes and much more. He has aired his views on all the problems that face the industry at different times to the media. Extracts from those interviews:
Ò ON FDI IN AIRLINES There is a tremendous growth expected in this sector. It is growing at a brisk rate but it is expected to grow at this rate. This industry requires a lot of capital and lot of expertise. Passenger-safety is involved, then the flights the ATC technology is changing and evolving...considering that our current airlines are under a lot of financial stress, although 26 percent FDI was allowed many years back, but nobody knew what was coming in because it is such a technical business not a run-of-themill business that anybody would invest that there is a general feeling that only the airlines would be interested in the investment in that. With the growth that we are witnessing and expecting there are so many dimensions to it. Therefore, 26 per cent was mooted, although it has not gone to the Cabinet yet. But there are some problems with 26 per cent. According to SEBI guidelines, if somebody buys 26 per cent from the investor, it has to make an open offer. That was a problem. So the committee of secretaries met and recommended that 49 per cent be allowed. Let’s remember that control still remains in Indian hands. Any FDI would be vetted by the security committee, and FIPB considers all the factors. It’s not as if it is an open field for anybody.
Ò ON BAILING OUT TROUBLED AIRLINES No, government is not going to have any bailout. Government is not going to ask banks or private industry for that matter. However, we have taken three crucial steps to help the aviation sector. Firstly, we have allowed all airlines to directly import aviation fuel. Next, we are working on allowing FDI up to 49 per cent in the aviation sector. Thirdly, we have allocated traffic rights to private airlines on foreign routes. All these measures should help airlines. The whole aviation sector is in crisis. The measures we have taken will help airlines come up with fresh business plans to persuade banks to lend them money. Now it is up to the banks to see if the business plans of the airlines are viable. But we are not going to bail them out.
Ò ON AIR INDIA We realised that Air India, in any case, was not able to utilise the allocated bilaterals, as it didn’t have adequate aircraft. Even the Dreamliners will take time to be here. Therefore, why should we let foreign carriers alone benefit? Private airlines can utilise that capacity as well. In any case, we stand to benefit when the airport facilities are utilised.
Ò ON KINGFISHER You can’t close down a company because it is making losses or banks are not giving it money. As long as passenger safety is not jeopardised, as long as it keep their schedule, why should we close down any industry?
Ò ON HELPING AIR INDIA
Ò ON SAFETY
Government is not in a position and will not bail out any private airlines. Air India is a public sector unit, so government has an obligation. But Air India will have to become competitive and restructure its costs... as the government cannot keep on pouring money
In the airline industry, there are six to seven players. Passengers’ safety is paramount. The DGCA is conducting a special safety audit and its teams are working on this. The DGCA is also looking into the problems faced by the passengers. That’s our main concern. The government also has a responsibility to see that the financial stress suffered by airlines does not affect safety and so the DGCA conduct financial audits. If an airline has five planes and adequate equity base, that’s fine for us. As long as safety norms are being met, there is no question of cancellation of licences.
Ò ON THE INDUSTRY AS A WHOLE There are problems. Industry has grown so fast in past few years. There is shortage of trainee pilots, of stewardesses... there are financial implications... But as far as question of jeopardising the safety of passengers is concern, there is no such fear. There is no
Industry has grown so fast in past few years. There is shortage of trainee pilots, of stewardesses...
MARCH 2012 I CRUISING HEIGHTS I 7
OUTLOOK SPECIAL MINISTRY
C R U I S I N G
H E I G H T S
ON WINGS FOR
100 YEARS AS WE PULL DOWN THE CURTAIN ON THE CELEBRATIONS OF HUNDRED YEARS OF AVIATION, WE CANNOT BUT LOOK WITH PRIDE ON WHAT INDIA HAS ACCOMPLISHED. OVER THE YEAR, THE MINISTRY OF CIVIL AVIATION AND OTHER AVIATION STAKEHOLDERS MARKED THE EVENT AND A GRATEFUL NATION REMEMBERED ALL THOSE STALWARTS WHO HAD CONTRIBUTED TO MAKING THE INDUSTRY WHAT IT IS TODAY.
M A R C H 2 0 1 2
A
irports all across India had a special glow on February 18, 2011. On that landmark day, tasteful illumination marked the completion of 100 years of Indian civil aviation. The day also marked the commencement of Civil Aviation Centenary Year. It all began on February 18, 1911, when French pilot Monseigneur Henry Piquet flew a Humber biplane from Allahabad to Naini, just across the Yamuna River, and back, covering a distance of about 10 km. He carried nearly 6,000 letters, many of which were addressed to King George V of England with ‘First Aerial Post’ as the postmark. This was also considered to be the world’s first airmail service. A year later, in 1912, the first domestic air route between Karachi and Delhi became operational. The service between the two cities was operated by the Indian State Air Services with the Imperial Airways (a UK-based airline). In 1915, to expand the horizons of the aviation industry, Tata Sons Limited started regular airmail services between Karachi and Madras (now Chennai). It also founded Tata Airlines, which was rechristened Tata Air Services in 1938 and then Tata Air Lines, the same year.
AAI
8 I CRUISING HEIGHTS I MARCH 2012
H C TIWARI
MINISTRY
On October 15, 1932, JRD Tata flew a single-engine aircraft from Karachi’s Drigh Road Aerodrome to Bombay’s Juhu Airstrip via Ahmedabad. The aircraft continued to Madras via Bellary, flown by former Royal Air Force pilot Nevill Vincent. Tata Air Lines had not, however, survive for too long after the end of World War II. On July 29, 1946, it became a public limited company called Air India and the government acquired 49 per cent stake in it, making it the country’s designated flag carrier. Air India operated its first international flight on June 8, 1948, from Bombay to London. Speaking during the inaugural of the Centenary Celebrations of Civil Aviation in India, the then Civil Aviation Minister Vayalar Ravi said: “Today, India is considered to be one of the safest countries in terms of civil aviation. Recently, the Federal Aviation Administration (FAA) of America even cited India as a role model in the Asia-Pacific region.” In order to retain this position and to assure all travellers the guarantee of safety, the Minister said: “It would be necessary to redefine the parameters of regulation. We are
CELEBRATING CENTENARY: Snapshots from the function of the celebrations.
already looking into this matter and considering to restructure the DGCA into a more comprehensive system, which works well above international standards.” “One of the biggest challenges before us was to lend renewed vibrancy to public sector undertakings like Air India and Airports Authority of India.” he added. Ravi also paid tributes to the pioneer of Indian aviation: JRD Tata, who obtained the first pilot’s licence issued in India and also founded the first commercial airline, which later became Air India. Tata also launched India’s first international carrier — Air India international and later when the government took over, he was appointed the Chairman of Air India in 1953, a position which he held for 25 years.
MARCH 2012 I CRUISING HEIGHTS I 9
OUTLOOK SPECIAL MINISTRY HIGHLIGHTS
C R U I S I N G
H E I G H T S
M A R C H 2 0 1 2
PRO-ACTIVE
MINISTRY
It has been a see saw year (2011-12) for Indian aviation. It was ATA the year of the centenary of aviation in India — a 100 remarkAir Transport Association of able years of flying! It was also the year when two important America (ATA): institutions — Pawan Hans Helicopter Ltd and Indira Gandhi It is clear that the rest of the world is Rashtriya Udan Academy — celebrated their silver jubilees. standing up against the EU’s unilateral It was also the year when the Directorate General of Civil and counterproductive scheme and we Aviation (DGCA) moved decisively to completely overhaul the are hopeful that the EU will stand down. regulatory mechanism that governs Indian aviation; it was also the year when Indian airports won global recognition from delegates across the world when they were here in India to participate in two major events in Delhi (ACI Asia-Pacific) and Mumbai (ICAN). It was also the year when aviation per se was in an yo-yo mood and the Department of Civil Aviation acted with imagination and enterprise to provide the necessary backing and support for the country’s growing airlines to face the uncertainty of global oil prices, the meltdown in the West and the difficult situation at home. Here are a few glimpses at the achievements that the Ministry accomplished through the year. The civil aviation ministry has recommended security checks by the Home Ministry and clearance by the Foreign Investment Promotion Board as the critical modalities for allowing foreign airlines to take up to 49 per cent stake in Indian carriers. The government is working on a policy package to help the < z entire cash-strapped industry come out of the financial San < rut. The information sought by the ministry relates to their Francisco overall financial situation, the extent of debt with financial institutions and their working capital requirements. The Ministry initiated steps to allow direct import of Air Turbine Fuel (ATF) by Indian carriers. ATF prices in the country are 30 to 40 per cent more than the prices in the interALTA national market due to high base price and higher taxes. The Latin American and Caribbean sales tax on ATF in different States in India is on much highAir Transport Association er side, and varies between four to 30 per cent in different (ALTA): states. The EU-ETS will be detrimental to the The Minister of Civil Aviation had also written to all Chief growth of aviation in Latin America and Ministers of the states to bring down the rate of sales tax on will set the industry back several years, ATF in order to make ATF cheaper for the Indian carriers. during a time of unsteady economic per The Civil Aviation Ministry has also started working to formulate formance. ALTA is a strong supporter of a a new civil aviation policy to cater to the latest concerns of the global approach to the reduction of caraviation industry, especially issues relating to its sustainability bon emissions through proactive steps, such as the use of new technologies, like jet fuel pricing, infrastructure, airfare pricing, safety and fleet renewal, the improvement of operasecurity. tional processes, effective investment in infrastructure and the development of biofuels.
10 I CRUISING HEIGHTS I MARCH 2012
The EU-ETS regime will hamper the flights from Asia to Europe. Air AsiaX, which has decided to stop flights to Paris and London from April has set the trend...
<
z
New York
MINISTRY HIGHLIGHTS
LEADING THE CHARGE AGAINST
EUROPEAN AIRLINES Association of European Airlines (AEA): Europe is right to demand concrete action and deliverable environmental results, but its approach lacks essential international buy-in. Non-European countries are also right to call for a global approach, but they need to back up their words with concrete actions which genuinely deliver for the environment. The debate is about how long it will take to deliver a global approach. AEA urges political leaders to seize the negative energy around the ETS and turn it into urgent, positive action towards a global solution.
IMPACT FOR INDUSTRY EU-ETS will ensure that ticket prices go up by two-three per cent.
ARAB AIR Arab Air Carriers Organisation (AACO): Unilateral and regional environmental initiatives, which ignore the boundaries of their jurisdiction, such as the European Emission Trading Scheme, will not succeed in resolving the environmental issue. To give Arab airlines more power to fight the EU-ETS, AACO is calling on the Arab Civil Aviation Commission to form an Arab position regarding the illegitimacy of applying the European Union scheme on non-EU airlines.
< < z
<
London
< z
<
Frankfurt
z
Munich
<< < <
Milan z
ODelhi Mumbai z
z z
Hyderabad
Bengaluru
GRAPHIC: RUCHI SINHA
ASIA PACIFIC
* The map is not to scale.
Association of Asia Pacific Airlines (AAPA): Members passed a resolution which “calls on the EU to scrap plans to include foreign airlines within the EU-ETS, rethink its position and re-engage with the international community. AAPA also strongly urges governments to work within the auspices of ICAO towards an effective multilateral agreement on a global, sectoral framework on aviation and the environment, and to refrain from introducing duplicative measures, including the imposition of arbitrary taxes that deliver no real environmental benefit”.
I
EU-ETS
ndia had taken the lead in hosting a conference of several countries last September in which a declaration was unanimously adopted to oppose the EU move. At that meeting, India and 26 other countries passed a strong resolution urging the European Union to desist from imposing the tax from January 2012. ICAO also backed the India lead offensive against the tax and suggested that the EU must debate the issue and allow ICAO to take the lead on such issues. More recently, the Indian government has asked the country’s airlines to refrain from submitting carbon emissions data to the EU. “I am directed to say that the ministry has decided that there is no need for Indian carriers to submit any data to European Union under EU-ETS,” the civil aviation ministry said in a letter on November 25, 2011, to all the domestic airlines that fly on international routes. Any correspondence received at your end (airlines) from the EU in this regard may be forwarded to this ministry, for taking necessary action,” the letter added. Representatives of Armenia, Argentina, Republic of Belarus, Brazil, Cameroon, Chile, China, Cuba, Guatemala, India, Japan, Republic of Korea, Mexico, Nigeria, Paraguay, Russian Federation, Saudi Arabia, Seychelles, Singapore, South Africa, Thailand, Uganda and United States of America, gathered in Moscow, on February 21 and 22, 2012, and adopted a joint declaration which starts by saying that the “inclusion of international civil aviation in the EU-ETS leads to serious market distortions and unfair competition”. India and 22 other countries, including Russia, China and the US, decided to retaliate with a series of measures which would impose heavy costs on European airlines and plane manufacturers. The joint declaration at Moscow asked the EU and its member states that they “must cease application of the Directive 2008/101/EC to airlines/aircraft operators registered in third states”.
MARCH 2012 I CRUISING HEIGHTS I 11
OUTLOOK SPECIAL MINISTRY HIGHLIGHTS C R U I S I N G
T
he country’s civil aviation sector has come a long way — from 500 departures per week in the country in 1994 before deregulation to nearly 15,000 departures daily — and at the International Civil Aviation Network conference in Mumbai recently, India set high benchmarks that will be difficult to replicate. Other than the hospitality to the guests, the week-long meet inaugurated by none other than the President of India brought in more than 300 delegates from 68 countries who held negotiations for bilateral air services agreements. For guests from across the globe, ICAN 2011 carried a special meaning. They were at the iconic Taj Mahal Palace in Mumbai that was so much in the news two years back for all the wrong reasons. The iconic hotel had literally been rebuilt from scratch and they were all gathered now to expand traffic and help countries fly to each other’s cities more frequently and more efficiently. By common consent it was agreed that the fourth edition of the annual week-long International Civil Aviation Network (ICAN) was by far the best and the most comprehensive of these events. The conference, (organised by the Ministry of Civil Aviation) held under the aegis of Montrealbased UN body, the International Civil Aviation Organisation (ICAO) provides a platform for aviation negotiators from different countries to conduct bilateral air services negotiations. “India has raised the bar so high that hosts will now find it tough to match these standards,” said one participant. It was almost flawless in execution: day-long meetings, plenty of entertainment and a side trip to Agra. No surprise considering that Civil Aviation Secretary Dr Nasim Zaidi has been one of India’s most successful representatives at ICAO. President Pratibha Devisingh Patil who inaugurated the meet was candid in her observations: “Governments must continually negotiate new bilateral treaties, to allow for and expand access to new and emerging markets for their carriers. ICAN provides a very convenient and essential platform, for a large number of
12 I CRUISING HEIGHTS I MARCH 2012
H E I G H T S
M A R C H 2 0 1 2
A GIANT LEAP: President Pratibha Patil (third from left) at the inauguration of ICAN conference in 2011.
INDIAN AVIATION TAKES
CENTRESTAGE
At the International Civil Aviation Network conference in Mumbai recently, India set high benchmarks that will be difficult to replicate
States to negotiate these bilateral agreements quickly, efficiently and with saving of time and expenditure. The World Air Transport Conference 2003 paved the way for this efficient system of air services negotiations, and I compliment ICAO leadership for promoting ICAN successfully in partnership with host countries.” She also said: “In the 1990s, for example, there were very few domestic connections between the metro towns — Delhi, Mumbai and others. There were long waiting lists for international flights particularly during the busy seasons. Carriers were limited. Deregulation of the domestic sector and liberalisation of bilateral traffic rights in the past decade has brought choices of carriers, choices of timings and fares. There is a sea change from 500 departures per week in the country in 1994 before deregulation, to nearly 15,000 departures daily — a 30 times jump. Today, 87 foreign airlines fly to and from India and five Indian carriers fly to and from 40 countries. In the last decade, domestic air traffic has quadrupled from 13 million to 52 million and international traffic more than tripled to 38 million.” More than 300 delegates from 68 countries attended the week-long conference. For the record, it may be mentioned that delegates from 65 countries held negotiations with each other. India has bilateral air services agreements with 108 countries, 72 foreign airlines are currently operating to/from various destinations. Three Indian carriers are operating to 35 destinations in 25 countries. MINISTRY HIGHLIGHTS
Continued on Page 16 `
OUTLOOK SPECIAL MINISTRY HIGHLIGHTS C R U I S I N G
H E I G H T S
M A R C H 2 0 1 2
“DEVELOP INDIA AS A HUB FOR
HIGH-QUALITY AVIATION EDUCATION” DR NASIM ZAIDI, SECRETARY, CIVIL AVIATION, BELIEVES THAT THE COUNTRY CAN BE A CENTRE FOR HIGH QUALITY AVIATION EDUCATION.
U
pbeat about the prospects of the aviation sector in the country, Dr Nasim Zaidi, Secretary, Civil Aviation, is confident that the number of domestic passengers will touch 160-180 million from 53 million now while international passengers will rise to more than 80 million from 38 million in the next 10 years. Dr Zaidi never misses an opportunity to boost Indian aviation. Extracts from the speech he delivered at the Nanyang Technological University, Singapore.
ON THE GROWTH OF CIVIL AVIATION India is the fastest growing aviation market in the world, ninth highest and will be amongst first four-five in next 10 years. Recent estimates suggest that domestic air traffic will touch 160-180 million passengers per annum in the next 10 years and international traffic will exceed 80 million passengers per annum from the current level of 53 million domestic and 38 million international passengers. Projected CAGR (Compounded Annual Rate of Growth) for the next 10 years is placed at 14 to 15 per cent of passenger traffic and above 10 per cent of cargo traffic. Such optimism stems from independent studies that have concluded that India’s urban population will be 590 million by 2030 i.e. 40 per cent of the total. And the number of million-plus cities will increase to 68 from 35. Further, the middle-class population is expected to grow from 13 per cent in 2010 to 37 per cent in 2025. The growth of the civil aviation sector is closely linked to the growth of GDP. In the emerging markets, air traffic is estimated to grow at about two times the rate of growth of real GDP. In India, we expect aviation to grow at 14-15 per cent range. While civil aviation is a substantial industry in its own, its key contribution to the nation’s economy is in enabling other sectors to operate more
14I CRUISING HEIGHTS I MARCH 2012
The private sector played an unprecedented role during the last 5-6 years by acting as a key contributor for the development of PPP airports
efficiently. Many of the growth sectors on which the future of the economy depends are crucially dependent on air transport for competing effectively in the global economy. By expanding the size of the market that can be served, aviation enlarges the scope to exploit economies of scale and enhances competition. Needless to say that it supports tourism in a big way, promotes trade and commerce and generates employment, both directly and indirectly through its related industries. The percentage growth figure may (be) striking. Let me, in a more simplistic manner, tell you the kind of changes that have taken place and affected the lives of people from all walks of life both in India and abroad. In the 90s, there were very few domestic connections between Metro towns: Delhi, Mumbai and others. On international connectivity, the situation was also not so good particularly during the busy season. Carriers were limited. If people wanted to travel to the West, they would travel to Mumbai to go to the USA or the UK with associated inconvenience. So, deregulation of the domestic sector in the 90s and liberalisation of bilateral traffic rights in the past decade brought choices of carriers, choices of timing, fares and experiences. Today, for example, there are (over) 50 direct flights between Delhi and Mumbai with complete freedom of carriers, timings and fares. In 1994, there were only seven flights between these sectors. The same is true of many other towns in the country. There is a sea change from 500 departures in the country in 1994 before deregulation to nearly 15,000 departures daily. The same phenomenon has occurred on the international side.
ON THE GLEAMING NEW AIRPORTS Today in India, about 60 per cent of the air traffic is happening in the airports under the PPP model at Delhi, Mumbai,
MINISTRY HIGHLIGHTS
Hyderabad and Bengaluru and the rest is with the airports owned and operated by Airports Authority of India. During the period from 2005 to 2010, $10 billion has been invested in airport development in the country. The private sector played an unprecedented role during the last five-six years by acting as a key contributor for the development of PPP airports. A major achievement in the airport sector in India during the last five years was the commissioning of Terminal 3 (T3) and associated infrastructure at the Delhi international airport in a record period of 37 months. T3 has an annual throughput capacity of 34 million passengers and the entire Delhi airport project required an investment of about $3 billion. We are also looking at 35 other airports in the country including state capitals, tourist centres, business and commercial centres. In these airports, the cityside will invite the private sector for commercial development including hotels, shopping complexes, cargo, parking lots, food courts, etc. We invite investors to become partners in this process. AAI has already invested about $ 1 bn.
Based on carbon emission data collected from scheduled airlines in India, it is seen that the carbon emission curve shows a flattening trend after 2008
skilled workforce at all levels. Even the industry would need this class of workforce in increasing numbers to cater to the growing demand. At the same time, I would also venture to say that this itself can prove to be an opportunity to develop India as a hub for high-quality aviation education and training for the emerging markets across Asia, Middle-East and Africa.
ON ENVIRONMENTAL CHALLENGES Considering the phenomenal growth in air transport, improving the environmental performance of aviation is a challenge. Based on carbon emission data collected from scheduled airlines in India, it is seen that the carbon emission curve shows a flattening trend after 2008 due to fleet renewal programmes and optimisation of operational procedures apart from the initiatives taken by the airlines to reduce their fuel expenditure.
ON THE FUTURE While figures of growth registered in the past decade sounds impressive, it is a matter of concern that only about 4 per cent people fly out of the total population of 120 million who travel. Large numbers of cities are still devoid of air connectivity. Global comparison of air travel penetration shows that India (at 0.04 air-trips per capita per annum) stands far behind developed countries like the US and Australia ( two air-trips per capita per annum). China’s domestic traffic is five times the size of India’s despite having a population just 10 per cent larger. There is a significant growth potential for the Indian civil aviation industry as the economy grows, disposable incomes of people rise and the value of time becomes more precious. Low ratio of per capita air-trips in India suggests a huge potential for air traffic growth considering the higher trajectory of economic growth the country is witnessing presently.
ON TRAINED MANPOWER
HEMANT RAWAT
Closely related to safety in civil aviation is skill augmentation in its entire dimension. Implementation of stringent standards to cope up with the growing air traffic is crucially dependent upon the ‘skills and competency’ of the workforce. A vibrant, world class education and training sector is, therefore, essential to meet the rising demand for
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FURSATGANJ TO GET AVIATION UNIVERSITY The Ministry of Civil Aviation has declared that a world class aviation university will come up in Fursatganj. This National Aviation University would be a hub for aviation-related disciplines. This was announced at a function to mark the 25th anniversary of Indira Gandhi National Aviation Academy (IGRUA), the country’s premier academy of pilot training. Secretary Nasim Zaidi, Union Civil Aviation Secretary, told the media: “Yes, it has been decided that the university would be built at Fursatganj in UP and its campus will be close to IGRUA at Fursatganj airfield.”
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AN INSTITUTE TO REMEMBER: Congress MP Rahul Gandhi lighting the lamp to mark the 25th anniversary of Indira Gandhi National Aviation Academy (IGRUA).
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18,000 Indians stranded in Libya. It was a remarkable operation in more senses than one. For starters, the coordination between the different wings of the government had to be seen to be believed. There was the MEA (Ministry of External Affairs) and the Ministry of Civil Aviation that literally pulled out all stops to make sure that the flights got into Libya as scheduled. And at that point of time, in a pleasant coincidence, the Civil Aviation Minister was Vayalar Ravi who was also the Minister for Overseas Indians. There were considerable complications in spite of all this. India does not have an ASA (Air Services Agreement) with Libya that would allow for bilateral movement of flights between the two countries. So, the Indian embassy in Tripoli had to literally sweat it out on a day-to-day basis to obtain permission for our aircraft to get into Tripoli. For the first time, the Ministry also had the private carriers operate to get our citizens back from Libya. Apart from Jet Airways, there was IndiGo, SpiceJet and Kingfisher all mounting flights to Malta and Alexandria. The airlift was the perfect example of cooperation at every level.
www.pravasitoday.in
TRIPOLI EXPRESS The Ministry of Civil Aviation carried out with aplomb, the complex operation to airlift nearly
COMING HOME AT DELHI MALTA
TRIPOLI
SIRT LIBYA
ALEXANDRIA
Graphic:: Ruchi Sinha
DJERBA DELHI
SABHA MUMBAI z Map is not according to scale
FLEEING THE CIVIL WAR
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www.vodafone4.itn.co.uk
MUMBAI RECEIVES INDIANS FROM LIBYA
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process of licence conversion. To check the quality of pilots coming after getting their commercial pilot’s licences from foreign shores, the government has decided to make such pilots undergo skill tests in India before converting their licences so that they become eligible for flying with desi airlines. The foreign licences will be checked with the issuing authority before converting the same. There will be increasing focus on technology to limit human interface - and hence chances of using corrupt practices.
FROM DGCA TO CAA Also, a reflection that Air India, all said and done is the work horse of the country. Tirelessly they flew close to 200 sorties to Libya and days later got into operational mode for Japan.
ACI: THE POWER OF AIRPORTS AND INDIA The ACI Conference in Delhi (April 5-8, 2011) saw a huge participation and appreciation of India’s remarkable aviation and airport journey. It was, perhaps, one of the best organised and best conducted conferences in the aviation sector in recent times. The USP of the conference was the range and depth of subjects discussed, the attendance and the excitement at India, one of the hottest aviation destinations in the world. As AAI Chairman VP Agrawal, who is on the Board of the Council, said: “For us it was not just a question of being good hosts. We wanted our colleagues from other parts of the world to see the enormous strides undertaken by Indian Aviation and how we managed this growth without much hiccups.” During his opening address, Agrawal told delegates that India had to face the challenges of “phenomenal” traffic growth head-on, and build new airports and upgrade others to avoid a future shortfall in capacity. This was something that Civil Aviation Secretary Dr Nasim Zaidi alluded to in his opening remarks at the inaguration.He explained that development and growth was one thing, but managing it was the great big task. He spoke of the huge HR reservoir that would be required if India has to move to the next level.
PILOTS’ EXAM GO ONLINE The government has started plugging loopholes in the pilot examination and licensing. As a first step, the Airline Transport Pilot Licence or ATPL exam (meant to certify commanders) has gone online to remove any discrepancies in the earlier process which was manual. So, for the first time ever, DGCA will now do extensive verification checks —asking the foreign authority concerned — about the veracity of the applicant’s claims on flying experience, etc. before even beginning the
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ACKNOWLEDGING RECOGNITION: ACI Asia-Pacific President Sri Bashir Ahmed Abdul Majid presenting a memento to Civil Aviation Secretary, Dr Nasim Zaidi.
In line with this thinking, the proposed CAA will also have powers to appoint regional Ombudsmen to ensure speedier action and settlement of customer or passenger disputes
The process of setting up an autonomous Civil Aviation Authority to regulate all aviation safety issues in India is in the final stages with a cabinet note on it likely to be finalised soon. The proposed CAA, which would have administrative and financial autonomy, is also likely to keep a tab on the entire range of activities — from proper provision of air traffic services and licensing to financial fitness of airlines. It will ultimately replace the present regulatory body, the DGCA. The CAA will regulate all aviation safety issues. It will have administrative and financial autonomy and will keep a tab on the entire range of activities: from proper provision of Air Traffic Services and licensing to financial fitness of airlines. The crucial aspect of the CAA will be the separation of the accident investigation wing and the regulatory functions of the Authority so that there is no internal clash within the proposed body. The DGCA, for instance, does safety audits, grants licences and investigates aircraft crashes. It is proposed to arm the CAA with more powers to address consumer affairs as lack of such powers with the incumbent DGCA had often emboldened the airlines to charge sky-high fares. In line with this thinking, the proposed CAA will also have powers to appoint regional Ombudsmen to ensure speedier action and settlement of customer or passenger disputes. The note which has been prepared by DGCA and submitted to the parent Ministry of Civil Aviation has been shaped based on a feasibility study first made in October 2009 in technical collaboration with ICAO. The mandate - if one can use that word — given then was to shape a new regulatory authority that will have improved financial and administrative autonomy for discharge of safety oversight functions more effectively. The ICAO feasibility report was received by the Ministry of Civil Aviation in March 2010 which was later endorsed by the FAA stating it would be in line with the ICAO policy. The draft CAA note — in the form of a Cabinet note — has been prepared after studying the existing setup in the UK, US, China, Germany, France and Singapore.
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February 12, 2011
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SHINING BEACONS: (L-R) Prime Minister Dr Manmohan Singh at the inauguration of the new `289 crore state-of-the-art international terminal building at Thiruvananthapuram Airport; The then Civil Aviation Minister Vayalar Ravi dedicating the `30 crore Shillong Airport’s new terminal building that was completed well before its scheduled date, to the nation; and, the formal inauguration of the `135 crore-Raja Bhoj Airport at Bhopal that saw among the dignitaries including the then Civil Aviation Minister Vayalar Ravi, Governor of Madhya Pradesh, Rameshwar Thakur, Chief Minister of Madhya Pradesh Shivraj Singh Chouhan, Union Minister for Urban Development Kamal Nath and Union Minister for Tribal Affairs, Kanti Lal Bhuria.
FIRST-EVER AIRPORT DIRECTORS MEET The first-ever conference of Airport Directors was organised in Delhi on June 16, 2011. The Civil Aviation Secretary, Dr Nasim Zaidi, also asked the airport managers to reorient their functioning to meet the new competitive challenges. Maintaining that `1.35 lakh crore would be required over the next decade for a massive upgrade and development of aviation infrastructure across the country, he said both government and private investment would be needed. “In future, there could be more than one airport in some cities,” he said. Therefore, the AAI and airport managers would have to reorient their functioning to meet this competition, he said. Noting that the country was projected to have 400 million air travellers and over 1,000 aircraft in the next ten years, Dr Zaidi said the AAI had earmarked `12,000 crore for the Eleventh Plan period to modernise airports. The Secretary also stressed on the need to hike income from non-aeronautical revenues. AAI Chairman V P Agrawal said airport managers in India would have to compete with the best in the world as the best airports were situated in the Asia- Pacific region. While huge investments would be made over the next few years to improve and expand aviation infrastructure, he said that the airport directors would have to learn to market their airports to customers as was done the world over. Agrawal also asked the AAI to devise innovative methods to maintain the plush new terminals which have come up in various states in the recent past. The conference was aimed to focus attention on the various issues confronting the AAI-run and managed airports across the country. “We are one team and we believe it will help us to learn from each other’s experience, outline our best practices and collectively find solutions to the issues that come up from to time,” said the AAI Chairman explaining his decision to hold the conference.
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NEW START: Former Civil Aviation Minister Vayalar Ravi while lighting the lamp at first-ever Airport Directors meet.
FAA has completed a bilateral agreement between the United States and India that will allow for the reciprocal certification of aviation products
INDIA-US TIE-UP FOR AVIATION PRODUCTS The Federal Aviation Administration (FAA) has completed a bilateral agreement between the United States and India that will allow for the reciprocal certification of aviation products. Dorenda Baker, Director of the FAA’s Aircraft Certification Service and Bharat Bhushan, Director General of the Directorate General of Civil Aviation (DGCA) signed the Implementation Procedures for Airworthiness (IPA) in New Delhi during the third US-India Aviation Summit. These implementing procedures reflect the mutual commitment of the United States and India to enhance international safety and will enable a more efficient exchange of aviation products. The IPA details the scope and nature of the cooperation established in the framework set up in the US — India Bilateral Aviation Safety Agreement (BASA) Executive Agreement. During the signing ceremony Dorenda Baker congratulated the DGCA for demonstrating and sustaining a high level of competence as a regulatory agency. The agreement, said Baker, “will further strengthen our already successful safety partnership. The FAA appreciates India’s long standing commitment to improving aviation safety”.
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CHARTING AVIATION’S
FUTURE GROWTH DETAILED BELOW IS THE REPORT OF THE WORKING GROUP ON CIVIL AVIATION FOR THE FORMULATION OF THE TWELFTH FIVE YEAR PLAN THAT HAS BEEN PREPARED ON THE BASIS OF THE REPORTS OF FOUR SUB-GROUPS CONSTITUTED UNDER THE WORKING GROUP ON CIVIL AVIATION AND BASED ON OTHER FEEDBACK RECEIVED FORM STAKEHOLDERS FROM TIME TO TIME. EXCERPTS:
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he report of the Working Group on Civil Aviation covers the following aspects: Role of air transport industry, the vision, review of performance during the Eleventh Plan period — segment-wise as well as organisation-wise. Growth projection for the 12th Five Year Plan including segment-wise investment requirement and key enablers. Key challenges highlighting air connectivity in North-Eastern region and other remote areas, viability of the sector, fiscal regime governing Aviation Turbine Fuel (ATF), tax regime governing third party Maintenance, Repair and Overhaul (MRO), safety, human resource development.
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INTO THE SKIES: A Kingfisher aircraft flies into Mumbai airport.
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CONVENIENCE: Fliers sorting out their luggage at the baggage handling counter at one of the Indian airports.
AIR TRAFFIC FORECAST FOR 12TH PLAN PERIOD
Assessment of internal and extra budgetary resources of the sector during 12th plan period. Projected 12th plan outlays of various organisations under Ministry of Civil Aviation. New initiatives in civil aviation sector during 12th plan period.
Forecast of air traffic carried out for 12th plan period suggests that domestic passenger throughput would grow at an average annual rate of around 12 per cent. The domestic passenger throughput is expected to touch around 209 million by FY-17 from 106 million in FY-11. Similarly, international passenger throughput is estimated to grow at an average annual rate of 8 per cent during the 12th plan period to reach 60 million passengers by FY17 from 38 million in FY-11.
REVIEW OF PERFORMANCE Civil aviation industry by virtue of its dynamics is vulnerable to economic recessions, natural disasters and political upheavals. The Indian civil aviation industry managed to exhibit resilience to the recent global economic slowdown. Both passenger and cargo traffic have shown robust growth and there has been modernisation and augmentation of capacities, in a major way, at various metro and non-metro airports. Some of the key achievements during the last five years include the following: India has become the 9th largest civil aviation market in the world Passenger handling capacity has risen three-fold from 72 million (FY 06) to over 220 million (FY 11) Cargo handling capacity has risen from 0.5 million MT (FY 06) to 3.3 million MT (FY 11) Connectivity to North Eastern region has risen from 87 flights per week to 286 flights per week Four international airport projects were successfully completed through the public private partnership (PPP) mode — greenfield development of Hyderabad and Bengaluru international airports and modernisation of Delhi and Mumbai international airports The Airport Economic Regulatory Authority (AERA) was established to safeguard the interests of users and service providers at Indian airports As of now five Indian carriers are operating on international routes
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KEY CHALLENGES AND POLICY ENABLERS
The Airport Economic Regulatory Authority (AERA) was established to safeguard the interests of users and service providers at Indian airports
Air connectivity in North-Eastern region and other remote areas, despite some degree of success of Route Dispersal Guidelines (RDG) in ensuring air connectivity to North-Eastern region, Jammu & Kashmir and other places, it is a fact that air connectivity has largely been confined to very few airports in these regions. The air connectivity is largely concentrated on routes connecting state capitals. Air connectivity has not increased proportionately on routes connecting Island airports. Although all the scheduled domestic airlines are complying with mandatory capacity deployment requirements contained in Route Dispersal Guidelines, however, some parts of the country still remain unconnected by air services or partly connected. The tendency has been that even in Category II and Category III routes, airlines are said to prefer to resort to cherry-picking or cream skimming and adopt only those routes which are comparatively more promising or lucrative while leaving the unviable sectors unserved or underserved. The RDG being a matter of internal cross-subsidisation between financially viable and un-economical routes for airlines, it does not appear to be sustainable to continue this in the long run given the nature and extent of remote and inaccessible areas in the country to be covered and the financial
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crisis the airline industry is facing. There is a strong view emerging in this sphere that in order to achieve the social objectives of providing air connectivity to remote and inaccessible areas, innovative mechanism needs to be evolved to achieve maximum impact. A sustainable and durable solution in the long run could be found only in direct intervention. Development of small low cost ‘no-frill’ airports and regional airlines to be encouraged through providing direct subsidies in a transparent manner both for airport operator and for the carrier. Under these circumstances, it is felt that there is a need to revisit the Naresh Chandra Committee Report that recommended Essential Air Services Fund (EASF). A framework of analysis is required to be developed for deciding a set of parameters to evaluate proposals for locating airports in the country.
VIABILITY OF THE SECTOR The future of India’s aviation growth is critically linked to the health of the airline industry. While there are number of structural factors that are responsible for this phenomenon, the operating cost environment the aviation sector in India faces many taxes on the inputs to production — fuel, aircraft leases, airport charges, air passenger tickets, air navigation service charges, maintenance costs, fuel throughput fees, into-plane fuel fees, and other items subject to service taxes. These fees and taxes on inputs are either not present in other matured aviation markets, or are much lower there. The Indian air transportation industry is thus laden with very high costs and larger operating losses than their other counterparts globally. The rates of value added tax on Aviation Turbine Fuel is high which affects the financial viability of their operations. In most of the states VAT applicable on ATF is in the region of 2530 per cent. Fuel cost alone constitutes nearly 40 per cent of the operating cost of the airlines
H E I G H T S
With the advancement in aviation activities in India, challenges to keep the skies safe need to be met appropriately. Safety is of paramount importance. The expansion of air transport in India is among the fastest in the world
in India. As per KPMG analysis, ATF prices in India are nearly 60 per cent costlier than competing hubs like Dubai, Singapore and Kuala Lumpur which hurts India’s competitiveness. (1) The ATF rules have since been amended to the status of “Declared Goods” (2) FDI in aviation has since been hiked to 49 per cent.)
SAFETY With the advancement in aviation activities in India, challenges to keep the skies safe need to be met appropriately. Safety is of paramount importance. The expansion of air transport in India is among the fastest in the world. This is being reflected in the double digit growth rates of passengers and aircraft orders placed by Indian carriers. To meet this growth there is an immediate need for improvement in existing infrastructure. As the number of operations increase, the congestion in the skies may also pose a threat of near-misses and collision warnings. The increase in number of movements affects runway safety, ramp safety, incursions and excursions, ramp congestion, precautionary landings, aborted take offs, and other serious situations affecting safety. Proactive measures are needed to avoid hazardous situations by having institutionalised mechanisms in place to ensure a high degree of safety. The implementation of safety programme by DGCA and safety management systems by all stakeholders needs to be ensured. DGCA’s infrastructure will need to be upgraded and the organisation modernised to meet the challenges of growth. The infrastructure development includes proper working environment, comprehensive computerisation plan including computerisation of the examination process by introducing on-line and ondemand examination system. Immediate need is to have an independent safety regulator without any further delay and the capacity building of DGCA in terms of
MORE FOR FLYERS: Passengers busy in a lounge area of one of the airports entertaining themselves. 26 I CRUISING HEIGHTS I MARCH 2012
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READY FOR THE GROWTH: Planes of Air India, Jet Airways and Spicejet lined up at apron. recruitment and training of all safety related technical personnel. DGCA needs to be restructured and strengthened with modernised processes and skills before it is subsumed into the Civil Aviation Authority that is on the anvil. Airports Authority of India (AAI) is the Air Navigation Service Provider (ANSP) at all airports in India including six joint venture airports. Global best practices, suggest that the benefits of corporatisation of ANSP are many and these include: that it would enable the entity to operate independently and carry out its own strategic operation and financial decisions and adhere to a business approach; enhances its ability to generate and manage its own revenue to cover costs; bring in cost oriented charges for the users through modernization and constant enhancement of efficiency of operations besides retaining safety as a primary goal. This process needs to be given priority.
SKILL DEFICIT The impressive growth in Indian aviation has resulted in a similar growth in employment opportunities in the sector. However, the supply of available skilled manpower has not been able to match the requirement. With passengers and aircraft fleet likely to triple by 2025, the need to augment the skilled manpower supply is immediate. Total manpower requirement of airlines in India is estimated to rise from 62,000 in FY-2011 to 117,000 by FY2017. This includes the number of pilots, cabin crew, aircraft engineers and technicians (MRO), ground handling staff, cargo handling staff, administrative and sales staff. Based on the projected passenger traffic and assuming the employee per million passenger ratio to become leaner for smaller airports as modernisation and other efficiency improvement initiatives are undertaken, the manpower requirement (including ANS) for the airports is estimated to increase from current 20,000 to
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The impressive growth in Indian aviation has resulted in a similar growth in employment opportunities in the sector
26,000-30,000 by FY 2017. Despite the existence of large number of private institutions in India that provide aviation education and training, there is consensus that the number of programmes offered, the depth of course contained and the infrastructure facilities available with them are not sufficient to meet the needs of the industry. Also, the quality of a substantial number of them is not up to the standard that is expected of them. There is no flying training institute for training civil helicopter pilots in the country. The focus of the institutes so far has been in conducting the programmes to meet the immediate needs of the industry. There is also a near total absence of credible institutions undertaking serious research or providing research facilities in the field of civil aviation. Therefore, higher education and extensive research in frontiers of technology, and science that is fundamental to long term interest of the sector is of vital importance. It is found that there is a near absence of qualitative and duly recognised formal educational programmes leading to award of diploma/degree/post-graduate degree in the field of civil Aviation in the country. As a result of this, all major as well as minor agencies/organisations in the sector have to mostly recruit generalists and invest considerable resources in post recruitment training. The opportunity cost of not investing in human capital required for civil aviation sector at this juncture would result in, reduced growth, increased cost of operations, compromise on safety and missed opportunities. It is, therefore, necessary to establish a National Aviation University to cater to the growing educational and training requirements of the civil aviation sector which will also infuse the best practices in the world to streamline and modernise the safety regulatory framework governing aviation education and training in the country. Â&#x2C6;
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TONY TYLER
will be in the driver’s seat “ofAsia-Pacific global growth…the potential is huge” LOOKING AT THE FUTURE, IATA CHIEF TONY TYLER EXPECTS MORE THAN 3.55 BILLION PEOPLE TO FLY IN 2015 WITH 212 MILLION FROM CHINA ALONE AND INDIA WILL NOT BE FAR BEHIND. AVIATION’S SUCCESS WILL DEPEND ON THE ABILITY OF INDUSTRY LEADERS TO COOPERATE ACROSS BUSINESS INTERESTS AND POLITICAL BORDERS.
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his Singapore Airshow Aviation Leadership Summit has evolved over what has been the most difficult decade in the history of aviation. Our central scenario for 2012 sees an industry profit of $3.5 billion. That may sound impressive, but for an industry with anticipated revenues of more than $600 billion, that amounts to a meagre 0.6 per cent margin. And if we are right about that forecast, then in the years since 2001 airlines will have lost $26 billion on revenues of $5.5 trillion. You cannot sustain a business or an industry that is all turnover with no leftover. There are lots of reasons for this poor performance, not least of which is the parade of successive shocks that the industry faced — terrorism, war, SARS, new strains of influenza, soaring oil prices, political unrest and a global credit crises — to name just the most memorable! Fortunately, aviation is resilient. An amazing team effort of value chain partners — in both the public and private sectors — makes aviation an efficient and environmentally responsible industry that connects markets and business across the world. Working together, aviation safely carried 2.8 billion people and 46 million tonnes of cargo in 2011. That's an incredible achievement by any measure. And, contrary to some opinions, our member airlines are providing this incredible mobility with even greater value to consumers. My chief economist tells me that over the last decade the real cost of travel has fall-
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Safety is our greatest example of partnership delivering success. We have global standards that guide governments and industry
en by about a third. I put the theory to the test with some online research on flights from Singapore to New York. The distance is about 15,000 km. And without much effort I found fares as low as $1,500. For 10 cents a kilometre, airlines will transport you with amazingly reliable technology to the other side of world in just over 24 hours. Along the journey, they will provide several meals and even show you a movie or two! No matter how you look at it…that's value. And if the price of oil was a bit cheaper, we could probably do even more! This unique meeting of government and industry leaders is about partnerships. Sometimes our agenda seems driven by issues that keep us apart-areas where we disagree. One of the things that I would like to do while I am at IATA is to focus on using a partnership approach to make the most of the areas where we can find some common ground. We won't agree on everything. And there is a need for a robust exchange of ideas on many issues to find solutions.
THE POWER OF PARTNERSHIPS Safety is our greatest example of partnership delivering success. We have global standards that guide governments and industry. There is a process for constant review and progress. And the results can be seen in the better than 40 per cent improvement in the hull loss rate for Western-built jets over the last decade. We can be proud that together we have made flying not only the safest mode of transport, but also one of the safest things that a person can do.
FOCUS The cooperation on safety among all stakeholders in the aviation value chain represents the best kind of partnership. We truly are united around common goals and shared interests. But sometimes partnerships need re-balancing. I think that it is a fair statement that airlines have emerged from the last decade with more bruises than most of their partners in the value chain. Every business activity comes with risks. Aviation is no different. But the balance between risk and reward is skewed in our industry. And I hope that in our discussions we will take a candid look at ways to build a financially sustainable future, shared equitably among all participants in the value chain. There is also a need to review the industry's relationship with governments. When it works, the results are brilliant. Look at our Singapore hosts. We have a world-class airline and a world class airport. The industry supports 119,000 quality jobs and contributes 5.4 per cent to GDP. The connectivity that aviation provides to Singapore has enabled it to develop as a successful regional hub for sectors as widely different as finance, healthcare, culture and education. But Singapore's progressive approach is by no means universal. Look at India. It is a market with enormous potential. But aviation's development is being held back by government policies. High taxes mean that fuel accounts for an average of 45 per cent of an Indian airline's operating costs-against an industry average of 32 per cent. A lack of capacity in the country's economic heartMumbai-restricts connectivity, while development of the new Navi Mumbai airport seems
India is not the only place that could do better. Europe is going through a difficult time. Governments need to restart economies that have been crippled by the sovereign debt crisis
SUSTAINABLE FUEL: Sir Richard Branson. President, Virgin Atlantic ( in the middle) during the unveiling of world-first low carbon aviation bio-fuel.
to incur a fresh roadblock at every stage of its development. And where world-class infrastructure has been built-as in Delhi-costs are an issue. Proposals to boost charges by 340 per cent may earn it distinction as one of the world's most expensive airports, but it will destroy Delhi's competitiveness as a hub. The stunted growth of Indian aviation comes with an economic cost. India's population is about 240 times the size of Singapore's. But the number of aviation jobs is just about 14 times larger at 1.7 million. And the economic contribution of aviation is still only 0.5 per cent to the Indian economy. It is an important 0.5 per cent. But even considering the differential in GDP per capita between Singapore and India, these numbers tell us that there is unused potential in India. There is a need to reassess policies in order for aviation to reach its potential as a primary contributor to India's economic growth. India is not the only place that could do betterâ&#x20AC;Ś Europe is going through a difficult time. Governments need to restart economies that have been crippled by the sovereign debt crisis. Economic growth is the only way forward and aviation can help. But it can only make a contribution if it is not hamstrung by policies focused on restricting its growth and taxing its every move. I urged Europe to use aviation more strategically through policies that support growth, efficiency and competitiveness.
GROWTH Aviation is a growing industry. Even in the face of enormous economic uncertainty in 2011, the number of passengers grew by near-
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try and among governments. And it is happening with support from major players such as the European Commission, the Chinese Government, the US Department of Homeland Security and Interpol.
ly 6 per cent. The connectivity that aviation provides is essential for economic development, modern globalised businesses and human interaction…and demand for it is increasing. And the pattern of that growth is shifting the industry's centre of gravity eastward. Having just moved from Hong Kong to Geneva, I am an exception. Let's look at some market share numbers. Admittedly, there is some overlap as a result of travel between regions, but if we set this aside, we can see that in 2010 about a third of all passengers traveled on routes to, from or within Asia-Pacific. For North America and Europe, the equivalent number was 31 per cent. But if we look ahead to 2015, we anticipate that Asia-Pacific will represent 37 per cent, while traffic associated with Europe and North America will fall to 29 per cent.
CLIMATE CHANGE Alongside safety and security, environmental responsibility is a core promise and top priority of the aviation industry. That is why airlines, airports, air navigation service providers and manufacturers have joined together in a global commitment to reduce aviation's carbon footprint by: Improving fuel efficiency by an average of 1.5 per cent annually to 2020, Capping net emissions from 2020 with carbon-neutral growth, and Cutting our carbon footprint in half by 2050 compared to that of 2005 levels. We also achieved consensus on a strategy to attain these targets with improved technology, more efficient operations and infrastructure, and positive economic measures.
SECURITY The challenge of security changed dramatically on September 11, 2001. In the decade that followed, we have seen the security of the industry improve dramatically. But improvement came with a steep price: costs to airlines and passengers grew to at least $7.4 billion annually. And the throughput of the system slowed dramatically. Prior to 9/11 we estimate that the average throughput of an airport checkpoint was 335 passengers per hour. Today that average has slowed to 149. Security is a top priority. And it must not be compromised. But I am sure that every traveller hopes for an early evolution from an airport checkpoint experience defined by queuing, unpacking, removing clothing, separating certain items and possibly invasive searches. The system works, but it is struggling to cope with the volumes of today. And when we add another 877 million passengers to the queues in a few years, the experience is bound to deteriorate even further. That is why one of my priorities is to build global consensus that will see the Checkpoint of the Future succeed. The concept has two main elements. First, we want to differentiate screening using passenger information already collected for immigration purposes. Every passenger will be screened to a baseline. Those that we know little about or who appear on a government watch-list would receive enhanced screening. And those who have volunteered for background checks would normally have access to expedited screening. The concept is being proven by a known traveller programme that is being successfully trialed by the US Transportation Security Administration. And we are working with Interpol and the International Civil Aviation Organisation (ICAO) on global standards. The key to delivering the Checkpoint of the Future is global coordination with indus-
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SUSTAINABLE BIOFUELS These commitments offer great opportunities to governments everywhere. Sustainable biofuels are a good example. Over their lifecycle, biofuels have the potential to reduce emissions by up to 80 per cent. And developing a sustainable biofuels industry will create jobs and reduce dependence on oil supplies while shrinking aviation's carbon footprint. For Asia-Pacific, the possibilities are particularly attractive. A sustainable biofuels industry could lift millions from poverty. And the many options for biomass-from urban waste to algae, jatropha or camelina-mean that production can concentrate on the source crop or material most suited to local conditions.
OPERATIONAL MEASURES
The challenge of security changed dramatically on September 11, 2001. In the decade that followed, we have seen the security of the industry improve dramatically
The excitement over sustainable biofuels should not cause us to overlook the tremendous potential offered by operational measures. I was urging Europe to move forward on the Single European Sky which has the potential to save 16 million tonnes of carbon emissions annually. We recently had the good news of the US Federal Aviation Administration re-authorisation, which I hope will pave the way for swift progress on NextGen for the country's air traffic management system. And I am pleased that the discussion of a Seamless Asian Sky is gaining momentum. These are all win-win solutions. The environment benefits from fewer carbon emissions. Airlines operate more economically. Travelers get to their destinations faster and with fewer delays. And national economies benefit from more efficient connectivity.
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EUROPEAN UNION EMISSIONS TRADING SCHEME (EU ETS)
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STRICT VIGIL: A flyer being screened through a scanner We recognise, however, that it will take at one of the airports. time for these technical, infrastructure and operational improvements to allow us to meet our targets. Positive economic measures such as emissions trading are a necessary, if temporary, bridge to reach aviation's climate change targets. But as with our other top priorities of safety and security, these measures must be globally coordinated to be effective. Europe deserves much credit for pushing this issue up the international agenda. So it is no surprise that Europe is on the forefront on emissions trading, but its unilateral approach is problematic. Departure taxes in the UK, Germany and Austria-introduced as environmental measures-amount to well over €4 billion. At current market prices for UN issued Certified Emissions Reductions, that would offset all the world's aviation CO2 emissions about oneand-a-half times. And ETS is being added on Aviation is a top of all that! great industry. It Non-European governments see this extrais a force territorial tax collection as an attack on their sovereignty. And they are taking action. for good in the The ICAO Council has adopted a resoluworld that tion urging Europe to change course. generates China declared that its carriers could not participate. wealth — both The US is processing similar legislation for material its carriers. and of And in fact at least 43 states are publicly opposed. They will shortly meet in Moscow to the plan next steps. Some are threatening retaliahuman spirit tory measures against European carriers or 34 I CRUISING HEIGHTS I MARCH 2012
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other European business sectors. Aviation can ill afford to be caught in an escalating political or trade conflict over the EU ETS. There is a way forward-ICAO. About a decade ago, ICAO achieved a globally-accepted balanced approach to noise that averted a conflict over Europe's unilateral plans. ICAO can do the same for climate change. The 2010 Assembly agreed to 15 principles for economic measures and committed to develop a framework for a global trading or compensation scheme by the next Assembly in the third quarter of 2013. In Brussels, I sensed a growing recognition that a global scheme, developed and implemented through ICAO, would provide a superior solution to the problem of airline emissions.
CONCLUSION Aviation is a great industry. It is a force for good in the world that generates wealth - both material and of the human spirit. It has enormous potential - particularly in this region. And aviation's success depends on our ability as industry leaders to cooperate as we have done throughout our history-across business interests and political borders. Our goal is to drive change and overcome challenges together-the theme of this conference. That will enable us to build our future by continually improving the safety, security, efficiency and sustainability of our industry. (Excerpts from the speech delivered by IATA's Director General and CEO at the Singapore Airshow Aviation Leadership Summit.)
INTERVIEW
“AAI’S LEADERSHIP PRINCIPLES
ARE THE BASIS OF OUR BUSINESS RELATIONSHIPS” AIRPORTS AUTHORITY OF INDIA CHAIRMAN V P AGRAWAL POINTS OUT THE NEED TO HAVE A HIGHLY MOTIVATED, TALENTED AND PROFESSIONAL WORKFORCE IN THIS INTERVIEW. EXCERPTS. Ò AAI has got several training facilities spread all over India. Please give us a brief overview of these training facilities and what have they achieved? We have four training institutes: CATC, IAA, FSTC and FTC at Allahabad, New Delhi, Kolkata and New Delhi, respectively, of which three can be categorised as cadre specific and specialised training institutes and one is General Cadre for overall developments.
INDIAN AVIATION ACADEMY (IAA) IAA has been formed under the aegis of NIAMAR society. The society was registered on July 22, 2010 as an autonomous body to provide education, training, research and consultancy in the fields of aviation. Various training programmes on safety and regulation, aviation security and airport management are conducted at the academy for capacity building in civil aviation to meet the challenges of rapid growth of civil aviation in India. It is a joint training academy of Director General of Civil Aviation, Bureau of Civil Aviation Security and Airports Authority of India, the main stakeholders of civil aviation in India. Within a year of its registration, IAA has been approved as the Aviation Security Training Centre by ICAO and as an Authorised Training Centre of IATA.
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CIVIL AVIATION TRAINING COLLEGE (CATC) CATC, Allahabad was established by DGCA in 1948 which now is part of AAI. In fact, it is the pioneer institute in the country which has been imparting training in various aviation fields, forte being CNS technology and air traffic management. It is the main feeder of producing technical personnel in the CNSATM fields. CATC has been rendering yeoman’s service to the aviation fraternity by churning out raw graduates into highly qualified personal manning the ground based aviation activities. It is a member of ICAOTRAINAIR programme.
FIRE SERVICES TRAINING INSTITUTES (FSTC, KOLKATA & FTC, NEW DELHI)
Both these institutions were formed in 1958 and 1976, respectively to meet the requirements of training fire safety personnel for the purposes of airfield fire and rescue services. Training imparted is in consonance with the ICAO guidelines.
COORDINATION: AAI Chairman V P Agrawal discusses with officers during a visit to the Fire Training Institute at Delhi.
Ò What are the critical areas where training is required for people interested in working in the airport business? As civil aviation in India is increasing at a rapid pace — almost 15 per cent per annum — there is need to train and develop the needed manpower for various functions of aviation management. The critical areas where the training is needed for people interested in taking airport business as a career are the terminal and airside operations management, facility management, civil, electrical and electronics installations, at airports, Airport Planning, Airport Commercial Functions, Airport Cargo Management etc.
Ò The IAA is likely to be converted into a world class aviation university that will train youngsters not just from India but from all over the region for aviation-related activities. What would be the role and scope of IAA? In the short-term, IAA plans to deliver certificate courses in various aviation fields such as aviation safety, aviation security and airport management. In the long-term, the academy plans to turn itself into an university of repute which will conduct long-term courses including diploma/degree programmes in aviation management. Ò How good is the Institute at Allahabad in terms of keeping pace with the modernisation of airspace and what are your short-term and long-term plans at Allahabad? In CNS discipline, training facilities have kept pace with the change and advancement in technology. In ATM, the training courses are regularly updated and revised as per training requirement of stakeholders. In ever-changing scenario of technology advancement, the Air Traffic Controllers are now exposed to updated curriculum in areas of performance based navigation procedure design, ADS-B based traffic surveillance and control and modern SAMSAR-based search and rescue procedures. A course to test Proficiency of English Language (PELA) for Air traffic Controllers have also been introduced recently for all Induction-level Trainees. The manual simulation-based procedural training has been replaced by state-of-art system based simulator by Adacel, Canada. Refresher courses for on the job instructors (OJT Instructor), Safety Management System (SMS), a computer based course on obstacle
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limitation and instrument procedure design are also likely to be introduced in near future. Upgradation of existing RADAR and Audio Visual Aerodrome Control Simulator is also being undertaken to meet the enhanced training requirement.
AAI, being a multi-faceted organisation, offers a unique opportunity for professional growth in management of airports which entails command and control of operations, finance, technical, etc
Ò Conserving the amount of personnel required to keep pace with the growth in Indian aviation what sort of personnel would be needed over the next 20 years? It is a well-accepted and established fact that airports play a pivotal role in the country’s economic and industrial growth. However, here is what it takes to attract, select, develop and retain a highly motivated professional workforce for an organisation such as AAI which is not only technically-oriented but also has to ensure highest standards of safety as there is no scope for margins of error. AAI can ill-afford to lower its guard as ramifications of the minutest accident have widespread/internal implications. AAI, being a multi-disciplinary/faceted organisation, offers a unique opportunity for professional growth in areas like management of airports and regions (consisting of multiple airports), which entails command and control of operations (inclusive of airspace management), finance, technical (inclusive of engineering i.e. electronics/communications, civil, electrical and
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for a congenial working environment that protects health of the employees according to high standards of safety and security.
mechanical) and HR. More importantly, with service in AAI having an all-India posting liability, one gets an exposure to the diverse Indian culture and heritage, which undoubtedly contributes to experience and personality growth of individuals. AAI lays great emphasis on evolving the values, ethics, work ethos and HR policies that are required to not only attract but also to ensure that they go a long way in retaining talented professionals within the fold of AAI. We have to take into consideration the core business of AAI, i.e. managing airports/airspace which demands 100 per cent safety and thus, the need to have a highly motivated, talented and professional workforce. It is a well-established fact that it is the knowledge, skills and competence of AAI’s employees which decide on its success in the marketplace. Therefore, what is important is how the professionals are treated from who flow out values and objectives.
People Development Our success essentially depends on the quality of our people. We, therefore, seek to attract, retain and develop the right mix of people, who display, in addition to their professional skills, the following competencies: Customer orientation People orientation Achievement orientation Leadership Impact Self-confidence Other than the relevant skills, experience and above-mentioned competencies, we give no consideration to employees’ origin, race, religion or gender. Ò Have you received any requests for training of personnel of other countries on a regular basis? IAA: There have been requests for training of personnel from countries such as Islamic Republic of Afghanistan, African Union etc. Recently, we have trained a group of 20 aviation personnel from Islamic Republic of Afghanistan in orientation programme for aviation management. We have also received requests from Bhutan, Nepal and Bangladesh. CATC: There are regular requests from foreign countries. However, CATC accommodates all the customers under bilateral agreements by Government of India. FSTC: Our international customers are Ethiopia, Surinam, Mauritius, Afghanistan, Yemen, Sri Lanka, Nepal and Bhutan.
Ò How do you upgrade the skills of AAI employees? Our values and leadership principles describe how our employees behave, as they are the basis of our business relationships. Therefore, special attention is paid to the AAI’s values and the company culture which aim at: Value for the customer Integrity Visible leadership Commitment to people development Continuous improvement of products and services Safety of employees and passengers Superior business organisation Truthful, timely and continuous information Our senior management is not only committed to these values and work ethos but practice them also to demonstrate the path to others. AAI Human Resource Policy Employment and employee motivation AAI, being a Schedule ‘A’ organisation, wherein its core business is to work alongside/in association with many an international organisations, offers a variety of attractive positions. The majority of them are tightly linked to customers and to our business of managing airports and airspace. They require high levels of competence, skills and knowledge. AAI believes that only highly motivated employees are the key to customer satisfaction leading to business success. Therefore, we lay emphasis on employee motivation and create action plans accordingly in order to constantly improve the motivation level so as to sustain it to desired degree. The aim is to establish a long-term work relationship in exchange for the commitment of the employees to adapt to constantly changing technology requirements through professional reorientation, continuous learning and mobility. We also strive
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AAI lays great emphasis on evolving the values, ethics, work ethos and HR policies that are required to not only attract but also to ensure that they go a long way in retaining talented professionals
Ò Are there any certifications that you provide to trained personnel and are these valid across the globe? IAA: Being a registered body and sponsored organisation of AAI, DGCA and BCAS, the certificates are issued by the IAA for all courses conducted. However, upon becoming an university in due course of time, the certificates, diplomas and degrees will be valid across the globe. CATC: All trainees are issued certificates. Since all our courses are designed and conducted as per TRAINAIR/ICAO guidelines, international participants receive the certificates and these certificates are accepted by respective civil aviation authorities of their countries under bilateral agreements. FSTC: Certificates are issued to candidates on successful completion of training. However, both training centres are listed in the training director of ICAO and the advisory circular of Federal Aviation Administration (FAA).
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NO FULLSTOPS FOR AAI ENHANCING AVIATION INFRASTRUCTURE ACROSS INDIA
THE AIRPORTS AUTHORITY OF INDIA MANAGES A MIND-BOGGLING NUMBER OF 125 AIRPORTS THAT INCLUDE 11 INTERNATIONAL AIRPORTS, 8 CUSTOMS AIRPORTS, 81 DOMESTIC AIRPORTS AND 25 CIVIL ENCLAVES AT DEFENCE AIRFIELDS — INDEED, A GIGANTIC TASK THAT AAI PERFORMS WITH FINESSE. IN ADDITION, AAI HAS UNDERTAKEN A MASSIVE MODERNISATION PROJECT TO UPGRADE A NUMBER OF AIRPORTS THAT WILL PROVIDE WORLD-CLASS SERVICES TO FLYERS. A LOOK AT WHAT AAI IS DOING IN THE FOUR CORNERS OF THE COUNTRY.
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he Airports Authority of India (AAI) is the largest airport operator and manages a total of 125 airports, which include 11 international airports, eight Customs airports, 81 domestic airports and 25 civil enclaves at defence airfields. AAI also provides Air Traffic Management Services (ATMS) over the entire Indian airspace and adjoining oceanic areas with ground installations at all airports and 25 other locations to ensure safety of aircraft operations. As part of the modernisation programme and to provide world-class standards to travellers, AAI has entered into a collaboration with all major metro airports in the country, including those in the PPP mode to upgrade the CNS ATM services at these airports to provide them better connectivity and a smoother flow of air traffic 24 x 7. It is in keeping with AAI’s commitment to provide cutting- edge CNS ATM services to cope with the increase traffic loads at these airports. All the major airroutes over Indian landmass are radar covered with distance measuring equipment. Most of the airports are also provided with night-landing facilities. Besides, 52 runways are provided with ILS installations. With AAI’s successful implementation of Automatic Dependence Surveillance System (ADSS), using indigenous technology at Kolkata and Chennai Air Traffic Control Centres, India gets the distinction of being the first country to use this advanced technology in the South-East Asian region thus enabling effective Air Traffic Control over oceanic areas using satellite mode of communication. Performance-Based Navigation (PBN) procedures have already been implemented at major airports and are likely to be implemented at other airports in a phased manner. AAI has also undertaken GAGAN project in technological collaboration with the Indian Space and Research Organisation (ISRO), where the satellite-based system will be used for navigation.
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AAI has also planned to provide GroundBased Augmentation System (GBAS) at Delhi and Mumbai airports. This GBAS equipment will be capable of providing Category-II (curved approach) landing signals to aircraft, thus replacing the existing instrument landing system in the long run, which is required at each end of the runway.
WESTERN REGION Ahmedabad * Akola Aurangabad Bhavnagar Bhopal Bhuj (CE) Diu Goa (CE) Gondia
Indore Jabalpur Jamnagar (CE) Kandla Keshod/Junagarh Kolhapur Latur Mumbai* (Santacruz)
Mumbai (Juhu) Nagpur* /Sonegaon Nanded Porbandar Pune (CE)/Lohegaon Rajkot Sholapur Surat/Dumas Vadodara/Baroda
SOUTHERN REGION Agatti Airport Bengaluru Int’l Airport (BIAL)* Bengaluru (CE) Calicut/Kozhikode* Chennai Int’l Airport Cochin Int’l Airport* Coimbatore Airport** Hubli Airport Hyderabad (Begumpet) Airport Hyderabad / Shamshabad Int’l Airport* Madurai Airport
Mangalore Customs Airport** Pondicherry / Puducherry Airport* Rajahmundry Airport Salem Airport Trivandrum Int’l Airport* Thiruchirapalli Customs Airport** Tirupati Airport Tuticorin Airport Vijayawada Airport Vishakapatnam Airport (CE)
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NORTHERN REGION
z
Agra (CE) Allahabad (CE) Amritsar (International) Chandigarh (CE) Dehradun Delhi-IGI (CNS/ATM BY AAI) Delhi (Safdarjung) Gorakhpur (CE) Gwalior (CE) Jaipur (International) Jaisalmer (CE) Jammu (CE) Jodhpur (CE)
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Srinagar (International-C.E)
Leh (C.E)
z
Jammu (C.E) Pathankot (C.E) z
z Kullu (Bhuntar) z
z z
Amritsar*
Ludhiana
Shimla
z Chandigarh (C.E)
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Dehradun
z Pantnagar
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Delhi-IGI* (CNS/ATM BY AAI) Delhi (Safdarjung)
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z
z
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Jaipur*
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Gwalior (C.E)
Jodhpur (C.E)
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z
z
z
Gorakhpur (C E)
Kanpur (Chakeri-C.E)
z
Allahabad (C.E)
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Varanasi**
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Udaipur
Khajuraho
z
z
Bhuj (CE) Kandla z Jamnagar (CE) z
z z
z
z
z
Gondia z Nagpur*/Sonegaon
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z
Shillong
(Barapani/z Umaroi) z Agartala
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Raipur
z
z
NORTH-EASTERN REGION
z
z
Sholapur
z
z
Goa (C.E)
Vishakapatnam (CE)
z Hyderabad (Begumpet) Airport z Shamshabad Int’l Airport* z Rajahmundry z Vijayawada
Hubli
zTirupati CE z Bangalore Bangalore Int’l Airport * Mangalore ** z Salem z Pondicherry / Puducherry Airport* z z Coimbatore** Calicut/Kozhikode* z Thiruchirapalli** z z Madurai z
z
Agatti Airport
Cochin*
Trivandrum*z
z
z
Bhubaneswar
Nanded
Latur Pune (CE)/Lohegaon
Kolhapur z
z
Kolkata Int’l Airport*
Surat/Dumas Mumbai Int’l Airport*Santacruz Mumbai (Juhu)z
z
Silchar Imphal (Tulihal) (Kumbhigram), (CE)
Aizawl (Lengpui)
z
Aurangabad
z
z
z
z
Bagdogra, (CE) **
z
Dibrugarh (Mohanbari)
Jorhat, (CE) z Dimapur/ (Manipur RD) z Guwahati (Borjhar)*
Tezpur, (CE)
Patna**
Ranchi
Indore
Bhavnagar
Diu
Cooch Behar z
z
Jabalpur
z
z
Vadodara/Baroda
z
z
Gaya**
z
Bhopal
Porbandar z Rajkot Keshod/ Junagarh
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Ahmedabad *
z
North Lakhimpur (Lilabari)
Agra (C.E) Kanpur (Civil) z Lucknow**
Jaisalmer (CE)
Kanpur (Civil) Kanpur (Chakeri-CE) Khajuraho Kullu (Bhuntar) Leh (CE) Lucknow (Customs) Ludhiana Pantnagar Pathankot (CE) Shimla Srinagar (International-CE) Udaipur Varanasi (Customs)
EASTERN REGION Bhubaneswar Cooch Behar Gaya** Kolkata* Patna** Port Blair (CE)* Raipur Ranchi
Agartala Aizawl (Lengpui) Bagdogra, (CE) ** Dibrugarh (Mohanbari) Dimapur/ (Manipur RD) Guwahati (Borjhar)* Imphal (Tulihal) Jorhat, (CE) North Lakhimpur (Lilabari) Shillong Silchar (Kumbhigram), (CE) Barapani/ Umaroi Tezpur, (CE)
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Port Blair (CE)*
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Tuticorin
Map not to scale
* International Airport ** Customs airports are airports with international flights usually operated by the country’s national carrier. MARCH 2012 I CRUISING HEIGHTS I 41
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STEPS TO THE FUTURE : An artist’s impression of Chennai airport.
CHENNAI READIES
FOR A DATE IN 2012 AAI’S SHOWPIECE AIRPORT IN THE SOUTH IS NEARING COMPLETION AND ONCE READY WILL BE ABLE TO HANDLE AROUND 30 MILLION PASSENGERS.
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he revamped, modernised and expanded Chennai airport will throw open its doors for commercial traffic sometime in the first quarter of 2012. Till then, the existing facilities both in terms of airside and non-aeronautical side including the existing terminals — domestic and international — will continue to operate. As per the status of Chennai airport on date, it has a total land area of 1298.01 acres with length of perimeter wall running 15 kilometers and the perimeter road meandering 14 kilometres. Its main runway 07/25 is 3658 metres long or over 12000 feet which is enough for a Jumbo to operate. The secondary
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Chennai airport has 17 taxiways and 81 parking stands. It has five aerobridges
runway 12/30 which was 2085 metres or 6765 feet has been extended by way of a stilted bridge on the Adayar river by another 1032 metres or nearly 3400 feet to take the total length to just about 10,000 feet. The length and width of the RCC/pre-stressed concrete bridge is 200 metres by 447.50 metres to accommodate secondary runway and parallel taxi track. The bridge will be able to take an A 380 superjumbo landing. Chennai airport has 17 taxiways and 81 parking stands. It has five aerobridges to cater to international passengers and three for domestic. Chennai airport falling under the 4E category is undergoing a massive renovation
AAI SPECIAL that will see a completely brand new all steel and glass front when the passengers and airlines get to use it in early 2012. The domestic terminal which was commissioned in April 1985 went through periodic upgrades and today is spread over 19,250 square metres. Against an annual passenger handling capacity of six millon, in fiscal 2010-11, the airport handled 7.80 million domestic passengers. The peak-hour handling capacity in the departure hall is 800 while in the arrival hall it is 1200. There are only four baggage conveyor belts in the domestic arrival hall. The domestic terminal has 48 check-in counters. The international terminal, which was twice commissioned â&#x20AC;&#x201D; once in April 1989 and later upgraded in May 2003 â&#x20AC;&#x201D; 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 2010-11. 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 proposed domestic integrated terminal building with its three-level structure under construction will have an area of 72,614 square metres. It has a provision for seven gates and two hardstand hold rooms and 52 check-in counters excluding eight e-ticketing counters. The international terminal building
In the revamped Chennai airport, the new international and domestic terminals will be connected with an elevated road (flyover) of a kilometre.
BUSY AREA: Passengers wait for baggage in the airport.
with also a three-level structure under construction shall be of 60,528 square metres and have a provision for two gates with multiple hardstand hold rooms, 52 check-in counters excluding eight counters for e-ticketing. Besides, the international terminal will have 18 immigration and four Customs counters for departure passengers. While the capacity of the new domestic terminal building will be for 10 million passengers per annum, the new international terminal building will cater to four million passengers per annum. After completion of the two new terminal buildings, the capacity of Chennai airport will be 23 million passengers per annum against the 2010-11 handled 12.05 million (the designated capacity of both the terminals is nine million only). In that sense, once the expanded and upgraded Chennai airport formally opens all its wings, Chennai would be able to handle nearly 30 million passengers though the actual handling capacity will be 16 million in domestic and seven million in the international terminal with peakhour passenger-handling capacity of 3300 for domestic and 2300 for the international terminal. In the revamped Chennai airport, the new international and domestic terminals will be connected with an elevated road (flyover) of a kilometre. With construction on in full swing, the massive steel and glass structure will be defined by dramatic, twin wing-like hovering roofs providing a 300 metre-long column-free space. The straightforward planning and super-efficient organisation of the
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programme, security and circulation, as per an AAI official at the site, formed the basis of an innovative design that incorporates vibrant sustainable gardens. Unlike any other airport in the world, Chennai airport will have lush green gardens on view throughout the terminal creating a unique dialogue between engineering and nature. The building volume will be clearly divided into the landside and airside and the spaces connected with a central security checkpoint for departure as well as two glass bridges on either side for arriving passengers. The circulation will be so organised that departing and arriving passengers will never mingle at any point in the terminal. Special energy-efficient technologies have been incorporated in the design besides various water management techniques such as water-efficient landscaping, rain water harvesting, water-efficient fixtures, use of treated grey water for airconditioning cooling system and innovative effluent treatment plant. These will help in re-using waste water. Both the terminals will be equipped with a sophisticated in-line baggage handling system which will be capable of Level-4 security screening system. This system consists of five departure conveyors including rejected baggage conveyor. There will be four arrival carousels in domestic and three in the international terminal. The total length of the conveyor will be 3500 metres which can handle 1250
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FLYING HIGH: Construction work in progress at Chennai.
The cargo complex proposed in Chennai will be much bigger than what is available in Hyderabad or Bengaluru
pieces of baggage per hour. A glass tube connecting both international and domestic terminal at the mezzanine level for length of 600 metres has been proposed on the city side. This will facilitate the passengers to move from the domestic terminal to the international terminal and vice-versa. There will be two walkalators each of one meter width. It is also proposed to connect a metro station by a link tube to the main glass tube. In due course, the job for constructing the two multi-level car parking will also be undertaken. Work will be initiated on the proposed metro rail station inside the airport premises with total area of 20,000 square metres with fourlevel terminal having concourse, platform, twowheeler parking for metro users and car park for airport users. AAI will execute the work of the metro station within the airport premises. In terms of passenger traffic, Chennai airport is the third busiest in the country. The airport is also undertaking a major revamp of its cargo facilities at a cost of `145 crore which may be increased later. An automatic storage and retrieval system is also being planned to be installed at this cargo complex which will improve efficiency of cargo handling substantially. The cargo complex proposed in Chennai will be much bigger than what is available in Hyderabad or Bengaluru. Already 75 per cent of the construction is over and once complete, this will be the most modern airport cargo complex in India. Â&#x2C6;
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TOUCHING THE SKIES : An artistâ&#x20AC;&#x2122;s impression of Kolkata airportâ&#x20AC;&#x2122;s terminal after it is completed.
KOLKATA WILL BE GATEWAY TO APAC COME JUNE THIS YEAR, THE NETAJI SUBHASH CHANDRA BOSE INTERNATIONAL AIRPORT WILL BE READY WITH ITS SPANKING NEW TERMINAL. PART OF A TWO PHASE MASSIVE MODERNISATION-CUM-EXPANSION PROJECT BY THE AIRPORTS AUTHORITY OF INDIA, KOLKATA AIRPORT WILL BE AT PAR WITH THE BEST AROUND THE WORLD. R KRISHNAN RECENTLY WENT TO CHECK OUT THE PROGRESS OF WORK AND CAME BACK IMPRESSED.
K
olkata airport, widely known as Netaji Subhash Chandra Bose International Airport, is located in Dum Dum area, approximately five kilometres from the newly-developing IT hub and 17 kilometres from Kolkata city centre. The fifth-busiest airport after Mumbai, Delhi, Bengaluru and Chennai, Kolkata handles over nine million passengers yearly against its designed total capacity of five million split between the international and domestic terminals. Since the present terminal is more than saturated, the government decided in 2008 to undertake massive modernisation-cumexpansion of Kolkata airport. The job of executing the expansion projection was given to the state-owned Airports Authority of India (AAI) which is literally racing against time to complete it. Once the work is completed by June 2012, the brand-new steel and glass terminal will literally be the pride of East. It will be able to handle 20 million passengers per annum with a floor carpet area of more than 2,33,000 sq mt. The current expansion project is actually the Phase I of Kolkata airport modernisation and the second phase is slated to begin in 2015-16. Since the city is the gateway to East (India) as also to the rest of South-East Asia and Asia-Pacific, it is expected that Kolkata will become an ideal stopover for many flights originating from Europe or the US bound for the Far East. Not only will it become an important destination
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point but also a transit point. Keeping all this in mind the Airports Authority of India has already begun planning for the second phase that will see the construction of a brand new third runway. Phase-I envisages a project cost of `2350 crore of which the work cost of Italian-Thai company ITD has been estimated at `1602.60 crore. While 90 per cent of the project work has been completed, in financial terms nearly `1700 crore has already been spent. The six-level integrated passenger terminal building will be spread over 2,33,000 sq mt. It will have a two-level car parking to accommodate 1,250 cars. The service yard will have 24 transformers and 13 DG sets to beat any power shutoff. Besides the new airport terminal is designed to have six chillers and 12-set cooling tower with a capacity of 42,000 gallons per minute. For fliers, the new terminal will have 18 aerobridges, 60,000 sq mt of neatly laid landscape, more than half-akilometre long or to be precise 515 mt of a flyover and 2.7-km-long dedicated drainage system. 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 in 2019-20. But considering the present passenger traffic handled of nine million against the designed capacity of five 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 check-in-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 conveyor belts and six conveyor belts respectively 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, eight escalators and six travelators. On the domestic side there will be 14 elevators, eight escalators and seven travellators. The new terminal is a five-tier building with the bottom floor being the arrivals and upperarrival area and the top being a departure and upper departure areas with basement for MEP (mechanical, electrical and plumbing) services. The environmentally responsive canopy design consists of the setback of the double-wall system of the canopy which is an effective measurement for controlling the solar heat gained. The results of the thermal dynamics studies showing the combination of the natural buoyancy driven and mechanically driven ventilation cavities are an effective strategy for energy efficiency design. The north-facing roof lights and a central courtyard flood the interior with natural light. The passenger terminal will have an apron for parking aircraft on its northern and northeastern sides. Eighteen aircraft are proposed to be parked in in-contact configuration. These stands will supplement to other 53 aircraft parking bays. Passengers will be able to embark or disembark from any aircraft stand and be able to proceed to either domestic or international sides. Airport Director Dr B P Sharma pointed out that the Kolkata airport modernisation project and the associated runway extension was a prestigious job for the AAI. Speaking about the runways, Dr Sharma said that the international airport had two runways of which the main runway was 3627 metres long and the secondary runway had been extended by 440 metres to 3270 metres. The other three metro airports -Delhi, Mumbai and Chennai -have two runways each but they are not parallel as they almost converge or cross each other. Delhi has now got a third runway over 4,000-metre-long runway, which is parallel to the main runway. Kolkata is perhaps unique with two parallel runways from day one with one that has undergone modernisation while the secondary runway has been extended. The main runway is 45 metres wide with a shoulder width of 15 metres which is also a feature of the sec-
AAI
AAI SPECIAL
TOWARDS DEVELOPMENT: Work in progress at Kolkata airport; a view from the airside.
Airport Director Dr B P Sharma pointed out that the Kolkata airport modernisation project and the associated runway extension was a prestigious job for the AAI
ondary runway. The two runways can allow operation of Airbus A380 and Boeing 747. However, it must be stated that two runways are separated by 260 metres and hence can allow only simultaneous operation but not parallel operation. This means while one runway can be used for landing the other can be used for takeoff. However, there cannot be parallel landing and take-off on each runway. It is proposed to create three more taxiways. When the second phase of modernisation-cumexpansion is taken up, AAI will consider constructing another parallel taxiway. This will free up the runways and, therefore, allow greater aircraft movement. AAI has identified 1,200 acres of land near and adjacent to the present airport and would soon request the state government for this land. When the land is allotted, it will be possible to build a parallel runway which will truly allow simultaneous operation. Of the 1,200 acres, 500 acres belong to the Government of West Bengal and the balance land will have to be acquired. In any case, Kolkata airport will reach saturation by 2020. M L Lehkra, Regional Executive Director, Kolkata Airport, mentioned the expansion and modernisation of the Air Traffic Control (ATC) at the airport. There was a proposed that the ATC at Kolkata needed to be upgraded along with the airport modernisation project. But for various reasons it did not happen as the size and scale of the ATC modernisation entailed high investment. It was decided to postpone the plans. Now, an upgrade of a few crucial elements of ATC has been planned. The new automation of ATC at Kolkata will enable the airport to handle more than 40 aircraft movements an hour. The system once operational from August-September 2012 will be even newer than what is available in Delhi. There are nearly 700 aircraft overflying Kolkata and the airport handles 300 aircraft movements per day which besides scheduled carriers also include defence and general aviation. As per International Civil Aviation Organisation (ICAO), Kolkata, in terms of airspace management is among the first five busiest sectors globally. Â&#x2C6;
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Imphal Airport
NORTH-EAST AS PART OF ITS DEVELOPMENT PROGRAMME, AIRPORT'S AUTHORITY OF INDIA HAS FOCUSSED ON THE CONNECTIVITY IN THE NORTH-EAST. A BRIEF LOOK AT THE CURRENT STATUS OF THE AIRPORTS IN THE REGION.
Dibrugarh Airport
4 ASSAM The largest state in the North-Eastern region of the country, Assam has six airports operating at capital Guwahati, Dibrugarh, Jorhat, North Lakhimpur, Silchar and Tezpur. Guwahati: Guwahati international airport is the busiest and largest airport in this region. It is suitable for wide-bodied aircraft like A330 or B747. This is the only airport in this region which has permission to operate in the night. The apron is wide enough to accommodate five A320s at one time, and the terminal building is huge with a capacity to handle 790 passengers during peak hours. One international flight of Air India leaves for Bangkok every week from here. Dibrugarh: Aircraft up to A320s can be operated from Dibrugarh airport. Night operation is not allowed at this airport, and 28 weekly flights leave for Guwahati and Kolkata. Apron can handle five aircrafts at a time and terminal is capable of managing 600 passengers during peak hours. A new control tower cum technical block is being planned. Jorhat: Jorhat airport supports aircraft up to A320s. Eight weekly flights leave from here to Guwahati and Kolkata. The apron can accommodate two A320s at one time, and the terminal building has a capacity to handle 120 passengers during peak hours. North Lakhimpur (Lilabari): Only two weekly flights leave from here to Guwahati and Dibrugarh. Lilabari airport is suitable for operation of aircraft up to A320s but Alliance Air, the only operator at this airport, just operates ATR42 flights from here. Apron can park two aircraft at a time and terminal build-
EASTERN CONNECTION: Pakyong Airport in East Sikkim, that will be completed in June 2012, will be a marvel of engineering and one of the picturesque airports of the country. The airport has been designed in such a way that there is minimum damage to the environment. 48 I CRUISING HEIGHTS I MARCH 2012
ing can accommodate 300 passengers during peak hours. Silchar: This airport is also suitable for operation of A320s; however, only ATR72 aircraft are operated by different airlines at Silchar. 32 weekly flights leave from here for different destinations: Guwahati, Imphal, Agartala and Kolkata. Apron can park four aircraft and terminal building can accommodate 300 passengers during peak hours.
AAI SPECIAL Shillong Airport
Lengpui Airport
Lengpui airport is at a 40-km distance from the state capital, Aizwal. Again, this small state has only one airport and it can support operation of aircraft up to A320s.
city of the state: Imphal. A320s can be operated from this airport. Night landing facility is available, but operation in night is not permitted. Four aircraft can be accommodated in the apron at one time and terminal building is capable of handling 400 passengers during peak hours. Expansion of apron to park two more aircraft is under process.
4 MEGHALAYA Even in Meghalaya, there is only one operating airport in the state capital: Shillong. This airport is suitable for operation of ATR72, and the only operating airline, Alliance Air operates only two weekly flights for Kolkata. Apron has a parking capacity of two aircraft and terminal building has room for 200 passengers during peak hours. A new terminal building and space for car parking is almost complete but hasn't started operating so far. Construction of new control tower cum technical block is planned. Extension of runway to 2,286 metre in South-West direction is also in the pipeline.
4 MIZORAM Tezpur: This civil enclave airport can handle operation of aircraft up to A320 or B738. Alliance Air operates just three weekly aircrafts from here for the destinations: Kolkata and Silchar. Apron can accommodate three aircraft at one time, and terminal building can handle 315 passengers during peak hours.
4 MANIPUR Tulihal airport is the only airport in the capital
Lengpui airport is at a 40-km distance from the state capital, Aizwal. Again, this small state has only one airport and it can support operation of aircraft up to A320s. About 29 domestic weekly flights are operated by different airlines for Imphal, Guwahati and Kolkata. Apron has parking space for three aircraft, and terminal building is good enough to handle 140 passengers during peak time. Installation of a new ILS (instrument landing system) is already complete, but it has not started its operation yet. Construction of cargo complex and isolation bay is being planned.
4 NAGALAND Again a state with only one operating airport. Dimapur airport is situated at a distance of 70 km from the state capital: Kohima. Alliance Air and Indian Airlines operate 15 flights in a week for Imphal, Guwahati and Kolkata. Suitable for aircraft up to A320s, the airport has an apron with parking capacity of two aircraft. The terminal building has a capacity to accommodate 404 passengers during peak hours.
4 TRIPURA Agartala airport, in the capital of the state, is the second busiest airport in this region. The airport is suitable for operation of aircrafts up to A320s and has 12 daily flights on an average. The apron is suitable for parking seven flights at one time and the terminal building is big enough to handle 600 passengers during peak hours. The work under process are modification of fire station and construction of new control tower. Acquisition of land for widening and development of runway strip from present 75 metre to 150 metre is in the planning stage. Â&#x2C6;
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MOVE
NORTHWARD KEEPING THE SENSITIVE NATURE OF THE REGION IN MIND, SECURITY HAS BEEN OF PARAMOUNT IMPORTANCE IN JAMMU AND KASHMIR. IN THE OTHER STATES TOO, AAI HAS BEEN CONCENTRATING ON BOOSTING DEVELOPMENT. A BRIEF LOOK AT THE REGION. 4 JAMMU AND KASHMIR
including one with international operations. Amritsar: It is the second largest International airport in northern region and is apt for operation of wide-bodied aircraft such as A340s or B777s. It is equipped with large apron that can accommodate fourteen aircraft at one time. Ludhiana: Ludhiana airport can operate ATR42 aircraft. Apron can handle only one aircraft at one time and terminal is suitable for maximum 50 passengers during peak hours. Pathankot: B737 aircraft can land on and take off from this airport. Apron can handle three aircraft at one time and terminal is suitable for maximum 220 passengers during peak hours.
The valley has three airports functioning amidst misty winters: Srinagar, Leh and Jammu. Srinagar (CE): Srinagar International Airport is suitable for A320, B767 and B777 operations. The apron can accommodate four aircraft at a time while the terminal can handle up to 930 passengers during peak hours: 450 flights in international and 480 flights in domestic. Jammu (CE): Aircraft up to A320s can be landed and take off from Jammu Airport. The apron can accommodate four aircraft at one time. The terminal can handle up to 364 passengers during peak time. Leh (CE): This airport is suitable for operation of aircraft up to A320s. The terminal can handle up to 140 passengers during peak time. The apron can accommodate two aircraft at one time.
4 HIMACHAL PRADESH There are two airports operating in this beautiful state of India. Tourists who are fond of mountains and valleys frequently visit this state. Tibetan exiles, including Dalai Lama, have found there new home in Dharmashala district of Himachal Pradesh. Shimla: Operation of ATR42 aircraft is possible on this airport. Apron can handle only one aircraft at one time and terminal is suitable for maximum 72 passengers during peak hours. Kullu: This airport is suitable for operation of ATR42 aircraft. Apron can handle two aircraft at one time and terminal is suitable for maximum 167 passengers during peak hours. Kingfisher and Air India operate ten weekly flights to Delhi.
4 PUNJAB There are three active airports in the state
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Srinagar Airport
J&K has three airports functioning amidst misty winters: Srinagar, Leh and Jammu
Dehradun Airport
AAI SPECIAL Jodhpur: Operation of aircraft up to A320s can be handled by Jodhpur airport. The terminal can handle up to 215 passengers during peak time. Udaipur: Udaipur airport can handle operation of aircraft up to A321s. Terminal is suitable for maximum 676 passengers during peak hours.
4 UTTAR PRADESH
Chaudhary Charan Singh International Airport, Lucknow
4 RAJASTHAN There are four airports in the state of palaces and forts. Being a state that truly depicts the stories of Rajputs and gallant reigns, it has always made tourists inquisitive. Jaipur: Jaipur international airport can operate aircraft up to A310s. There are two terminals which can handle 1120 passengers during peak hours: 900 in international and 224 in domestic. Jaisalmer: Jaisalmer airport is suitable for operation of aircraft up to A320s. Apron can handle three aircraft at one time and terminal is suitable for 21 passengers during peak hours.
There are seven airports in the state of Uttar Pradesh. Agra: Agra airport is apt for operation of aircraft up to A320s. The terminal can handle up to 270 passengers during peak time. Allahabad: Operation of aircraft up to A320s can be performed at Allahabad. The terminal can handle up to 42 passengers during peak time. Gorakhpur: Gorakhpur airport is wide and strong enough to handle the operation of aircraft up to A320s. The terminal can handle up to 20 passengers during peak time. Kanpur (Civil): Kanpur civil airport can handle the operation of aircraft up to C 90s. The terminal can manage up to 26 passengers during peak time. The apron can accommodate only three aircraft at one time. Kanpur (Chakeri): Kanpur Chakeri airport can manage operation of aircraft up to A320s. The terminal can handle up to 33 passengers during peak time. Lucknow: Aircraft up to A310s can be handled by Lucknow airport. It is equipped with large apron that can accommodate 26 aircraft at one time; new terminal, which is not operational so far, has an apron of 13 aircraft parking capacity. Varanasi: Aircraft up to A321s can be managed by airport at this pilgrimage. Terminal is suitable for maximum 1100 passengers during peak hours, after recent expansion.
4 UTTARAKHAND
Amritsar Airport
Udaipur Airport
Agra airport is apt for operation of aircraft up to A320s. The terminal can handle up to 270 passengers time
There are two airports in the state of Uttarakhand: Dehradun and Pantnagar. Mussourie is one of the places which are very popular with wanderers in India. Dehradun: This airport can run aircraft up to A320s but presently operating with ATR-72. The terminal can handle up to 233 passengers during peak time. The apron can accommodate only two aircraft at one time. The new passenger terminal is wing styled roof made primarily from steel Kalzip. The roof has translucent skylight set into more than five per cent of area to provide natural light to the main concourse. Pantnagar: This airport is suitable for operation of ATR42 aircraft. Apron can handle only one aircraft at one time and terminal is suitable for maximum 44 passengers during peak hours. Â&#x2C6;
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EAST ALSO RISES THE AIRPORTS AUTHORITY OF INDIA HAS DRAWN UP EXTENSIVE DEVELOPMENT PLANS FOR THE AIRPORTS IN THE EASTERN REGION OF THE COUNTRY. A BRIEF OUTLINE OF THE VENTURES IN THE AIRPORTS. 4 ANDAMAN AND NICOBAR ISLANDS There is only one airport in this group of islands: Port Blair international airport. The official name is Veer Savarkar International Airport. Airportâ&#x20AC;&#x2122;s runway can handle operation of aircraft up to A310 or B757. Apron is
big enough to park eight aircraft at one time and terminal building has good space for 270 passengers. New terminal complex and a cargo complex are under planning stage.
4 BIHAR There are two functional airports in the state
Bhubaneswar Airport
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AAI SPECIAL 400 passengers respectively during peak hours. Acquisition of land for extension of runway is being planned by the authority.
of Bihar. The status is as follows: Patna: Official name of this custom airport is Loknayak Jaya Prakash Narayan Airport. The airport’s runway is wide enough to support aircraft up to A320s. The apron can park five aircraft at one time. The terminal building is big enough to house 200 passengers during peak hours. In addition, the integrated international side is also capable of handling 100 fliers. Resurfacing of the apron and the adjacent pavement will be starting soon. Modification and the expansion of the terminal building are in the planning stage. Gaya: This airport can support operation of aircraft up to A321. Apron can park two aircraft at one time. The terminal building is divided into domestic side and international side which can accommodate up to 100 and
4 CHHATTISGARH Biju Patnaik Airport is in the capital city, Bhubaneswar. Huge construction work is in progress at this airport. A new integrated terminal is being constructed which will increase its capacity to handle more than 1,300 passengers from present 350
Port Blair Airport
This state also has only one airport in its capital Raipur. Raipur Airport’s runway can handle operation of aircraft up to A321. Apron can park three aircraft at one time and terminal building has good space for 400 passengers. New international terminal, which will have enough space to accommodate 800 passengers, is in the last phase of construction. The Authority has been planning to acquire more land for expansion of runway and construction of new control tower and fire station.
4 JHARKHAND Again, Jharkhand is also a state with only one airport in its capital: Ranchi. Its runway can handle operation of aircraft up to A321. Apron can park two aircraft at one time and terminal building has space for 130 passengers. Resurfacing of the apron and the adjacent pavement is in its last stage. Also, strengthening and expansion of apron is almost complete.
4 ODISHA Biju Patnaik Airport is at the capital city, Bhubaneswar. Huge construction work is in progress at this airport. A new integrated terminal is being constructed which will increase its capacity to handle more than 1,300 passengers from present 350. The runways are capable in operation of aircraft up to AB767-300. The new apron, which is under construction, would be able to park six aircraft at one time; old apron has space for two parking. Also, new air traffic control tower (ATC)-cum-technical block has been proposed, and further expansion of the apron has already been approved.
4 WEST BENGAL
Ranchi Airport
TETSUROYOSHIDA/FLICKR
Gaya Airport
The state of West Bengal has two functional airports in AAI’s list. Their status is as follows: Kolkata International Airport: Officially known as Netaji Subhash Chandra Bose International Airport, it is suitable for operation of wide-bodied aircrafts such as A340s and B747. It has a huge apron which is capable of parking 35 aircraft at one time. The peak hour capacity of the terminal building is 1864, 1240 in the domestic side and 640 in the international side. It has a big car-parking area, which can accommodate 2500 cars. The traffic is very high with 692 domestic and 100 international flights a week. (Please see the detailed story on modernisation of Kolkata airport on pages 38, 39 and 40) Cooch Behar: Aircraft up to ATR42s can be operated at this airport. Apron can accommodate two aircraft at one time and terminal building is suitable for at least a 100 passengers.
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4 ANDHRA PRADESH This state has six functional airports. Begumpet Airport in Hyderabad, Rajahmundry Airport, Tirupati Airport and Vijayawada Airport are managed by Airports Authority of India. Vishakhapatnam Airport is managed by Indian Navy and Hyderabad International Airport is managed by GMR Hyderabad International Airport Limited (GHIAL). Following is the current status: Hyderabad (Begumpet) Airport: This airport is suitable for operation of aircraft up to B747. Apron has enough space to park 13 aircraft at one time. It has car-parking space for 400 cars. Rajahmundry Airport: This airport can support operation of aircraft up to ATR72. Kingfisher and Jet Airways operate 14 flights for Hyderabad every week. Apron has space for parking two ATR72 at one time. With the functioning of the new terminal building at the airport, the peak hour capacity will increase to 336 from current capacity of 120. Tirupati: Kingfisher, Jet Airways and Air
Kingfisher, Jet Airways and Air India operate a number of flights to Tirupati every week. The runways can handle operation of aircraft up to A321s
SOUTHERN SPLENDOUR
THE SOUTH HAS SOME OF THE HOTTEST DESTINATIONS IN THE COUNTRY AND WITH THE FOCUS ON CONNECTIVITY, THE AIRPORTS HAVE BECOME THE MOST SOUGHT-AFTER ONES. A LOOK AT THE LATEST DEVELOPMENTS IN THE REGION.
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India operate a number of flights every week. The runways can handle operation of aircraft up to A321s. Apron can park two A321s and one ATR72 at one time. The current terminal building is suitable for 250 passengers at one time, the new integrated one, which is under construction, would have a peak hour capacity of 700 passengers. Vijayawada: Kingfisher operates 14 weekly flights for the destinations: Hyderabad and Bengaluru. Vijayawada airport can support operation of aircraft up to B737. The old apron can park two A320s at one time and the new apron can accommodate five A321s. Peak hour capacity of the terminal building is 75 passengers. Vishakhapatnam: Indian Navy operates and maintains this civil enclave airport. The runways are apt for operation of aircraft up to A330s. The existing apron can park three B737s, and the new apron, which is not functional so far, has eight stands for parking the aircrafts. The peak hour capacity is 125 passengers in the old terminal building.
4 TAMIL NADU There are six airports in this state. The status is as follows: Chennai: Flights leave for 21 international and 24 domestic destinations from International Airport at Chennai. Apron has total parking space of 66 aircraft on domestic side and 10 on international side. The peak hour capacity to handle customers is 96 in Kamaraj Domestic Terminal, up to 2300 in Anna International Terminal and 3,300 in integrated new domestic terminal. (Please see the detailed story on modernisation of Chennai airport on pages 34, 35 and 36) Coimbatore: This is a customs airport and
Calicut Airport
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AAI SPECIAL Madurai Airport
Mangalore Airport
Coimbatore Airport is suitable for operation of aircraft up to A321. International flights leave for two destinations from this airport: Sharjah and Singapore. Apron can park three aircraft on domestic and international side each. The peak hour capacity at the existing domestic terminal is 240 passengers. Madurai: The new terminal building for international operation can accommodate 700 passengers during peak hours. Construction of a new ATC building and fire station has been planned. The runway at this airport is capable of operation of aircraft up to A321s. Salem: In the major development works, extension of runway and allied facilities has been planned. The present runway can handle operation of aircraft up to ATR72s. Kingfisher is the only airline providing services at this airport for the only destination: Chennai. Tiruchirapalli: This is a custom airport. Several airlines operate 24 domestic flights for the destination: Chennai and Trivandrum. At this airport, 47 international flights are also being operated for the destinations: Colombo, Dubai, Kuala Lumpur, Singapore and Abu Dhabi. Tuticorin: Kingfisher operates seven weekly flights from this airport to Chennai. The airport is suitable for operation of aircraft up to ATR72-500s. Apron can park two aircraft at one time and terminal building has a maximum capability of accommodating 83 passengers. Puducherry (Union Territory): This airport is suitable for operation of aircraft up to ATR-72-500s. The new terminal building has just been completed, which can accommodate 150 passengers during peak hours.
4 KARNATAKA There are four airports in the state of Karnataka: Bengaluru International Airport, Bengaluru CE, Hubli Airport and Mangalore Customs Airport. Out of these four, Bengaluru International Airport is managed by BIAL (Bengaluru International Airport Authority Limited), Bengaluru CE Airport is under HAL (Hindustan Aeronautics Limited) administration, and airports at Hubli and Mangalore are run by Airports Authority of India.
Trivandrum Airport Hubli: Runways at this airport can handle operation of aircraft up to ATR42s. Kingfisher operates 14 flights every week from here for Bengaluru and Mumbai. The apron has capacity to park five aircraft at one time. The terminal building can handle traffic of 60 passengers during peak hours. Installation of ILS (instrument landing system) is being planned. Mangalore: This is a customs airport. The runway can handle operation of aircraft up to A321. There is parking space for four aircraft in the old apron and six in the new one. The old terminal building can handle 300 passengers during peak hours, and the new integrated terminal has a capacity to handle 731 passengers during peak hours.
4 KERALA
There are four airports in the state of Karnataka: Bengaluru International Airport, Bengaluru CE, Hubli Airport and Mangalore Customs Airport
This state is a paradise for nature lovers. The flora and fauna of this state lures thousands of tourists every month. There are three airports in this state; two of them are managed by AAI and one by CIAL (Cochin International Airport Limited). Kozhikode: Calicut International Airport is suitable for operation of aircraft up to B747. Apron has stand for parking nine aircraft at one time. The terminal building is big enough to accommodate 1604 passengers during peak hours. It has a big car parking space which can easily accommodate 200 cars at one time. Thiruvananthapuram: The international airport at Thiruvananthapuram has gone under major transformation in the recent past. AAI has equipped this airport with a new international terminal building complex, eight parking stands for the aircraft (total parking stands on apron increased to 20 along with old 12 stands), car parking on both sides and parallel taxiway on Chakai Canal side. The runway of the airport can handle operation of aircraft up to B747.
4 LAKSHADWEEP ISLANDS This group of islands has one airport namely Agatti Airport. It has direct flights from Ernakulam (Cochin). The runway at this airport is suitable for operation of ATR42 aircraft. Parking of only one ATR42 aircraft is possible on the apron. The terminal building can handle 25 passengers during peak hours. Â&#x2C6;
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Diu: This airport can handle operation of aircraft up to ATR-72-500s. Jet Airways is the only airline which operates six weekly flights from this airport for the Mumbai via Porbandar. Terminal building at the airport has capacity to accommodate 30 passengers during peak hours. The apron can park two ATR-72-500s at one time. Goa (C.E.): Runways at Goa International Airport are suitable for wide-bodied aircraft like A340-600s. Several airlines operate 18 international flights and 224 domestic flights at this airport. Apron has big parking space for accommodating 11 aircraft at one time. The present terminal building has capacity to house 778 passengers during peak hours. Construction of new building is going on; it will be able to accommodate 2,000 passengers on the domestic side and 480 passengers on the international.
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4 GUJARAT There are nine operational airports in the state of Gujarat. Ahmedabad: Ahmedabad International Airport is officially known as Sardar Vallabh Bhai Patel International Airport. Runways at this airport are suitable for wide-bodied aircraft like A340-600s or B747-400s. 250 domestic and 48 international flights are operated at this airport by different service providers. The existing apron can park six aircraft at one time; the new under-construction airport, in front of the under-construction international terminal building, will be able to park six more aircraft. Bhavnagar: Bhavnagar airport can handle operation of aircraft up to A320s. Jet Airways and Kingfisher operate 14 flights for Mumbai every week from here. The apron can park two aircraft at one time, and the terminal building can house 110 passengers during peak hours. Bhuj: This is a civil enclave airport. The operation of aircraft up to A320s is possible at this airport. Jet Airways and Kingfisher operate 14 flights for Mumbai every week from here. The apron can park two B737-800 aircraft at one time, and the terminal building can house 350 passengers during peak hours. Jamnagar: This is also a civil enclave airport. The operation of aircraft up to A320s is possible at this airport. Air India operates seven flights for Mumbai every week from here. The apron can park two B737-700 aircraft at one time, and the terminal building can house 150 passengers during peak hours. It has a car-parking space for 60 cars. Extension of apron and expansion of terminal building are being planned. Kandla: This airport can handle operation of aircraft up to ATR-72s. Kingfisher operates seven flights for Mumbai every week from here. The apron can park two ATR-72 aircraft at one time, and the terminal building can house 81 passengers during peak hours.
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THE WEST
RACES ON THE WESTERN REGION HAS SEEN SOME OF THE FASTEST FOOTPRINTS AMONG AIRPORTS. A BRIEF ON THE AIRPORTS AUTHORITYâ&#x20AC;&#x2122;S PLANS FOR THE REGION. Extension of runway for operation of A320 aircraft and construction of new terminal building complex are in the planning stage. Porbandar: The runways can handle operation of aircraft up to ATR72-500s. Jet Airways operates six flights for Mumbai every week from here. Apron can park two ATR72-500 aircraft at one time. The terminal building is suitable for 318 passengers during peak hours. The tender for new air traffic control tower cum technical block has been released. Rajkot: This airport is suitable for operation of aircraft up to A320s. Jet Airways and Air India operate 20 flights for Mumbai every week from
AAI SPECIAL Bhopal Airport
old apron can park three B737-800s and one ATR72 at one time. The recently-constructed apron can park 10 B737-800s or A321s. Indore: Official name of this airport is Devi Ahilya Bai Holkar Airport. The runway of this airport is suitable for operation of aircraft up to A321s. The frequency of this airport is 161 departures a week. The old apron can park three B738s and one ATR 72-500 at one time. The recently constructed apron can park four A321s and four ATR 72-500s. Jabalpur: This airport is suitable for operation of aircraft up to A320s. There are 11 weekly departures operated from here for the destinations: Delhi and Gwalior. The parking space is sufficient to house two ATR-72-500s at one time.
4 MAHARASHTRA
Ahmedabad Airport here. The apron can park one B737-400 and one ATR72 at one time. The terminal building can accommodate 140 passengers during peak hours. Surat: Even called Dumas Airport, it is suitable for operation of aircraft up to A320s. Alliance Air operates six flights every week from here for the destination: Delhi. The apron can park one B737-400 and one ATR72 at one time. The terminal building can accommodate 140 passengers during peak hours. Vadodara: This airport is suitable for operation of aircraft up to A320s. Several airlines operate 49 flights for Mumbai and Delhi every week from here. The apron can park six A320s and one ATR72 at one time. The terminal building can accommodate 330 passengers in old side and 720 passengers on the integrated side, which has just started its operation. Parking space for 200 cars is available here.
4 MADHYA PRADESH There are three airports in the state of Madhya Pradesh. Bhopal: It is officially known as Raja Bhoj Airport. The runway of this airport is suitable for operation of aircraft up to A321s. The frequency of this airport is 36 flights a week. The
42 weekly departures are operated by different service providers from Aurangabad Airport to different destinations: Delhi and Mumbai
There are eleven airports in the state of Maharashtra. Akola: This airport is suitable for operation of aircraft up to ATR-42-320s. The apron has parking space for three aircraft: two ATR72 and one C90. Terminal building can house 25 passengers during peak hours. The ongoing work is modification of existing terminal building. Aurangabad: 42 weekly departures are operated by different service providers from Aurangabad Airport to different destinations: Delhi and Mumbai. The runways can handle operation of aircraft up to ATR42-320s. The new terminal building is capable of housing 800 passengers and old one has the peak hour capacity of 200 passengers. Gondia: This airport has no scheduled operations. Runways at this airport are suitable for operation of aircraft up to A320s. Apron has space for parking seven aircraft at one time. Pune: Pune airport which is a Civil Enclave with ATC and operational area under the control of IAF, has registered phenomenal growth over the years. It is the eleventh busiest airport in India. The number of aircraft, passengers and cargo handled during 2004-05 were 7745, 6.01 lakh and 8791 metric tonnes, respectively. In 2010-11, it rose to 27,000, 28 lakhs and 27000 MT, respectively. The growth has been almost four times during the last six years. The other airports in Maharashtra are as follows: Mumbai International Airport under PPP mode with Mumbai International Airport Ltd, Kolhapur (leased for 15 years by State Government [SG] to AAI), Latur (leased by SG to Reliance Airport Developers), Mumbai Juhu - Historic old airport of the city under improvement and expansion with AAI, Nagpur - the AAI airport under agreement with MIPL, Nanded - SG to Reliance Airport Developers, Sholapur - leased for 15 years by AAI from SG and Pune - Puneâ&#x20AC;&#x2122;s Lohegaon airport is an IAF airport with Civil Enclave operated by AAI. Â&#x2C6;
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COMING: BETTER AIR TRAFFIC FLOW MANAGEMENT AS AIRCRAFT NUMBERS AND PASSENGER VOLUMES GROW, THE AIRPORTS AUTHORITY OF INDIA HAS CHALKED OUT PLANS TO USHER IN AN AIR TRAFFIC FLOW MANAGEMENT SYSTEM THAT WILL REDUCE CONGESTION DELAYS AND A REDUCTION IN THE CARBON FOOTPRINT FROM AIRCRAFT EXHAUSTS.
I
ndia is the ninth largest aviation market in the world. According to the Airports Authority of India (AAI) estimates, international aircraft movements will increase by eight per cent per year for 2010 to 2013, and seven per cent per year for 20142023. Domestic aircraft movements will increase by 3.4 per cent per year and 8 per cent per year over these same time periods. International passenger volumes will grow by 10 per cent per year and nine per cent per year during these time frames. Domestic passenger volume will decline by 0.3 per cent per year from 2010 to 2013, grow at an 8 per cent annual rate for 2014 - 2018, and grow at an annual rate of 10 per cent for 2019 - 2023. With passenger growth projected at 15 per cent per year in India, the gridlock that is already occurring in the operation will have an even larger impact on passengers, airports, airlines, and the overall Indian economy. Air traffic in the recent past at Indian airports and in the airspace has grown exponentially and is likely to grow further in the immediate future. At major airports, enroute and the terminal airspace, traffic growth has resulted in congestion delays leading to increase in fuel burn and environmental impact. The growth-induced traffic complexities would also adversely affect safety. Hence, a system called Air Traffic Flow Management is considered necessary to optimise the capacity versus demand, both strategically and dynamically, by integrating various operational constraints and weather parameters. Mitigating measures and alternate actions to avoid congestion and delay, both in terminal and enroute airspace and airports, are required to be achieved through a collaborative decision-making process involving all stakeholders. With the strong growth in the international and domestic aviation markets, the need for CATFM is felt on a daily basis. Passenger delays and unnecessary holding in the airline operation lead to dissatisfaction and excessive cost and an unnecessary impact on the environment, both in time and cost efficiency and a large carbon footprint. India needs to satisfy this increased demand while operating under difficult weather constraints (e.g., fog, turbu-
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“AAI has taken many strides to modernise its CNS-ATM facilities, where AAI has drawn up the Master Plan for implementation of FANS (Future Air Navigation System). The implementation of the CNS-ATM Master Plan will put India amongst the elite group of countries that have an efficient ATM System ” V P Agrawal, Chairman, AAI
lence and convective weather associated with monsoons and the occasional cyclonic storms), and living within the national security constraints that result from the extensive airspace used exclusively by the Indian military. Today, the primary method for long-term balancing demand with system capacity is to restrict demand by allocating a fixed number of arrival/departure slots to scheduled aircraft operating into and out of India’s major, congested airports. Slot allocations are made on a quarterly basis, with the numbers adjusted for seasonal weather and traffic conditions. The slots equitably distribute the restricted airport and airspace capacity to aircraft operators. Short-term (e.g., during a flight day) balancing is accomplished by air traffic control (ATC) imposing delays on aircraft and airlines’ decisions to divert to alternate airports during periods of weather-restricted capacity. Weather information and airport capacity information are not made available to ATC and flights through an integrated system. Each party makes independent decisions about how to restrict and manage flights during problem periods. This often results in less than optimal utilisation of available airspace, airports, and aircraft resources. These bottlenecks will be eliminated through the implementation of C-ATFM for the entire system in India. The proposed CATFM system will balance demand and capacity in Indian airspace and airports for most efficient operations that will include both international and domestic traffic. The required C-ATFM system will balance demand and capacity in Indian airspace and coordination with adjacent Air Navigation Service Providers (ANSP) from countries. Integration with systems of adjacent states will further enhance the regional C-ATFM and will allow a better flow of the departure aircraft into the East-West and West-East traffic flows overhead of India. The C-ATFM system will balance demand and capacity in Indian airspace and airports for most efficient operations that includeboth international and domestic traffic. Air Traffic Flow Management (ATFM) is strongly advocated by ICAO in its The Global
INNOVATION Air Navigation Plan Doc 9750 developed by the International Civil Aviation Organisation (ICAO). Global Plan Initiative (GPI-6) describes the scope of Air Traffic Flow Management as the implementation of strategic, tactical and pre-tactical measures aimed at organising and handling traffic flows in such a way that the totality of the traffic handled at any given time or in any given airspace or aerodrome is compatible with the capacity of the ATM system. ICAO has introduced many standards and recommended practices in Annex 11, Doc 4444 and brought out broad guidelines to states as to when and how to establish ATFM. The Ajay Prasad Committee, constituted for formulating next-generation futuristic Air Navigation Services Master Plan, has also recommended to implement AFTM system expeditiously preferably in “the Near-TermImmediate Plan”. AAI, in its strategic CNS/ATM (Communications, Navigation, Surveillance/Air Traffic Management) plan accorded high priority for developing a comprehensive Air Traffic Flow Management and accordingly granted in-principle approval for establishment of C-ATFM in India. ATFM system being new and complex for the Indian environment, AAI considered it prudent to have the technical support from the Federal Aviation Administration, USA.
ATFM PLAN Phase 1: The C-ATFM baseline with near-term solution would be in place by the end of 2013. This would provide AAI and aircraft operator users with significant capabilities to perform strategic, pre-tactical, and tactical ATFM and CDM associated with sectors demand of entire Indian airspace and arrivals into all airports from grade 1 to 5 in two stages.With access to aircraft operator schedule data via the Official Airline Guide (OAG) and/or directly from the aircraft operators and operational flight data from AAI’s ATC automation system, strategic and pre-tactical demand predictions are provided to AAI to determine periods of excess demand compared to the available capacity. CATFM for ANSP provides capabilities to model and implement Traffic Management Initiatives (TMIs) to smooth the demand to the available capacity via Ground Delay Programmes. TMIs are shared with aircraft operators as an integral part of the CDM (Collaborative Decision Making). process. For periods of significant, unexpected capacity reductions, Ground Stop TMIs can also be modelled and implemented. Once a TMI is implemented, C-ATFM for ANSP will provide updated demand predictions to monitor TMI performance. Updated predictions are driven by tactical flight data updates from AAI as well as flight specific updates provided by aircraft operators. Aircraft operators are provided capabilities to perform schedule manage-
A key part of the future ATFM concept is CDM which helps ATC achieve its goal of managing the ATC system and the operators achieve their goal of managing their schedules
ment adjustments (e.g., slot substitutions) to optimise their operations consistent with the available capacity determined by AAI and the constraints of the TMI. C-ATFM for ANSP provides a web-based interface for aircraft operators in addition to the Enhanced Substitution Module interface for advanced scheduled management functions. C-ATFM for ANSP provides real-time and post-operational reports to help AAI and their stakeholders evaluate system performance and lessons learned. In addition to the operational capabilities, C-ATFM for ANSP provides System Administration and Adaptation Management functions to monitor and control the operational system and support the preparation and validation of system reference data. Nationwide ATFM system covering all the airports and an expanded use of C-ATFM for ANSP to support ATFM/CDM for airspace programmes and arrivals into airports throughout the country would be fully operational by 2013. Some key functional enhancements for including departure programmes of additional airport and airspace flow programmes to complement the proposed airport arrival programmes also would be in place in Phase 1. Future functionality will be considered by AAI by customer needs and advances in ATFM. Phase 2: The specific functionality will be defined in collaboration with the international ANSP necessary to support the international ATFM integration identified by AAI. These integrations can be thought in several ways. In case an adjacent FIR of another country is not controlled by an ATFM system, this FIR can be included in AAI’s C-ATFM system. In the case adjacent FIRs or countries would have their own ATFM system, a system to system integration can be provided to improve efficiencies across both ATFM systems. There is no specific time line planned to introduce this phase. Development of ATFM capability in India will be consistent with guidance issued by the International Civil Aviation Organisation (ICAO) in the document entitled Demand and Capacity Balancing. The total aircraft movement (Arrivals and Departures) in Indian airports per day is around 5,200. The ATFM service must take measures to ensure a balance exists between air traffic demand and the declared capacities and help ATC use, to the maximum extent possible, its capacity. A key part of the future ATFM concept is CDM which helps ATC achieve its goal of managing the ATC system and the operators achieve their goal of managing their schedules. The result of CDM is a shared situational awareness and collaborative resolutions for “win-win” solutions for both ATC and stakeholders. Collaboration leads to enhanced options, resulting in improved decision-making, stakeholder acceptance and support, and increase service performance.
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MOVING TO
SEAMLESS ATM
THE AAI HAS CHALKED OUT A PLAN TO RESTRUCTURE THE ENTIRE INDIAN AIRSPACE TO AMALGAMATE THE PRESENT 11 AREA CONTROL CENTRES INTO FOUR AND LATER TO ONLY TWO CENTRES. THE MOVE WILL HARMONISE UPPER AIRSPACE AND BRING ABOUT SEAMLESS AIR TRAFFIC MANAGEMENT.
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onsistent with ICAOâ&#x20AC;&#x2122;s Global Plan initiatives and the Indian Future Air Navigation Services Master Plan, the Airports Authority of India (AAI) has embarked upon a number of initiatives to improve Air Navigation Services and airport infrastructure with the objective of enhancing safety, efficiency and capacity of airspace and airports in India. One such initiative is towards establishing a single continuum of upper airspace which will facilitate uniform application of rules and procedures. AAI has a detailed plan to restructure the entire Indian airspace to amalgamate 11 Area Control Centres (ACCs) into four ACCs initially and finally into two centres. Each FIR will have only one Upper ACC centre with multiple sectors to be operated from four major cities: Delhi,
AAI has a detailed plan to restructure the entire Indian airspace to amalgamate 11 Area Control Centres (ACCs) into four ACCs
Mumbai, Kolkata and Chennai. These will be the four main enroute centres for the provision of enroute control service. The airspace within the jurisdiction of these centres will be reorganised to establish multiple en-route sectors of appropriate lateral jurisdiction based on the flow of traffic and complexities. All the four centres will be equipped with similar level of ATM automation and CNS infrastructure (Air Traffic Management/ Communication Navigation Surveillance). One centre will serve as a backup to the other centre in the event of disaster or complete breakdown. Enroute centres will be equipped with multiple numbers of controller workstations of similar configuration and HMI (Human Machine Interfaces) to achieve operational efficiency and better administrative control. Provision of appro-
LOOKING OUT FOR AIRCRAFT
A
emission and noise. tion between aircraft. This means that DS-B (Automatic Dependent Unlike the case of procedural conmore number of aircraft can be accomSurveillance System-Broadcast) trol, where the controllers have to premodated in the available airspace consystem enables aircraft to transmit dominantly depend on voice critical information on the position reports, ADS-B perlocation, speed and altitude mits controllers to know the to ground stations connected position exactly on the disto air-traffic centres. The sysplay and apply required septem uses the Global aration positively permitting Navigation Satellite System enhanced safety. (GNSS) to determine the Being digital technology, position of the aircraft and it does not suffer from broadcast the data in real atmospheric attenuation and time enabling the Ground hence accuracy does not Automation Systems and air degrade with distance and traffic controllers to benefit more accurate than radar. from highly accurate position This ensures safety of airof the aircraft. This leads to craft operations in allsafer operations and TOUCHING THE SKIES: AAI hosted the seventh meeting of the Southweather conditions. improved efficiencies of the East Asia and Bay of Bengal Sub-regional ADS-B Implementation Though it requires airair-traffic control systems in Working Group at Chennai. borne equipage, it is relafuture. tively cheaper compared to radar and tributing to capacity enhancement and It helps air-traffic control know the provides high-quality surveillance. reduction in delay for the aircraft and exact position of the aircraft on the disHowever, the Directorate General of consequently for the passengers. This play (unlike the case of procedural conCivil Aviation (DGCA) has been also substantially reduces fuel burn, trol) allowing for reduction in separa-
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INNOVATION
priate CNS facilities and automation support would be provided to support implementation of uniform ATC procedures, training, and application of harmonised separation standards. Sector configuration will be flexible, i.e., dynamic for consolidation and deconsolidation of sectors based on traffic density. The entire controlled airspace will have overlapping surveillance cover through radar /ADS-B (Automatic Dependent SurveillanceBroadcast)/Multilateration combined with matching seamless air-ground communication to facilitate efficient air-traffic management.
requested to consider mandating 1090 Extended Squitter (ES) for all the aircraft flying across Indian airspace by a suitable date as concluded in the APANPIRG (Asia Pacific Air Navigation Planning and Implementation Regional Group) meeting. Installation of ADS-B ensures surveillance of remote/inhospitable areas lacking radar coverage. Given that range is a function radio line-of-sight and is dependent on antenna height, aircraft altitude and terrain, ADS-B permits a maximum range of more than 150 nautical miles. Considering the above benefits and the low-cost technology associated with ADS-B, ICAO in APANPIRG/19 meeting held in September 2008 has adopted a conclusion that States should minimise reliance upon pilot-voice position reporting for surveillance of aircraft and maximise the use of ADS-B on major air routes/terminal areas. The Ajay Prasad Committee has also recommended
ALL CLEAR: Former Civil Aviation Minister Vayalar Ravi overseeing operations of the ATC unit at Chennai Airport. Also seen is AAI Chairman V P Agrawal.
Considering the complexity and magnitude of the task of restructuring Indian airspace, AAI has considered it appropriate to proceed in a phased manner and has taken up restructuring of Chennai FIR (Flight Information Region) as the pilot project. The restructuring of the Chennai FIR has been completed and operationalised from Sepember 22, 2011. The restructured FIR has one upper ACC with five sectors to be operated from Chennai. Lateral jurisdiction of existing ACCs at Hyderabad, Mangalore and Trivandrum has been re-designated as lower ACCs with revised lateral and vertical jurisdiction up to FL255. Tower and approach are operated from individual airport as per present lateral and vertical jurisdiction. The highlights of the project include operating multiple sectors of Air Traffic Control from a single centre at Chennai covering the enroute phase of the flights, integration of various radars located at Chennai, Porur, Hyderabad, Mangalore, Bengaluru, Trivandrum, Bellary and HAL and complete ATS automation with various controller tools and remote operation of VHF from Chennai.
INTEGRATION OF RADARS Integrating information from seven existing radars, the three additional radars and ADS-B into the automation system, the radar picture of
that ADS-B be implemented to supplement enroute MSSR (Monopulse Secondary Surveillance Radar) initially in low density traffic areas and progressively extend to other areas. The AAI (Airports Authority of India) has embarked upon a plan for augmentation of ANS infrastructure to provide 100 per cent surveillance coverage over the entire continental air space and adjacent oceanic air space using radar and ADS-B as far as practicable. The AAI has taken up the project for implementation of tower automation system at 32 airports and six ACC centres. This new automation system is capable of accepting, processing and displaying radar and ADS-B track data wherever such inputs are available. It has been decided to implement ADS-B initially at 10 airports (Approach Stations) and six ACCs, which will provide a supplementary surveillance cover at these airports/ACC centres and will also serve as a backup in case of a radar failure. Since radar replacement
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is on the cards at the six ACCs, the new radars can be implemented keeping ADS as a back-up. AAI has planned to implement ADS-B at 14 locations ,i.e, Jaipur, Lucknow, Calicut, Agartala, Trivandrum, Ahmadabad, Guwahati, Port Blair, Nagpur, Mangalore, Coimbatore, Cochin, Varanasi and Amritsar for the purpose of supplementing the coverage of the existing enroute MSSRs initially in the lowdensity traffic areas and progressively to other areas. At 10 of the 14 airports, ADS-B will be employed for the provision of ATC in terminal areas (where procedural ATC is in vogue presently) thereby reducing delay for aircraft considerably. The ADS-B initiative will enable surveillance of aircraft even at low altitudes and high-terrain areas as well. India has planned to issue mandate of ADS-B in the entire Indian airspace and planning to operationalise ADS-B stations by December 2013 as per ICAO-APAC regional plan .Â&#x2C6;
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GBAS FOR SAFER APPROACHES AND LANDINGS
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craft. GBAS provides its service to a reduction of ground infrastructure and he Ground Based Augmentation local area (approximately a 20-30 mile annual maintenance costs compared to System (GBAS) will augment the radius). The signal coverage is the Instrument Landing System. Global Positioning System (GPS) to designed to support the aircraft’s tranGBAS would serve all approaches improve aircraft safety during airport sition from enroute airspace into and to multiple runway ends within the approaches and landings. GBAS will throughout the terminal area airspace. radius of six km of the existing yield extremely high accuracy, availThe GBAS equipment in the airapproach decision heights unlike the ability, and integrity necessary for craft uses the corrections provided on case of Instrument Landing System Category I, II, and III precision which will serve only a single approaches. approach end of the runway. GBAS consists of ground While ILS requires regular equipment and avionics. The flight inspections to ensure that ground equipment includes the approach path is repeatable four reference receivers, a and accurate, a GLS approach does GBAS ground facility, and a not change with time and hence VHF data broadcast transmitdoes not require repeated flight ter. This ground equipment is inspection requirements. This complemented by GBAS avionwould reduce the cost enormously. ics installed on board the airThrough a combination of RNAV craft. and RNP concepts coupled with Signals from GPS satellites GLS final approach, the proceare received by the GBAS GPS dures can significantly reduce disReference Receivers (four tance to Touch-down of every receivers for each GBAS) at the ACTIVE WATCH: Signals from GPS satellites are received by Aircraft making an approach as GBAS-equipped airport. The the GBAS GPS Reference Receivers (four receivers for each an example, A Quantas Boeing reference receivers calculate GBAS) at the GBAS-equipped airport. 737 flight flying a fully automattheir position using GPS. position, velocity and time to guide the ed RNP procedure to GLS transition The GPS Reference Receivers and aircraft safely to the runway. reported a saving of 140Kg of fuel and GBAS Ground Facility work together 440Kg of CO2 for one single approach. to measure errors in GPS-provided position. The GBAS Ground Facility GBAS BENEFITS produces a GBAS correction message GBAS provides CAT I landing minima AAI PLANS based on the difference between actual alternative to Instrument Landing With an eye to the advantages, AAI has and GPS-calculated position. Suitable System and is expected to support CAT entered into an agreement with integrity parameters and approach III operations in the foreseeable future. USTDA (US Trade and Development path information are included in the Designing flight procedures to Agency) under the US India Aviation message. This GBAS correction mestransition seamlessly from RNAV and Program to establish a project providsage is then sent to a VHF data broadRNP (Area Navigation and Required ing technical support for GBAS instalcast (VDB) transmitter. Navigation Performance) to a GBAS lation and operational certification. The VDB broadcasts the GBAS sigLanding System (GLS) would definiteThe USTDA Grant Agreement for technal throughout the GBAS coverage ly improve ATM capacity and efficiennical assistance in the GBAS Project has area to avionics in GBAS-equipped aircy. GBAS would entail significant been signed on July 19, 2011. Continued o Page 61 `
all the aircraft in the southern region can be seen at Chennai ATC centre. The integration of radars facilitate direct routing of flights thereby reducing flight distance/time and saving fuel for the airlines. The minimum distance between the aircraft can be reduced through application of Radar Separation Minima even in the enroute airspace which helps the controller to accommodate more number of flights in the given airspace. Ultimately, the aircraft would get their preferred flight path and desired level, thereby reducing the flying time and facilitating on time performance. Adequate safety nets in the form of conflict alerts, Minimum Safe Altitude Warning, etc., ensure safety of aircraft by protecting the aircraft from obstacles and from other aircraft.
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NEW INTEGRATED CHENNAI TOWER
The integration of radars facilitate direct routing of flights thereby reducing flight distance/time and saving fuel for the airlines
This major initiative of restructuring Chennai Upper Airspace would lead to application of reduced separation between aircraft resulting in increased air space capacity utilization and enabling aircraft to get their preferred flight levels and improving the on-time performance. This initiative would ultimately result in marked improvement in ATM operational efficiency, safety of aircraft operations, fuel efficiency for airlines, savings in operating cost for airlines and environmental benefits due to reduced fuel burn and reduction in pilot/controller workload. Projected fuel savings are 2216000 kg per annum and consequent cost savings are US $2.3 million and reduced carbon emission.
REGULATION
PUBLIC-PRIVATE HANDSHAKE: The Prime Minister, Dr Manmohan Singh, the Chairperson, UPA and National Advisory Council, Sonia Gandhi and the Chief Minister of Delhi, Sheila Dikshit at the dedication ceremony of the Indira Gandhi International Airport's Terminal 3 to the nation, in New Delhi.
RECIPE FOR SUCCESS MAKING A STRONG CASE FOR THE DUAL TILL APPROACH, SATYAN NAYAR IS CONFIDENT THAT IN TERMS OF ECONOMIC EFFICIENCY, DUAL TILL REGULATION WILL HAVE A MORE POSITIVE IMPACT THAN SINGLE TILL. IN ADDITION, DUAL TILL WOULD MAKE THE AIRPORT BUSINESS ATTRACTIVE FOR PRIVATE INVESTORS WITHOUT IGNORING PASSENGER INTEREST.
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he airport business has emerged over the last two decades as a thriving commercial enterprise and transferred from government monopoly with public utility outlook to an industry drivSatyan Nayar en by commercial-oriented private entrepreneur-managed business units. Until recently, most airports were owned and managed by public authorities. Nonetheless, a growing number of airports in Europe, Australia and New Zealand became fully or partially privatised in the last 20 years. Many airports in South Africa, Asia and other regions are under review of being privatised. In India, the liberalisation started in 2006 with setting up of PPP model airports. Today, five airports are operating on PPP model wherein the majority stakes are with private hands. These five PPP airports are handling 65 per cent of passenger and 85 per cent cargo business of the country. Available forecast suggests that by 2020 the air passenger throughput traffic will be around 300 million.
Today, five airports are operating on PPP model wherein the majority stakes are with private hands
To meet this huge air traffic demand, the country will require approximately 350-375 operational airports across the country. This implies that huge private investment will have to be attracted as the Airports Authority of India (AAI) alone will not be able to raise such huge funds i.e. US $30 billion. Similarly, India is likely to have a total of approximately 4,000 fleet strength of various types of civil aircraft by 2025 requiring an additional investment of approximately $90-billion. Airport privatisation is almost always accompanied by some form of price regulation. In reality there is no fully liberalised airport market in the world and airport policy makers and regulators are basically considering modifications of the regulatory regime in an ongoing way. A fine example is the debate on the Till which is true in the Indian context also. Airports are considered natural monopolies as far as airside is concerned. This has resulted in setting up of economic regulation of airports. The world over different countries have adopted different forms of regulation (See â&#x20AC;&#x2DC;Keeping airports in checkâ&#x20AC;&#x2122;).
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KEEPING AIRPORTS IN CHECK Country / Airport
Form of Regulation
Remarks
UK, Austria, France, Ireland, Norway, Spain, Portugal and most airports in Germany
Single Till/ Single Till with price cap regulation (RPI/CPI-x)
Aero-service prices below provision costs which pose a problem, specially at a congested airport
Frankfurt, Copenhagen, Malta and Budapest
Dual Till
Argument that regulation should be confined to the monopolistic bottleneck and incentive for developing the nonaero business should not be stifled
Belgium and Netherlands
Rate of Return
Complex and no incentive to reduce cost
Australia and New Zealand
Price Monitoring and Threat of Regulation
Trigger or “grim strategy” regulation where a light-handed form of regulation is used until the subject firm sets prices or earns profits or reduces quality beyond some point and thus, triggers a long-term commitment to intruding regulation
It is clear then that there is no uniform regulatory approach adopted by all countries. While some countries have adopted Single Till, some are on Hybrid Till and some on Dual Till. It is also interesting to note that few countries have Light Hand Regulation wherein they will only monitor the price and market. Let us examine the concept of Till in the airport economic regulation context. Concept of Till Issue: The Till concept is all about how the revenue and the expenditure is treated in the pricing of aeronautical services. There are two distinct forms of income and expenditure at an airport and they are aeronautical and non-aeronautical. The aeronautical set of business is made up of fees received from the airport core activities and the non-aeronautical revenue comes from the activities undertaken on top of the core activities. There are mainly three types of Tills: 1) Single Till: In this case the entire revenue of non-aero services will be taken into account for the purpose of tariff fixation. The non-aero revenue will be deducted from the allowable total revenue and the net revenue will be the eligible revenue which the operator can generate from the airport operations. 2) Dual Till: In this case no part of nonaero revenue will be deducted from the allowable yield. The airport operator will be entitled to retain the entire non-aero revenue. 3) Hybrid Till: In this case a certain percentage of non-aero revenue will be utilised for subsidising the aero revenue. This means a certain percentage of non-aero revenue will be deducted from the allowable revenue. In the price cap regulation, the allowable revenue of an operator is calculated by multiplying the WACC (Weighted Average Cost of Capital) on the RAB (Regulatory Asset Bases pertains to aeronautical assets only). This will be added with
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depreciation and Opex cost. The total amount will be the admissible amount which an operator will be entitled to recover from his basket of services. In the case of Single Till, the RAB will be both aero and non-aero assets, whereas in other cases only aero assets will be considered for the calculation of WACC. In some cases, relevant portion of RAB for non-aero services will also be considered as in Hybrid Till. The three Till concepts are explained in the diagram. It explains how the aeronautical yield per passenger will be calculated under different Tills. The basic difference is on the treatment of non-aero revenue (See ‘Three Tills’). Professors Tae Hoon Oum, Anming Zhang and Yimin Zhang conducted a study on various forms of economic regulation for airport and the report has been published in the Journal of Transport Economics and Policy (Vol. 38, Part 2 [2004]). The study shows that various alternative forms of economic regulation have their efficiency implications for airports. Their analysis appears to support the argument made by several economists that Dual Till regulation would be better than the Single Till regulation in terms of economic efficiency especially for large and busy airports.
MOVE TOWARDS DUAL TILL
The aeronautical set of business is made up of fees received from the airport core activities
The cross subsidisation under Single Till approach leads to inefficient allocation of resources and does not give the right signal for capacity addition and cannot attract investment into the sector. Realising this, airports across the world are moving towards a Dual Till regulatory regime. The regulatory framework at major airports with private equity (OECD countries) is: The progressive move towards Dual Till has not been accompanied by higher charges as some have argued. In fact, there is no evidence that Dual Till equals higher charges just as there is no evidence that Single Till leads to lower charges.
REGULATION
THREE TILLS Regulatory Building Block Approach Single till (RAB both Aero and Non - Aero)
Single Till
Price Cap Regula on
CAPEX Fair Rate of Return RETURN ON RAB REGULATORY ASSET BASE (RAB)
OPEX
Non-aero revenue
DEPRECIATION Aeronau cal Yield per Passenger
Service Quality
Regulatory Building Block Approach Hybrid Till (RAB Aero and a portion of Non Aero -In some cases only AERO) Single Till
Price Cap Regula on
CAPEX Fair Rate of Return
REGULATORY ASSETBASE (RAB)
RETURN ON RAB OPEX DEPRECIATION
Some % of Non aero (eg.30%) revenue Aeronau cal Yield per Passenger
Service Quality
RegulatoryBuilding BuildingBlock Block Approach Dual Till Regulatory Approach (RAB only AERO) Price Cap Regulation
CAPEX
Dual
Till
Fair Rate of Return
REGULATORY ASSET BASE (RAB)
RETURN ON RAB OPEX DEPRECIATION
0 % of Non- aero revenue
Service Quality
Aeronau cal Yield per Passenger
India, therefore, should not follow a system which other countries have discarded or moving away from.
REGULATION ON ECONOMIC PRINCIPLES The PPP model has been increasingly adopted as a preferred mode for building and operating modern airports. While allowing private players it is essential to provide adequate incentive to the operator. As long as the airports are governmentowned, Single Till could be the best option but when private participation is in a large majority, Dual Till regulation has a more positive impact than Single Till. It is a well-known economic principle that subsidies distort markets and consequently distort investment decisions. Including non-aeronautical revenues in the cost basis for the calculation of airport charges can constitute an unwarranted subsidy to air carriers from the airport operator. Single Till can be contrary to the objectives of cost-relatedness and the â&#x20AC;&#x153;user paysâ&#x20AC;? principle which would require airport charges to
The airport sector in India needs $30 billion investment in the next 10 years to improve the airport infrastructure and for spreading the air transport service
cover all of the costs of the services provided to users. Non-aeronautical revenues, thus, can be considered among other sources of funding by the airport operator to finance new investments, to pursue new business opportunities or to remunerate airport stakeholders at the sole discretion of the airport operator. In a Single Till approach, the regulator would be required to determine the expenses and revenues relating to non-aero activities while fixing the charges. However, in a Dual Till regime, there should be no requirement to use non-aeronautical revenues to reduce airport user charges and it should be left to the airport operator to consider a full or partial use of non-aeronautical revenues to defray aeronautical charges as appropriate or necessary to increase their competitiveness. Overall, the arguments for a Dual Till carries more weight and seem to prove the principle that regulation should not intervene in workable competitive markets and should be restricted to the monopolistic bottleneck. There is no doubt that in terms of overall economic efficiency, Dual Till scores better than Single Till. It is a wellknown economic principle that subsidies, as in the case with the Single Till, distort markets and consequently distort investment decisions. Dual Till leads to better aeronautical investments because it forces management to look more closely at its airport investment policy and operations to ensure it delivers good performance. India is on the verge of being a superpower. We need to ensure that Indian airports mirror our growth and rise in world status. It is estimated that the airport system in India may be handling over 300 million passengers per annum by 2020. Hence, additional airport capacity is urgently required. Non-aeronautical revenues today are the key factors that makes airports an attractive business for private investors. Non-aeronautical revenues critically depend on the number of passengers and to some extent to the number of carriers and destinations which are important for attracting business to an airport. The airport sector in India needs $30 billion investment in the next 10 years to improve the airport infrastructure and spreading the air transport service across the country. According to Oxford Economics, good air connectivity is vital for inward direct investment. The scale of current and forecast demand at many airports clearly indicates a need for increasing levels of investment to maintain and enhance capacity at an appropriate service quality. Airport charges and non-aeronautical revenues are major sources of funds for investment. Airports should be permitted to retain and invest these revenues to finance future upgradation and modernization. Any action to restrict this use of revenues, or to require all commercial revenues to be used solely to reduce current user charges, could conflict with this objective and inhibit the much needed investment. There is no incentive for the airport operator to excel in Single Till regime.
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TILL OPERATIONS Form of Regulation Remarks Single Till
In case where allowed return is greater than or equal to the actual cost of capital, the airport has an incentive to make excessive investment in capital. As the regulation is essentially cost based, the airport would not benefit from cost reduction. As Tretheway (2001) puts it: "It is some thing like having an unlimited expense account: if you could produce a receipt, you would be reimbursed."
Dual Till
As long as concessions are profitable, the airport will invest efficiently and provide airside services with minimum social cost, regardless of whether concessions are regulated or not.
Price Cap
Airports will try to under invest in capacity. Thus, while the price cap regulation alleviates the distortion in airport charges, it introduces the distortion in airport capacity constraints.
Rate of Return
May have undesirable implications for airport behaviour, leading to inefficient capital investment and a general lack of managerial drive to reduce cost and improve efficiency.
VIEWS ON AIRPORT REGULATION Innumerable papers have been written on pros and cons of Single and Dual Till regulation. There is no conclusion about which regulation is the best and suits all countries. Various views have been expressed by well-known economists/experts on the regulatory regime to be followed while regulating the airports. Views on Single and Dual Till are listed but it is very clear that there is no uniform view on the regulatory approach to be adopted for airport regulation.
ICAO ON ECONOMIC REGULATION International Civil Aviation Organisation (ICAO) is a specialised agency of the United Nations created to oversee a safe and orderly development of International Civil Aviation throughout the world. It sets standards and regulations necessary for aviation safety, security, efficiency and regularity, as well as for aviation environmental protection. The views of ICAO on economic regulation on airports are: Where an airport is provided for international use the user shall bear the full share cost of providing the airport. User charges should be non-discriminatory, cost-related, transparent and should be finalized after due consultation with users. The cost to be shared is the full cost of providing the airport and its essential ancillary services, including appropriate amounts for cost of capital and depreciation of assets, as well
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ICAO is a specialised agency of the United Nations created to oversee a safe and orderly development of International Civil Aviation throughout the world
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as the costs of maintenance, operation, management and administration, but allowing for all aero revenues plus contributions from non-aero revenues accruing from the operation of the airport to its operators. The revised version of ICAO doc 9082, approved by the Council in October 2011 and to be published shortly as the ninth edition, further clarifies the position of ICAO on the subject of the cost basis for airport charges. The new version leaves no doubt that ICAO stands neutral on the subject of Dual or SingleTill, leaving it to the economic oversight adopted in each state to decide on this matter. From the above it is evident that: ICAO does not propagate Single Till. Even if contribution from non aero revenue is to be taken it is only for airport operations not from other activities like hotel, real estate etc. ICAO insists cost basis for airport charges.
TILL ON PRICE AND QUALITY The proponents of Single Till always argue that the Single Till lowers the airport charges and better quality. The arguments presented in favour of Single Till are not true as evident from the examples of airports. The evidence is that Dual Till is better than Single Till in attracting investments. Research has shown that the inefficiency effect of Single Till may result in prices being higher than they would be under a Dual Till regime. A review of International practice shows Copenhagen
Dual Till
Aeroports de Paris
Moving towards dual
Brussels
Moving towards dual
Auckland
Light handed
Sydney
Light handed
Melbourne
Light handed
Brisbane
Light handed
Perth
Light handed
Grupo Asur (Mexico)
Dual Till
Grupo Pacifico (Mexico) Dual Till OMA (Mexico)
Dual Till
Hamburg
Dual Till
Frankfurt
Dual Till
Rome
Dual Till
Zurich
Light handed
Budapest
Dual Till
Athens
Dual Till
London Heathrow
Single Till
London Gatwick
Single Till
REGULATION
HOW THE EXPERTS SEE IT Experts
Views on Airport Regulation
Beesley (1999)
Price cap regulation is inappropriate in case of London Heathrow
Tretheway (2001)
ROR regulation tends to be complex, unresponsive and expensive to administer
Kunz and Niemeier
Cost-based RoR regulation used in Germany is inefficient and results in the mis-allocation of resources
Starkie (2001)
Ex-ante regulation for airports might be unnecessary because the airports are unlikely to abuse their monopoly power due to the existence of complementarity between the demand for aviation services and demand for concession services.
Starkie (2001)
Since increased concession activities can cause superior locational rents, increase in traffic volume at an airport would often produce a significant increase in its profitability. Therefore, even an unregulated profit-maximising airport would have a strong incentive to reduce aviation user charges in order to take advantage of the unidirectional demand complementarity from passenger volumes of aircraft movements to concession sales. This means that as long as an airport provides both aviation services and retailing activities, its incentives will be to set airside-user charges lower than if runways were a standalone facility, and thus there may be no need to regulate its aviation-user charges.
Tae Hoon Oum, Anming Zhang and Yimin Zhang (2004)
Australian Productivity Commission Inquiry Report (2002)
The extent of the under investment is found to be less under the Dual Till price cap than under the single till price cap Total factor productivity is greater under the dual till price cap than under either the sin gle price cap or Single Till ROR Analysis supports the argument made by several economists that Dual Till regulation would be better than the Single Till regulation in terms of economic efficiency, especially for large and busy airports. The scope for airports with market power to use (or abuse) that power is constrained by commercial pressures and opportunities, particularly the substantial ‘non-aeronauti cal’ income to be had from promoting air line passenger traffic. In these circumstances, because of the risks and potential costs of strict price controls relative to more light-handed price regula tion, such controls are judged not to be required even at the four airports with substantial market power.
that majority private owned airports operate under Dual/ Hybrid Till. The evidences from the international airport sector clearly indicate the preference for a Dual Till/Hybrid Till approach in the countries where private sector airports play a prominent role. Except for UK airports, all the key private international airports are under Dual or Hybrid Till.
Airports of similar size, structure and age should show lower charges under Single Till than Dual Till if arguments hold - but the benchmarks indicate this relationship does not hold consistently. In a study conducted by IATA, London's Heathrow Airport — following Single Till approach — has been found to have high charges and poor service quality. Paris Airport (ADP) currently on a Single Till was more expensive than near neighbour European hub Amsterdam (Dual Till) or Copenhagen and Brussels (Hybrid), Mexico and Cancun (both Dual Till) are the lowest priced regulated airports on the list. Research shows that Dual Till airports provide better service quality to customers. In a study conducted by Jacobs Consultancy, Dual Till airports have emerged as airports with better service quality. In terms of the overall average scores, Dual Till, Hybrid, and Light Handed and indeterminate airports all have average scores of just over 4 while Single Till airports have scores averaging 3.75.
HYBRID TILL AS A BETTER APPROACH At Brussels Airport, the movement from Single to Dual Till is taking place. At Aeroports De Paris, recent proposals envisage taking retail activities out of regulation from 2011, with the possibility of transferring the remaining other activities over time. As per the report of Economic Regulation Framework of Aeroports de Paris: Current status and prospects February 1, 2010, the switching over from Single Till to Dual Till by Paris airport has been recommended for these reasons: 1. Greater incentive for the competitiveness 2. Efforts undertaken with regard to retail activities and traffic growth would bring value unlike the Single Till system. 3. Helping to establish a direct and strong incentive for airports. 4. A significant motivational factor for continuing retail activities. 5. Incentive for investment to develop and improve airports. 6. A price signal on fees that has a direct link to infrastructure and service costs and their development promote economically sound and responsible behaviour. The United States provides a useful comparable environment in which residual cost (Single Till) airports operate alongside compensatory (Dual Till and Hybrids). Currently, only about one-third of agreements at major US airports are on a residual basis, compared to almost 60 per cent in 1983.The Civil Aviation Authority (CAA), the regulator in the UK, has observed in its review reports that the investment requirements of the airports could not be met with the current Single Till
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HOW THE EXPERTS SEE IT Experts
Views on Airport Regulation
Australian Productivity Commission Inquiry Report (2002)
If the government nevertheless were to opt for a stricter form of price regulation, CPI-X price caps are preferred because they can offer incentives for efficient airport operation. 1. Unlike the existing price caps, however, any new price caps should be explicitly based on a ‘Dual Till' and factor in anticipated investment. 2. Conventional price caps would be confined to Melbourne, Brisbane and Perth airports. For a capacity-constrained Sydney Airport, arrangements should not be such as to force prices down. 3. Whatever the regulatory framework decided for Sydney Airport, that policy, in particular the pricing and investment provisions should be clearly and publicly articulated to bidders so that the sale price can adequately reflect it.
Australian Productivity Commission Draft Inquiry Report (2011)
Under light-handed regulation, airports have continued to invest to meet the growth in air travel, without the bottlenecks that have beset other infrastructure areas: 1. There has been a marked increase in aeronautical investment since the removal of pricecaps, with an additional $9 billion projected over the next decade 2. Aeronautical charges do not indicate misuse of market power and quality outcomes are generally ‘satisfactory’, although airlines have, on occasion rated two airports as ‘poor’
Competition Commission of UK
Aeroports De Paris (ADP)
New Zealand
In practice there would be no effect on air fares at either congested or uncongested air ports if airport charges were to be higher at the three BAA London airports as a result of a switch to a Dual Till regime. A move from the single till to the Dual Till would in the longer term mean a substan tial transfer of income to airports from air lines and/or their passengers, potentially under mining regulatory credibility and creating regulatory uncertainty ADP moved to a Dual Till regulatory regime from 1st January, 2011. The move was driven by ADP’s objective to remain competitive, concentrating on larger investments and making airport business attractive for the investor.
In May 2003, the Commerce Minister announced that no controls would be imposed at any of the three airports viz. Christchurch, Wellington and Auckland. Commerce Minister mentioned that she had “taken into account a wider range of matters than those the Commerce Commission was asked to consider. I have given particular regard to the negative net public benefits of control and the relatively small net benefits to the airlines, and indirectly passengers”.
regime. Further, from the results of some global airport benchmarking studies provides strong evidence against the presumption that Single Till airports maximise overall welfare.
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AIRPORT COMPETITION International experience for the airport sector has clearly shown that the heavier and more rigid the regulation, the lesser are the incentive for the airport operator for further investment. The new reality is that airports compete against each other, and face correspondingly reduced market power in their negotiations with airlines. In fact, for some airports, the balance of power has completely changed over recent years, with airlines and airline alliances often being the dominant party in negotiations. Consequently, airports around the world are increasingly offering aggressive airline discounts and incentive packages. For many airports, the potential for growth is limited to a few airlines, with airports vying to provide the best deals to these. Aeronautical charges have been observed to be less than 4 per cent of the operating cost of airlines world over. These are even more immaterial at the passenger level. Hence, the costs of regulating the prices of Indian airports are not likely to result in significant benefits. In fact, excessive regulatory intervention will stifle airport capacity addition and in the long run this would prove more detrimental to the aviation sector. If there is a competition there need not be any regulation. Airports are the economic engines for growth and prosperity of any country. Better airports foster evolution in the airline industry and play a crucial role in the choice of the consumer. Subsidised airport charges may keep airlines content, but if those charges are over-stimulating demand and not allowing an adequate infrastructure to be provided, then they are neither efficient nor sustainable, and are damaging social welfare. Airports operate in an increasingly competitive environment and must undertake multi-billion investments in order to provide the much required infrastructure. According to Professor David Starkie, even an unregulated profit-maximising airport would have a strong incentive to reduce aviation user charges in order to take advantage of the unidirectional demand complimentarity from passenger volumes of aircraft movements to concession sales. In an industry where the balance of market power is increasingly unclear, economic regulators can best serve the common good by regulating only in areas where there is evidence of market inefficiencies resulting from the disproportionate pooling of market power. To do otherwise risks further distortions, and the unnecessary and inherently highly political arbitration as to who gets what rent transfer. Regulating only where necessary is an inherent part of efforts to ensure fair competition and ultimately to maximise economic welfare, and is central to all attempts to create pricing signals equivalent to those which would result
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Table 1
Source: Jacobs Consultancy Report on Review of Airport Charges, 2009
in a fully competitive non-regulated environment. This will enhance economic and viable operation of airports. If there is a competition there need not be any regulation and can have Light Hand regulation of price monitoring. The objective of any regulation should be to bring “competitive prices” and not “minimum prices”. World experience shows that there is no best fit regulation. Regulation has to be adaptive to the requirements of each country. India needs substantial investment, that too private, for airport infrastructure. Indian airports are on a growth trajectory and require to align their charges to graduate from obsolete facilities to world-class infrastructure. It is important that Airports in India need to remain incentivised to deliver adequate investment in capacity in the years ahead and this requires authorities to tailor economic regulation to the current competitive state of the industry. Hence, it is essential that returns are attractive enough for private investors. If the regulation mandates that non-aero revenue is fully put in the Till, there will be no motivation to increase Non-Aero revenues as the entire amount goes for subsidisation. It is a wellknown economic principle that subsidies, as in the case with Single Till distort markets and consequently distort investment decisions. There is no doubt that in terms of economic efficiency, Dual Till regulation has a more positive impact than Single Till. In the Indian context, there should be Dual Till to make the airport business attractive for private investors without ignoring passenger interest, which is taken care of in Dual Till as excessive user charges at an airport would run counter to the objective of growing passenger and traffic volume. Higher aero revenues from higher user charges can never compensate for loss of passenger and traffic volumes with higher NonAero revenues. Hence, the airport operator will have a strong incentive to reduce aviation user charges to attract more passengers. Given the massive investment requirements and the desire of the government to promote world-class airports and facilities in the country, the right approach to the Till regime would go a long way in setting the right incentives for the airport operators. India needs to incentivise investors willing to participate in the development of airport infrastructure. It has been proven beyond doubt that Dual Till is the most appropriate regulatory approach to ensure that India develops airport infrastructure to meet its future growth. This is the only way we can ensure that the pace of regulation is in tune with the development of the sector and attract the much-sought investment in the sector and takes India to the top three civil aviation markets of the world by 2020.
Table 3 shows the service quality levels of airports specifically under Single or Dual/ Hybrid Till regimes. It can be seen that 3 of the top 4 airports follow Dual/ Hybrid Till while all bottom 4 airports are Single Till airports
(The writer is Secretary General, Association of Private Airport Operators, headquatered at Delhi.)
All regulatory approaches 70,000
Charges index (SDRs)
60,000
50,000
40,000
30,000
20,000
Toronto Athens New Jersey-EWR Osaka Frankfurt New York JFK Paris-CDG Amsterdam Sydney Vancouver Tokyo Zurich London-LHR Vienna Brussels Warsaw Berlin Munich Prague Budapest Auckland Copenhagen Dusseldorf Lisbon Beijing Dublin Seoul Washington Oslo Stockholm Angeles Los Moscow Milan-MXP Miami Madrid Bangkok San Francisco Rome Helsinki Johannesburg Jeddah London-LGW Singapore Mumbai Mexico City Cancun SaoPaulo HongKong KualaLumpur Dubai
10,000
Single
Dual
Hybrid
Indeteminate
Light hand
Source: Jacobs Consultancy Report on Review of Airport Charges, 2009 (Note: Toronto, though shown as Light Handed, is 'not for profit' and, therefore, having similar characteristics of a Single Till airport. Mumbai is shown indeterminate as it is still following AAI rates.)
Table 2 Ranked quality 5.00 4.50
ASQscore for overall sa sfac on
4.00 3.50 3.00 2.50 2.00 1.50 1.00
Single
Hybrid
Indeterminate
Lisbon
Milan-MXP
Frankfurt
Paris-CDG
Rome
Budapest
Dublin
Vienna
Sydney
Madrid
Moscow
London-LHR
London-LGW
Oslo
Helsinki
Dubai
Athens
Amsterdam
Stockholm
Toronto
Johannesburg
Munich
Mumbai
Dual
Copenhagen
Zurich
Auckland
Vancouver
Mexico City
Kuala Lumpur
Tokyo
Bangkok
Beijing
Cancun
HongKong
Seoul
Singapore
0.50
Light hand
Source: Jacobs Consultancy Report on Review of Airport Charges, 2009
Table 3 Tills only quality 5.00 4.50
ASQ scores for overall sa sfac on
4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50
Cancun
Copenhagen
Johannesburg
Athens
Single
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Amsterdam
Dual
London-LHR
London-LGW
Dublin
Paris-CDG
Hybrid
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AMBER DUBEY
SIX CRITICAL POINTERS FOR GROWTH
OF INDIAN AVIATION WHILE IT IS GENERALLY ACKNOWLEDGED THAT INDIA WILL BE AMONG THE TOP THREE AVIATION MARKETS BY 2020, THERE ARE CHALLENGES THAT HAVE TO BE OVERCOME TO REACH THAT TOP SPOT. AMBER DUBEY HIGHLIGHTS THE MOST IMPORTANT.
A
ir transport is a major contributor to the global growth and economic well-being. Aviation is the only major rapid world-wide transportation network, which makes it indispensable for global business and tourism. Industry forecast suggests that the global economy will become increasingly dependent on international trade, of which air transport is an important facilitator. It plays a crucial role in facilitating economic growth, particularly in developing country like India. The Indian economy is passing through a high growth phase. The real GDP per capita of India, which grew at a CAGR of 3.9 per cent during 1992-2001, grew at a much higher CAGR of 5.9 per cent during 2001-2011, according to Reserve Bank of India. India was one of the few countries that led the recovery from the global financial crisis of 2008-09. It is expected to continue on the high growth path for over the next five years. India has the potential to become a leading hub for passenger and cargo traffic. India can reap its demographic advantage as a wide section of the population nurtures an aspiration to fly. India also has the natural talent to drive innovation and technology development in the area of aircraft design and manufacturing. Civil aviation industry by virtue of its
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The Indian GDP per capita that grew at a CAGR of 3.9 per cent during 1992-2001 rose to a much higher CAGR of 5.9 per cent during 20012011
dynamics is vulnerable to economic recessions, natural disasters and political upheavals. Still, the Indian civil aviation industry has managed to exhibit resilience to the recent global economic slowdown. Both passenger and cargo traffic have shown robust growth and there has been modernisation and augmentation of capacities, in a major way, at various metro and non-metro airports. Some of the key achievements during last five years include the following: India has become the ninth largest civil aviation market in the world in 2011. The passenger-handling capacity has risen almost two fold from 73 million (FY 06) to 144 million (FY 11). The cargo-handling capacity has risen from 1.5 million MT (FY 06) to 2.3 million MT (FY 11). Connectivity to the North-Eastern region has risen from 87 flights per week to 286 flights per week. Four international airport projects were successfully completed through the public-private partnership (PPP) mode â&#x20AC;&#x201D; greenfield development of Hyderabad and Bengaluru international airports and modernisation of Delhi and Mumbai international airports. The Airport Economic Regulatory
INFRASTRUCTURE Authority (AERA) was established to safeguard the interests of users and serviceproviders at Indian airports By end of 2011, five Indian carriers would be operating on international routes Enhanced national and international connectivity â&#x20AC;&#x201D; 72 foreign airlines are operating to/from various destinations. By FY 11, India had bilateral agreements with 104 countries. Significant investments are planned over the next five years, which is a clear indication that Indian aviation is likely to continue on the robust growth trajectory. The 11th Plan has propelled the Indian aviation sector on a high growth path. In FY 11, India has already made its place among the 10 largest aviation markets of the world. Based on the current growth estimates, India is expected to be among the top three aviation markets of the world by 2020. However, there are challenges to overcome. Air-travel is not prevalent among the masses. Global comparison of air travel penetration shows that India at 5 per cent stands far behind the developed countries such as the US and Australia at over 200 per cent. China's domestic traffic is five times the size of India's despite having a population just 10 per cent larger. There is significant growth potential
Significant investments are planned over the next five years, which is a clear indication that Indian aviation is likely to continue on the robust growth trajectory
for the Indian civil aviation industry as economy grows, disposable incomes rise and the value of time becomes more precious. Airports Council International (ACI) has projected that India will be the third-largest aviation market in the world within 12 to 15 years. Airbus projects that the domestic aviation market in India will be the fastest-growing market in the world over the next 20 years. In order to facilitate this significant growth potential, India will need more airports, higher capacity, supporting infrastructure, finance and human resources. All this would require progressive policies and collaborative approach between the government, industry and the public at large.
KEY ISSUES AND POSSIBLE ENABLERS A. Airport regulatory till philosophy There are certain areas where there is a significant diversion of opinion between the regulator AERA and the industry. There is need for a stable, transparent, predictable and investor-friendly regulatory regime with a mechanism for time-bound resolution of issues to create a sense of certainty in the sector. The private sector played an unprecedented role during the 11th Five Year Plan by acting as a key contributor for the development
BILATERAL AGREEMENT: The Minister of Civil Aviation, Ajit Singh and the Minister of Foreign Affairs and Communication of Trinidad and Tobago, Dr Surujrattan Rambachan signing an air services agreement between the Government of India and the Government of Trinidad and Tobago in the presence of the Prime Minister, Dr Manmohan Singh and the Prime Minister of the Republic of Trinidad and Tobago, Kamla Persad-Bissessar. MARCH 2012 I CRUISING HEIGHTS I 73
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of PPP airports. Total investment made by private airport operators in the last five years was to the tune of `30,000 crores spread across Greenfield development of Hyderabad and Bengaluru international airports and modernisation of Delhi and Mumbai international airports, according to Association of Private Airport Operators (APAO). Estimates received from AAI and APAO indicate that the Indian airports would require an investment of about `65,600 crore during the 12th Plan of which around `50,000 crore is likely to be contributed by the private sector. Attracting and managing finance of this magnitude won't be an easy task. Government must take an initiative to encourage/facilitate to attract private investors to invest in the airport sector. Apart from the need of a clear airport development policy, certainty in regulatory regime is the most important factor in attracting private sector investment. Regulations without considering the past agreements entered into by government with the private players could severely impact future investments in the airport sector. The ability to mobilise private capital hinges upon the creation of a supportive investor-friendly environment. A forward-looking and investor-friendly regulatory regime can only ensure free flow of large-scale private capital. B. FDI by foreign carriers and ATF rationalisation The proposal to allow 49 per cent FDI by foreign airlines has been moved to the Cabinet, which will take it up shortly. Then it will be debated in the Parliament, before finally being legislated. FDI by foreign airlines is a significant decision and can play a crucial role in improving the aviation landscape in India. Apart from the much-needed fund infusion, it would also provide access to global routes, managerial expertise and synergy benefits. It brings us closer to achieving the ministry's vision of making India a global aviation hub a la Dubai and Singapore. The earlier decision to allow foreign parties (such as PEs, NRIs and VCs) buying stakes in domestic carriers yielded limited response. Airline sector requires long-term investors, who can bring in technological expertise as route planning, operational and financial management, global alliances and outsourcing strategies. Thus, FDI by foreign airlines augurs well for the overall growth of the sector. Policy changes on ATF pricing: High cost of ATF (40-50 per cent of their total operating cost) is a formidable challenge for the financial health of airlines. This has been a long standing issue and requires an immediate resolution. ATF prices in India are distorted because: It is subjected to a multitude of cascading
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Apart from the need of a clear airport development policy, certainty in regulatory regime is the most important factor in attracting private sector investment
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taxes by different government entities. Despite being an input fuel (similar to coal and gas), it is subjected to sales tax as high as 30 per cent. As per KPMG analysis, it is nearly 60 per cent costlier than that in competing hubs such as Dubai, Singapore and Kuala Lumpur and hurts India's competitiveness. Many a time, air-tickets to these global locations are cheaper than that for locations within India. To offset the high costs, government has agreed to the demand of airlines for direct import of ATF. This is a vital step in the process of bringing ATF prices in line with global standards. This will help the entire aviation industry in the long term. In short term the airlines may need to depend on Oilcos infrastructure and expertise. It may be a challenge for an airline to get into the complex business of ATF procurement, transportation and storage business. India incidentally produces around 10 million tonnes of ATF every year of which as high as 45 per cent is exported. It defies logic that airlines may need to import ATF in an ATF surplus country and clearly shows that our taxation policies need to be more visionary and business oriented. The state-governments may now decide to rationalise high ATF taxes. That would nullify the need for direct ATF import in the first place. Air travel is not an end in itself. It only facilitates movement of goods and people for economic activity. The resultant increase in air traffic, fuel uplift, employment generation and higher economic activity will be more than compensate the states for the notional loss of sales tax in the short term. C. Establishment of Air Freight Stations (AFS) Most of the airport warehouses are congested, because of infrastructure overload, leading to delay in the cargo processing. This has contributed to the increased dwell time for both imports and exports. The concept of AFS was conceived as a means to reduce congestion in the airport premises, by permitting transfer of cargo to designate/customs notified freight Stations â&#x20AC;&#x201D; AFS or ICDs. This will facilitate greater throughput efficiency, reduce dwell time, and maximise the utilisation of installed capacity. Traditionally, almost all activities related to air cargo processing (including weighing, screening, customs examination, ULD formation, etc.) have been done at the cargo terminals. With the growth of cargo volume, the current space at most cargo terminals in country is proving woefully inadequate, leading to severe congestion issues. Steps need to be taken to facilitate extension of airport functionalities to off-airport locations through Air Freight Stations (AFSs) and Forwarders' Bonded Terminals (FBT). The enormous suc-
INFRASTRUCTURE cess of CFS (Container Freight Station) in decongesting the Indian sea ports is an example worth emulating by the air cargo sector. However, it has been noted that existing AFS's as notified by Ministry of Finance have not been made operational. The key reasons for this non-operationalisation of AFS are: i. Lack of enabling customs procedures in place of off-airport clearance facilities. ii. Absence of legal framework to ensure creation and utilisation of AFS instead of mere notifying of the facility. iii. There appears to be reluctance on the part of the Custodians (Air Terminal Operators) to accept AFS as a support facility on the assumption that it may drain their revenue. Hence, there should be a legal framework to ensure creation and utilisation of AFS instead of mere notifying of the facility. The barriers with regard to operationalising the AFS concept should be removed without any further delay. It is vital that the regulatory clearances and notifications concerned are issued by Customs, permitting the bonded (duty-free) movement of cargo to and from the off-airport terminal/shipper's premises. D. MRO taxation issue Indian MRO industry is expected to triple in size from `2,250 crore in 2010 to `7,000 crores by 2020. However, this future size may still be small compared to the present MRO industry size of other countries such as UAE (`8,000 crores per annum) and China (`10,000 crores per annum). This is mainly due to the discriminatory tax policies, which have resulted in making the domestic MRO players uncompetitive. Some of the key enablers to make India a regional MRO hub are: i. Elimination of discriminatory taxation policy for domestic MRO players: Due to discriminatory tax policy, Indian MRO players have to suffer an additional tax burden of nearly 40 per cent over foreign MROs. These are in terms of import duties, VAT and service tax. This has led to India carriers taking their aircrafts, at a high cost, to other MRO locations such as Dubai, Singapore, Malaysia etc, since it still works out to be more cost-effective than that in India. It therefore appears that our taxation policy has actually created business for our competing countries. The resultant tax revenues in India from MRO are a fraction of what could have been. There is a need for an urgent review and reversal of this anomalous taxation policy. ii. Abolishing of import duties for spare parts: Due to high import duties, (not applicable to foreign MROs) local MROs are not able to maintain an inventory of key spare parts. This at times leads to aircraft being grounded for longer periods. Abolition or reduction of import duties for spare parts will cut short the timelines for servicing
Due to discriminatory tax policy, Indian MRO players have to suffer an additional tax burden of nearly 40 per cent over foreign MROs
the aircraft. E. Need for capacity building The impressive growth in Indian aviation has resulted in a similar growth in employment opportunities in the sector. However, the supply of available skilled manpower has not been able to match the requirement. With passengers and aircraft fleet likely to triple by 2025, the need to augment the skilled manpower supply is immediate. As per a KPMG analysis, total manpower requirement of airlines is estimated to rise from 62,000 in FY-2011 to 117,000 by FY-2017. Some key enablers needed to augment the aviation human resource supply base are: i.Pilot training academies: India currently has over 4,500 pilots, including 400 expatriates. With the doubling of fleet size expected by 2017, India will require a total of around 9,000 pilots by 2017. There is acute shortage of trained pilots in India. Shortage of pilots leads to an artificial increase in their salary levels which hurts the profit margins of airlines, especially the LCCs. There is a need to increase the number of pilot-training academies and the capacity of existing academies by way of capital subsidies. Foreign investment in pilot training academies needs to be encouraged. The success of CAE at Rae Bareli and Gondia should be replicated at other locations also. Certificates issued by leading flying academies in the developed world should be made acceptable in India, subject to adequate checks by DGCA. ii.ATC training academies: The number of Air Traffic Control Officers (ATCOs) has grown from 1,500 in 2008 to around 1,900 in 2011. There is still a shortage of around 350400 ATCOs. Training and capacity building of ATCOs should be an immediate priority. Partnership options with international ATC training institutes should be explored to enhance capacity of CATC. The enhanced capacity can also help CATC earn additional revenue in the long run by training foreign ATCOs and providing consultancy services to global ATC service providers. The Indian civil aviation industry is on a high-growth path. The vision is to make India one of the five largest civil aviation markets in the world by the end of the 12th Plan period (2017). The government, industry, media and the people at large should work together to address the opportunities and challenges. With the right vision, roadmap, policies, regulatory framework and a relentless focus on quality and cost, India would be well set to claim its rightful place in the global civil aviation industry. Â&#x2C6; (The writer is Director-Aviation, KPMG. With inputs from Kunal Sinha, Consultant, KPMG)
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INDIRA GANDHI INTERNATIONAL AIRPORT
RAISING THE BAR
TODAY, THE INDIRA GANDHI INTERNATIONAL AIRPORT IS AMONG THE TOP IN THE WORLD, ACCORDING TO THE ACI’S ASQ RATINGS. THE LEAP TO THE SIXTH POSITION FROM THE LAST — 110 — IN THE HEAP IN A SHORT SPAN OF FOUR YEARS IS NO MEAN FEAT. IT TOOK HARD WORK, COLLABORATION AND INSTILLING A SENSE OF BELONGING AMONG THE STAFF OF THE AIRPORT. A DETAILED LOOK AT WHAT WENT BEHIND THE SCENES.
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rom being at the bottom of the pile of Airport Council International’s ASQ ratings, the Indira Gandhi International Airport (IGIA) at Delhi has made a remarkable leap to the sixth position in the world in 2011. Many might call it sheer luck, but the truth is that IGIA has undergone a metamorphosis through meticulous hard work that percolated down to every employee of the eighth largest airport in the world. That it has improved drastically has been measured by Airport Council International’s Airport Service Quality (ASQ) Survey, on the same parameters and scale as with the world’s 200 member airports. How this leap of faith happened and what were the circumstances that led to Delhi airport raising the bar for all airports, is a story waiting to be told. The second busiest airport in South Asia, IGIA is a vital link between India and rest of the globe. From being an airbase for the British Royal Air Force during the Second World War, and post-independence serving the Indian Air Force, it evolved from Palam Airport to Indira Gandhi International Airport when Terminal 2 was inaugurated on May 2, 1986. The airport has come a long way since then.
IGIA has undergone a metamorphosis through meticulous hard work that percolated down to every employee of the eighth largest airport in the world
In 2003-04, Delhi airport handled 10.4 million passengers, of which 58 per cent were domestic. Nearly 97 per cent of the country’s foreign tourists arrived by air, mostly through the Delhi and Mumbai gateways. Tourism was the nation’s second largest foreign exchange earner. But the state of the airports was quite dismal. This was reflected in a survey by the International Air Transport Association (IATA) which revealed that for the year 1999, Delhi and Mumbai airports ranked amongst the three least favoured airports in the Asia-Pacific region in each of the 19 service elements considered. The modernisation of the airports was the only option left with the government and when Delhi got the mandate to host the Commonwealth Games 2010, the decision to modernise received a fresh impetus. In June 2003, the Airports Authority of India (AAI) board had approved a modernisation proposal. Delhi airport handled twice as many aircraft movements as it was originally designed for, resulting in congestion for both aircraft and passengers. Capital crunch with the government led to the emergence of privatisation for modernising the languishing Indian airports.
EXCELLENCE: A view of Terminal 3 from the cityside
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Finally, a bidding process began in May 2004 and on January 31, 2006, the then aviation minister Praful Patel announced that the empowered Group of Ministers (GoM) had agreed to hand over the management of Delhi Airport to the DIAL consortium. The year 2006 became a watershed in the history of Indian airports. Change was in the offing. The airport initiated the journey towards delighting passengers. It was one of the best Public-Private Partnership (PPP) models the country was going to witness. OMDA or Operations, Management and Development Agreement which was signed between Delhi International Airport Private Limited (DIAL) and AAI had the deliverables well chalked out. In addition to operations and the development of the existing Terminal T1 (Domestic) and T2 (International), DIAL was to implement a 20 year airport Major Development Plan (MDP) developed by the Lead Technical Advisor (LTA) consultant group comprising Mott MacDonald, HOK Architects and Pell and Fishman. The MDP envisaged developments in four stages with the current Project being Phase 1. Phase 1 comprised a new runway, passenger terminal building (T3) and other supporting infrastructure. The newly-renovated terminals were appreciated by the passengers. The focus was entirely on the passengers. The airport personnel, security staff and all those dealing with passenger facilitation were sensitised about their vital role and the importance of the passengers visiting the terminal. Several initiatives like DISHA ensured that airport staff knew how best to handle the passengers and all those who visited the airport. The slow and steady change was reflected in the ACI ASQ survey conducted in 2009. That year, IGIA featured at the 32nd position among the 140 airports which participated in this survey. The position was no minor feat. It was crowned with the tiara of twin triumphs: being the most improved airport in the Asia Pacific Region and the fourth best airport in its category of 15-25 mppa (million passengers per annum). The major target in the course of delighting the passengers was to build up a world-class integrated domestic and international terminal, T3. DIAL went ahead and developed a brand
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The airport initiated the journey towards delighting passengers. It was one of the best PPP models the country was going to witness
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new domestic departure — T1D — and dedicated it to the nation on February 26, 2009. This terminal pre-empted what was coming in a big way in the form of T3. The improved facilitation measures in the form of officials and staff dealing with passengers, improved services, better amenities and seating arrangements, reduced traffic snarls, all led to an even better score on ASQ parameters. In 2010, IGIA reached 12th rank among the participating 154 airports across the world. Also, it maintained its 4th position in the region but in the new category of 25-40 mppa featuring some of the best airports of the world. The best, however, was yet to come. The opening of the New Integrated Passenger Terminal Building — T3 of IGIA marked the beginning of an extraordinary travel experience for passengers from Delhi. T3 is the 8th largest terminal building in the world. Handling both international and domestic passenger loads, DIAL has built an additional capacity to handle 34 million passengers per annum. T3 has India’s largest and integrated checkin for and baggage retrieval facility. Common User Passenger Processing System (CUPPS) and an advanced five level in-line baggage handling system with explosive detection technology is put to use to ensure quicker processing and higher security. 6,400 m of conveyor belts are used for the totally automated baggage handling system at T3 which can handle 12,800 bags per hour. Some of the high-end security systems provided at IGI Airport include sophisticated CCTV system with more than 3100 cameras; fully-fledged dog squad with trained sniffer dogs; fully-equipped bomb detection and disposal squad; more than 90 X-Ray machines; explosive detectors and more. There is a state-of-the-art Security Operational Control Centre (SOCC) at IGIA that operates round the clock under the charge of the CISF (Central Industrial Security Force). All the feeds received from the elaborate CCTV coverage network at IGI Airport and also the Perimeter Intrusion Detection system are monitored at the SOCC. The IGI Airport was specially chosen by the BCAS (Bureau of Civil Aviation Security) to showcase the security standards
DELHI maintained at the airports in the country for the International Civil Aviation Organisation (ICAO) audit of country. The audit of IGI airport was conducted by the International Civil Aviation Organisation in February, 2011 where IGI Airport was found to be fully compliant with the provisions of Annexure 17 and National Civil Aviation Security Programme (NCASP). At IGIA, there are more than 4500 fully trained CISF personnel effectively maintaining security. Trained security personnel, passenger support staff and registered taxi operators with biometric cards ensure a much safer travel to and from the new airport terminal. Almost 20,000 sq m of retail area offers bagful of delights at the duty free stores. Passengers get the feel of a huge mall inside the terminal itself. Shoppers have a tough time choosing from a mind boggling variety of products from the best of Indian and international brands. Swanky lounges, nap and shower rooms add to the passengers’ delight. Pizza Hut, Copper Chimney, Costa Coffee, KFC, Flavours, Café Ritazza and the Food Village together with fine dining and well stocked bars make the passengers want to wait for their flights. The airport provides various avenues for entertainment. Television, free Wi-Fi internet connection keeps flyers hooked to the world. In case they wish to rejuvenate and relax, there are Shower and Massage Lounges and Nap and Massage Lounges at the terminal. The terminal also boasts of India’s first transit hotel at any airport. The 93-room Eaton Smart Airport Transit Hotel inside Terminal 3 is designed to make unpleasant layovers a thing of the past with its intelligent modern design and comfortable facilities. The hotel is divided into two wings with 57 rooms available in the international wing and 36 rooms available in the domestic wing. The hotel offers several services for the comfort of the passengers viz. innovative ‘Aqua Pods’, a unique wash and change facility; ‘The Essentials Spa’; a fully-equipped gymnasium; free internet access and TLounge offering a wide range of tea and alcoholic beverages. For art connoisseurs, T3 is a visual feast. Renowned artistes like Paresh Maity, M F Husain, Seema Kohli have their works on display at the new Terminal 3.
The terminal also boasts of India’s first transit hotel at any airport. The 93-room Eaton Smart Airport Transit Hotel inside Terminal 3 is designed to make unpleasant layovers a thing of the past
DELIGHTING PASSENGERS: A view of the shopping and retaurant facilities in Terminal 3.
A massive multi-level car parking right in front of the terminal building is ready to take care of the parking worries of passengers. With a capacity of 4300 cars, this is the largest multilevel car parking facility in India with the most modern security systems. Additionally, a separate surface parking area is also available for 2200 cars. Park and fly facility is available at the premium parking area on ground level. The counters have advanced Airport Parking Payment System (APPS) for calculation of usage time for parking. The parking facility has Closed Circuit Television (CCTV) cameras and Public Address (PA) systems. To ease the approach to the terminal and travel through the city, an eight-lane approach road to terminal and a dedicated high-speed Metro line from the city centre has been completed on a fast track mode. Now, Delhi’s domestic as well as international travellers can check-in at the metro stations on the Airport Metro Express Line and take a smooth 20 minute ride to Terminal 3. DIAL’s commitment to excellence also shines through the renovation of T2 that was refurbished and modernised in 2008. The first change visible at the new look terminal was the doubling of entry points: from four to eight. Immigration counters, the second and biggest bottleneck at the airport, also witnessed improvement. The number of counters went up to 52. DIAL also introduced inline baggage handling system and passengers would not have to get their luggage X-rayed before check-in now. Removal of the old machines also increased space at the congested terminal and DIAL installed seats at the check-in area also for passengers coming much before their flights. In DIAL’s vision, the modernisation of the terminals alone was not sufficient. DIAL undertook the construction of Terminal 1D beyond its scope of work. Enhanced terminal capacity served as a much-needed relief to the passengers. The total area available at T1B was around 18000 sq m over which was increased to 42,000 sq m at T1D. The number of check-in counters rose from 32 to 80; the number of boarding gates went up from 7 to 16. Commercial area available at 1D stood 3050 sq m from 700 sq m at T1B. Car parking that was a perennial prob-
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lem earlier with a capacity of 500 cars was increased to over 1650 cars. In the departure check-in area, an additional 2,500 sq m of space was added to increase the number of check-in counters. The terminal now features 100 check-in counters, from 78. These counters allow airlines to process passengers faster. If revamping T2 was a mammoth task, the construction of T3 from scratch was no mean feat. To construct such a massive terminal building, thousands of tonnes of steel and concrete was used; 18000 metric tonnes of structural steel has been put in building the roof alone. About 100,000 sq m of curtain wall has been imported from China and 110,000 sq m of granite has been imported from Bahrain for flooring. 170,000 sq m of carpet material has been taken from Brintons, the world leaders in carpet manufacturing, for a luxurious look inside the terminal. The material has been imported from UK and later fabricated at Pune. A massive project of this magnitude needed careful planning for not just the material and manpower for building the structure but for landscaping and beautification as well. Landscaping an area of 70-acres outside the terminal and 10000 sq m inside the terminal building was a mammoth task. Numerous varieties of plants, trees and shrubs were planted keeping in mind the aesthetics, ease of maintenance, growth pattern and colours of flowers during the flowering season of Delhi. By the end of the landscaping work, more than a million trees and plants will be planted. Numerous water fountains are already visible near the terminal. Within a year of commencement of operation, T3 had been awarded the LEED ‘GOLD’ rating by the Indian Green Building Council for green buildings in recognition of its environment- friendly features. It has also become the first airport in the world to be certified for energy management systems to latest ISO 50001 2011 standards. Delhi Airport has made the passenger central to its development and modernisation process. But it also aims to be the cargo gateway
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A massive project of this magnitude needed careful planning for not just the material and manpower for building the structure but for landscaping and beautification as well
ON THE MOVE: Fog or shine, IGIA keeps planes on the move.
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of India. The cargo terminal is undergoing modernisation in a phased manner. To begin with, a second terminal has been introduced. The operations of both the cargo terminals have been handed over to world-class companies in order to ensure that the services provided at IGIA meet the best standards. The modernisation work of the terminal is being carried out in a phased manner. DIAL also has plans for developing a Cargo Village to expedite cargo operations at Delhi Airport. Ever since IGIA began participating in the ACI-ASQ customer satisfaction benchmarking programme in 2007, its scores have steadily increased. From being at the 101 position in 2007 (the lowest among the 101 participating countries), it has jumped to the sixth position among 186 participating airports in 2011. Service has become central to the airport’s operations and this is reflected in the scores. DIAL carved a vision of being among the world’s top 10 airports by 2011 and achieved it by dint of sheer collaborative effort, planning and execution for spearheading a service-sensitive culture across the IGIA community. For 2009, IGI Airport was awarded Asia-Pacific’s Most Improved Airport Award with a 33 per cent increase over the scores of 2008. In 2010, it was honoured with the ACI Director General’s special recognition award. With an overall annual score of 4.73, the ranking in its category of 25-40 mppa (million passengers per annum) is second best in the world. The service quality also received a fillip with initiatives from the DISHA Academy of Service Excellence. The academy initialised its function by streamlining the processes and bringing lucidity in the work profile of different role holders by documenting the scope of their respective profiles. The academy’s scope is divided into two broad spectrums: training and sustenance. The agenda is to drive the awareness about the ASQ vision across the entire airport staff and instill the pride of being associated with the national asset of the country. DISHA trains the entire staff and infuses soul into the functioning of the airport. To instil a sense of airport community among the employees an initiative, ‘Sanyukt IGIA Parivar ‘ has been launched for the purpose of getting all workers from the grassroots’ level to department heads together. This aims to inculcate a feeling of bonding and most importantly, the pride of association, for greater progress and higher achievement. The vision is to provide an environment which inculcates pride, drives inclusive growth and makes IGIA the best place to work. The airport has taken rapid strides in a short span of time by undertaking a mammoth task and executing it well. It has now set its sights on 2014 to achieve the highest number of Air Service Quality ratings and be Number 1 by January 2014.
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ADDING MORE FACILITIES: An artist’s impression of the upcoming retail area at Hyderabad airport.
ALWAYS A
BETTER CHOICE HYDERABAD IS ONE OF THE FASTEST-GROWING CITIES AND THE SIXTH-LARGEST METROPOLITAN AREA IN THE COUNTRY. WITH ITS CENTRAL LOCATION, THE CITY’S AIRPORT SERVES AS A HUB FOR DOMESTIC PASSENGERS, INTERNATIONAL PASSENGERS AND CARGO TRAFFIC AND OVER THE YEARS, IT HAS CONSTANTLY STRIVEN TO RAISE ITS BAR IN PROVIDING QUALITY FACILITIES FOR ITS USERS. 82 I CRUISING HEIGHTS I MARCH 2012
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odernising any institution or organisation has become an unavoidable phenomenon. In line with this concept, airports in India have gone on a modernization spree over the past six years since a modern outlook symbolises progress and success. The Rajiv Gandhi International Airport (RGIA) in Hyderabad, operated by GMR Hyderabad International Airport Ltd (GHIAL), was constructed to present a completely modern installation to this city of pearls, and to the country. Incidentally, RGIA is Indiaâ&#x20AC;&#x2122;s first Greenfield airport to be operational under the public-private partnership (PPP) model. The swanky RGIA, designed by Hong Kong-based architects Winston Shu and Gudmund Stokke from Norway, is located at Shamsabad, about 40 km from the city. The
An airport needs to differentiate itself uniquely and offer different services. GHIAL at RGIA tries to achieve this
entire campus with the terminal and peripherals is set on 5495 acres of land and boasts of a world class passenger terminal, cargo hub and pharma zone, Aerospace Park, MRO facility, five star hotel and more. An airport needs to differentiate itself uniquely and offer different services. GHIAL at RGIA try to achieve this through seamless connectivity, transfer process and world class airport facilities. Gone are those days when air travel was an unfulfilled dream. With the influx of low cost carriers and an air route map spreading to every corner of the country, RGIA also has spread its connectivity to various domestic and international destinations bringing the world closer for passengers. Hyderabad is within two hours of flying time to all major Indian metro cities and 3-5 hours of business and leisure destinations
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across the Middle East and South-east Asia. Currently, Hyderabad is connected to 24 domestic destinations by six airlines. It is connected to the whole of India including cities like Agartala, Bhubaneswar, Bhopal, Hubli, Indore, Jaipur, Lucknow, Nagpur, Rajahmundry, Tirupati, Trivandrum, Varanasi, Vijayawada and Vishakhapatnam, etc. Also, Hyderabad is connected to 16 international destinations across South-east Asia, Middle East, Europe and North America. Around 125 flights are operated by 13 airlines, per week. In the contemporary world, where all businesses have a consumer-focused approach, GHIAL has also developed a B2C marketing strategy for RGIA. The airport is the first in India to have initiated marketing the airport as a product through ‘Fly via Hyderabad’, a unique programme of its kind. With this, GHIAL intends to establish Hyderabad airport as South and Central India’s gateway and hub of choice. Due to the strategic location of Hyderabad, there is a considerable amount of saving in the flying time and operating cost for carriers from the city. The south-central location of Hyderabad also reduces the flying time to any of the regional cities by 15-20 minutes, in comparison to Bangalore or Chennai. The programme which was flagged off in August 2011, has been receiving good response from Pune, Nagpur, Mangalore, Raipur, Vijayawada, Vishakhapatnam, Rajahmundry, Aurangabad, Madurai and Bhubaneswar. GHIAL also plans to launch the programme at other Tier 2 and 3 cities in south and central India. This will provide better flying options for passengers in the region to different international and domestic destinations. RGIA is also better connected to cities within Andhra Pradesh and the bordering states. At present, passengers can fly to 15 regional routes in south and central India. This enables multiple flight options for passengers round the clock out of Hyderabad. GHIAL is also continuously working with airlines to offer more air connectivity and improve passenger experience at RGIA. The main focus of the airport is:
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Enhance regional connectivity Improve and strengthen international connectivity Enhance the overall passenger experience
RGIA boasts of a 4,260 mt runway and recently inaugurated a new parallel runway which is 3707 mt long and Code-E aircraft compliant; thus becoming the first Greenfield Airport in the region with two runways. This will help RGIA to provide 24x7 uninterrupted flight operations.
ON A PLATTER BEFORE FLYING It’s a fabulous experience for passengers at the RGIA as it serves up a wide variety of food and beverage and retail options for the convenience of passengers, and to suit every taste and fit every budget. From coffee to pizza, from gourmet cuisines to fancy cocktails, RGIA has it all. Specialty restaurants, international fast food joints, juice bars, ice-cream counters and coffee shops are all within easy reach of the passengers. Also on offer is a wide variety of Indian cuisines and brands in the food court, appropriately called “Flavors of India”: from north Indian thalis to Hyderabadi biryanis to south Indian dosas, it’s all there. As an added dash, passengers can also taste famed Indian street foods. Recently, the true icon of Hyderabad baking “Karachi Bakery”, has opened its outlets at the domestic and international departure areas in the airport. As for shopping, RGIA provides a wide range of products with value for money concept. Retail options include liquor, tobacco, perfumes, cosmetics, branded apparel, souvenirs, fashion accessories, books, music, jewellery, footwear, flowers and gifting. To make these available to all, outlets are stationed in the carpark, the meeters and greeters area, apart from the arrivals and departures areas.
SHOP DUTY FREE
VALUE-ADDITION: (L-R) A view of the lounge area; and, controllers busy handling airport operations.
At the RGIA, customer satisfaction is at the heart of Hyderabad’s Duty Free (HDF) shopping experience. It is also the most preferred destination to shop with the assurance of “Best Prices Always”, when compared to other duty-free shops worldwide including the Middle East. RGIA has introduced incredible product promotions, the best shopping deals and reinvented stores to provide with a fantastic shopping experience. Any passenger departing or arriving at the RGIA can shop at the duty-free with tax waivers providing substantial savings of up to 15 per cent or more.
GHIAL
CLEAR WINNER: Cargo terminal at Hyderabad airport has been hailed as the best in the country.
Top of the line for cargo
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ajiv Gandhi International Airport, Hyderabad, developed India’s first modular integrated Cargo facility spread over 14,330 sq mt with a capacity to handle 150,000 MT annually. This Terminal is also home to India’s only dedicated pharmaceutical handling zone “The Pharma Zone”. With a favourable investment climate in Andhra Pradesh -- home to India’s new sunrise industry, pharmaceuticals -the airport has grown at a CAGR of 16 per cent while India’s overall airfreight volumes were at 11.2 per cent. The airport handles dedicated freighter aircrafts including B747-400, MD-11, AN-124, IL-76, the largest freighters currently operational globally, offering connectivity to all major regions of the world including Africa, Europe, USA , Middle East and Asia Pacific. RGIA was the first airport operator in the country to identify the need for specific solutions for the pharma industry and the launch of India and the region’s first and only dedicated “Pharma Zone” in January 2011 was with a view to offer customers best-in-class solutions. The facility has a capacity to process shipment throughput of more than 33,000 tons per annum offering a truck dock to airside temperature-controlled environment. Lufthansa approved this as a
While air freight volumes in India have grown at a CAGR of 11.2 per cent, RGIA recorded a 16.1 per cent CAGR handling 48,000 tonnes between April and October 2011
“World Class Facility” and nominated Hyderabad as its key hub in South Asia for transportation of pharmaceuticals. The presence of a dedicated freighter aircraft parking apron with a 24 x 7 security CCTV coverage has also helped RGIA offer one of the best-in-class globally benchmarked solutions for airfreight. RGIA is also home to India’s only airport-based FTZ (Free Trade Zone) within the 250 Acre Multi-purpose SEZ. It is being developed to facilitate the fast growing logistics trade and will allow its users to Warehouse, Distribute, Trade and Value Add goods and services for customers. Common-user Bonded and Unbonded Warehouses are being developed for 3PL players to store and process their shipments helping them manage their supply chain more efficiently. The Road Feeder Service (RFS) which connects Hyderabad to other major cities in India offers efficient options for airfreight considering the congestion prevalent in major gateway airports. Coupled with Hyderabad’s ‘geo centricity’ and the future rollout of GST, the RFS solutions is expected to play a major part in improving supply chain and helping decongest the other major gateway airports in India and realising RGIA’s vision of being the Logistics Hub of India and South Asia.
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Flyers can discover an amazing variety of exciting products and deals at HDF. One can get fabulous deals on fragrances, cigarettes, chocolates, liquor, and more and be spoilt for choice with luxury brands. A walk into the brand new store at the International Departures will bowl flyers over. HDF has exciting promotions that are currently running, giving the perfect reason to shop.
RGIA is the third best airport in the world
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he Rajiv Gandhi International Airport (RGIA) has been adjudged as the third best airport in the world in the 515 MMPA category in Airport Service Quality by Airports Council International (ACI). The Hyderabad Airport, led by GMR Group, has been ranked ahead of global contenders such as Abu Dhabi, Adelaide, Geneva, Cape Town, Hamburg and London Luton Airports. RGIA, led by the GMR Group, scores higher than its last year’s ASQ ratings. While in 2010, the airport scored 4.51 overall, 2011 score led the Hyderabad Airport to 4.57 in the 5-15 million passengers per annum category. Year-after-year RGIA had consistently raised its standards and has made significant progress since 2009 when the score was 4.44. Recently, the Rajiv Gandhi International Airport (RGIA) has started the second runway. The new parallel runway, 3707 mtrs long, is Code-E aircraft (such as A340/B747) compliant. The first runway is 4260 mtrs long. GMR Hyderabad International Airport Ltd (GHIAL), the operator of RGIA has obtained clearances by DGCA in order to make this runway operational, making it the first Greenfield airport in the region with two active runways. Hyderabad Airport has now an edge over other airports in terms of runway maintenance, according to industry experts. With the activation of runway, RGIA can now continue flight operations uninterruptedly during the regular main runway maintenance of Tuesdays. Speaking on the occasion, Vikram Jaisinghani, CEO-GHIAL , said, “An airport’s foremost responsibility is to improve facilities for passengers and offer them a convenient and comfortable transit. We are happy that RGIA excelled in all major parameters under ASQ ratings. RGIA has also initiated innovative programmes like Volunteer Service for passenger facilitation, Installation of Photo kiosk, Introduction of international retail brands etc., which already have drawn attention and praised by passengers through Feedback Forms available at the airport. We are working hard to make Hyderabad the best airport in the region and are pleased that our perseverance has borne results.”
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RELAXING FUN RGIA is India’s only airport with its own racing track and literally welcomes all those who have petrol flowing in their veins! Zip around the 750 m track in karts ranging from the 7 bhp model for beginners to the ultra-powerful 28 bhp model which can cross the 100 mph mark. The track provides transit passengers and meeters and greeters a fun way of whiling away some time between journeys. The track is one of the safest in the country and the safety parameters are approved by FMSCI (Federation of Motor Sports Club of India). A national standard track, it is technically the most challenging track in the country and what is most important is that it is operational 24X7. Apart from Go-Karting, passengers can also hold their nerves at simulator zone, remote control car racing, zorbing, net cricket and paint ball target shooting.
FOR SPIRITUALLY-INCLINED GHIAL has been working closely with Andhra Pradesh Tourism Department. It has a tie-up for the Jet Airways Tirupathi package and recently, SpiceJet also signed an agreement with Andhra Pradesh Tourism Department on a similar darshan package for passengers.
CATERING TO ALL POCKETS
The airport has 13 Business Class Lounges with services that include Business Center, Baggage Hold, Shower, Napping areas and Massage services
The Novotel RGIA is located a mere five minutes from the airport and approximately 35 minutes away from the city centre with ease of connectivity and access. Built on five acres of beautifully landscaped area, the hotel is contemporary and features 305 spacious rooms consisting of 11 suites, 53 Premier rooms and 241 Superior rooms. The airport also has 13 Business Class Lounges with services that include Business Center, Baggage Hold, Shower, Napping areas and Massage services. There are three VIP lounges located at the Departure, Arrival and at the Remote gates on the ground level. The Plaza Premium offers passengers a special lounge with nap and shower facility at RGIA, which provides a comfortable place for passengers to relax before or after a flight. Flyers can avail of a wide choice of food and beverages here. The lounge is located opposite the car park and below the airport village area. It comprises 28 rooms with showers and a TV each, a lounge with seating capacity for 44, two meeting rooms, a business centre, four shower
GHIAL rooms, a massage room with four seated massage chairs, TV viewing area and a 24-hour bar. For the benefit of others, there are good options available at the airport lodge situated at the Passenger Transport Center (PTC), where all the RTC buses from the city and other districts will be halted. The rooms and dormitory facilities are very cheap at the lodge.
MORE FACILITIES WITHIN To facilitate passenger convenience, there are 130 check-in counters and 16 self check-in counters for passengers carrying only cabin baggage; 46 immigration counters: 23 departure, 22 arrival and one transfer; four-level in-line baggage handling systems. RGIA also provides four types of transfer desk: domestic to international, international to international, domestic to domestic and international to domestic. In addition, the airport provides four conveniently located prayer rooms (namaz), baby rooms and smoking lounges within the passenger terminal building. Porter services are available at arrivals and departures at both domestic and international terminals. For the elderly and physically challenged, there are wheelchair facilities and free buggy services. A Lost and Found Counter has been set up by RGIA, in case any passenger has misplaced/lost his or her belonging at the airport.
WELL-ORGANISED: Firefighting vehicles lined up at the airport.
MEDICARE Apollo Hospitals has provided the Medical Centre that is equipped with a 24-hour pharmacy and 17-beds. There are well-trained doctors and paramedics available 24x7, to serve as an emergency treatment centre for passengers/visitors. It also serves as an important partner in disaster management, with stand-by ambulances fitted with advanced life-saving equipment within the airport premises.
CONVENIENCE UNLIMITED Radio Taxi services at the RGIA are provided by leading service providers for the convenience of customers. These are air-conditioned cab services with charges payable on the basis of meter reading at the end of the journey. In addition, there are car rental services, providing services for passengers arriving at the airport. The Aero Express is a non-stop airport shuttle service between the airport and many important destinations located in the city. These are AC coaches offering secure, safe travel and all this along with value for money. Andhra Pradesh State Road Transport Corporation (APSRTC) operates many city bus services to the airport from important locations. For the benefit of passengers from the districts, APSRTC runs direct bus services between the airport and districts such as Karimnagar, Warangal, Nizamabad, Korutla, Metpally,
RGIA also provides four types of transfer desks: domestic to international, international to international, domestic to domestic and international to domestic
Nirmal, Armoor, Raichur, Tenali, Guntur, Rajahmundry, Razole and Vijayawada.
RGIA FEATS ACI ranked RGIA as World No.1 airport for two consecutive years, 2009 and 2010, in 5-15 million passengers category. It was also rated as world No 5 in 2009. For 2011, RGIA improved its rating and ranked world No 3 in the 5-15 million category. RGIA is the first airport in the world to be awarded LEED Silver Rating for its ecofriendly design. Airport Environmental Performance of the Year 2009 by CAPA. Certificate of Merit in the General Category Sector for the National Energy Conservation Awards - 2011. Conde Nast Traveler India Award for ‘Favourite Indian Airport 2010’. Skytrax World Airport Awards 2010 for ‘Best Airport India’. Certification of ISO-10002:2004 Customer satisfaction - Guidelines for Complaints Handling. RGIA was awarded ISO 9001:2008 (Quality Management System), ISO 14001:2004 (Environment Management System) and OHSAS 18001:2007 (Occupational Health and Safety Management System) certification. RGIA voted as one of the seven wonders of Hyderabad in Times of India contest. Routes Airport Marketing Award for two consecutive years (2010 and 11). ORBIS Award 2008 for Corporate Social Responsibility. RGIA won Best Gardening Award at Hyderabad Festival organised by Department of Horticulture, AP Government, for two consecutive years in 2011 and 2012 SATTE (South Asia Travel and Tourism Exchange) awarded RGIA as the Best Performing Domestic Airport in SATTE-2012. The Government of India awarded the National Tourism Award to Rajiv Gandhi International Airport, Hyderabad under the Best Airports category for 2009-10 and 2010-11.
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OUTLOOK SPECIAL MIAL
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MIAL AIMS
TO PLEASE DESPITE ITS GEOGRAPHICAL LOCATION, THE CHHATRAPATI SHIVAJI INTERNATIONAL AIRPORT HAS EXCELLED IN PROVIDING TOP-OF-THE-LINE SERVICES TO ITS FLYERS. IN THE LAST FIVE YEARS, THE AIRPORT HAS MOVED FROM ONE ACCOLADE TO ANOTHER FOR PROVIDING THE BEST SERVICES AND FACILITIES.
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MIAL
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he year 2006 was a great milestone in the history of airports in India. Mumbai International Airport Pvt. Ltd. (MIAL), a joint venture between GVK (one of India’s largest infrastructure developers)-led consortium (74 per cent) and Airports Authority of India (26 per cent), was awarded the mandate for modernising and upgrading Mumbai’s Chhatrapati Shivaji International Airport (CSIA) in February 2006. MIAL’s vision is to transform CSIA into one of the world’s best airports that consistently delights customers and be the pride of Mumbai. One of the biggest challenges for MIAL has
MIAL’s vision is to transform CSIA into one of the world’s best airports
been CSIA’s location: it is in the heart of the city and is landlocked. Additionally, MIAL undertook the modernisation process while the airport was still operational and continues to do so till date. In the last five years, MIAL has initiated several steps for increasing airport capacity. In 2007, within just a year of taking over operations at CSIA, MIAL opened a new Domestic Arrival Terminal at 1B as a result of which 65 per cent of the domestic arrivals shifted from Terminal 1A to 1B. In fact, Terminal 1B in itself, the International Terminals 2B and 2C and Terminal 1A have been refurbished considerably over a period of time in the last few years resulting in expansion of capacity to meet the increase in passenger traffic. A brand new Domestic Terminal 1C connecting 1A and 1B was unveiled in April 2010 as well. CSIA is one of India’s busiest airports having recorded passenger traffic of 29.1 million in 2010-11, along with cargo traffic of 670,235 tonnes. To cater to the stupendous growth in passenger traffic, MIAL as an airport operator has always tried to understand passenger behaviour closely and addressed their requirements on an ongoing basis. With a clear focus on passenger convenience and comfort in the long term, there have been a number of changes at CSIA such as additional check-in counters, faster immigration, free wi-fi, new retail options for duty-free shopping, better housekeeping, improved signages, fast-food kiosks, better kerbside management, and smoother traffic flow. MIAL is currently implementing a master plan that has been designed to have an integrated passenger terminal at Sahar with stateof-the-art infrastructure and facilities to cater to passenger traffic of 40 million per annum.
CLASS EXPERIENCE: Inside view of the terminal; and (inset) a coffee shop. MARCH 2012 I CRUISING HEIGHTS I 89
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H E I G H T S
PASSENGER FACILITIES AND SERVICES
More convenience at the Integrated Terminal The terminal will have a total floor area of nearly 439203 sq. mtrs spread across four levels. Besides its unique architectural and design concepts, the terminal will be extremely passengerfriendly, and will raise the level of the much-acclaimed ‘CSIA travel experience’ to a new high’. Aspiring to be the new Gateway to India, in every sense of the word, T2 will soon host a unique experience for every traveller and visitor to this vibrant city. World-class architecture and passenger facilities 184 check-in counters 700,000 SF of retail space, F&B, lounges and travel services 32 fixed-link boarding bridges/66 passenger boarding bridges Parking space to accommodate 5,000 cars Three-km, six-lane dedicated access road through Western Express Highway
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CSIA has around 78 separate immigration counters, free photograph facility and separate interview rooms for Tourist Visa on Arrival
ART AT ITS BEST:Beautiful structures give Mumbai airport a unique identity.
E-Ticket Printing Kiosk/Self check-in kiosks: MIAL introduced e-ticket printing kiosks outside all the domestic departure gates at CSIA. It was the first Indian airport to introduce this facility. The e-ticket printing enables passengers to avoid long queues outside airline ticket counters and print their e-tickets prior to their departures. There are also 39 self-check-in kiosks at the Domestic Terminal and 35 at the International Terminal. Social Media: MIAL announced the launch of its social media initiative for CSIA and earned the unique distinction of being the first and only airport in India to go live on social media with a dedicated Facebook page and Twitter handle. Faster and efficient immigration process: CSIA has been recognised as one of the fastest airports in the world with reference to the immigration process it follows. CSIA has around 78 separate immigration counters, free photograph facility and separate interview rooms for Tourist Visa on Arrival. Retail: CSIA’s convenient shopping areas provide everything passengers need before and after their flights. Passengers can choose to shop from an array of top of the line fashion, latest gizmos to books, handicrafts and souvenirs, which are all available at CSIA. Terminal 1C, which opened in 2010, has an area of approx. 10,000 sq ft of retail space and boasts of prominent F&B outlets such as Coffee Bean and Tea Leaf and Ultra Bar. Passengers can also shop at a range of premium stores such
OUTLOOK SPECIAL MIAL
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as Ethos, William Penn, Parcos, Swarovski, Croma, Media Mart, Bombay Store, Lilliput and Hidesign. CSIA boasts of a veritable duty-free shopping paradise where passengers can choose to shop for must-haves, such as gadgets, watches, liquor, designer wear and other premium gift items. The Duty Free area showcases some of the best brands in the world which are available at CSIA at a much lower rate, compared to other airports. Wellness offerings: High-end travellers can relax and recharge their senses prior to boarding their flights with a number of spa options to choose from such as the O2 spa, Mantra Spa and My Foot Reflexology.
H E I G H T S
QUICK CHECK-INS: A view of flyers checking in at Mumbai.
Honour for Mumbai Chhatrapati Shivaji International Airport was ranked the third best airport in the world by the annual Airport Council International (ACI). It also received the Airport Service Quality Awards for 2011. CSIA was also rated as the second best in India, for airports handling 25-40 million passengers per annum (mppa). The survey was conducted across 180 airports in the world. G V Reddy, managing director of Mumbai International Airport Pvt Ltd (MIAL), said the award showed improvement in service quality at the airport. "This award is a reaffirmation of our vision to transform CSIA into one of the world's best airports that consistently delight customers and be the pride of Mumbai. It is gratifying to note that we received this award last year in the 15-25 mppa category and again this year in the 25-40 mppa category," Reddy said. The survey, undertaken by ACI, was conducted with passenger feedback on fliers' experiences from their arrival till departure. CSIA catered to 29.1 million passengers between April 2010 and March 2011, a MIAL spokesperson said.
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CSIA offers the busy and onthe-go business travellers a new breed of stylish airport bars and lounges at both the domestic and the international terminals
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General Aviation Terminal: CSIA was also the first airport in India to have a self contained General Aviation (GA) terminal for handling round the clock domestic and international flight operations for private and NSOPs. Lounges: The international terminal sports a number of airline lounges including those run by premium carriers such as Lufthansa, Emirates and British Airways. Additionally the Lufthansa lounge can be accessed by passengers flying an airline that belongs to the Star Alliance group Food and Beverage: There’s something for everyone at CSIA with its numerous restaurants, cafes and food courts, providing a wide variety of F&B offerings to suit ones palette. At the dedicated 11,750 sq ft food court at Terminal 1C, overlooking the airside, passengers can grab a quick meal while waiting for their flight. It hosts a variety of Indian and international outlets including KFC, Domino’s, Idli.Com, Curry Kitchen, Cafeccino and Mad over Donuts. The Arrivals area of Terminal 1B also hosts a number of F&B outlets that passengers can choose from. On the other hand, the international terminal also offers passengers a variety of F&B options. In addition, CSIA offers the busy and on-the-go business travellers a new breed of stylish airport bars and lounges at both the domestic and the international terminals. These include amongst others the chic and friendly Bombay Blue, the filmi yet upscale IIFA lounge bar or the extremely hip and trendy Noir Bar that was launched in 2010. The options at the domestic terminal include the classic Ultra bar at the domestic terminal 1C or the Signature bar at domestic terminal 1B or the Foodies bar at domestic terminal 1A. The domestic terminal recently also played host to a new set of bars, the swanky RC Bar which was unveiled by the Royal Challengers team, Bengaluru and the upscale Good Times Bar. Awards and Accolades: Over the years, MIAL’s efforts in modernising CSIA have been acknowledged with many awards and accolades. CSIA was rated the third best airport globally and the second best airport in India for airports in the 25-40 million passengers per annum (mppa) category, by ACI for 2011 Rated the best airport in India for airports above 15 million passengers per annum (mppa) in the ASQ (Airport Service Quality) survey carried out by Airport Council International (ACI) and ranked 4th amongst all airports globally in the 1525 mmpa category in the second quarter of 2010 CSIA’s proposed Air Traffic Control Tower won the ‘Autodesk Hong Kong Building Information Modeling (BIM) Award 2009’ Frost & Sullivan Asia Pacific Aerospace & Defense Awards — ‘Aeronautical Excellence Airport of the Year’ in 2008.
BIAL
FLOORING FLYERS,
BIAL-STYLE THE HEIGHTENED CUSTOMER EXPERIENCE SAYS IT ALL. FROM THE VERY BEGINNING, THE BENGALURU INTERNATIONAL AIRPORT HAS INSISTED ON DELIVERING A HIGHQUALITY EXPERIENCE BACKED BY ASSURED SERVICE LEVELS AND HIGH RELIABILITY. A DETAILED LOOK AT THE INITIATIVES TAKEN BY THE AIRPORT AUTHORITIES TO ADOPT AN INCLUSIVE APPROACH OF INVOLVING THE LOCAL COMMUNITY WITH THE AIRPORT AND ITS EXPANSION PROJECT.
B
enngaluru is one of the fastest-growing cities in the world; it attracts huge amounts of investment in the fields of IT, machinery, BPO, biotech, medical tourism and educational institutions. The growth of the IT sector has been the major influencing factor in growing international traffic from the city. Early this year ‘Lonely Planet’ rated Bengaluru as the third favorite city in the World for 2012. Bengaluru was rated after London and Muscat as was called the undisputed Elvis of South Asian megacities for its well-known flamboyance. Bengaluru, due to its geographical positioning, lies exactly in the middle of South India hence the average distance between all the regional airports is lower in comparison to major South Indian airports such as Chennai and Hyderabad. The average flying time between all South Indian airports from Bengaluru is less than 90 minutes and has a strong case to develop into a strong hub airport. The passenger profile at Bengaluru is also very attractive. The domestic passenger traffic currently amounts to around 83 per cent of the total traffic and the remaining are international travellers. ‘The Silicon Valley of India’ sends more than 50 per cent of its international passengers to the US and Europe, thereby identifying them as knowledge workers and IT professionals. In domestic aviation, more than 60 per cent of travellers are on business while the others are on personal or leisure. As an airport, Bengaluru International Airport Limited (BIAL) provides excellent service to its passengers through a range of business-excellence programmes. The ability to achieve value for the customers is driven by their focused strategy and rigorous attention to operational efficiency. The company has pioneered various initiatives and practices and set benchmarks for the industry. The airport is focused on customer experience — of both the airline as well as the passengers. The airport delivers to its customer airlines and passengers a high-quality experience
INNOVATION AT ITS BEST: Teenager checking in at an e-kiosk at Bengaluru Airport. MARCH 2012 I CRUISING HEIGHTS I 93
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backed by assured service levels and high reliability. One of the steps that the Bengaluru International Airport, took while aiming to give passengers the ultimate in travel experience, is investing in state-of-the-art IT and communication systems to ensure faster processes and responsiveness. The airport deployed common IT infrastructure that has multiple advantages for all stakeholders utilising it. It also has the first and only Airport Operations Control Centre (AOCC) for collaborative decision making among the airport’s key stakeholders. This AOCC serves as the nerve centre of the entire airport with real-time data being fed into it from diverse departments and facilitating collaborative decision making. The airport operator’s choice of a baggage handling system was also made on similar lines.
H E I G H T S
The airport deployed common IT infrastructure that has multiple advantages for all stakeholders utilising it
CHECKING IN The airport is equipped with 53 check-in counters in a straight line, facing the main entrance of the departure hall in the terminal building. The fully equipped, Common Use Terminal
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INSIDE-OUT: An inside view of an aerobridge at BIAL.
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Equipment (CUTE)-enabled counters have been designed based on the feedback of all airlines operating to and from Bengaluru and are linked to a fully automated baggage-handling system. The CUTE service provider at Bengaluru International Airport is RESA CREWS.
SELF-SERVICE FOR BUSY TRAVELLER The airport, in keeping with the ‘Simplify the Business’ initiative of IATA, endeavours to develop and support various alternative forms of check-in that is meant to de-congest airports. Business travellers are busy-people and travel comprises a major portion of their working lives. Travelling mostly with only hand baggage, time for these passengers is precious. To facilitate these passengers, the airport has 18 Common Use Self Service (CUSS) kiosks located in the terminal building right in the path of the passenger flow, from the departures entry to the check in counters. The airport received the IATA platinum certification for being the first 100 per cent BCBP
BIAL
compliant airport in India. Both the CUSS and CUTE facilities at the airport are BCBP complaint.
SETTING STANDARDS IN BAGGAGE DELIVERY
HUSTLE AND BUSTLE: (L-R) Glimpses of the passenger conveniences at Bengaluru Airport.
The Objectives of baggage handling, safety, security, efficiency and reliability are met through intelligent deployment of state-of-the art technology, stakeholder collaboration, clearly defined processes and most importantly a committed workforce. Over the last three years, the airport has
achieved a zero bag-loss count and consistently high standard of baggage delivery for both domestic and international bags. As part of its philosophy of continuous improvement, the processes are constantly improved, employees are retrained several times and technology is upgraded so as to remain on top of the game. While the passenger reaches the baggage carrousel faster due to the short walkways, a long wait for the baggage could be disappointing. Usually arriving passengers take about 7-10 minutes to reach the baggage claim area at Bengaluru International Airport. Hence, it has Continued on Page 98 `
First airport to adopt biofuel for its vehicles
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n an effort to reduce the carbon footprint and increase energy efficiency, Bengaluru International Airport Ltd. (BIAL), recently announced its partnership with Karnataka State Biofuel Development Board (KSBDB), for its operations at BIAL. Marking another landmark in a series of many firsts for the airport, BIAL has chalked out plans to migrate operations of its ground vehicles to biofuel supplied by KSBDB. With this, BIAL has become the first airport in the country to adopt biofuel in its operations. "We have consciously taken this decision to implement and develop Bengaluru International Airport into a green facility and reduce greenhouse gas emissions. Deploying biofuel reduces carbon footprint, in comparison to usage of fossil fuels and thus is a responsible way to meet our energy needs. We are proud to have partnered with KSBDB in its efforts to create an enabling and sustainable environment," said Sanjay Reddy, Managing Director, BIAL. BIAL, as part of its ongoing efforts towards making the airport energy efficient, has taken up several green initiatives
USHERING GREEN: (L-R) Hari Kumar, VP, Engineering & Maintenance, BIAL; Y B Ramakrishna, Executive Chairman, KSBDB; Abhishek Mudram, Director (Manufacturing), Tetrahead; Hari Marar, President (Operations), BIAL; A K Monappa, Managing Director, KSBDB and Bhaskar Bodapati, Director (Finance), BIAL flagging off a bio-diesel vehicle.
in the past including water conservation and management. While these initiatives have been recognised and awarded at various industry forums, BIAL is committed towards adopting such best practices and set benchmarks across all functions at the airport. The adoption of biofuel by BIAL was a step in the right direction and would go a long way to further the biofuel programmes and policies at the state level, said Y B Ramakrishna, Executive Chairman, KSBDB.
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Karnataka: Leading the Indian
Aviation Revolution
WITH WIDESPREAD SUPPORT FROM THE STATE GOVERNMENT FOR A SLEW OF PROJECTS, KARNATAKA IS TRAILBLAZING THE AVIATION SECTOR IN THE COUNTRY.
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he expanding aviation sector in India is evident from the growth seen in the sector during the past few years. According to the Indian Brand Equity Fund (IBEF), India is the 9th largest civil aviation market in the world. Further, with 45 million domestic passengers, it is ranked fourth in terms of domestic passenger volumes. From 2004-05 to 2010-11, the air passenger volumes saw a 16 per cent compounded annual growth rate (CAGR). Domestic passenger growth at 17.6 per cent CAGR was higher than international passenger growth of about 12 per cent CAGR. To support this growth, there is a need for augmenting airport infrastructure in India. As a result, the Indian government has been pushing for development of airports on a PublicPrivate Partnership (PPP) basis. The Central Government, however, can contribute to this goal only to a limited extent. Of the 454 airports and airstrips in India, only 97 are owned and operated by the Airports Authority of India (AAI). The rest are under the purview of the states, which have a major role to play in meeting the challenge of expanding Indian airport infrastructure. Karnataka is one of the few states that has successfully risen to this challenge and has been at the forefront of developing airports on the PPP model across the state. It has not only spearheaded the development of Bangalore International Airport but also aimed at developing several Greenfield airports across the state. Further, it has been actively involved with AAI for
expanding/modernising existing airports within the state. Karnataka has also undertaken steps to encourage the airline sector in the state. Under its Vision-2020 programme, the state plans to become a model for promoting aviation. Short-haul aviation is expected to be given a major boost in the state by ensuring the presence of an airport/airstrip in every district of Karnataka.
BENGALURU INTERNATIONAL AIRPORT
Bengaluru International Airport was the first-ever Greenfield airport set up in the â&#x20AC;&#x153;Investments worth country on Public-Private-Partnership nearly `16,460 million model through the pioneering initiative are estimated to flow of the State of Karnataka. Developed at into the Greenfield a cost of `24,700 million, the PPP projairport sectorâ&#x20AC;? ect brought all stakeholders - private parties, AAI and the Karnataka State DR RAJ KUMAR KHATRI, IAS Government -- together to make a SECRETARY TO GOVERNMENT world-class airport in Bangalore a posINFRASTRUCTURE DEVELOPMENT DEPARTMENT, GOVERNMENT OF KARNATAKA sibility. In 2004, a concession agreement was signed between the Bangalore International Airport Ltd. (BIAL) and the Government of India, where the former was given exclusive rights to develop, design, finance, construct, operate and manage the airport for 30 years with automatic renewal for another 30 years. To facilitate development of the airport, several measures were taken by both the State and Central governments that included granting exclusivity within a radius of 150 km, providing 4,008 acres of land on lease basis, power and water supply up to the battery limits of the airport and improving the connectivity from the city to the airport. The
Greenfield Airport initiatives by Karnataka Location
Cost (in ` Million)
Status
Shimoga
2300
Being implemented by Regional Airport-Holdings International Limited (RAHI), a joint venture between ITNL and Comet Infra-Developments Private Limited (CIDPL); 653 acres acquired, expected to start small aircraft landing by September 2012
Gulbarga
1100
Being implemented by Regional Airport-Holdings International Limited (RAHI), a joint venture between ITNL and Comet Infra-Developments Private Limited (CIDPL); 692 acres acquired, expected to start small aircraft landing by July 2012
Bijapur
5650
Awarded to MARG Aviations in 2008. 727 acres of land has been acquired and being handed over to the developer.
Bellary
1410
Awarded to MARG Aviations in 2010.
Hassan
6000
Awarded to Jupiter Aviation in 2007. 536 acres of land has been handed over.
Total Investment
16460
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SPOTLIGHT
RAHI
Cost (in ` Karnataka Government also DEVELOPMENT OF Location Status Million) provided financial support in EXISTING the form of an interest-free AIRPORTS Mysore 175 acres of land handed over to AAI for 420 Apart from Greenfield airloan of `3500 million and (expansion) development, MoU signed. ports, Karnataka is also equity of `500 million for the Temporary terminal building has been con- working towards modproject. Bidar 320 structed and approval of MoCA is awaited ernising and expanding its The airport became operfor flight operations. existing airports and ational in May, 2008 and is There is a naval base and Civil Enclave is airstrips. One of the major presently handling around 12 planned to be developed and will be taken projects being undertaken is million passengers per Karwar 320 up during second phase expansion of port the upgradation of Hubli annum. At present, this is the by Naval Authorities. Airport at a cost of `1950 3rd largest airport in the counmillion. The state governtry in terms of the passenger 370 acres of land has been acquired for traffic. The airport was voted Belgaum 1500 expansion of the Airport and handed over to ment is facilitating the land acquisitions and nearly 615 ‘Best Airport India’ by Skytrax AAI. MOU has been signed on 19.01.2012. acres has been acquired World Airport Awards in Expansion planned, 615 acres of land has Hubli 150 and 586 acres of land has Copenhagen, Denmark on been acquired. been handed over to AAI. March 30, 2011. With the Other airports have been planned for modernisation or acquisition of major shareholdings from the original priexpansion via a Memorandum of Understanding with vate promoters during 2009-11, the GVK Group became AAI (see Modernisations plans). the largest shareholder amongst the private promoters. To meet the growth in passenger traffic, BIAL has taken DEVELOPMENT OF GREENFIELD up expansion of the facilities including the existing termiAIRSTRIPS nal building at a cost of `14,790 million, which is likely be In line with its Vision-2020 programme, the state has completed by late 2012. decided to develop small airstrips in districts that do not DEVELOPMENT OF OTHER have an airport: 11 sites for Greenfield airstrip developGREENFIELD AIRPORTS ment have been identified. The Karnataka government has not stopped at developPROMOTION OF REGIONAL AIRLINES ing the landmark airport project at Bangalore (see Airport development can be a failure without the supGreenfield airport initiatives by Karnataka). It has taken port of airlines and Karnataka has taken some steps to initiatives to develop airports at Greenfield sites to underTRANSFORMING promote short-haul aviation. The state has slashed line its commitment to build airport infrastructure in the AVIATION: sales tax on the Aviation Turbine Fuel (ATF) from 28 state. It has various Greenfield airports under various Runway construction per cent to 4 per cent for airlines landing and taking off stages of development under PPP. Investments worth in progress at Hubli within the state to promote regional airlines in nearly `16,460 million are estimated to flow into the Airport. Karnataka. Greenfield airport sector.
HELIPADS
To promote heli-tourism across the state, Karnataka has been setting up helipads at various locations. There are already 38 helipads in Karnataka and 7 have been recently constructed including some at locations with tourist importance like Jog, Chikkamagalur, Udipi and Chitradurga. Work on 10 new helipads at Hampi, Belur, Kollur, Dharmastala, Bijapur, Hornadu, Bangalore (3 locations), and Shringeri is on.
POLICY SUPPORT
Karnataka’s infrastructure development, including airports, is supported by the Infrastructure Policy-2007 which was framed to expand and upgrade infrastructure in the state with PPP at its core. The Infrastructure Development Department was set up by the government for streamlining the process of appraisal and approval of various infrastructure projects. The highlight of the infrastructure policy was the implementation of the “Single Window” system. Incentives include entry tax exemption, stamp duty concessions, financial guarantees in some cases, provision of land at concessional rates and viability gap funding. Karnataka government is also working on finalising the greenfield airport/airstrip policy for facilitating investment in the airports sector. MARCH 2012 I CRUISING HEIGHTS I 97
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interest of key stakeholders, reputation, brand and value-creating activities. Through this process, BIAL has undertaken extensive risk-assessments, various impact analyses, and recovery planning of its every process spread across the organisation. The entire BCM of the airport went through repeated internal auditing and regressive third party audits viz. KPMG and BSI to ensure that the BCM is adhering to international standard requirements.
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been mandated that the ideal time for baggage delivery of the first bag should be between about seven minutes, in order to ensure that bags are available on the belt before arrival of the passengers.
STRONG FOUNDATION: (Above) Flyers checking e-kiosk at the airport; (top) outside view of the airport.
BUSINESS CONTINUITY MANAGEMENT Business Continuity Management (BCM) is absolutely critical in any business today, so also with an airport. Bengaluru International Airport Limited is the first airport in the region to have implemented BCM as one of its mainstream activities. BIAL’s BCM is a holistic and ongoing management process intended to identify potential hazards of varying size and severity that threaten the organisation/business. It provides a framework of building resilience by developing and maintaining appropriate response plans as well as costeffective alternative resources to safeguard the
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BIAL is the first airport in the region to have implemented BCM as one of its mainstream activities
BIAL welcomes active involvement in the airport’s development. Soon after announcing the expansion of the existing Terminal 1, the airport operator launched a campaign named ‘Smile Bengaluru’. This was an opportunity for the city’s residents and airport stakeholders to share their thoughts and ideas on how they would like to see the expanded T1. After all, it is their needs that BIAL serves. The launch of this campaign is testimony to their inclusive approach of involving the local community with the airport project. These ideas and suggestions were considered to shape the future of Bengaluru’s expanding airport. With this campaign, Bengaluru Airport is the first airport in the country to seek public opinion on what they would like at their airport. A campaign strongly promoted on the social-media platforms as well as outdoorcity hoardings, radio and the airport spaces itself includes a large audience. All one needed to do was to log onto the Smile Bengaluru website and post their ideas and requirements. All comments were transparent and viewable by all, readers could even vote for an idea that they liked.
INFRASTRUCTURE
INDERJIT SINGH
Indian airports:
The emerging big picture THE PRESENT TURBULENCE IN THE GLOBAL AVIATION INDUSTRY NOTWITHSTANDING, AVIATION ANALYST INDERJIT SINGH ENVISIONS A BRIGHT FUTURE FOR INDIAN AIRPORTS.
PICTURE PERFECT: Check-in counters at Terminal 3 in Delhi airport.
T
he lyrics “Big isn’t beautiful” by King Adora band have been an all-time sensation. But in the case of some airports which have emerged on the Indian aviation landscape in the last decade, the myth has been busted. Big can be beautiful, after all! The airports in Delhi, Mumbai, Bengaluru and Hyderabad developed in the last decade through the PPP route and several others by Airports Authority of India (AAI) stand proudly as a testimony to this phenomenon. Thanks to certain bold initiatives of the government and active involvement of private entrepreneurship, the activity, which hitherto had been confined within the fiefdom of the highly-regulated public sector was opened to
Several worldclass airports have already been developed in India using the PPP model and this trend seems likely to continue
the private sector through the PPP mode. And the results are evident. Several world-class airports have already been developed in India using the PPP model and this trend seems likely to continue. It is not just the emergence of new swanky passenger terminal buildings and associated paraphernalia but the overall airport facility-compliant to the level of passenger facilitation, safety, security and operational standards expected of modern worldclass airports. Several other busy airports in other metropolitan cities in India still suffer from the demand-capacity syndrome — terminal buildings apparently bursting at their seams during peak hours, and craving for rehabilitation and expansion.
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TRIPS PER CAPITA: 2010
(Source: Airbus Industry* Passengers originating from respective country) reforms and initiatives in the pipeline, and envision possible solutions for sustained growth of the industry in the years ahead.
Indian aviation is currently celebrating its 100 years of existence and has reasons to rejoice on its track record; even though, during this period, it has witnessed several ups and downs, yo-yoing between extremes of cruising and not-so-cruising heights — pun intended!.
INDIA AVIATION: PAST PERFORMANCE
AFTERMATH OF ECONOMIC SLUMP Like any other sector of the economy, the global aviation industry is presently passing through a turbulent phase with ramification on development of airports and airlines-and India is no exception. Airports and airlines worldwide are facing escalating operational costs, revenue growth constraints and an investment crunch. As I see, the airports and airlines are the inseparable two sides of the same coin and cannot be considered in isolation — their facing diametrically in different directions, both literally and unfortunately in reality, notwithstanding. However, given the time-tested built-in resilience and tenacity in the system, the Indian aviation, supported by the ongoing industry reforms and initiatives would bounce back with vengeance, as it has in the past, whenever it had encountered some setbacks. It is my strong conviction that despite the ongoing challenges, the Indian aviation will carry forward and upwards too. I have made an attempt to take stock of the situation, chronicling the meteoric rise and steep fall, flag issues of concern, outline the
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With an expanding consumer base, India presents one of the fastest-growing aviation markets in the world with potentially enormous opportunities for investment
The aviation market in India has witnessed a phenomenal growth in the last decade. It has come a long way since private players were first given permission to enter the sector in 2004, in the post-liberalisation regime. The pace of growth has been especially spectacular during the last five years as the Indian aviation industry has grown from 46th to the 9th largest position in the world. It is set to become one of the top four markets by 2020. Realisation has dawned that aviation plays a crucial role in the economic development process through its virtue of “rapid global connectivity” boosting trade, tourism and commerce. As the economy grows, disposable incomes rise resulting in growth in the propensity to travel by air. Flying thus remains no longer the prerogative of a few privileged, but an option for an increasingly broader section of society and India has a massive population base to support. With an expanding consumer base, India presents one of the fastest-growing aviation markets in the world with potentially enormous opportunities for investment. At 0.04 air trips per capita per annum, India stands far behind the developed countries with more than two trips per capita per annum, indicative of a substantial growth potential.
INFRASTRUCTURE AVIATION AND ECONOMIC GROWTH
cent. According to IATA, India’s domestic aviation market expansion has been the strongest in the world and is pitched to become the third largest aviation market in the world from its current 4th position after US, China and Japan. Given the strong market fundamentals, the robust rate of growth is expected to continue. Indications are that the Indian civil aviation market will register a compound annual growth rate (CAGR) of more than 16 per cent during the period 2011-2013. Looking further ahead, the Indian Ministry of Civil Aviation Vision 2020 statement envisages a compound annual growth rate of around 15 per cent in the next five years.
Civil aviation sector with its integral organs of airports, airlines and aircraft have an impact on the economic growth and development of a nation’s economy. As per ICAO estimates, $ 100 spent on air transport produce benefits worth $325 for the economy and 100 additional jobs in air transport result in 610 new jobs across the market. It further postulates that air transport component of civil aviation contributes for over 4.5 per cent of global GDP. If aviation was a country, it would rank 21st in the world in terms of GDP, generating $425 billion of GDP. The Indian government has committed itself to several initiatives, policies and regulations to encourage private participation and investments in the various infrastructure sectors. Of the $130 billion in the 2011-12 towards transportation sector, $14 billion is budgeted for the development of Greenfield airports and upgrade of existing airports — a major portion of it would be from the private sector, financial institutions and Foreign Direct Investment (FDI).
REFORMS ARE IN THE AIR The Civil Aviation Ministry has recently agreed to the proposal of allowing foreign carriers to buy 26 per cent stake in private airlines. At present, India allows FDI of up to 49 per cent in Indian carriers, but foreign airlines are banned from investing in domestic airline industry — the three arguments against FDI by foreign airlines being security issues, price war and hostile takeover. The Working Group on Civil Aviation (WGCA) of the government has however, proposed raising the Foreign Direct Investment (FDI) limit by foreign carriers into Indian carriers to 49 per cent; in the backdrop of some private carriers slipping into a severe debt crisis and several others facing resource crunch. The Indian government has strongly protested to European Union (EU) against its proposal of carbon tax on Europe flights. With the current level of aircraft movements, it would cost India $1-billion a year. The government has formally lodged a complaint with the EU, terming the imposition as “unfair” trade practice. It is reportedly considering requesting Indian carriers withhold emissions data as part of its opposition to the imposition of the European Union Emissions Trading Scheme (ETS) on non-EU airlines or even impose a retaliatory tax on European airlines.
OPEN SKIES As per industry estimates India’s airports by 2020 will handle more than 460 million passengers per annum. In terms of passenger-handling capacity of airports, it has grown from 66 million in 2001 to 235 million in 2011 and is expected to touch 450 million by 2020. During the period 2005-2010, $10 billion were invested in airport development in the country and the private sector played a predominant role in the process. Around 60 per cent of the air traffic is presently being handled at the four airports developed under the Public Private Partnership (PPP) and the remaining 40 per cent traffic is handled at the airports operated by the stateowned Airports Authority of India (AAI). One of the most significant recent developments in Indian aviation contributing to the upgrading and development of Greenfield airports in Tier-II and Tier-III cities has been the emergence of ‘low cost carriers’ (LCCs). From a level of about 1 per cent in 2003-2004, the LCC market share today exceeds 70 per cent of total domestic traffic. Signing of the Open Skies Agreement in 2005 between India and the USA was a positive step in the building of the Indo-US partnership in the aviation segment leading to rapid increase of traffic between the two nations necessitating improvement of airport security infrastructure to meet with the stringent FAA requirements. India was the fastest-growing domestic market in the world in August-September 2011 period with 18.4 per cent year-on-year growth (see Growing and how…). Traffic growth in Indian market exceeded the growth rate seen in China 9.7 per cent and was considerably more robust than the global growth rate of 3.8 per
Signing of the Open Skies Agreement in 2005 between India and the USA was a positive step in the building of the Indo-US partnership in the aviation segment
LOOKING AT THE FUTURE IATA in the wake of the current setbacks in the industry has recently asked the Indian government to set the aviation industry free by reducing taxes, those on jet fuel in particular, instead of ‘micro-managing’ the cash-strapped sector. “The service tax on tickets, the high jet fuel prices due to high taxation which account for 45 per cent of the Indian aviation industry’s cost in comparison with 30 per cent for airlines in other parts, should be reduced or eliminated,” said Tony Tyler, Director General and CEO, IATA. With the potential of India to become the fifth-largest market in the world in terms of overall traffic growth in the next ten years; the following key challenges, according to me,
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GROWING AND HOW… Domestic passenger growth by country: August - September 2011
(Source: IATA Air Transport Market Analysis) need urgent attention: (a) Private sector investment in the development of some airports in the recent past through the PPP route has been about $6-billion. The country would require $130 billion worth of further investment over the next 15 to 20 years. The government has thus to evolve an attractive mechanism and package to ensure a guaranteed ROI to institutional and private investors. PPP would have to be undoubtedly the vehicle for India’s rapidly growing aviation market. The success achieved in Metro airports need to be replicated in Tier-II and Tier-III cities. (b) In metro cities where the existing airport cannot accommodate future growth, a Second airport should be expeditiously developed. The inordinate delay in developing Navi Mumbai is a case in point. Chennai’s second airport at Sriperumbudur is a welcome initiative. (c) Modernisation of Indian airports will remain a mirage, unless the ATCs are modernised through infrastructure enhancement, appropriate staffing and training. Implementation of an advanced air traffic flow management is a must towards that end to alleviate problems of congestion in air traffic. (d) The low-cost airlines are basically low-fare airlines and high taxation prevents lowering of air fare. There is an urgent need to develop airports on low-cost model. Low-cost airports will help low-cost carrier further lower the air fare.
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(e) Airports and airlines must prioritise collaboration in at least four areas to address the major challenges they share: security processes, common-use self-service, new pricing models and airport capacity constraints. (f) Formation of a Civil Aviation Authority (CAA) in place of the DGCA to take on the regulatory challenges is crucial. (g) Asia is now the leader in business aircraft purchases with India and China leading. The government through appropriate policies and regulations must provide support to this profitable industry to provide impetus to develop low-cost-airports.
CRITICAL CHALLENGES The paradox of India’s aviation sector is that it serves one of the world’s fastestgrowing economies and is posting double-digit traffic growth
The fundamental drivers of aviation growth in India remain strong and it should emerge as the third-largest market in the world within ten years. It would be incumbent on the Indian policymakers to quickly realign the Indian aviation industry with the global standards especially in respect of policy, regulatory and legal framework in a non-restrictive business-friendly manner conducive to growth. But this will require important decisions in 2012 by government and operators alike to position Indian aviation as a safe, efficient and a viable transport sector. (The writer is Head of Aviation URS Scott Wilson India, the South-Asia office of the URS Corporation U.S.A. and formerly Airport Director of IGIA, New Delhi and can be contacted at inderjit.singh@aviationanalyst.net)
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HEAD-TO-HEAD ON
GROUND HANDLING
H C TIWARI
EVERY EFFORT TO IMPLEMENT THE GROUND HANDLING POLICY HAS SEEN A SEE-SAW BATTLE BETWEEN THE GOVERNMENT THAT IS KEEN TO SEE THE POLICY IN ACTION AND THE PRIVATE CARRIERS. HOWEVER, THE POLICY COULD SEE IMPLEMENTATION IN JULY THIS YEAR WHEN THE SUPREME COURT DELIVERS ITS JUDGMENT AFTER HEARING THE CASE FOR THE LAST TIME, WRITES R KRISHNAN.
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GROUND HANDLING
C
ome July 2012, the Supreme Court will hear the case of ground handling policy implementation. Till then the government will maintain status quo and domestic airlines will be allowed to do self-handling. The new Ground Handling Policy (GHP), announced in September 2007, is on hold again for the fifth year due to opposition from domestic private carriers. The dispute has entered the final legal phase. The airlines fear that the policy will take away their control on their own carriers in terms of product offering and differentiation which is their USP besides putting a question mark on another USP â&#x20AC;&#x201D; quicker turn-around of their aircraft which is crucial for ensuring on-time performance. It was when the Union Government took a final call to implement the new GHP with effect from January 1, 2011, that the private airlines under their umbrella organisation Federation of Indian Airlines (FIA) first knocked on the doors of Delhi High Court and subsequently appealed to the Supreme Court when they did not get relief in the High Court.
The new Ground Handling Policy (GHP), announced in September 2007 is on hold again for the fifth year due to opposition from domestic private carriers
The airlines do self-handling such as general administration, baggage, freight and mail handling, loading and unloading of aircraft, crew, passenger and baggage and fuel handling besides catering services. According to official sources, domestic carriers promised that they would go along with the new ground-handling policy after it was stalled earlier. It was for this reason that the Directorate General of Civil Aviation (DGCA) notified that the new policy would become effective from January, 2011. The airlines challenged the new GHP in the Delhi High Court. They feared that handing over ground-handling functions to independent companies would take away the airlinesâ&#x20AC;&#x2122; own control over their cost, efficiency, scalability, and management of ground-support activities. The Centre, on the other hand, feared that allowing too many personnel on the airport tarmac and other restricted/technical areas could pose serious security risks. FIA challenged the new Ground Handling Policy (GHP) stating it was aimed at overturning the level playing field and would violate
ON AGAIN-OFF AGAIN: Ground handling staff at work in one of the busy airports.
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Article 19(1) (g) of the Constitution. It also said ground handling was an intrinsic part of their operations and remained at the heart of an airline. But the government quoted the security aspect as being of paramount importance to the whole issue. It was because of its seriousness and the need to ensure security that it decided to have a uniform ground handling policy. The security aspect compelled the government to argue that it was essential to access latest technology and manage them. The government representative told the court that it was a matter of fact that Indian aviation had become a target of international terrorism which made it imperative on the part of the authorities to take control of ground handling of all flights. It was mentioned that ground handling activity required the presence of a maximum number of personnel in sensitive areas of the airports and in view of the security concerns, such activity by each airline on its own would not be allowed. Following this, the Delhi High Court lifted the stay on the implementation of the four-year-old new GHP. After Delhi High Court’s ruling in favour of the government and against the FIA, the government said the new policy would be implemented with effect from April, 2011. The High Court directed the private airlines to sign up with the recognised GH service providers at the relevant airports. Since the policy was announced in September 2007 by the DGCA, it has witnessed a see-saw battle between private carriers and the government. The latter tried to resolve it in June 2010 when it directed the DGCA to notify the new GHP for implementation with effect from January 1, 2011. That is when the private airlines challenged and filed a writ petition against it in the Delhi High Court and obtained a stay. The matter was heard and the High Court rejected the writ petition. In its ruling in the first week of March 2011, the High Court said the new GHP would be implemented with effect from April 1, 2011. But FIA appealed against the order in the Supreme Court in April 2011.
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A LOSS OF JOBS The DGCA notification specifically noted there would be no self-handling in six metro airports of Delhi, Mumbai, Chennai, Kolkata, Bengaluru and Hyderabad
TOUGH ASK: Fuelling of ATF forms an indispensable part of the ground handling staff’s duty.
The FIA, whose membership includes all the domestic carriers, contended that member-airlines could efficiently manage their ground-handling services of their aircraft as at present. Moreover, the airlines would also be forced to retrench nearly 3,000 workers, who are associated with ground handling work, on behalf of these carriers all over India. As per information available with the government, Jet Airways has 250 in-house GH staff or on its rolls and outsourced 1000 workers. Kingfisher Airlines had 150 such staff on its roll while it had outsourced 1600 staff; IndiGo had its 46 personnel doing GH work and outsourced 574 workers, SpiceJet had 80 GH staff on its roll while it outsourced 470 and GoAir had 54 company employees and outsourced 250 staff to provide ground handling to its flights across India. In the case of Air India, it had 800 workers on its rolls while had another 990 on contract or outsourced.
The FIA has since got a breather as the Supreme Court posted the case for final hearing in July 2012. Till then, it has asked the government to maintain status quo; that means no implementation of the GHP and allowing airlines to do self-handling. The FIA said it had no issues on that and, in any case, was complying with whatever the Bureau of Civil Aviation Security (BCAS) wanted. FIA submitted earlier in the Delhi High Court that most of the airlines like the petitioners were involved in providing selfground handling service and even if any of the petitioners were presently getting their ground support activities through third parties, they had the right to conduct self-handling. The DGCA notification specifically noted that there would be no self-handling in six metro airports of Delhi, Mumbai, Chennai, Kolkata, Bengaluru and Hyderabad. FIA said: “Ground handling constituted an integral and inalienable part of any airline’s business.” It is one of the unique selling propositions of the airlines differentiating the services provided by one particular airline over their competitors. The ground handling services aimed at providing a unique and hassle-free experience to passengers and was akin to providing hospitality services. Airlines normally provided self-ground handling services while some airlines sub-contracted this to the airports or a handling agent or to another airline. The selection of the sub-contractor was based on various factors which had to provide efficiency. Undertaking of ground handling services itself enabled the airlines to maintain quality,
GROUND HANDLING cost and efficiency of the services provided by it to its passengers. Significantly, one of the parameters of judging an airline’s performance and ground handling played an important role in it. For example, the FIA said in its petition to the Delhi High Court that one of the main reasons for voting IndiGo as thebest low cost airline was among other things its Ground handling efficiency. The ground handling included both ramp and traffic handling. In this context, the FIA said should the impugned AAI regulations were implemented, then passengers and baggage handling at the airport terminals and the traffic services at the airport terminals including passenger check-in could not be performed by the private airlines in AAI-controlled Chennai and Kolkata airports. While granting applicant airline permission to start scheduled passenger air transport services, the relevant DGCA notification stated airline concerned should have “adequate ground handling facilities and staff for preparation of load and trim sheet, flight dispatch and passenger/cargo handling. The staff should have undergone the training and checks as specified by DGCA”. Therefore the aforementioned requirement was one of the pre-conditions for the grant of licence. The petitioners made huge investment in creating the necessary and highly capital intensive infrastructure and wherewithal to undertake ground handling services to efficiently cater to its airlines operations. Around this time, the Ministry of Civil Aviation directed all airlines to hire their own staff to do ground handling at non-major airports. But at many smaller airports, the airlines outsourced ground handling as it was cheaper to do so. Many viewed this as a direct consequence of the FIA’s decision to fight the government on the new GHP. Soon afterwards, the Delhi High Court rejected the writ and lifted the stay. The Ministry of Civil Aviation directed the stateowned Airports Authority of India to issue a circular to the six metro airports where the GHP was intended to be implemented. The aim of the policy was to increase security and safety at these airports which was questioned by FIA and was turned down by the Delhi High Court. Thus, the original policy remained unchanged which required three ground handling agencies in each of the six metro airports. After rejecting the writ, the Delhi High Court upheld the earlier decision of the Cabinet Committee on Security which required activities such as baggage handling, cargo scanning, taxiing, refuelling and cleaning among other things of private sector airlines to be handled by officially recognised GH companies. On April 4, 2011, the Supreme Court heard the appeal of the FIA against the order of the
KEEN EYE: Staff overseeing baggage handling operations.
The Government faced a tough time in justifying its policy of denying private airlines to do self-ground handling and for which it had directed the private airlines to hand over their requirements of ground handling
Delhi High Court. The apex court issued notices to the Ministry of Civil Aviation, DGCA, BCAS and other agencies. It however did not stay the March 4, 2011 order of the Delhi High Court and wanted the member airlines of FIA to immediately sign up with any one of the three GH companies in the six designated metro airports. The airlines signed MoUs with select GH companies to comply with the Supreme Court directive. The government faced a tough time in justifying its policy of denying private airlines to do self-ground handling and for which it had directed the private airlines to hand over their requirements of ground handling to one of the three companies in each of the six metro airports. 1. The designated company by the airport operator either standalone or in JV based on a revenue-sharing model 2. Air India-SATS JV which got this role based on some kind of “Grandfather’s right” or being a state-owned company and hence fully safe from security point of view; and, 3. A third joint venture selected through a bid process conducted by the airport operator concerned . While GMR and GVK handled Delhi, Hyderabad and Mumbai, Bengaluru, respectively, the state owned AAI handles Chennai and Kolkata airport. The private airlines complied with Supreme Court direction within 24 hours and signed MoUs with one of the ground handling companies in these six airports as approved by the DGCA. The Supreme Court, however, asked the government that if the private airlines had their own services, why should they go in for services of others? The Solicitor General reportedly observed that ground handling had been taken away from private airlines keeping in view the security concerns. The two judge bench of the Supreme Court observed that while it was right for the government to make policies, why should it disturb something when it was going smoothly? It reportedly observed that government was trying to bring competent private airlines to a
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D
uring the November 26, 2011 meeting the FIA had with the Prime Minister against the backdrop of the Indian aviation industry turning sick, the airline operators, among other issues, raised the issue of ground handling. The members of FIA articulated much of what they had said in both the Delhi High Court and the Supreme Court. The crux of what they said was that the FIA had no problem with the new GHP but the member airlines or private carriers should not be barred from providing self-handling in the six metro airports for security reasons. It was reported that an important functionary of the PMO present at the meeting, after the departure of PM’s earlier Principal Secretary T K A Nair, asked if the FIA would withdraw its petition should the government follow the new route as suggested. Though it is not known what happened subsequently, the fact was that the FIA subsequently wrote to the Secretary, Ministry of Civil Aviation, on the contentious issue of ground handling. In support of its contention, the FIA said all domestic carriers in India were subject to strict control in keeping with the national security requirements. For instance, no more than one third directors of an airlines company can be foreigners. The Chairman had to be an Indian national and directors could be appointed only after security clearance by the Ministry of Home Affairs. Any violation of this condition could attract cancellation of the operating permit of the airlines concerned. Further, the antecedents of each airline employee working at any airport in India are verified by the police and only thereafter clearance was given and a photo-identity card issued to him which entitled the said employee from entering one or more areas of the airport depending upon his specific work. Significantly, all critical security work of
If the government wants it can retain the new ground handling policy and at the same time also allow continuation of self-handling by private airlines in the six metros
FLYER-READY: International check-in counters at Hyderabad airport. 108 I CRUISING HEIGHTS I MARCH 2012
passenger screening and frisking at the airports is undertaken by CISF and the privatized airports had already moved to centralized baggage screening where airline employees were not involved. Even the AAI was moving in that direction and had already given to Bhadra International its ground handling activities in the metro airports of Chennai and Kolkata. It was only during times heightened threats that airline employees performed some secondary checks on the passengers and which was in accordance with government directive. Further, airline employees at airports primarily aimed to provide hassle-free check-in facilities to ensure that only screened baggage was loaded on the aircraft, passengers go through proper security checks by CISF and then are comfortably escorted to the aircraft. Each airline tried to excel in these services which were more than in the nature of hospitality and aimed at providing comfort, safety and retention of the customers. It was in this context that ground handling formed an integral part of an airlines’ offering with the primary objective of differentiating itself over its competition. Therefore, over the years, airlines hired thousands of skilled personnel who have been trained to deliver quality standards laid down by each airline and on which hundreds of crores of rupees has been invested in acquiring assets to ensure smooth passenger handling and safety of the aircraft. Hence self-handling is the fairest and most equitable option to create a level playing field in which a third party handler will secure business if it can equal or better both quality and cost offering of the airlines and also assist airlines in mitigating its human resources issues due to such transition. If the government wants it can retain the new ground handling policy and at the same time also allow continuation of self-handling by private airlines in the six metros.
level of incompetence. As per media reports, the government representative was even asked if he had travelled by private airlines and how it kept up its timing. It feared that the efficiency of the private airlines would be killed. It also raised the issue that if ensuring security was true in six metros, then what about other cities like Jammu and Kashmir, Amritsar and even Kochi which were left out of the DGCA list? The Supreme Court had given time for the petitioners and respondents to file their response. The airlines have maintained that such restriction would affect their ability to distinguish themselves from rivals and render ground-handling equipment worth hundreds
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of crores of rupees useless. The airlines said that it would add to the cost of the already bleeding industry. Those wanting development of a strong airport infrastructure believe that the new GHP should be implemented as it is one of the important ingredients of a new airport’s business plan. Those who are airline backers, feel that an already financially bruised domestic carriers with falling yields and rising costs need a breather before implementation can be reconsidered. A Centre for Asia Pacific Aviation (CAPA) study showed that domestic airlines objected to the new GHP as they felt awarding their ground handling job to third party ground handlers would lead to: a) Loss or dilution of control over service quality as airlines feel the first point of interface between passengers and airline staff is at the check-in counter/gate and induction of a third party on airlines’ behalf will dilute its USP; b) Airlines stated that they are not too concerned about the impact of outsourcing ramp activities but were not willing to trade their USP, like on-time performance which they fear could happen as one could not expect the third party GH provider to treat all the airlines as their own respective staff do; c) While airlines doing self-handling could cut costs on their own self-handling, this may not be the case when a third party is doing the job leading to rise in costs; and d) Limiting the number of ground handlers to three is limiting competition. Incidentally, what an airport operator or a ground handler can charge for various ground handling services is now an important matter awaiting examination and resolution by the newly set up Aviation Economic Regulatory Authority (AERA). Independent Ground Handlers have stated
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GIVING DIRECTION: After a smooth landing, all that a flyer wants is quick delivery of his baggage, that is the job of the GH staff.
An important trend for ground handlers in the context of the Indian market is the rapid growth of Low Cost Carriers (LCCs) and similar subsidiaries of full-service carriers
that they will make huge investments in GH equipment to enhance service quality. If airport infrastructure is to suck in a few billion dollars in investment then it will be a distortion if such investment is not made in GH, a crucial aspect of airport management, that includes a drastic reduction in downtime or turnaround time for aircraft and thereby increase the rate of aircraft movement. This aspect of airport revenue stream cannot be wished away. If India needs international standard ground handling, investment needs to be made as introduction of best practices and software-based resource allocation systems would lead to greater efficiencies in the equipment utilisation. For instance in 2010-11, Mumbai Airport had listed an inventory of more than 90 ground power units which was three times more than for an airport of its size. It is not known if this position has changed. As for traditional agencies — be it airlines or otherwise — there is over-staffing and the fear of job losses and the resulting airport unrest are what have been bothering policymakers after announcing the ground handling policy. An important trend for ground handlers in the context of the Indian market is the rapid growth of Low Cost Carriers (LCCs) and similar subsidiaries of full service carriers. Today, LCCs account for nearly 60 per cent of the domestic market share or even more. When their negotiation position increases it will not be surprising that they may even demand competitive bids from potential GH agencies. At present, since the airlines are allowed selfhandling and in case of LCCs, it is beneficial since it ensures a quick turnaround of the aircraft. The LCCs will not want this compromise by a third-party agency providing ground handling and also the cost at which it will be provided. Should this cost rise, it could crack the LCC model.
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INDIRA RANI Infrastructure
Turn airports into
multimodal transport hubs
FRAPORT.COM
AIRPORTS IN INDIA COULD PLAN TO BECOME MULTIMODAL TRANSPORTATION HUBS BUT ONLY AFTER A “TRANSPORTATION SYSTEM OF SYSTEMS” IS CREATED, COMMENTS INDIRA RANI. THAT CAN ONLY HAPPEN IF THESE AIRPORTS MOVE BEYOND PHYSICAL INFRASTRUCTURE AND DOVETAIL THAT WITH SUPPORT FROM TECHNOLOGIES BETWEEN TRANSPORTATION OPERATORS, THE COMMUNITY AND CUSTOMERS.
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t was not so long ago when travelling in an airline was restricted to a select few in India. With only the state-run carrier available, people did not have many options. Flying used to be an expensive affair and train was the most preferred mode of transport for in-country travel. As the Indian economy witnessed a strong surge in the last two decades, the number of fliers increased significantly. Rapid urbanisation and introduction of private low-cost carriers helped the aviation industry grow in India. The nation’s aviation infrastructure, with the overall growth of the industry, has undergone a significant transformation. Most of the country’s key cities such as Delhi, Mumbai,
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SETTING THE AGENDA: Frankfurt Airport is well-connected with high speed train networks.
Bengaluru, and Hyderabad can now boast of airports which are truly world class and equipped with best-of-breed facilities. With socio-economic development of the nation, it is expected that more and more such airports will be established — either through revamping the existing ones or through greenfield projects. Today, airports are not just a place for aviation activities; they are becoming multimodal transportation hubs. The end-to-end experience of an air travel is not restricted to the flight only but also connects to other modes of transportation — road, rail, and even sea. To realize their full potential as multimodal hubs, airports must lead the creation of a “transportation system of systems”. They need to move beyond physical infrastructure to help integrate operational processes and supporting technologies between transportation operators, the community and their customers. The reason for this is that smarter airports do not recognise traditional boundaries between air and other forms of transportation. Instead of competing with rail, road and water, a new-age airport is a multimodal hub with a large catchment area that offers regional and global air-route connections and helps reduce overall transportation times and costs. At these hubs, more passengers and cargo can move more efficiently, serving more destinations, with increased on-time performance. However, the multimodal transport system of a city develops over a period of time. Traditionally, most of these systems work
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independently without much of coordination. Creating a multimodal transport system, therefore, is a long-term journey, needs to be done in a phased manner and requires significant investment. There are five maturity levels for creating an intelligent multimodal transport system: Level 1 — Single Mode: This is the most prevalent stage with a single-mode planning with little coordination between various transport providers. This lack of coordination leads to limited data collection and integration. As a result various systems work in an ad hoc manner and respond to situations individually. Level 2 — Coordinated Modes: In this level, a transport vision is articulated, with a single overarching regulator in place that has limited planning and management powers. Most transport systems start focusing on data collection, with periodic analysis. However, this analysis often does not translate into actionable. Network and incident response still managed mostly by individual modes. Level 3 — Partially Integrated: The establishment of an integrated multimodal transport authority is essential in this level. With coordinated demand management measures, the system is able to ensure real-time collection of multiple data source with high-level analysis. The system also builds an automated network and incident response systems. Level 4 — Multimodal Integration: As the systems become more mature, authorities are able to build an integrated corridor-based multimodal planning. The system features dynamic demand management schemes and real-time multimodal coverage for most corridors. The data analysis becomes real-time and exhaustive, enabling authorities for automated pre-planned multimodal incident response. Level 5 — Integrated Regional MultiModal Planning: This is the highest level of a multimodal transportation system. It covers a wide region and ensures continuous systemwide performance measures with dynamic pricing. With system-wide real-time multimodal data collection, integration and analysis, it enables dynamic network optimisation and incident response. As governments and civic authorities are trying to provide better citizen-centric services, more and more multimodal transport systems are coming up across the world. Airports are playing a pivotal role in this effort, with the number of international and domestic fliers on the rise across the globe. It is estimated that the number of passenger trips will reach a staggering 7 billion in 2020 from 2.2 billion in 2009. To improve the traveller and customer experience, airports can start by aligning air route networks and schedules with those of other kinds of land transportation. Passengers
VEHICLES OF CHANGE: Airport Express which connects Delhi Airport to the city has provided wider reach and connectivity to passengers.
With everincreasing traffic, multimodal transport system is the way to go and city authorities will have to develop it, sooner or later
and cargo shippers can then make informed planning and purchasing decisions about each type of transportation they use. Airports should also adopt the actions of current world-class airports by expanding land and sea travel networks to offer new destinations. Frankfurt and Paris are examples of airports that are connected with high-speed train networks. Amsterdam and Hong Kong benefit from the existence of large seaports that strengthen the airports and vice versa with additional traffic volumes and development of logistics and trade areas. Most of these cities have been able to well integrate their airports with the larger transport system. In India, multimodal transport systems have not evolved much due to various factors. Lack of collaboration between authorities that run these transport systems and disparity in the technologies used, have often created challenges in the integration. For example, the initiative to create a single smart card that can be used both in the metro and in buses in Delhi is yet to be implemented, while it was planned sometime ago. Once implemented, it will help commuters save time and ensure ease of travel. However, there are examples of excellence, as well, although a few. The metro rail network to Delhi airport is an apt demonstration of how multiple transport systems can be integrated efficiently. As the travellers are able to check in at the metro station and submit their luggage at the counter, the airport is able to expand its reach beyond the physical infrastructure and provides differentiated experience to its customers. With an ever-increasing traffic, multimodal transport system is the way to go and city authorities will have to develop it, sooner or later. Airports are critical in this initiative and will play an increasingly important role with time. They will become larger centres for economic activities, a what they are today. (The writer is Vice President, Distribution Sector, IBM India/South Asia.)
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FROM DAKOTAS TO
DREAMLINERS…
INDIAN AVIATION HAS COME A LONG WAY, WRITES ABHIJIT BHATTACHARYYA, AS HE TRACES THE HISTORY FROM THE 1950S TO THE PRESENT. THE HITS AND MISSES IN THE LONG JOURNEY NOTWITHSTANDING, THE INDIAN AVIATION MARKET HAS POTENTIAL AND WITH MORE JUDICIOUS MANAGEMENT OF MAN AND MACHINE, THERE IS NOTHING THAT CAN HOLD IT BACK.
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JRD Tata
Chairman of Air India Limited
aircraft registered with the air services regulators in the 1950s
J D Choksi
Was Managing Director of Air India International Ltd
1950s
Era of DC-3s
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Vishnu Hari Dalmia Owned and operated Indian National Airways Ltd. Was also its Chairman
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t is time to take stock of the aviation legacy of the nation. When India became a Sovereign Democratic Secular Socialist Republic in 1950, there were no government-owned or government-operated or “IAS-administered”, perpetually loss-incurring, airline in the vicinity. There were at least nine private carriers operating in the domestic civil aviation market (4 in Calcutta, 3 in Bombay, 1 in Delhi and 1 in Hyderabad) and a total 744 aircraft registered with the air services regulators. Calcutta’s Air (India) Ltd Managing Director was K K Roy; Bharat Airways Ltd was owned by industrialist scion B K Birla; Himalayan Aviation Ltd was owned by its chairman His Highness Major General Mahabir Sham Sher Bahadur Rana and Kalinga Air belonged to late Chief Minister Biju Patnaik, an ace pilot in his own right. The three Bombay based airlines were Air India International Ltd with J D Choksi as its Managing Director; Air India Ltd had J R D Tata as its Chairman and Air Services of India Ltd was owned by its Chairman, Tulsidas
HISTORY
1000
Biju Patnaik B K Birla
Owned Kalinga Air and even piloted its plane
Owned Bharat Airways Ltd
Dreamliner
2012
1993 1985
Planning Commission projects India could add about 1,000 planes and 250 helicopters over next five years due to rising demand
The second non-fatal Airbus-300 crash on November 15, 1993
Air India Boeing-747 crashed killing all 323 passengers on board over Ireland waters on June 23, 1985
2010
Air India Express crashes at Mangalore Airport on May 22, 2010 killing 158 people
Kilachand. In Hyderabad’s Begumpet airport was located Deccan Airways Limited owned by M K Vellodi and in New Delhi was housed the Indian National Airways Ltd, owned and operated by its Chairman Vishnu Hari Dalmia. Indian air transport in the early 1950s was essentially for the rich, high and mighty and for those who owned and operated the airplanes. The scenario, however, changed overnight with the “nationalisation” of the private carriers into Indian Airlines Corporation in 1953. Till then, of the 110 aircraft operated by the nine carriers, 72 twin-engine, 21 seaters were US Douglas DC-3 Dakotas. First flown on December 18, 1935, DC-3 first was commercially operated by American Airlines in June 1936. With a maximum take-off weight of 11,440 kg (11.44 tonnes), the sturdy DC3 had an unusually long operational range of its time, with 1510 miles (2,420 km) thereby making it the most widely used airplane at the end of the Second World War. Reportedly, on January 1, 1951, there were over 500 DC-3s of all types in commercial services all over the world.
Indian air transport in the 1950s, however, was essentially for the rich, high and mighty and for those who owned and operated the airplanes
On the ground, the nascent civil airports of India were primitive and too few to make for a truly public air transport system for a vast Indian landmass. Runways of all four Metro (city) airports (Delhi, Calcutta, Bombay and Madras) were 6000’ each. Nagpur had the longest runway with 6420’ and only 14 foreign airlines (Air France; British Overseas Airways Corporation; Air Ceylon; KLM; Orient Airways of Pakistan; Pan American; Qantas; Trans World Airlines; Ethiopian Airlines; Iranian Airways; Philippines Air; Siamese Airways; Norwegian Braathen’s SAFE and Scandinavian Airline system operated to, from and through India. The Indian private operators, however, appear to have had the flexibility to operate their domestic flights up to India’s neighbourhood airports such as Karachi, Dacca, Bangkok, Singapore, Chittagong and Rangoon. And to top it all, Indian civil aviation had at least a dozen flying clubs, patronised by the high and mighty to train potential pilots in the art of flying. Thus, Delhi-based Aero Club of India,
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under the banner of Tata Industries Ltd, was founded 1928, as the pioneer association of the Indian flying clubs. Bengal Flying Club, Barrackpore; Delhi Flying Club and Bombay Flying Club were all founded in 1928 as patronage of some of them came from celebrities. Hind Provincial Club, established in 1947, with centres at Allahabad, Kanpur and Lucknow, had Raja Bajrang Bahadur Singh of Bhadri as Managing Director. Hyderabad State Aero Club, founded 1936 at Begumpet aerodrome, had L C Jain, ICS, as its Secretary. Orissa Flying Club, founded 19461947 at Bhubaneswar airport, Secretary was the redoubtable Biju Patnaik, the future Chief Minister of that state and one of the most distinguished ministers in independent India’s federal government. Surprisingly, there also existed an array of civil aviation publications in the form of “Airline Guide”; “Airways Magazine”; “Travellers’ air guide”; “Journal of the Aeronautical Society of India”, etc. thereby developing a healthy intellectual and knowledge-based platform for the aerial route to the uninitiated also. Understandably, Indian civil aviation has come a long way from 6000’ to 12000’ runway and from propeller-driven Douglas Dakota to the state-of-the-art twin-jet, widebodied Dreamliner of the Boeing. There, however, is the flip side of the story. There has been a consistency in the Indian sky since 1947. India has always used foreign/Western aircraft as an importer and has never succeeded in either manufacturing or co-producing civil passenger aircraft making its aviation market a highly capital-intensive, resource-crunching enterprise from the beginning. Another intriguing and important aspect of the Indian aviation's growth saga is that it has often faced a nagging and stark deficiency in flight safety in both the international and domestic sectors. One of the earliest shocks came in 1955 when Air India's Lockheed-built Super Constellation Kashmir Princess plunged into Indonesian waters killing all but two on board. Reportedly, sabotage (planted bomb)
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Another intriguing and important aspect of the Indian aviation’s growth saga is that it has often faced a nagging and stark deficiency in flight safety on both international and domestic sectors
EARLY BEGINNINGS: Tata Airlines’ old office building.
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spoilt the flight safety of Air India. Another high profile tragedy struck with the crash of Air India's Boeing 707 Kanchanjhungha, over Mont Blanc, Switzerland in January 1966 killing all; among them was Dr. Homi J Bhabha, the fatherfigure nuclear scientist of India. In May 1973, with the crash of Indian Airlines Boeing 737 at the approach of Delhi airport was killed Mohan Kumaramangalam, a prominent minister of the government. With the plunging of an Air India Boeing 747 in the Arabian Sea on January 1, 1978, soon after the take-off from Mumbai runway 27-09, focus once again shifted to the poor flight safety record and equally poor-handling of the crisis situation of the pilots of Indian carriers. Nevertheless, the supreme crisis-moment for Air India arrived with the mid-air disaster of Air India 182 Boeing 747 killing all 323 passengers on board over Ireland waters on Sunday, June 23, 1985. In the domestic sector also, the loss of the twin-engine French Caravelle of Indian Airlines over Mumbai airport runway in August 1976 bode ill for the flight safety of Indian civil aviation. Significantly, when the brand new French Airbus-320 (VT-EPN) crashlanded just short of Bengaluru runway on Wednesday, February 14, 1989, it once again exposed the poor-quality piloting by Captains Gopujkar and Fernandez and a lamentable lack of understanding and coordination of, and between, the deceased pilots of the crash. The trend continued with the crash of a Boeing 737 of Indian Airlines into the hills lying on the outskirts of Manipur's Imphal runway on Friday, August 16, 1991 killing all owing to Captain Haldar's misjudgement and inability to follow the advisory, navigation and instruction of the Air Traffic Controller in a mountain terrain around the airport. With the latest Air India Airbus 320 accident at Mangalore airport in May 2010, the pilot's failure to coordinate, synchronize and judge the flight envelope and the critical /serious deficiencies of overall cockpit management system in the Indian skies once again came to light. Earlier, however, the worst civil aviation mid-air disaster of all times had occurred over Delhi on Tuesday, November 12, 1996 when two airborne craft (one ascending and the other descending) of Kazhakhstan and Saudi Arabia made a fatal and catastrophic mistake by ignoring the air traffic controller of the host airport. The crash also brought into light the need to upgrade the air navigation and controller and controlling system in the ever-increasing crowded skies of India. Amidst all these flight safety lapses, however, one aircraft, the twin-engine, twin-aisle Airbus 300 created a record of sort by not killing a single person during its entire operational life from 1976 to 2010 in the Indian sky. The Indian Airlines fleet of 11 Airbus 300s flew from Southeast Asia to West Asia and made daily
HISTORY landings in the ten domestic airports of Delhi, Kolkata, Mumbai, Chennai, Guwahati, Thiruvananthapuram, Bengaluru, Hyderabad, Ahmedabad and Srinagar and came out clean on flight safety and human life-saving machine in the Indian sky. Two models of this craft operated in India; Airbus-300 B-2 (maximum take-off weight 142 tonnes) and Airbus-300 B-4 (maximum take-off weight 165 tonnes). There were two major accidents also resulting in complete write off of the craft; yet both emerged non-fatal accidents. It first happened in September 1986 during take-off run on the tarmac of Chennai airport. Having virtually reached the V1 and V2 speed for the “nose wheel up” to be airborne, the pilot, hearing the fire-on-board alarm, aborted the “full-load” craft to a screeching halt thereby completely wrecking the Airbus 300 on the edge of the runway. The second non-fatal Airbus 300 crash of November 1993 was more spectacular as the Hyderabad air traffic controller refused the call of the pilot to land owing to “poor visibility”, the repeated distress call of the mechanical fault and failure of the flight notwithstanding. In fact, the plane flew low and slow thereby consuming more fuel than expected and force landed in the rice field off Tirupati airstrip. Once again the aircraft was written off but the full load of 250 passengers emerged unscathed. The end-result nevertheless was another accident and repeat of flight safety failure. What now is the future? What ails India's civil aviation market and industry? Certain grim realities need to be faced and resolved today if India sincerely wishes to be counted upon as the economic powerhouse. With the arrival of several private carriers post-1991 liberalisation have also arrived the ills of a market-economics which drive enterprise for profit. Unfortunately, being a service industry with high fuel costs, capital and labour intensive, the dividing line between loss and profit lies in a razor-thin edge in the civil aviation market, which even in the best of times is a highly cut throat competition game and is price-sensitive to the consumers of India. It is a case and question of efficient professional management when it comes to serving the people in a service industry. Regretfully, but realistically, Indian civil aviation market so far has not enhanced its reputation for professionalism and efficiency. Not that neighbouring countries have done any better than India. But India's 122 crore population cannot be compared with anyone else, except China. And China appears to have gone miles ahead of India at present. One instance would suffice to prove the point. Ever since the advent of private players in the Indian sky 20 years ago, at least 10 carriers have closed shop thereby putting India in a bad light. What happened? Why and how did East-West Airlines, Damania, City Air Link, Modiluft, Sahara Airlines and NEC Airways start with bang and end with a whimper? Answer is; rank
GLORIFIED PAST: An Indian Airlines’ Airbus300 landing.
Regretfully, but realistically, the Indian market so far has not enhanced its reputation for professionalism and efficiency
bad management; total lack of professionalism and a poor understanding of the dynamics of aviation economics; cutting corners in flight safety; gross over-expenditure; poor aircraft acquisition programme and thinking it to be a glamour world enterprise only. The scenario is there for all to see. Air India has gone bust owing to successive bad decisions taken by the civil servant-minister duos. Sahara Air has been gobbled up by Jet Airways, which, in turn, is tottering in the aviation as well as financial markets. Deccan can now be found as footnote in the aviation history book of India and Kingfisher Airlines has become a classic case study of “How to destroy a high flying and dream debut made by an airline of, and for, good times”? The short of the long story of Indian civil aviation today is simply manmade chaos and confusion which may be difficult to solve but not impossible to achieve. Amidst all this, however, there are a few professional carriers which are silently consolidating position and expanding their operational sphere. They seem to have understood the economics of aviation and the art of maintaining a balanced man-machine ratio vis a vis the load factor and the passenger flow in the sectors to which they operate. Although it is too early to predict as to how far and how much they are likely to go and gain, their performance as on date is definitely a cause for appreciation in an otherwise gloomy market of the world in general and the sluggish Indian mart of civil aviation in particular. And finally, as Air India and the Government of India wait with bated breath for the induction of Boeing-787 Dreamliner in 2012 itself, one does look back with a smug sense of satisfaction that perhaps not all is lost as yet. From the Douglas Dakota in 1950s to Boeing Dreamliner in the 21st century, it has not been a bad flight per se, but none of the planes are of Indian make. Indian civil aviation would do better than before only if at least some of the twin-engine jets are produced, distributed and “consumed” by the people of 122 crore which by itself is a self-sustaining market of its own.
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MROs IN FOR A LONG HAUL THE MRO BUSINESS IN THE COUNTRY IS NOWHERE NEAR CHINA OR SINGAPORE. TO TOP IT ALL, COMPETITION HAS BEEN BUILDING UP IN SOUTH EAST ASIA AND THE GULF. ADDED TO THAT ARE HIGH COSTS AND TAXES. IN SUCH CIRCUMSTANCES, REPORTS R KRISHNAN, THE POSSIBILITY OF INDIA BECOMING A MRO HUB FOR THE REGION APPEARS RATHER AMBITIOUS.
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he business of Maintenance, Repair and Overhaul (MRO) suffered during the global economic meltdown when airlines scaled down capacity and introduced severe cost-cutting measures. This trend continues — though not so stringently as it was during the earlier recessionary phase of 2008-09 — many airlines that were planning to set up one of their own seem to have understood that it does not always make sense to go that way. With signs of expansion showing, the importance of a MRO is once again engaging the attention of aviation investors in India. But it is too early to say if better days are ahead for the MRO business except for the fact that any over-capacity could spell danger to new entrants. According to estimates, the civil aviation MRO market at the beginning of fiscal 2011-12 was $ 42 billion business. The prolonged downturn of 2008 and 2009 pushed the expected average annual growth up to 2020 to 4.4 per cent. In value terms, MRO business could grow from $ 50 billion in 2015 to $ 65.3 billion by 2020. MRO unit costs calculated on the basis of 1000 available seat miles have been dropping since 2001. While exchange rate fluctuations had their impact, the improvement in process and technologies had its own downward pressure on costs. With the arrival of new-generation engines, airlines using them save on fuel consumption but as and when the engines and airframes come up for maintenance they cost more. The only difference is a plane like a Boeing 787 made of composites and Airbus A 350, as and when they arrive with new fuel-efficient engines and airframes, maintenance jobs will need to start from the tenth year rather than the seventh year as is the case now. In a way, the aircraft are available maintenance free for a longer period of time and, therefore, have a positive impact on revenue flows. This will be true also in respect of the new version of the A 320s with new engines and the Boeing 737 NGs. This particular aspect may well ensure that not all get into MRO business. It is now becoming clear that most airlines — beset by problems of rising costs, mainly fuel — are now going back to focus on the core business
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TECHNICAL TALENT AT WORK : Engineers at work in the Airworks’ MRO (Maintenance, Repair and Overhaul) workshop.
With signs of the expansion phase showing, the importance of MRO is once again engaging the attention of aviation investors in India
ENGINEERING of flying rather than frittering their energy and money on MROs which seem to have more chances of succeeding as standalones, unless a legacy carrier has been in the MRO business like Air India. According to Frost and Sullivan, based on a ten-year MRO profile, beginning 2000, China earned 10.3 per cent of Asia Pacific MRO revenue in 2000. This rose to 21.5 per cent or equal to what Singapore earned in 2009. Japan, which was the third-largest MRO revenue-earner, dropped from its earlier share of 16.6 per cent to 16 per cent a decade later. In this context — newer planes and newer engines — ANA took delivery of the first Boeing 787 Dreamliner in September/October of 2011 thus setting in motion new aircraft
There are many views ranging from high growth on a small base to a virtual explosion in the MRO business in India
induction. So, it may not have any immediate need for major maintenance (bread and butter of MROs) in the near future. As per 2010-11 figures, in terms of MRO spend by airlines in respective countries, the US with $15.6 billion was the largest MRO spender followed by Western Europe with $10.4 billion, AsiaPacific $5.6 billion, China $2.3 billion, South America $2 billion, Africa $1.5 billion, Eastern Europe $1.2 billion and India $444 million. Because of the small base, the MRO business in India grew by 11.5 per cent. There are many views ranging from high growth on a small base to a virtual explosion in the MRO business in India. But there is a wide consensus in aviation circles that it will take quite a while before India’s MRO busi-
AIRWORKS
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ness acquires a global scale and size or even begins to rival Chinaâ&#x20AC;&#x2122;s MRO development. Projection of MRO business indicates that Europe may witness over 2 per cent annual growth in MRO revenues, North America below one per cent, China 8.2 per cent, India 8.9 per cent and the rest of Asia-Pacific (APAC) excluding China and India at 3.2 per cent. APAC is closely followed by the Middle East with annual revenue growth estimated at 6.1 per cent. Emerging trends suggest that the core of aerospace MRO activity is shifting to Asia with more to China and less to India. A report of Pricewaterhouse Cooper and Confederation of Indian Industry (CII) in 2009 noted that Indiaâ&#x20AC;&#x2122;s MRO segment was expected to grow by 10 per cent to reach $800 million by end-2010 and further rise to $2.6 billion by 2020. This projection has already faltered being an over-optimistic estimate considering that MRO in India did a total business of only $ 444 million in 2008. The global recession of 2008 hit the Indian aviation sector forcing domestic carriers to cancel or postpone new deliveries. As a result, it was certainly a drought period of Indian MROs. In fact, after
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A report by the Aeronautical Society of India estimated the MRO market in India to grow from below $ one billion to $2.6 billion by 2020
HIGH-CLASS: Labourers at work at the Boeing MRO in Nagpur.
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India emerged out of recession, there were signs of revival in 2010 which quickly again went under because of the near second dip in the global economy mainly led by a bankrupt Europe. American Airways, for instance, has withdrawn its daily Delhi-Chicago and gone out of the Indian skies. Air France is also reducing its Indian frequencies and this could be true of other European carriers as well. Obviously, the hay will be made by the Gulf carriers in this shining time. And it is no wonder that the Gulf and Middle East nations have planned well into implementation major MRO workshops, be it Dubai or Qatar. A report by the Aeronautical Society of India estimated the MRO market in India to grow from below $one billion to $2.6 billion by 2020. But as stated earlier, the MRO market within India was a mere $450 million. If one included the money spent by airlines to send their aircraft to MROs located abroad, then the expenditure was $800 million. The report further noted that in value terms the major segment of MRO business included engines (35 per cent), airframe (20 to 25 per cent), component (20 to 25 per cent) and line maintenance
ENGINEERING about (20 to 25 per cent). Air India’s Sanjeev Rotkar, Executive Director — Sales and Marketing for MROSBU, has a different take. There are 1060 airlines in the world and the aviation industry is most fragmented. His observation made in 2011 noted that the top 20 carriers in the world accounted for 50 per cent of global aviation turnover. In 2010-11, the aviation industry carried 2.4 billion passengers, employed 32 million people and generated $ 55 billion revenue even as it had an overall debt of $ 270 billion. The main challenge facing the global aviation industry is excess capacity (which also seemed to be the case in India till Kingfisher Airlines shrunk) as more than 1300 aircraft are delivered yearly. This increased the external cost, which included navigation, airport charges etc even kicking up labour cost besides high taxes and high aviation turbine fuel prices. So, the aviation sector is expected to continue to be under pressure. It is within this climate even a business like MRO has to operate. Out of the total annual expenses of a typical airline, fuel accounted for 40 per cent (now it accounts for nearly 50 per cent in the
MROs, whether airframe, engines or components, are all set to emerge as a big time aviation business in India
total expenses incurred by domestic Indian carriers), aircraft maintenance 8 to 12 per cent, labour cost 12 to 17 per cent and overheads 23 per cent. Within the labour cost, a major share is on behalf of highly-skilled staff such as the operating crew and technical staff — be they engineers or maintenance personnel. Aircraft engines contribute approximately 70 per cent of airline annual maintenance cost and, therefore, are big cost drivers. As per commercial MRO by-product market, 21 per cent market is line maintenance and components, 14 per cent is for airframe heavy maintenance and 9 per cent is modification and as high as 35 per cent for engines. There are four main categories of MROs: Original Equipment Manufacturers (OEMs), In-house airline MRO shops, Engine MRO shops and Airline Third Party Providers. As per available indicators, OEM-based joint ventures account for 43 per cent of engine MRO market followed by inhouse airline shops with 23 per cent, independent engine MROs 19 per cent and airlines’ own third-party MROs 16 per cent. An airline MRO shop capacity is better utilised as it can opt for third-party work in a lean period thus reducing the gap between peak and lean load season. However, generally 52 per cent of such MRO work is outsourced and in this heavy maintenance, engine and modification dominate outsourcing. In recent years, with Asian economies booming especially after the entry of India, Asia has become a very important source for importing MRO services. According to an estimate, the Indian MRO market is nearly one billion dollars and growing at 15 per cent annually but now faltering with rising losses of Indian carriers and near disappearance of some great brands. Earlier, it was expected that the Indian MRO market would be worth $2.6 billion by 2020 but now seems unlikely when the GDP growth has dropped to 7 per cent. It is not known whether the labour cost advantage, which India enjoyed all these years, will continue to be available considering the BPO business has also shifted to nearby newly-emerging Asian economies such as Vietnam and Philippines following the rising cost of labour in India. Notwithstanding all these factors, it is felt that Indian MROs can still leverage the advantage of being situated where they are mid-way between South-East Asia and the Gulf. However, issues like high taxes including service tax, customs duties on components, etc. need fine tuning to make India an attractive MRO hub. In 2011, the Indian engine MRO segment was worth $ 174 million, which is expected to grow to $ 500 million in 2014-15. MROs, whether airframe, engines or components, are all set to emerge as big time aviation business in India. But along with the opportunity comes the fear of excess capacity
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as it happened in Europe and elsewhere. Air India rightly considers that it can be an ideal candidate for Airline Third Party MRO. It is in this context that its upcoming MRO in Nagpur — being funded and built by Boeing and Air India’s own new hangar providing upto C checks for airframe — besides the existing facilties in Delhi and Mumbai assumes importance. Air India Express’ maintenance hangar at Thiruvananthapuram airport is the first-ever state-of-the-art engineering hangar to be set up in Kerala. The facilities inaugurated in December 2011 will undertake all engineering requirements in-house. All engineering checks from transit to “C” check will be done in the facility. It will also provide third-party maintenance jobs. A 15-acre plot was allotted by the Kerala government free of cost on which two hangars with dimensions of 50 x 56 square metres has been set up. For the first time in India, a state-of-the-art electrically-operated vertically moving hangar door system has been installed. Among the many facilities, the important ones include engine video boroscope, wheels and brakes shop, battery shop, pressure vessel shop, etc. There is also a facility for DFDR/CVR download and read-out facilities. As for Delhi and Mumbai, the MRO facilities available are well known both in terms of airframe and engine. Besides Boeing building the MRO facility
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Air India Express’ maintenance hangar at Thiruvananthapuram airport is the first-ever state- of-the-art engineering hangar to be set up in Kerala
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at Nagpur’s MIHAN, which Air India will operate and manage, the state-owned carrier had also signed an agreement with GE for setting up a state-of-the-art engine MRO particularly for GE 90/GEnx engines which are being used in Boeing 787 Dreamliners. It will be a very large engine shop. The new AI-GE facility will be initially based in Mumbai but later shift to Nagpur where Boeing-Air India’s new airframe MRO is under advanced construction. Like the airframe MRO, which may provide later third-party service to not just Boeing aircraft but even Airbus narrow bodies, the AI-GE engine shop will overhaul not just GE 90 engine but also CFM-5 and CFM-7 engines which is powering both its Boeing 737-800s and the A 320 family. Air India is confident that all its MROs spread across the length and breadth of the country will provide top-class airframe and engine overhaul services to not just its own 140 aircraft but also to the aircraft of other airlines both within India and abroad. It is this third-party work which Air India thinks will drive its MRO brand name as also business. As on date, there are about 450 commercial aircraft in India. In the next two decades, around 1000 aircraft could join suggesting a good scope for already established MROs in the country. Servicing an aircraft in India entails a service tax of 10.3 per cent, which overseas MROs do not charge. Importing
STRATEGIC ALLIANCE: Kiran Grandhi, Chairman-Airports, GMR Group, exchanging MoU with the then Executive Director/Chief Financial Officer, Tengku Azmil Zahruddin, Malaysia Airlines, after sealing an agreement between Malaysia Airlines and GHIAL to set up a MRO. 122 I CRUISING HEIGHTS I MARCH 2012
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spares/components entails levy of Customs duties of upto 50 per cent besides a 12.5 per cent VAT. In places like Mumbai, there is also an additional octroi of 4 per cent. So, while a “C Check” (half overhaul of an aircraft done every 18 months) on an A320 is estimated to cost `2 crore abroad, the estimate in India because of these levies could be as high as `3 crore and with dollar appreciation and rupee depreciation even these costs have undergone a drastic change. Maybe India’s cheap labour theory could well get neutralised by costlier imported spares and components. Thus, in a way, all these issues give a great fighting chance to the Maharaja to take the lead in the Indian MRO business, both in terms of cost savings by servicing in-house aircraft and a new revenue stream by providing third-party services. The only private third-party-oriented MRO is Air Works which set up its facility in Hosur, near Bengaluru. Air Works’ MRO has already got DGCA and EASA certification. DGCA has given approval to work on ATR 42500s and ATR 72-500s and Kingfisher Airlines had begun to get its ATRs serviced and maintained at this centre. After the serious financial crisis that gripped Kingfisher airlines, the Air Works MRO has also taken a bit of hit. DGCA also approved Air Works to conduct major checks on B737 NGs as also A 320 family aircraft. The company has spent `50 million at the same place to build a hangar for wide body aircraft. This hangar is operational and Air Works is now looking to develop and provide heavy maintenance work in general
TOWARDS RENEWAL: An Air India Express plane in an maintenance hangar.
Yet another MRO has come up in Hyderabad airport as part of the GMR Infrastructure. It is a 50-50 JV between the GMR Group and Malaysian Airlines Systems
aviation as well. Yet another MRO has come up at Hyderabad airport as part of the GMR Infrastructure. It is a 50-50 JV between the GMR Group and Malaysian Airlines Systems. Besides, it also has a CFM56 maintenance training centre. In March 2010, Jet Airways had signed a $750-million contract with ST Aerospace in Singapore. Under the deal, ST Aerospace was to maintain Jet Airways and JetLite’s CFM engines based on an hourly contract. The agreement envisaged commissioning of “entire hospital shop” at Jet Airways’ hangar at Mumbai airport. The two were to build an engine shop there. ST Aerospace’s scope of work involved off-wing, on-wing and on-site support as well as technical and annual maintenance support to the fleet of both Jet Airways and JetLite. However, there is not much talk about this facility of late. Incidentally, even Jet Airways is under financial strain like other competing airlines in India. It will take a few years before India can get anywhere near China or Singapore. With new/substantial expansion taking place in MROs located in South-East Asia (mainly Singapore) and the Gulf such as Dubai and Abu Dhabi besides Qatar in the Middle East, the possibility of India becoming a MRO hub for this part of the world appears over-ambitious for the present. Even the established MRO HAECO in Hong Kong lost money in 2008-09 and 2009-10 but it is planning to set up another unit to perform heavy checks on A 320s.
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fter successfully driving the sale of Boeing aircraft in India from Seattle where all its commercial airplanes such as the 737, 777 and, now the 787, were and continue to be manufactured, Dr Dinesh Keskar moved to Delhi a couple of years ago as Boeing India President where his mandate included the sale of Boeing’s military aircraft even as he attended to other requirements of the company -- be it the supervision of the Offset Clause or setting up of the MRO at Nagpur. Dr Keskar in early January 2012 was promoted as Boeing Commercial Airplane’s Senior Vice President Sales Asia-Pacific. The new assignment will now give him a much wider spectrum to operate in India and the Asia-Pacific. He sees it as a great challenge even as he admits his passion for India which he says has great potential and future, in this conversation with R Krishnan. Ò What is the status of the Boeing MRO coming up at the Multi-Modal International Hub Airport at Nagpur (MIHAN)? The Boeing MRO located at MIHAN SEZ is coming up in an extremely good way. Our plan is to build two hangars each with an area of 100 metres by 100 metres. Each hangar will have the width and height to easily accommodate either a Boeing 747 or a Boeing 777 or alternatively three narrowbody Boeing 737 aircraft at a time, respectively. The construction started in January 2011 and the contract for construction was given to L&T while that for its management to CBRE. The project is proceeding ahead of schedule and we expect it to be completed by the fourth quarter of 2012. Recently, work on placing a slab of 206
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The upcoming MRO situated on 50 acres of land at MIHAN-SEZ will have a very large tarmac to accommodate waiting planes before they go into the hangar for checks, etc. The existing main runway at Nagpur airport is long enough to receive a Boeing 747
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metres by 30 metres was completed which will be the roof and also the office space and component shop of the MRO. Boeing’s total investment in the project will be US $ 100 million. The upcoming MRO situated on 50 acres of land at MIHAN-SEZ will have a very large tarmac to accommodate waiting planes before they go into the hangar for checks, etc. The existing main runway at Nagpur airport is long enough to receive a Boeing 747. Ò Are there any issues holding up work? None in particular. However, we are expecting that the work on connectivity that is a link from the main runway to the MRO hangar is completed by the time the MRO is ready; that is before the fourth quarter of 2012. For this, we have requested the Maharashtra Airport Development Company (MADC), which is the developer of the SEZ, to expedite the link. Earlier, there were plans for a second runway at Nagpur airport but it got delayed due to certain land acquisition issues. As a result, the need for constructing or laying a connecting link road of 1.6 kilometres from the main runway has arisen, which we hope will be done by MADC on time. The MADC Managing Director has confirmed the plan for the taxiway. What I would like to say is that while we are abiding by our part of the plan, it is now the turn of MADC to abide by its part of the plan to provide the taxiway. As far as the construction of the MRO is concerned, we are ahead of the schedule and it would be completed before the fourth quarter of 2012.
‘BOEING’S NAGPUR MRO
WILL BE READY BY END-2012’ H C TIWARI
DR DINESH KESKAR IS UPBEAT ABOUT BOEING'S PROSPECTS IN INDIA.
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INTERVIEW Ò What will be the scope of its work? The MRO is designed exclusively to do only airframe work and as part of it, the MRO initially will deal with only Air India’s fleet of Boeing 737, 777 and later on the 787 or the Dreamliners. The remaining capacity will be used to offer MRO services to other Indian carriers that have Boeing fleets such as Jet Airways and SpiceJet. As for working environment inside the MRO, it will be a green building with solar power, natural lighting and rainwater harvesting. The reason why we zeroed in on Nagpur is that it has an ideal climate: the city has a temperature of between 40 and 45 degrees Celsius, which is ideal for a maintenance hangar. Moreover, it is not close to the sea; hence, there is no chance of corrosion, etc. We have such weather conditions in Phoneix and Florida in the USA.
There has been a significant growth of aircraft fleets in India in the last five years that have not been coupled with adequate MRO facility... the Nagpur MRO will first take care of Air India and other local Boeing operators and then nonBoeing aircraft will be provided these services
Can the MRO sustain itself only with Air India aircraft? First, the MRO facility will take care of Boeing customers and this state-of-the-art maintenance repair and overhaul shop may in future look at providing services to other aircraft types such as the Embraer and the Airbus depending on the availability of capacity. Ò When modern MROs have either come up or are coming up in Qatar, Dubai besides Malaysia and Singapore, what is your expectation of third party business? There has been a significant growth of aircraft fleets in India in the last five years that have not been coupled with adequate MRO facility. Once the Boeing MRO at MIHAN-SEZ facility is completed, it will first take care of Air India and other local Boeing operators and then nonBoeing aircraft will be provided these services, subject to the availability of capacity at the MRO shop or depot. Further, based on factors like cost/quality/time, etc. this MRO will even look at handling MRO business from regions such as the Middle East and South East Asia. Ò Moving away from the MRO, could you tell us about the Dreamliner Boeing 787? It is going to be a game changer because in the airline business significant difficulties are being faced such as rising fuel costs, exchange rate variations and low fares. Under these circumstances, anything, which can help airlines, is welcome. On the cost side, the Dreamliner will burn 20 per cent less fuel than today’s airplanes that have higher fuel burns. Therefore, there will be big savings on fuel. Besides, the Dreamliner will also entail 30 per cent less maintenance cost as a "D" Check will be necessary in 12 years compared to other aircraft. The Dreamliner, then, will be in revenue service much longer than any competition. On the revenue side, the 787 has more belly cargo carrying capability. Since there are a few 787s in commercial operations, Air India could also have the first-mover advantage leading to much high loads and, therefore, higher revenue. The Dreamliner will have newer features such as lower cabin altitude, better inflight entertainment and humidity control inside the aircraft. All these will result in more passengers wanting to or even choosing to fly this aircraft. Perhaps, they may even ask for it by name. All these will combine to make it an effective game-changer. Ò Is Boeing not concerned by the rising graph of Airbus narrowbody sales in India?
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There is a significant misunderstanding about Boeingâ&#x20AC;&#x2122;s position in India. Boeing already has a market dominance in widebody. For instance, there are 20 Boeing 777s with Air India and 10 777s with Jet Airways. Besides, Air India has on order 27 Boeing 787 Dreamliners and Jet Airways has 10 Dreamliners on order. When you compare this with the competition you will get your answer. As for narrowbodies, which are called standard bodies in the US, Boeing introduced 737s to the Indian Airlines in the 1960s and subsequently the start-up private carriers in the early 1990s chose the 737s. Today,
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THUMBS-UP: Keskar welcomes the Boeing 787 Dreamliner during its first visit to India.
Jet Airways has a fleet of 737s, which are all the new series of 700/800/900. This fleet of Boeing 737s exceeds any other fleet of aircraft in India. Further, a fleet of 21 Boeing 737-800s is with Air India Express. SpiceJet has over 30 Boeing 737s and another 30 such airplanes are on order. Both Jet Airways and SpiceJet continue to take Boeing deliveries on regular basis. As for the competition, there is only one airline which has been taking its plane on regular delivery. Hence, in the total capacity added there is no difference in the intake of narrowbodies by Indian carriers. Â&#x2C6;
CHOPPERS
HEMANT RAWAT
CELEBRATIONS ALL THE WAY: Pawan Hans Chairman and MD R K Tyagi presenting a memento to DGCA E K Bharat Bhushan during the 25th anniversary celebrations of Pawan Hans. Also seen in the picture is Civil Aviation Secretary Dr Nasim Zaidi and Joint Secretary G Asok Kumar.
PAWN HANS IS 25!
WELL-KNOWN AS THE ‘LIFELINE OF INDIA’, PAWAN HANS HELICOPTERS LTD BEGAN ITS JOURNEY IN OCTOBER, 1985. SINCE THEN, IT HAS GROWN FROM STRENGTH TO STRENGTH AND IS TODAY, ONE OF ASIA’S LARGEST HELICOPTER COMPANIES THAT MAINTAINS AND OPERATES BY OFFERING A WIDE RANGE OF SERVICES TO ITS CLIENTS THROUGH ITS FLEET OF HELICOPTERS. PHHL CELEBRATED ITS SILVER JUBILEE RECENTLY WHERE IT HONOURED AND REMEMBERED ALL ITS FORMER EMPLOYEES.
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ndia’s only multi-disciplinary helicopter service provider — Pawan Hans Helicopters Limited, celebrated its silver jubilee function in Delhi on February 21. This public sector company was incorporated in 1985 under the administrative control of Ministry of Civil Aviation and was granted ‘Mini Ratna’ status just last year. The Chairman and Managing Director of the company, R K Tyagi narrated the journey of the helicopter operator to the audience which included both present and former employees of the company. What made the occasion special was the presence of the families of almost every Pawan Hans employee as well as a large number of former CEOs of the company. “The growth of the company over the last few years has been encouraging. Unlike the initial years, the company has witnessed a
The occasion was special with the presence of the families of almost every Pawan Hans employee as well as a large number of former CEOs of the company
manifold growth in its operating profit. While the profit of the company stood at `2.8 crore during the financial year 2006-07, the profit grew exponentially to `48.5 crore during the last fiscal,” Tyagi told the delighted audience. Several employees were felicitated by Civil Aviation Secretary Dr Nasim Zaidi for their good performance and contribution to the company. What was most moving was the gesture of remembering old-timers starting with the first CEO of the organisation. In his speech, Dr Zaidi pointed out to the fact that he was hoping that Pawan Hans would go on to achieve specific milestones in the next 25 years. He hoped that the Chairman and Managing Director would be able to achieve them in the next five years. “It speaks volumes for the commitment of the Pawan Hans employees and the leadership of Mr Tyagi,” said Dr Zaidi.
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FUTURE READY
PAWAN HANS HELICOPTERS HAS CHARTED OUT A DETAILED PLAN FOR ACQUISITION AND DEPLOYMENT OF AROUND 250 CHOPPERS AND SEAPLANES IN THE COUNTRY OVER THE NEXT FIVE YEARS FOR WIDE-RANGING DUTIES: FROM TOURISM TO LAW AND ORDER AND EMERGENCY EVACUATION FOR MEDICAL AND OTHER PURPOSES, ACCORDING TO THE ‘ROAD MAP FOR HELICOPTER INDUSTRY IN INDIA (XII FIVE YEAR PLAN - 2012-17)’’.
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W
hile there are around 35,000 helicopters in operation worldwide, in India the share is less than a meagre one per cent at just over 300 helicopters, despite being the second most-populous nation in the world witnessing a sharp economic growth. In the last two decades, with the opening of the Indian economy, there has been considerable improvement in the size of the aviation industry and a significant growth in number of customers who are availing such services. At the same time, Indians have the lowest propensity to travel by air among the BRIC (Brazil, Russia, India and China) countries, making less than 0.1 trips per capita in 2009, at par with Belarus and Senegal, according to Airbus data. Although the airline industry is expanding at a rapid rate in India at present with aircraft (more than $40 billion) in the order pipeline, connectivity remains inadequate through
There is an urgent and realistic requirement and possibility of increasing the size of the helicopter industry by addressing the persistent requirements
much of India, and airport infrastructure is virtually non-existent in many smaller cities. There is an urgent and realistic requirement and possibility of increasing the size of the helicopter industry by addressing the persistent and latent requirements such as non-passenger services including medivac, disaster management, law enforcement, etc. which are seriously lagging behind conventional uses at present. The Strategic Plan of the Ministry of Civil Aviation covers the road map for the aviation industry over a five-year period. Keeping the helicopter industry in view and its growth potential through the XII Five Year Plan period (2012-17), a roadmap has been proposed wherein the number of civil helicopters may increase from the present 300 to over 500. Through GBS (Gross Budgetary Support) forming part of the XII Five Year Plan of other ministries i) DoNER
CRUISING ON WATER AND IN THE AIR: Indiaâ&#x20AC;&#x2122;s first sea-plane (amphibian plane) of Pawan Hans.
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Acquisition of 21 helicopters to enhance connectivity of the North East Region for running regular passenger services. These projections are based on the detailed deliberations with DoNER(Development of North Eastern Region)/NEC (North Eastern Council) and studies carried out in North Eastern states by PHHL. The report submitted by PHHL has been accepted in principle. It is pertinent to mention that PHHL was nominated as a nodal agency for carrying out this study to support enhanced connectivity in the North Eastern region. ii) Ministry of Tourism Acquisition of 20 helicopters for developing new tourist sectors which otherwise are not operational at present due to lack of connectivity and infrastructure at important tourist destinations. The projections are based on studies and surveys carried out at important tourist
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MULTI-TASKING: (Above) A Pawan Hans chopper landing on the helipad at Vaishno Devi shrine; and (below) Pawan Hans provides helicopter support for offshore operations of ONGC.
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destinations in West Bengal (including the Sunderbans region), Bihar (Buddhist Circuit), Gujarat, Jammu & Kashmir, Kerala, etc. iii) Ministry of Home Affairs Acquisition of 20 fully-equipped medium helicopters for maintenance of law and order, anti-Naxal activities, coastal surveillance and for metro cities in India. Acquisition of helicopters to provide heli support to 618 districts in India by deploying initially up-to 178 helicopters, equivalent to 30 per cent of the total number of districts, ensuring wide coverage for disaster management, emergency and primary medical care, medivac, law enforcement, etc. Through GBS forming part of the XII Five Year Plan of Ministry of Civil Aviation Create infrastructure like at least one heliport in eight North-Eastern state capitals and up to one or more helipads per district in all the NE states totalling around 40 helipads as projected in the study for improvement of connectivity at the NE regions submitted to DoNER. Create three cityport/heliport projects/extension of heliport in metro locations (apart from Rohini, New Delhi) in India and provide a fillip to helicopter usage to facilitate enhanced capacity for the helicopter industry and other requirements such as medivac, disaster management, law and order, etc. Acquisition of 10 seaplanes for inter-island connectivity at the Andaman and Nicobar Islands, the Lakshadweep Islands and other coastal areas and connect the islands to the
CHOPPERS THE INDIAN ’COPTER INDUSTRY
UTILISATION
TOTAL CHOPPERS BY PROJECTS: 259
CHOPPER USERS
mainland for passenger services to the local people, medical evacuation and promotion of tourism, etc. PHHL has already carried out feasibility studies for seaplane operations at Andaman and Nicobar Islands and the Lakshadweep Islands. Create infrastructure at Hadapsar, Pune like Training Centre for pilots and engineers, MRO, simulators, flight monitoring/following systems, etc. for HR capacity-building to produce skilled manpower to cater to the growing demand of the helicopter industry. Create infrastructure for safety training for the aviation industry. Development of aero-sports offering model building/flying, motorised gliding, paragliding, parasailing, hot air ballooning activities to professionals as well as enthusiasts in order to generate awareness and interest in the aviation industry. The above projects would be centrally covered through the Gross Budgetary Support (GBS) of the Central Government covering various central ministries/government agencies as these are not in the nature of commercial activities. Such GBS of the other central Ministries is proposed to be routed through Ministry of Civil Aviation with Pawan Hans Helicopters Ltd (PHHL) being appointed as the nodal agency for implementation of the proposed plan. The proposed acquisition of fleet and creation of infrastructure will be national assets and PHHL would be involved as the operating and maintenance agency. To address the above requirements, estimates have been made for plan outlay during the XII Five Year Plan period (2012-2017) covering capital asset creation such as acquisition of helicopters and creation of other infrastructure. This includes purchase of 249 helicopters in various categories, 10 seaplanes and creation of heliports/helipads and related infrastructure. It also includes infrastructure-creation for HR capacity building at Hadapsar-Pune, National Institute of Aviation Safety & Services (NIASS) and Pawan Hans Training Institute (PHTI), etc.
TOTAL FINANCIAL IMPLICATION
MOVING AHEAD: FINANCIAL BREAK-UP
Through GBS forming part ` 9,020 Crore. of the XII Five Year Plan of other ministries Through GBS forming part ` 10,10 Crore. of the XII Five Year Plan of MOCA TOTAL (A+B)
TOTAL: 10030 crores
` 10,030 Crore.
The total plan outlay projected for acquisition of helicopters/aircraft and other projects during the XII Five Year plan period covering various Central Government agencies and its funding through GBS aggregates to `10030 crore.
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PAWAN HANS
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THE NATION A RECENT PROPOSAL PUT FORWARD BY PAWAN HANS HELICOPTERS LTD SEEKS TO ENHANCE THE CHOPPER INFRASTRUCTURE IN THE COUNTRY WITH THE INDUCTION OF 249 CHOPPERS TO THE EXISTING 250. A REPORT.
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t is an ambitious plan but one that will is certain to send India into the big leagues. Some time ago, Pawan Hans Helicopters Limited (PHHL) submitted a `10,030-crore proposal for the purchase of 249 helicopters and 10 sea planes. India has presently 250 helicopters. The proposal also includes the construction of 180 helipads across the country. Pawan Hans has submitted the plan to four ministries: while the Union Home Ministry has got a `7,760-crore plan, the Civil Aviation ministry has been given a `1,010-crore proposal, the Ministry of Development of the Northeastern Region a `1,020-crore plan and the Tourism Ministry a `240-crore plan. When the ministries give the green signal, the implementation would begin in the 2012-2017 five-year plan. Of the 249 choppers, 178 would be used for
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medical emergencies, law enforcement, etc while 20 each would be equipped for air surveillance and tourism and a further 21 for use in the Northeast. The 10 sea planes would be used for connectivity in the Andaman, Nicobar and Lakshadweep region. According to officials in Pawan Hans, the project would bring helicopters into the mainstream helping, for instance, road accident or earthquake victims. However, law and order would benefit the most. According to the proposal sent to the Home Ministry, 20 fully equipped medium helicopters would be procured to monitor anti-national activities, coastal surveillance, etc. The proposal from Pawan Hans will provide muscle to the present infrastructure. Over the last 25 years, Pawan Hans Helicopters
PHHL has emerged as one of Asia’s largest helicopter operators with its 42 helicopters
Limited has grown in strength. No longer does the company operate only in hilly and inaccessible areas or promote travel and tourism; it has to its credit a number of achievements — establishment of a specialised institute for Safety Audit and Excellence, heliports and becoming an authorised maintenance unit for an international chopper manufacturer. Pawan Hans has turned into India’s premier multi-disciplined helicopter services provider. Incorporated in October 1985, PHHL began operations within one year. Its objective: provide helicopter services to the oil sector, operate in hilly and inaccessible areas and make available charter flights for promotion of travel and tourism. The company has added three more objectives in the 24th Annual General Meeting held on December 23, 2009: set up a training institute of AME, pilots; operate sea plane and establish a specialised institute for Safety Audit and Excellence and set up heliports and joint ventures for operations and maintenance of helicopters. PHHL’s authorised capital has been increased from `120 crores to `250 crores on December 3, 2010. The paid-up share capital of the Company is now `245.616 crores comprising `125.266 crores in the name of the President of India and `120.35 crores in the name of ONGC Ltd. ONGC has converted loans amounting to `95.85 crores into equity and equity shares allotted on February 14, 2011. The government has conferred the status of “Mini Ratna-I” for PHHL on April 11, 2011. PHHL signs an MoU with the Ministry of Civil Aviation every year after the Task Force negotiation meeting in the Department of Public Enterprises. In 2007-08 and 2008-09 the company has achieved MoU rating of “Good” and “Very Good” respectively as per DPE norms. For the year 2009-10 the MOU rating is “Excellent”. With its registered office at Safdarjung Airport, New Delhi, corporate office at Noida and regional offices at Mumbai and New Delhi, PHHL has a team of dedicated highly motivated and skilled manpower comprising pilots, engineers, executives and support staff. The company is headed by Chairman-cumManaging Director and five part-time directors. PHHL has emerged as one of Asia’s largest helicopter operators with its 42 helicopters. At present, the company has a fleet of 51 helicopters comprising 18 SA-365N Dauphin, 14 Dauphin AS365N3, 3 Bell 206 L4, 4 Bell 407, 2 AS 350-B3 and 1 MI-172 helicopters. The company has an operation and maintenance contract of a Dauphin N3 helicopter of Government of Gujarat, two Dhruv helicopters owned by ONGC and four Dhruv helicopters owned by the Border Security Force in 2009 with HAL. Further, the company has signed in December 2010 another contract with HAL for operation and maintenance of four more Dhruv
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NORTH-EAST PUSH BY PAWAN HANS One of Pawan Hans' prime objectives is providing services in the North East. The company has deployed a number of its choppers with state governments and Public Sector Units (PSUs) in the North East. These helicopters are provided to the states on a long term lease basis. The state governments pay Pawan Hans directly for utilizing the helicopters and in turn are subsided for the helicopter operations by the Ministry of Home Affairs (MHA). In Arunachal Pradesh, Pawan Hans has provided a Mi-172 helicopter that is being utilized for passenger services connecting Itanagar with Guwahat, Tezu, Ziro, Roing, Tawang, etc. The services by the Mi-172 are run by the state government on a subsidized basis with 75 per cent subsidy from MHA and the balance 25 per cent is recovered from passengers. In neighbouring Meghalaya, Pawan Hans has provided a Dauphin helicopter on wet lease from February 15, 1999. The state government has been operating daily passenger flights on Guwahati-Shillong-Tura sector and other flights within the state. The passenger services are operated with a subsidy from the MHA. Pawan Hans has stationed a five-seater Bell helicopter on wet lease for the Sikkim government since October 31, 1998. Here too, the state government. has been operating daily passenger/tourist flights on the Gangtok-Bagdogra-Gangtok sector and other flights for carrying tourists on a subsidized basis with 75 per cent subsidy from MHA. The Sikkim government has also awarded a contract to PHHL to provide single/twin engine helicopter. In Tripura, Pawan Hans has provided a five-seater Bell helicopter on wet lease from September 25, 2002. The state government has been utilizing this helicopter for regular passenger services connecting Agartala, Dharmanagar, Kailashaar, etc. and for other purposes within the state again on a subsidized basis. The MHA had also been utilizing a Pawan Hans Dauphin helicopter since 1996 based at Guwahati. The contract for the AS 350 B3/Bell 407 helicopter expired at the end of 2010. The helicopter was based at Guwahati and was being used by ministers and senior officials of the central government to visit places in the North East. Pawan Hans has also provided a AS 350 B3 helicopter for pipeline survey to Oil India Ltd. from September 20, 2010. The chopper is stationed at Guwahati.
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PHHL runs the helicopter services from Phata to the holy shrine of Kedarnath during the May-June and SeptemberOctober seasons every year
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helicopters of BSF. Operational Milestone: Pawan Hans has transited from its Quality Management Systems under ISO 9001:2008 standards to ISO 14001 and 18001 Certification which is known as Integrated Management System covering environment and safety aspects. The company has achieved flying of more than 5.13 lakh hours and 19 lakh landings of its fleet since its formation. Operations for ONGC: Since October 1986, Pawan Hans has been providing helicopter support for offshore operation of ONGC for carrying its men and vital supplies round the clock to drilling rigs situated at Mumbai offshore platforms. PHHL operates to ONGC’s rigs (mother platforms and drilling rigs) and production platforms (wells) within a radius of 130 nm. from the mainland at Mumbai.
OTHER CUSTOMERS: PHHL has provided helicopter support services to several state governments. The company provides three Dauphin helicopters to the Administration of Andaman and Nicobar Islands and two Dauphins to Lakshadweep. It is also providing helicopter services to Ministry of Home Affairs (MHA) at Guwahati, Oil India Limited and GAIL. PHHL runs the helicopter services from Phata to the holy shrine of Kedarnath during the May-June and September-October seasons every year. The company was able to achieve record revenues from operations at Phata during two seasons, namely May-June 2010 and September-October 2010 by carrying 19,182 passengers. PHHL has also been awarded a contract by Shri Amarnath Shrine Board for operating helicopter services for the Shri Amarnathji Yatra 2010 and 2011 on BaltalPanjtarni-Baltal sector and started services from July 1, 2010 with two Bell 407 helicopters. PHHL has been successfully operating helicopter services at Mata Vaishno Deviji from Katra to Sanjhichhat under competitive conditions and has carried 1.90 lakh passengers in 2010-11, 2.05 lakh passengers during financial year 2009-10 and 1.24 lakh passengers in 2008-09. The company has been awarded contract for three years by the Shrine Board of Mata Vaishno Deviji from April 1, 2011, under significant competitive environment after being declared the lowest bidder. The company has undertaken a project for Power Grid Corporation of India Ltd. Hotline Washing of insulators of the power transmission lines for five months in 2008 and for three months in 2009. PHHL has been awarded a contract by Gujarat State Petroleum Corporation Ltd. for charter hire of a Dauphin N3 helicopter for three years from November 26, 2010. It has carried out operations for Border Road Organisation at Arunachal Pradesh from November 18, 2010 for eight months with one
CHOPPERS
“THE HELICOPTER INDUSTRY IS POISED FOR VERY HIGH RATE OF GROWTH” managing disaster, enforcing law and order, building and maintaining infrastructure, provide emergency medical support, bring primary healthcare to the doorstep of every citizen including the remotest of the remote areas of country. In addition, it has to provide last-mile connectivity and also promote our national heritage for tourism.
PHHL Chairman R K Tyagi* on the growth that Pawan Hans has seen in the last 25 years. Ò How were the first 25 years of Pawan Hans? The year 1985 can be considered the year when India began its journey of a new era with Rajiv Gandhi as the young Prime Minister. As PM, he displayed a vision of a new India where growth would be the way of life. This was the year when India defined its strategic sectors such as petroleum, which had to be protected for the development of our country. This was the year when the telecom revolution began with the Prime Minister’s vision for nationwide (rural and urban) connectivity. And this was the year when Pawan Hans was born as the Helicopter Corporation of India. Pawan Hans began its journey on October 15, 1985, from a hotel room in New Delhi. Today, after 25 years of service to the nation, Pawan Hans has achieved the status of a Mini Ratna and has its own corporate building and well-established regional offices and bases across the country to serve different customers. The company showed high energy right from its inception in 1985 and became operational within one year. The journey of the last 25 years has been full of energy, excitement, learning and growth. In these years, the company has handled more than 100 helicopters consisting of 11 different types and all categories: light, medium and heavy. We have developed expertise in the entire gamut of helicopter services — be it operations, maintenance or training. Today, the company is ready to handle 1000-plus helicopters that are required to meet the country’s demand for last mile connectivity, disaster management, internal security and medical services — primary healthcare and emergency services. Ò What is the vision statement for the next quarter century? India is one of the fastest-growing economies of the world today and aspires to be the third largest economy of the world with the projected share of 14.3 per cent of the global economy by the year 2015. These aspirations cannot be achieved without the growth of the civil aviation sector especially helicopters. India needs more helicopters to perform numerous roles for public good. Therefore, the helicopter’s role for India is cut out. It has to be used as an effective tool in
Ò Pawan Hans has a major role to play in training pilots and engineers. You have a process in place already. How will you ramp it up? Like any other growth-oriented company, Pawan Hans has diversified to include training and safety. It has opened Pawan Hans Helicopters Training institute (PHTI) at Mumbai to impart basic three-year training course for aircraft maintenance engineers. The National Institute of Aircraft Safety and Services (NIASS) has been opened in New Delhi to impart safety courses like safety management system course, accident prevention and investigation course, special VFR course for pilots, CRM training, etc. These institutes are meant to develop the skilled manpower for the helicopter industry.
Pawan Hans has achieved the status of a Mini Ratna and has its own corporate building and well-established regional offices and bases across the country to serve different customers
Ò You work with many state governments across India. Please elaborate your relationship with them. Pawan Hans was created to serve petroleum sector and also provide the much-needed connectivity in the states of the North-East and other far-flung areas of country. Pawan Hans has been in the forefront in supporting state governments in providing muchneeded connectivity, especially in the North-East. These state governments have lauded our efforts for years. People of these regions consider our services to be a lifeline and appreciate our efforts. Recently, in Sikkim, PHHL has rescued approximately 500-plus people from various quake-affected areas to the nearby base stations/camps including dead bodies/major injured people/pregnant women/kids since the calamity took place. PHHL has also transported relief material in far-flung areas of North Sikkim, the worst-affected by the earthquake. Similarly, we supported Orissa government in its floods relief efforts. Due to our sincere efforts, the state governments have often called Pawan Hans to deploy helicopters during natural calamities ahead of the defence forces. *R K Tyagi has since moved on to take over as Chairman and MD, HAL
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EQUIPPED FOR TOTAL MAINTENANCE Since it started operations, PHHL has built up adequate infrastructure/maintenance facilities (CAR 145 standard), qualified engineers and technical staff for the maintenance of different type of helicopters that the company operates from different locations. In addition, Pawan Hans also undertakes repair/maintenance of helicopters and components owned by others as per the approved CAR 145 standard. It has, for example, operations and maintenance contracts for Dauphin AS 365 N3 of the government of Gujarat and Dhruv helicopters of the Ministry of Home Affairs and the ONGC. PHHL has approved CAR 145 standard SOAP Lab for monitoring the health of aero engines and gear boxes by analysis of lubricating oil for concentration of metals by the atomic emission method. The state-of-the-art workshop facilities are located at Mumbai (western region) and Delhi (northern region). The workshops at the regions are: Main Rotor Blade Shop Engine Shop Composite Repair Shop Safety Shop Battery Shop Radio Shop SOAP Lab Instrument Lab Electrical Shop The Main Rotor Blade shop in Mumbai is the only one of its kind in Asia approved by Eurocopter and is capable of undertaking repair jobs on the main rotor blades of the Dauphin series helicopters. The Mumbai base is approved for carrying out inspections on A3 rated helicopters that include the Dauphin SA365N installed with ARRIEL 1C engine; the AS365N3 with Arriel 2C engine and the MI-172 with TV3-117 engine. The northern region and western region are also approved for other servicing/maintenance of helicopter components, These are: C3 -rated communication and navigation equipment, C5-rated electrical components, C6-rated equipment which includes ELTs, liferafts, C7-rated engines APU, C9-rated fuel units, C10-rated helicopter rotors, C11-rated helicopter transmission such as tacho generator, C12rated hydraulics, C13-rated instruments like 14 scale indicator, C14-rated landing gears, C18-rated protection instruments like fire detector, and C 20-rated structural checks, etc.
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For the first time in India, PHHL provided four helicopters (Dauphin and AS 350 B3 helicopters) for live coverage of Commonwealth Games 2010 events for Doordarshan
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Mi-172 helicopter taken on lease. For the first time in India, PHHL provided four helicopters (Dauphin and AS 350 B3 helicopters) for live coverage of Commonwealth Games 2010 events for Doordarshan. PHHL introduced seaplanes for first time in India to promote heli-tourism in Andaman and Nicobar Islands on 50:50 profit/loss sharing basis. A Cessna 208 An amphibian seaplane was taken on wet lease for a pilot project of six months initially. The seaplane was dedicated to the nation on December 27, 2010 and a proposal has been put up to the Ministry of Civil Aviation for providing support for viability gap funding to the tune of `3 crore to PHHL for this project. Heliport/Helipad in Delhi: The Delhi Development Authority (DDA) allotted 25 acres of land near Rohini for construction of the first integrated heliport in the country on June 1, 2009. DDA also earmarked a hectare of land for construction of helipad at Commonwealth Games Village site and PHHL completed the helipad in October, 2010. PHHL also created the basic infrastructure facilities/parking and helipad at Rohini. The Environmental Impact Assessment Study Report for the Rohini Heliport has been completed and the final report has been submitted. PHHL has constructed the heliport at CWG Village (Akshardham) with best facilities. As the ownership of heliport belongs to DDA, PHHL has requested DDA to grant permission to utilise the infrastructure/facilities for helicopter operations. PHHL is planning to develop a Helicopter Training Academy-cum-Heliport at the existing Gliding Centre at Hadapsar, Pune which is under administrative control and owned by DGCA. The project has been approved by Ministry of Civil Aviation and the DGCA has released an amount of `10 crore for the purpose. PHHL signed a MoU with DGCA on May 17, 2010, and DGCA has authorised to use land and other infrastructural facilities for development at the Gliding Centre. PHHL signed an MoU on July 23, 2010 with HAL for carrying out a feasibility study for setting up a joint venture for operation and maintenance of ALH Dhruv, Chetak and Cheetah helicopters of the defence forces. The Boards of HAL and PHHL have given in-principle approval for setting-up of the said JV of 50:50 and further discussions are in progress. The company set up a DGCA-approved helicopters training institute at Mumbai — Pawan Hans Helicopters Training Institute (PHTI) — in September 2009. In June 2010, PHHL started the National Institute of Aviation Safety & Services (NIASS) at Delhi for safety management system and safety awareness in the country. The institute aims to cater to emerging safety standards and audit
CHOPPERS
PAWAN HANS
compliances in helicopter industry in India and to provide consultancy in conducting audits for various aviation set-ups of PSUs/state governments/private operators. The institute has started conducting courses on Aviation Safety and would also provide consultancy services to other clients, new start-ups and audits of various helipad/heliport/offshore installations. Acquisition of new fleet: PHHL has signed agreements with helicopter manufacturers for purchase of ten Dauphin N3, three AS350B3 and two Mi-172 helicopters. The company has signed an agreement with ONGC on August 13, 2010 for term loan up to `275 crore, being 80 per cent of the estimated cost for purchase of seven new Dauphin N3 helicopters. Further, the company has also signed MoU with NTPC for long term lease of a new Dauphin N3 helicopter for 10 years with loan for 100 per cent funding for that helicopter. Till the delivery of the new Dauphin N3, a Dauphin N has been provided to NTPC on wet lease basis. PHHL has acquired seven new Dauphin N3 and three AS-350 B3 helicopters till date. Further, three Dauphin N3 and two Mi-172 helicopters are on order and delivery of these helicopters would take place between 2011 and 2012. While ONGC has funded Rs 261 crores towards 80 per cent of the cost of seven Dauphin N-3s, NTPC has agreed to fund the cost of a Dauphin N-3. The rest of the helicopters will be financed through external borrowings. Mid-life upgrade programme of Dauphin fleet: With a view to meeting the requirements of DGCA and the ONGC contract for Aviation Standard-4 (AS-4) compliant helicopters, retrofit programme for the Dauphin fleet has been undertaken in a phased manner. The programme has been undertaken for better safety and improved serviceability of the Dauphin fleet in view of on-time monitoring of all dynamic components and engines by the technical personnel of the company. Presently,
POWER PACKED: A Pawan Hans chopper performing hotline washing of transmission lines.
The operating and maintenance standards of Pawan Hans are one of the highest in the world. All aircrew must pass proficiency tests every six months
18 AS-4 compliant Dauphin helicopters after upgrade programme are available for use. The company has a team of dedicated highly motivated and skilled manpower comprising pilots, engineers, executives, technicians and support staff. PHHL prides itself as a selfcontained organisation with workshops covering different requirements (instruments, electrical, safety equipment, synthetic panel, component repair shop, spectrometric Oil Analysis Procedure Lab and radio including full test data checks) are available on site at Mumbai.. The operating and maintenance standards of Pawan Hans are one of the highest in the world. All aircrew must pass proficiency tests every six months. Maintenance crew undergo regular refresher courses. Meticulous maintenance checks on helicopters are carried out and extensive workshops with in-house facilities provide the backup. Further, to meet the requirement of present and future helicopter requirements of Coast Guard and other paramilitary forces like ITBP, BRO, BSF, etc., PHHL has initiated the setting- up of a Joint Working Group with the Ministry of Defence in the national interest to ensure that the requirements can be met on a consolidated basis through PHHL. These organisations can provide funding for their requirement of helicopters to PHHL as PHHL needs large amounts for acquisition of helicopters. In today’s market, there is no substitute for professionalism and PHHL’s staff is dedicated to being the best in the business. PHHL’s pilots, maintenance technicians, and support personnel are all committed to safety and service excellence. Throughout its history, PHHL has taken the initiative in developing safe operational techniques in many demanding conditions. Whether on the ground or in the air, PHHL’s talented professionals stand ready to meet customer. The experience and expertise we have been developing and our dedications to excellence in serving our customer enable us to maintain our position of leadership.
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n a bid to enhance revenue earnings, Air India board has approved a proposal to slash business class seats and increase economy seats on its Airbus fleet. The number of business class seats will be cut down in 34 Airbus aircraft, including A320s and A319s. It also decided to rent out its properties at prime locations in Mumbai and other cities to increase its earnings. Meanwhile, the Union Cabinet is expected to consider this package shortly to enable inclusion of the provision in the general
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The government has invested `1,200 crore this year, taking Air India’s equity to `3,345 crore
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budget. The airline is likely to get a `10,000crore package in the next financial year, including `6,600 crore worth of equity infusion, in the March 2012 budget. The Cabinet is likely to debate this package shortly to enable inclusion of the provision in the general budget, for which a Cabinet note has already been issued for comments to the ministries concerned. The government has invested `1,200 crore this year, taking Air India’s equity base to `3,345 crore. The Group of Ministers (GoMs), headed by Finance Minister Pranab Mukherjee,
MAHARAJA
LOOKS AT REBIRTH
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THERE WAS A TIME WHEN AIR INDIA USED TO PRIDE ITSELF FOR ITS PRODUCT, WHEN INDIA’S FORMER PRIME MINISTER INDIRA GANDHI ADDRESSED THE NON-ALIGNMENT MOVEMENT’S MEETING OF HEADS OF STATE AND GOVERNMENT IN 1983-94, AIR INDIA ADVERTISED ITSELF IN MUMBAI, DELHI AND OTHER PLACES: “FROM LUSAKA TO OSAKA—THE MOST NON-MALIGNED AIRLINE.” THERE ARE HOPES THAT IN THE NEXT TWO YEARS AS THE TURNAROUND PLAN TAKES EFFECT, AIR INDIA WILL COME BACK TO ITS HALCYON DAYS.
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cleared the financial restructuring plan for Air India, allowing it to raise `7,400 crore by issuing government-guaranteed bonds or by other means. The bond is likely to carry a coupon rate of 8.5-9 per cent. Financial institutions that have lent money to Air India may subscribe to these bonds, civil aviation ministry officials said. The entire package was suggested by the GoM as part of the airlineâ&#x20AC;&#x2122;s financial restructuring and turnaround plan. Air Indiaâ&#x20AC;&#x2122;s lenders have agreed to subscribe to `7,400 crore bonds issued by the
AI is planning to save `1,000 crore initially by way of interest on its working capital loans
debt-laden airlines as an interim arrangement, while giving an in-principle nod to a revised debt recast package, said senior bank officials. The bonds will be offloaded in favour of mutual funds and insurance companies after about six months. Lead banker SBI has suggested that the bonds could be subscribed by banks immediately and subsequently offloaded to other intermediaries like mutual funds and insurances companies. In another move, Air India is planning to save nearly `1,000 crore initially by way of interest on its working capital loans.
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‘Await a vastly improved Air India’ A BRIEF CHAT WITH ROHIT NANDAN
ON TURNING AIR INDIA AROUND
There are no two opinions about it: economic turnaround of Air India is my number one priority. It is a process that is being diligently followed at every level. There are regular meetings of the Group of Ministers on the airline’s financial and operational restructuring plans. We are given clear-cut directives and I view my job as one in which the implementation of the turnaround plan in a defined timeframe is the key.
ON PERSONNEL
I run an open and transparent office. My effort has been to reach out to all section of employees, meet as many of them as possible, seek their feedback and, of course, urge all those who desire to see the airline’s turnaround to come together. At the end of the day, it is the AI human resources that will make all the difference and I can see that in terms of attitude and commitment our employees are making a difference.
ON MEETING THE COMPETITION
It’s a different India… An aspirational India where the young form the majority of the demographic matrix. They are wanting to traverse the globe, experiment and explore. Air India is perfectly poised to tap into this vast market, but we know we have our job cut out while facing competition not just from foreign airlines but from our fellow Indian airline operators.
CORRECTING THE WRONG: Justice (Retd.) D M Dharmadhikari presenting the report on Air India HR issues to the Union Minister for Civil Aviation, Ajit Singh.
INDUCTING THE DREAMLINERS
“I run an open office. My effort has been to reach out to all section of employees, meet as many of them as possible, seek their feedback and, of course, urge all those who desire to see the airline’s turnaround to come together.”
IMPROVED NUMBERS
ON OPERATIONS
I am delighted that we have managed to lift our on-time performance beyond anyone’s wildest dreams. In fact, making sure that we take off on time and land on time was my first priority. That, literally, sets your ground staff and operational team in absolute sync and resolves a variety of issues. It also helped project a picture of Air India that is professional and in keeping with the service-oriented nature of this industry.
PIB
FINAL WORD
We are improving every day, every hour, every minute. (An enlarged version of this interview has appeared in the regular edition of CRUISING HEIGHTS)
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Rohit Nandan CEO & MD, Air India
If the funds are approved, it would just be in time for Air India to induct the much-delayed Boeing 787 Dreamliner aircraft, the first of which is likely to join the fleet in April. However, the Cabinet has to take a call on the order placed earlier. Air India, in the mean time, has already started preparing a schedule on the basis of new aircraft. This involves flights upto and more than six hours. The airline is expected to receive 11 B787 aircraft in 2012, three in 2013, 11 in 2014 and two in 2015. Delhi and Mumbai will be operational bases for the new aircraft. The schedule has been proposed on the assumption that the aircraft will fly 4,500 hours per annum. It means daily utilisation of 12-13 hours. Such an utilisation schedule can help the airline to go for even two international stations with the help of one aircraft.
The carrier has turned in a good performance in January with the overall revenue going by 30.4 per cent over the same period last year. The air carrier’s international revenue went up by 27.2 per cent and domestic revenue is up by 36.6 per cent during the month. Overall there was a 30.4 per cent improvement in revenues throughout the network, a senior official pointed out. Domestic capacity in terms of available seats per kilometre increased 16.3 per cent, whereas in the overall network, it remained static. The number of passengers carried increased 11.5 per cent on international routes and 18.1 per cent on domestic routes thereby helping the passenger load factor to a 5.4 per cent increase over the entire network. The yields on international routes rose 18.8 per cent and 16.9 per cent on domestic services and on the network by 19.3 per cent, he said. Incidentally, Air India’s performance is in line with the figures projected in its turnaround plan.
EXPERT VIEW
KAPIL KAUL
Aviation sector faces its
most critical phase THE COMING 12 MONTHS WILL BE THE MOST CRUCIAL FOR THE FLOUNDERING AVIATION INDUSTRY, COMMENTS KAPIL KAUL. AND THE SITUATION WILL NOT EASE ONE BIT WHAT WITH RISING FUEL AND AIRPORT COSTS TO NAME A FEW. THE INDUSTRY, HOWEVER, CAN SEE BETTER TIMES IF THE RIGHT DECISIONS ARE TAKEN.
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ndian aviation enters 2012 facing its most critical challenges since the advent of the 2004 industry reforms. The paradox of India’s airline sector is that it serves one of the world’s fastest growing economies and is posting double-digit traffic growth, yet the Centre for Asia Pacific Aviation (CAPA) estimates Indian carriers combined will lose $2.5 billion in the 12 months ending March 31, 2012. This is on total revenues of just under $10 billion — a worse result than in FY2008-09, when traffic was declining and fuel prices spiked at $150/barrel. In the domestic market, India’s airlines lose $25-30 every time a passenger boards an aircraft. This situation has prompted unprecedented intervention by the Prime Minister, who has outlined a 12-point agenda, upon which the Ministry of Civil Aviation must report every month.
POLICY PARALYSIS; SLOW ECONOMY The outlook for the operating environment in 2012 is not encouraging. India’s economy has slowed noticeably in the last two quarters and GDP growth for this current fiscal year is likely to be closer to 7 per cent than the 8.5-9.0 per cent forecast at the start of the year. With increasing concerns about the direction of the global economy, India’s growth in FY2012-13 could possibly dip below 7 per cent. This is a rate of expansion that most economies would envy, but it falls short of the government’s own targets and of the growth needed to achieve the government’s employment-generation and poverty-alleviation objectives.
Negative global economic sentiment, led by the financial crisis in Western Europe, is only partly to blame. India’s slowdown has largely been driven by internal factors, primarily a government at the centre that has been plagued by corruption and governance scandals. These have diverted attention from implementing the reforms needed to modernise the economy, directly frustrating investors. Capital has consequently been fleeing the country, depreciating the Indian rupee by almost 20 per cent since September 2011. For the airline industry the result is higher costs: fuel, aircraft leases and maintenance.
AIR INDIA IS CREATING THE PROBLEM The outlook for the operating environment in 2012 is not encouraging. India’s economy has slowed noticeably in the last two quarters
The lack of reform within the aviation ministry itself — without a dedicated minister since January 2011 — has served to heighten paralysis at the macro level. For almost the entire year Vayalar Ravi, Minister of Overseas Indian Affairs, had the Ministry merely tacked onto his main role. His almost exclusive obsession with Air India caused policy inertia, seriously damaging the entire industry. Perhaps, the most retrograde decision has been to grant Air India first right of refusal on private carrier applications for international traffic rights. These national assets — in the form of bilateral entitlements — are thus being viewed through the prism of a seriously bankrupt company. Air India has limited capability to operate new routes, meanwhile blocking private carriers from doing so. As has happened so many times before, the only winners in this scenario are foreign airlines from
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whom Air India is being “protected”. Despite the pre-occupation with Air India, the airline has no turnaround plan. Its sole strategy is to spend up to $1 billion annually in government subsidy throughout the coming decade — as much as the entire national higher education budget. Why this is necessary when there are perfectly good private sector operators ready and able to offer air services simply beggars belief. But there is worse: to generate cash flow, Air India is pursuing a suicidal taxpayerfunded commercial policy, discounting fares that private carriers are forced to match. Here is the main cause of the losses posted by the industry, taxpayers’ money being used to destabilise private sector airlines. Passengers have enjoyed a temporary consumer surplus, benefiting from cheap airfares, but an unviable sector is not ultimately in the interests of the travelling public.
FOCUS ON INDUSTRY VIABILITY Meanwhile, the government visibly continues to micro-manage issues such as the rights of airlines to sell exit row seats or charge for additional checked-in luggage. Seasonal increases in demand, which results in higher fares trigger scrutiny by the regulator — yet there is no intervention in the case of predatory pricing. If airlines cannot charge higher fares during peak season to counter losses during the leaner months it is simply not possible to maintain a viable operation. And quite clearly the losses incurred by the industry indicate that airlines can hardly be accused of price gouging. Rather than focusing on micro issues, the
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CAUGHT ON THE WRONG FOOT: Anxious flyers check out the information display board at Bengaluru airport.
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Ministry of Civil Aviation’s objective should be to create an environment, which recognises and supports industry viability and competitiveness. The sector must be in a position to operate safely and efficiently, delivering sustained and reasonable profits and covering its cost of capital.
A DEDICATED MINISTER IS A POSITIVE
Rather than focusing on micro issues, the Ministry of Civil Aviation’s objective should be to create an environment which recognises and supports industry viability and competitiveness
On December 18, 2011, Ajit Singh took over Vayalar Ravi’s civil aviation responsibilities. A dedicated minister is a positive development, but a change of leadership at this critical time means that uncertainty will persist, especially in the absence of a clear-strategic framework for the sector. Ajit Singh’s task is to create an environment that will allow airlines and indeed the broader aviation industry, to become viable. Even airports and general aviation operators are struggling. The solutions are relatively easy to identify but the weak link is the political and bureaucratic will.
FINANCIAL RECOVERY WILL BE SLOW Recovery, particularly for the full-service carriers, Air India, Jet Airways and Kingfisher, will be slow. India’s airlines have approximately $16 billion in debt, including outstanding payments to vendors, of which $6-7 billion is for aircraft-related loans. Air India’s debt will increase by a further $4 billion if it proceeds with plans to purchase its order for 27 Boeing 787s, generating an annual interest burden of $1.25-1.50 billion. A combination of low fares and sustained high costs, thus make sustainability unlikely. Several expenses have been out of the control of the airlines, fuel for example has been at elevated levels
EXPERT VIEW
H C TIWARI
for almost 12 months, general inflation in India has been at close to double digits, airport and ground-handling charges have been increasing, and a shortage of skilled labour means that wage pressures are mounting. Under these challenging circumstances India’s airlines have struggled to raise capital. Aside from Air India’s equity infusion from the government and a preferential shares issue by SpiceJet, plans to raise in excess of $1 billion from capital markets have been deferred. The situation has been made more difficult by record low market caps for the listed carriers — several carriers have immediate financing requirements greater than their current market cap. Aircraft financing has also dried up and carriers are increasingly turning to leasing to finance their aircraft deliveries. Heading into 2012 airlines will continue to struggle to raise equity and will need to take on additional debt, further eroding viability. Banks have become a critical pillar of the aviation sector — to date they have provided invaluable support to Air India and Kingfisher Airlines, but in 2012 they are likely to be called upon by even more carriers, increasing their aviation exposure further above the current $6 billion. The negative impact on the balance sheets of Indian public sector banks in particular could create a political issue in itself.
TOUGH TASK AHEAD: Ministry of Civil Aviation headquarters.
AIRPORTS’ FINANCIAL CHALLENGES Meanwhile, private and state-owned airport operators continue to struggle. The operators of Delhi and Mumbai airports have invested $5 billion in modernising these facilities but the revenue collection has been less than expected due to the economic regulator not permitting a dual-till framework, while the Supreme Court ordered both airports to cease collection of Airport Development Fees from passengers, pending approval by the Airports Economic Regulatory Authority. The single-till/dual-till debate must end as the overall regulatory approach is known and we need to ensure fair returns to the investor while protecting consumer interests. The state-owned Airports Authority of India (AAI), which has 125 airports under its control, of which around 85 handle scheduled services, is also in a state of financial distress. CAPA estimates that airlines have accumulated approximately $240 million in outstanding payments to the AAI, which meanwhile continues to face significant capital expenditure commitments to support its extensive airport modernisation programme — creating a cash crunch for them too. The AAI’s complex business model, which includes managing the largest portfolio of airports in the world under a single operator, investing huge capex in airports which are largely loss-making and the provision of air navigation services, will come under increasing pressure in 2012.
The state-owned Airports Authority of India (AAI), which has 125 airports under its control, of which around 85 handle scheduled services, is also in a state of financial distress
SOLUTIONS AND IMPLEMENTATION The government can easily take immediate steps to assist the sector. These include reducing the punitive sales taxation on aviation turbine fuel by including ATF under the ‘declared good status’ as allowing import of ATF is not practical due to infrastructural and logistics challenges; permitting foreign airlines to acquire up to a 49 per cent shareholding in Indian carriers (a proposal now before Cabinet); approving private carrier applications for international rights in a rationale and transparent manner(approved recently, details awaited); removing restrictions on ancillary revenues; and obliging more rational pricing by Air India and other industry players. Ensuring a cost plus pricing is critical to the long-term viability and competitiveness of the airline sector. In the longer term, the focus needs to be on creating a well-structured policy and regulatory framework and on enhancing the efficiency of the nation’s aviation infrastructure, particularly airports and airspace. The fundamental drivers of aviation growth in India remain strong and it should emerge as the third-largest market in the world within five years. But this will require important decisions in 2012 by government and operators alike to position Indian aviation as a safe, efficient and viable sector. With just two years to go until the next elections, the sad prospect presents, however, of a government which will be prepared only to allow the rot to persist. Yet an active Ajit Singh has it within his grasp to engrave his name as the Minister who turned around India’s flailing aviation industry. (The writer is CEO, South Asia, Centre for Asia Pacific Aviation)
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Hemant Rawat
TRAINING
INDIA TAKES THE LEAD TO TRAIN
AVIATION PERSONNEL BARELY A YEAR OLD, THE INDIAN AVIATION ACADEMY HAS SET A BLISTERING PACE OF TRAINING AVIATION PERSONNEL FROM THE COUNTRY AS WELL AS THE ASIA PACIFIC REGION. A REPORT.
T
he Chairman of the Airports Authority of India (AAI), V P Agrawal captured the spirit of the Indian Aviation Academy (IAA) correctly when he observed that in an environment of fast changing technology what matters most is the “Man” behind the machine and not the machine itself. In line with the establishment of IAA and the training it is imparting to airport personnel to meet the increasing challenges — be it in terms of technology or holistic management of the airport sector itself — the Chairman could not have expressed it better. V P Agrawal made his remarks on the occasion of the completion of the first year of the constitution of IAA in Delhi under the aegis of NIAMAR (National Institute of Aviation Management and Research). IAA is a successor to NIAMAR which itself is a product of a MoU between AAI, Directorate General of Civil Aviation (DGCA) and Bureau of Civil Aviation Security (BCAS). Constituted as an autonomous society, NIAMAR was formed under the Societies Act on July 22, 2010.
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IAA has taken major steps towards developing the skills of a large pool of efficient manpower of AAI, BCAS and the DGCA through technical advancement
Subsequently, the IAA was set up with the main objective of developing it as a centre of excellence in the area of education, training and research in aviation in the Asia Pacific region. On the completion of the first year in March 2012, IAA has taken major steps towards developing the skills of a large pool of efficient manpower of AAI, BCAS and DGCA through technical advancement and consequent refinement of operating standards and procedures including new standards of safety, security and improvement in management techniques. The training imparted for airport management caters to airport operations, airport engineering, construction, maintenance and project management, airport finance, human resources management, airport commercial and land management, aviation law, aviation security and safety besides aviation cargo management. According to the AAI Chairman, IAA in time to come will become not only a boon for the three partners but also other stakeholders of the Indian aviation industry as well as those outside.
TRAINING
Speaking to CRUISING HEIGHTS, Dinesh Kumar, Director of IAA, said as India progresses towards becoming a major player in the aviation scenario worldwide, the biggest challenge will be to fill the desired level of skills required by the personnel engaged in different specialised fields in the aviation industry. On the completion of the first year of the Indian Aviation Academy, indications are that it will go a long way to meet the challenges as well as the need for development of skills in various fields of airport management, aviation regulation and aviation security. The academy has taken the initiative of formalising the ICAOIndia developing countries training programmes in airport operations management, airport commercial management, general airport management, airport security management, etc. The academy offers courses in 15 areas presently that range from airport operations and airport engineering to airport finance, international aviation law as well as dangerous goods regulations. An MoU with ICAO has also been signed to conduct fellowship programmes for developing countries. This MoU specifically covers courses like airport certification; safety management systems; airport security management; airport commercial management; airport operations management and airport cargo management. Aviation officials from a number of countries â&#x20AC;&#x201D; Syria, Saint Lucia, Bangladesh, Mauritius, Zimbabwe, Namibia, South Africa, Uganda, Thailand, Philippines, Mongolia, Guatemala, Eritrea and Pakistan â&#x20AC;&#x201D; have participated in various fellowship programmes. Referring to specifics, Dinesh Kumar noted
A LEAP AHEAD: (Clockwise from top left) A class in progress in the academy; Civil Aviation Secretary Dr Nasim Zaidi (third from left) and AAI Chairman V P Agrawal (fourth from left) along with the officials of ICAO at the signing of MoU to conduct fellowship programmes for developing countries; view of the lobby at IAA; and IAA Director Dinesh Kumar.
that courses relating to airport security covered issues like unlawful interference, etc. This is basically the domain of BCAS. As for DGCA, the training capsules relate to licensing of airports and air worthiness. In a way all the three signatories to the MoU bring their own expertise. While DGCA brings in the licensing aspect, BCAS the security and AAI the airport management aspect. In fact, airport management is a very wide term and the spectrum includes management of the terminal, operations, and such sectoral details such as commercial mainly retail, land, human resources, management of finances and air cargo management under which hazardous goods are also covered though it is a separate topic by itself. Before IAA was constituted, NIAMAR (before it came under the Societies Act) related institute imparted training only to AAI officers. After NIAMAR was brought under the Societies Act in August 2010 and subsequently it was succeeded by IAA, the training facilities have been opened to external candidates as well who include not only the private airport operators in India but also other airport operators, either state owned or otherwise from different parts of the world. Recently, IAA imparted 10 weeks training to 20 students from Afghanistan on the whole gamut of airport management including the theory of air navigation system. All the 20 were civil aviation personnel. Earlier, a batch of 22 from the Delhi, Mumbai, Bengaluru, Hyderabad and Cochin airports were given specific training to update their skills. Kumar also pointed out that the idea of AAI Chairman V P Agrawal was to convert the
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Professional courses for aviation personnel
s the aviation sector becomes complex with modern aircraft and airports get bigger to cater to increasing load of passengers, so do the management of airports and other ground services. Human resources have to be constantly upgraded in the fields of airport operations, airport engineering (construction, maintenance and project management), cargo management, airport finance, airport commercial and land management, HR management and aviation law. The Indian Aviation Academy caters to requirement of training of personnel of the Airports Authority of India, Director General of Civil Aviation (DGCA) and Bureau of Civil Aviation Security (BCAS) under one roof. The objective: to become centre for global excellence in areas of education, training and research in aviation in the Asia-Pacific region. Its aim is also to become a deemed university in due course. Located near the airport and spread out over an area of five acres, IAA’s infrastructure and teaching facilities are state-of-theart and comparable to the best civil aviation training institutes around the world. The lecture rooms and laboratories at the Academy are equipped with the latest teaching/training aids including computers, multi-media projectors, flip boards, video projectors, video cameras, etc. To promote
Academy into a full-fledged Aviation University in the coming years. “Right now we are in a formative stage. However, a Detailed Project Report (DPR) has been prepared suggesting the road map to convert the academy into a university,” he said. The Secretary, Civil Aviation, Dr Nasim Zaidi, has taken keen interest in the institution and has expressed the view that in the years to come, the Indian Aviation Academy will formulate and deliver world class management training and educational programmes and develop as a centre of
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The Academy is accredited by IATA and DGCA to conduct courses on Dangerous Goods Regulations, on a regular basis
research, the Academy also has a wellequipped library with books on aviation and airports and subscribes to leading publications worldwide in the aviation sector. The course domains are: Cargo operations. Airport passenger operations. Airport commercial aspects. HRD courses. Airport finance. Airport engineering. Aviation law. IT operations. The Academy is accredited by IATA and DGCA to conduct courses on Dangerous Goods Regulations, on a regular basis. BCAS has also approved the Academy for training in Aviation Safety and Security. Under the guidance of International Civil Aviation Organisation (ICAO), the Academy has set up a Course Development Unit under ICAO TRAINAIR Programme for developing standardised training packages (STPs) in the field of aviation. It has already developed two STPs, on ‘Bird Hazard Control Management’ and ‘Aviation Pavements Maintenance’. Four more STPs on ‘Airport Passenger Terminal Management’, ‘Contracting for Airport Construction’, ‘Contracting for Procurement of Equipment’ and ‘Contracting for Airport Services’ are under preparation.
excellence and ultimately a deemed university in the Asia Pacific region to begin with and global in due course of time. Come April, Dinesh Kumar said that the Academy would hold two IATA programmes relating to airport management and air cargo management for outsiders. “During fiscal 2011-12, in its first year of coming into being, the Academy has trained about 2500 people. I would like to point out that not just airport operators and related staff, we have also got participants from the BSF and NBCC,” said Kumar. The IAA Director also mentioned that apart from general airport management there were some very key aspects that needed to be understood. BRANDING AT ITS BEST: : “I would like to draw the attention of everyone (L-R) AAI Chairman, V P to ‘acts of unlawful interference’ and constant Agrawal; DGCA E K Bharat threats these posed to the safety and security Bhushan; Former Civil of civil aviation operations. It is here one Aviation Minister Vayalar would require a huge team of trained and proRavi; Civil Aviation fessional security officials besides spreading Secretary Dr Nasim Zaidi; awareness about security,” said Kumar. G S Malhi, Chief, BCAS and According to IAA Director, the faculty of the AERA Chief Dr Yashwant academy has both regular and visiting faculty. Bhave at the unveiling of There is also a hostel with 28 air-conditioned Indian Aviation Academy rooms for trainees/participants besides airlogo at the Airports conditioned suites for visiting faculty. Directors' conference.
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WORLD-CLASS
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THE PIONEER TRAINING INSTITUTE FOR CNS-ATM IN THE COUNTRY, THE ALLAHABAD-BASED CIVIL AVIATION TRAINING COLLEGE HAS BEEN DOING YEOMAN’S SERVICE BY PROVIDING HIGHLY-QUALIFIED PERSONNEL TO MAN OUR AIRPORTS. A MEMBER OF THE ICAO-TRAINAIR PROGRAMME, THE COLLEGE ALSO PROVIDES TRAINING TO AVIATION PERSONNEL FROM ABROAD.
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he Civil Aviation Training Centre at Allahabad was established by the Director General Civil Aviation in 1948 and now is a part of the Airports Authority of India. Renamed as Civil Aviation Training College (CATC), it has been a member of the ICAO TRAINAIR programme that guides aviation training throughout the world. In fact, as a pioneer institute in the country, it has been imparting training in various aviation fields with its main training areas being CNS technology and air-traffic management. Ever since its establishment it has been the main source of producing technical personnel in the CNS and ATM fields. In the CNS stream, it trains personnel who are trained for maintenance, repair, calibration and operation of ground-to-ground and air-to-ground equipment. The college boasts of state-of-theart equipment for high frequencies and very high frequencies and high-speed data transmission sophisticated lines working on the world wide network. Another field is the maintenance and repair of navigational aids spread across the Indian continent which has non-directional radio beacons, very high frequency Omni range (VOR)
Ò During 2008, the college conducted 51
courses in ATM, 32 courses in CNS and one course in other category. Ò In 2009, there were 38 courses in ATM and 40 courses in CNS and four courses in other categories Ò 2010: There were 36 courses in ATM and 30 courses in CNS and two courses in other categories. Ò On an average 650 persons are trained every year.
Other special courses concerned with improvement of skills, proficiency, obstacle limitation surfaces, search and rescue have been conducted and are conducted regularly
transmitters and DMEs that are used for navigation by flights. The CNS technical officers are trained at CATC to maintain the equipment. Similarly, training on radars technology has been imparted from the times when dark room radars were in use. At present, state-ofthe-art equipment is in use in our country and the complete technology is maintained by the CNS officers trained at CATC. Terminal navigational aids such as the Instrument Landing Systems, surface radars and internal communication systems are always in the hands of the people trained at CATC. The maintenance of the systems used in the air-traffic control units in the country is done by these capable officers from the CNS discipline. The Air Traffic Management branch imparts training to controllers in Apron Management Service, Surface Movement Control of the Aircraft, Aerodrome Control Operations, Approach Control Service to Arriving and Departing Flights, enroute service to the flights in the controlled areas, flight information regions and the overflying traffic across the continents. Other special courses concerned with improvement of skills, proficiency, obstacle limitation surfaces, search and rescue have been conducted and are conducted regularly. The aviation growth and the management of airspace of the country have been managed successfully by the Air Traffic Controllers trained in the CATC. Training departments: The college has two training departments. The CNS department has the communication and the security systems, navigation aids, surveillance aids and automation sections. The ATM department has the Aerodrome Control, the Approach Control, the Terminal Area Control, Special Courses and the Civil Airport Terminal sections. Every section has its training curriculum and conducts courses as needed for operation of the airports and the air-navigation services. There are other supporting sections such as the Meteorological, Human Resources, Finance, Civil and Electrical, Hostel Management, Course Development Unit, Hospital and Transport. Continued on Page 152 `
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THE ‘ALMA MATER’ OF ATCS AND
COMMUNICATION ENGINEERS BAKSHISH SINGH, EXECUTIVE DIRECTOR, CATC, ON THE HISTORY OF CATC AND TRAINING
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he CATC at Allahabad enjoys a special place. Established in 1948, it has undergone many changes and is today one of the foremost training establishments for CNS and ATM disciplines in the country and the region.
Ò Give us a brief history of your institution and its transformation from what it was earlier to what is now CATC. What was the spirit behind its setting up by DGCA in 1948 and its new avatar now? CATC Allahabad, the training establishment of the Airports Authority of India, is the 'Alma Mater' of Air Traffic Controllers and Communication engineers. In the review of civil aviation in India in 1948, M C Ghosh, the then DGCA, had disclosed that between July 1, 1947 and June 30, 1948, the number of flying hours, the distance flown and the freight carried had increased considerably rather than that during the previous year. It was decided to establish a flying training school and an airfield school at Allahabad. CATC came into existence at its present location in 1948. It functioned under the ministry of communication until a separate ministry of civil aviation was created in the 1950s. The establishment was initially known as the Civil Aviation Training Centre and imparted training in various technical aspects of aircraft operations: flying, aircraft maintenance, air traffic control, navigational and communication equipment and operational procedures. Ever since the establishment of CATC, it has conducted many professional as well as refresher courses for Pilots, Air Force Personnel,
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KEEN STUDENTS: A class in progress at CATC.
The objective of the establishment of the training centre has been done for the fulfillment of training needs of the Airports Authority of India under the powers of AAI Act 1994
Maritime Officers, Air Traffic Controllers, Aerodrome Assistants, Communication Officers, CNS Technical Officers and Technical Staff. The CATC estate has a sprawl of about 100 acres. Till the mid90s, the barracks of World War II era accommodated classrooms and other associated buildings. In 1963, the associated aerodrome was taken over by the Indian Air Force to establish Central Air Command at Allahabad and thus, there are no flying training courses in CATC. CATC became a part of the National Airports Authority of India in 1985 and its name was changed to Civil Aviation Training College in 1990. Subsequently, NAA was merged with International Airports Authority of India and rechristened Airports Authority of India (AAI) by an Act in 1995 and the centre/college remains a part of the AAI. The objective of the establishment of the training centre has been done for the fulfillment of training needs of the Airports Authority of India under the powers of AAI Act 1994, Chapter III Article 12(d). A new institute complex was constructed during the 1992-96 at a cost of `35 crore under UNDP programme. Improvements and addition to existing infrastructure have since been continuously carried out in CATC. There are 12 classrooms and 34 technical laboratories for CNS executives and ATM executives. In addition, there is a conference hall, a seminar hall and a full-fledged model audio-visual auditorium. The recreation infrastructure includes gymnasium, table tennis, lawn tennis, badminton, basketball, cricket, football, and swimming pool. Ò Why was Allahabad chosen for this institute when today there are hardly any flights to the city? That was because of the city’s historical linkage with aviation. The first civil airmail flight was operated from Allahabad in 1911. Allahabad is one of the four airports established for the first time in India in 1929. Allahabad was the chosen capital of the then Northern province even before Independence and there were regular civil scheduled flights and training flights at
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Training delivery; Instructional personnel quality; Training design and development; and, Training quality system ICAO TRAINAIR-Plus methodology is the basis for designing the course materials. Either the Standardised Training Packages (STPs) developed by other countries are imported for training or course materials are developed in-house. Competency-based training: All the instructors undergo through a programme of training of the trainers before they are declared competent in their subjects. They are regularly subject to proficiency tests. There are skill development programmes for them. Quality standards: Rigorous quality standards have been worked out; performance is evaluated on the basis of standards. Learner-centric training: The training style is learner-centric. There are only 10 or 12 students in every class. The teachers follow the standard instructional techniques in theory classes, lesson plans designed to test the effectiveness of the delivery. The controllers are made to work in low-density traffic in the beginning and slowly move to medium density and then to the highest density of traffic under difficult conditions and emergency situations.
Allahabad. It was one among four airports that was operational during that period. Historically, the centre has a full-fledged established infrastructure for training with residential facilities, so relocating the centre to some other city may not be economically viable. Ò Could you please tell us the important milestones in this "educational" institution which trains personnel for CNS and ATM? CATC became a member of TRAINAIR (ICAO) in 1993 and developed seven Standard Training Package courses. New infrastructure including classrooms, ATC Simulator and hostel were developed under the UNDP Programme between 1995 and 2002. Efforts are on to upgrade CATC from TRAINAIR to TRAINAIR-Plus. CATC has already been audited by the ICAO auditor to become TRAINAIR-Plus associate. The objective of the assessment was to evaluate the capability of the Training Centre to manage and conduct the ATM and CNS training courses and use of STP within the established quality system. TRAINAIR-Plus audit has been conducted by ICAO assessor for associate membership of ICAO TRAINAIR-Plus certification. Enhancement of training capacity for ATM Directorate to accommodate initial Training for special requirement drive of ATCOs by Ministry of Civil Aviation. Establishment of Gondia and Hyderabad Training Centre as a extended training centre for ATM training to meet the growing demand of ATCOs. Modern non-radar simulator was installed and is in the process of commissioning for training from March 2012. Our international customers are Ethiopia, Surinam, Mauritius, Afghanistan, Yemen, Sri Lanka, Nepal and Bhutan. Ò Between the CNS and ATM which stream witnesses faster obsolescence in terms of equipment installed and why? Does it mean that personnel need to go for more frequent re-training? These are maintained by those from the CNS discipline. This equipment is used by Air Traffic Managers and thus, recurring training is required for both CNS personnel and ATM personnel for operating the latest equipment. CATC conducts induction-level courses for newly-recruited personnel as well as refresher training and advanced courses for proficiency and career progression. Ò CATC being a member of ICAO TRAINAIR, what are the internationally accepted-norms? How often do you revise the courses you offer or teach to AAI staffers? The norms that are laid down by ICAO TRAINAIR-Plus programme are: I. Facilities and technology supporting training;
Ò The equipment installed at the training centre— especially the Simulators — are they the latest or have they been upgraded ? The equipment installed at CATC is the latest and upgraded periodically depending on the training requirement. At present, the Audio Visual simulator from Singapore Technologies and the Radar simulator from CAE Canada are being used for ATM training. The latest Procedural Non Radar simulator from ADACEL of Canada is in last phase of installation and commissioning.
CATC imparts training in the field of ATM and CNS discipline. It has trained personnel from foreign countries also
Ò At present, there are about 200 students in each of the two streams: CNS and ATM. But with rising passenger traffic, more aircraft and many new airports coming up, where do you see the requirement of engineers and how will the demand be met? The requirement of CNS and ATM is increasing at all the airports; therefore, there is increasing demands for both ATCs and CNS engineers to meet the requirement. Ò How many students have passed out or were trained by the Centre? CATC imparts training in the field of ATM and CNS discipline. It has trained personnel from foreign countries also. The total number of foreign nationals trained between year 2001 and 2010 is 66. The total number of AAI personnel trained by CATC between January 2009 to January 2012 is 2177 including foreign nationals in both ATM and CNS discipline.
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The college also trains personnel from Ethiopia, Surinam, Mauritius, Afghanistan, Yemen, Sri Lanka, Nepal and Bhutan. Training Quality: The Training Quality policy states that the Civil Aviation Training College/Centre (CATC) Allahabad shall: Determine the training needs of all the personnel of Airports Authority of India working in various departments throughout the country and review the needs every year with respect to the changes or upgradation in the aerodromes, airport operations, ground handling operations and air navigation services, communication, navigation and surveillance facilities and other aviation-related subjects and publish a training calendar every year. Deliver the training output as per the training needs determined. Achieve the highest standards of training by adopting the international standards of ICAO, TRAINAIR; national standards laid down by the DGCA, India, for communication, navigation aids, surveillance aids, aerodromes and aerodrome operations, air navigation services, search and rescue, fire and rescue operations, safety and security in air traffic services. Share the training with other stakeholders within the country and outside the country. Provide training to any other customers. Strive for continual improvement in the training quality by setting targets, measure the performance and review regularly. The instructors of the college are highly qualified and comprise the best selected technical officers and ATC officers with experience in maintenance of CNS equipment. They have practical experience in airport management and operations as well as in air-navigation services and hold current ratings in technical units and the ATC units. State-of-the-art simulators in aerodrome control training, approach control and enroute sections are utilised in the training of personnel. The latest equipment in CNS training such as Doppler VOR-Thales, DME-Thales, NORMARC ILS, NDB-SAC, VHF-OTE, HFZENETEL, AMSS-ECIL, etc. are available for
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KEEN-LEARNERS: (L-R) Personnel having hands-on practical training in an ATC room; and, personnel taking lessons in a classroom.
State-of-the-art simulators in aerodrome control training, approach control and en-route sections are utilised in the training of personnel
training. Training design and development: The CATC compiles data for various cadres and the upcoming technological additions at airports and navigation centres based upon the job profile of the people and analyses it to determine the training needs of the nation. Training capacity: At present 200 students in ATM and 200 students in CNS can be accommodated at a time in various courses Competency based training: All the instructors undergo a programme of training before they are declared competent in their subjects. Quality standards: Stringent quality standards have been laid down and the results are evaluated regularly. Continual improvements in the manner of teaching as well as review of the courses are done as and when needed. Learner-centric training: The training style is learner centric. There are 10 or 12 students in every class and teachers follow standard instructional techniques for the theory classes, while lesson plans are designed to test the effectiveness of the delivery. Simulator exercises too are formulated keeping in mind contemporary needs. The controllers are made to work in low-density traffic in the beginning and gradually upgraded to medium and high density of traffic under difficult conditions and emergency situations. The college has excellent hostel facilities for nearly 450 students. While there are 50 air-conditioned rooms equipped with TVs and refrigerators for international students, there are separate air cooled rooms for ladies and gents. The college authorities are fully aware of the worldwide growth in civil aviation, the upsurge in the technology of air-navigation services, the operational safety of aerodromes and associated fields. The staff at the college work towards the continual improvement in the training methodology. It has set a high benchmark and is moving ahead in close cooperation with national and international stakeholders and customers to achieve its vision: “To be a world-class training institute by 2013 capable to create Next Gen aviation officials to meet the training needs of the country and fulfill the expectations of ICAO.”
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f you Google search “airhostess training” like I did, you'll find over 2 lakh sites listed just for India. Of these 98 per cent will be advertising an academy or institute that “claim” to train airhostesses. I say “claim” only because that's what it is — a “claim”. Try calling any of them and you'll find either the number is disconnected or wrong — even those number listed on official Websites. I was lucky and persistent enough to discover just about a handful of academies that were operational and still provided airhostess training. It's like the war ended before it even started. It makes one think, what do aspiring airhostesses do when they come across such a hurdle? And this is just one of many they'll be facing throughout their training and career. The next hurdle is getting into one of these few institutes and hoping that it remains open long enough to give you
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There are two primary kinds of academies available to students in India today — an airline training academy and a stand-alone academy
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a diploma so you can at least begin a career in this line. Research shows that of all the students who get in such academies, many opt out before even completing the course because they are so disillusioned and discouraged, seeking another line of profession. And of those who pass out, only small faction emerges in roles with the airlines, even if they've been trained by an airline-owned academy! So all that glitters may not be gold in this line of profession.
THE SCENARIO So what really is the scenario of airhostess training in India today? Looking at the base situation, I would say not too good. There are two primary kinds of academies available to students in India today — an airline training academy and a stand-alone academy. There was a time when academies were pop up all
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ATTEND THE FLIGHTS? A COUPLE OF YEAR AGO, THE AVIATION INDUSTRY WAS SEVERELY HIT, EFFECTING ESPECIALLY THOSE WHO WERE ASPIRING TO JOIN IT AS YOUNG ENTHUSIASTIC CREW MEMBERS. TODAY THE INDUSTRY SEEMS TO BE ON THE MEND AND SOME EVEN CLAIM IT'S DOING VERY WELL, BUT WHAT DOES THAT REALLY MEAN TO THOSE WHO HAD ONCE WANTED TO BE A PART OF IT, ASKS MEGHNA BHADURI.
IN WATER: Students of Urasia Aviation Academy during a swimming drill. 154I CRUISING HEIGHTS I MARCH 2012
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over the country, but largely due to the recession of 2009 most closed down. Even airlinetraining academies wound up shop, except for a couple like Kingfisher, which started in April 2007 in Mumbai but never expanded the way it had been envisaged. And those standalone academies which survived, had to diversify from instructing flight attendants to training them in hospitality, customer care services, and airport duties. Amongst them was Frankfinn Airhostess Training Institute, which had to add two new elements to their portfolio — travel and hospitality.
HEALTHY INTERACTION: Students taking lessons in a classroom of Frankfinn Airhostess Training Institute.
KEEPING UP THE SUPPLY There is clearly an increase in the number of airlines operating in India. But are the remaining few academies and institutes able to keep up with producing enough trained personal required in the industry today? An optimistic Samir Valia, President, Frankfinn Airhostess Training Institute, says yes. “Over the last few years, requirements of these various airlines have pretty much been met. The only issue has been that since 2008 many branded institutes have wound up largely due to the recession in 2009. But mid-way through 2010 and 2011, the numbers once again rose and domestic and even international airlines have been coming in regularly and recruiting.” According to Anshu Bery, COO, Flying Cats and Global Retail School, who believes that the civil aviation industry is witnessing a revolution in its 100th year of operations in India and domestic carriers are expanding into international operations, aviation schools are now mushrooming again all over India to match the industry demand; but quality train-
“Over the last few years, requirements of these various airlines have pretty much been met” Samir Valia President, Frankfinn Airhostess Training Institute
ing is a big question mark with most of them. Less optimistic, owner of International Travel & Tourism Academy, Sanjiv Mishra, says academies and institutes are only able to keep to some extent. “There is still a huge gap between demand and supply. We still have people in India, who are not aware of the career options available with airlines. On the other hand, whatever pool of qualified students we have, they are not absorbed by airlines because they are not experienced. This criteria is limited in domestic airlines but international airlines just don't accept fresh candidates.” With a similar point of view John Naushad, MD, Flyair Aviation Academy, says, “It is true that many academies and institutes have shut down and this has largely been due to the recession and lack of proper management. But not much recruitment happened last year. Although academies had an 'n' number of good candidates, they could not place them as candidates. This is usually due to a lack of contacts with the airlines companies and not knowing where the interviews are happening. This happened a lot in the North East and Kolkata. Academies promised airhostess training but were in fact training for the hotel industry.” Gurpreet Khanna - Director & CEO - IESP, Airawat Group, who began his venture with his father, A S Khanna, Chairman, Airawat Group and Ex-GM - Air India, has a wider outlook, “Airlines and aviation companies across the globe, today, are making continuous efforts in seeking readily employable talent or 'industry-ready' talent to meet their staffing requirements in the category of fresh recruits. Being the world's largest democracy,
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India, also, boasts of one of the largest populations of young people. With its rapidly increasing workforce each day, about eightnine million new entrants are being added each year. Presently, about 44 per cent of India's labour force is illiterate with the quality of most graduates being poor. Only a small number of organisations offer adequate opportunities for upgrading of skills with only 16 per cent of Indian manufactures providing on-the-job training compared to a mammoth 90 per cent and above in China. Organisations like the World Bank are currently supporting improvement projects to help produce engineers at par with international standards. There is a clear need for skill-development measures in India to increase employability. Most Indian organisations, educational bodies/institutions, vocational training players are in nascent stages to produce industry-ready talent and are ramping up their efforts to meet the industry workforce demands. It is evident that most students in India are equipped with academic certificates; however, they severely lack in employable skill sets. This has led to increasing the gap between academic yield and industry demands.”
AIRLINE VS STAND-ALONE So, does a student attending an airline-training academy have an advantage over one who doesn't? Bery claims so, “An airline-training academy has much to offer to its students. Apart from just classroom sessions, we impart simulation training in a mock training room, which is an essential part of the academy. This training includes meal service procedures,
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“A stand-alone academy is an academy that gives the student an introduction to aviation and it is more a familiarisation training that prepares them for the ab nitio training with an airline-training academy” Arlene Marwah Director/Co-founder of Urasia Aviation Academy
INQUISITIVE MINDS: Aspiring cabin crew members in an interactive session organised by Fly Air Aviation Academy.
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meal service delivery, business/economy class service, announcements, safety demonstrations and the like, and it is delivered by industry experts with long years of experience in the industry. Over and above, the job training is an integral ingredient of our curriculum where students get a hands-on experience on in-flight training services and airport management. A stand-alone academy on the other hand, produces half-baked candidates who are not completely equipped to join the work force.” Director/Co-Founder of Urasia Aviation Academy Arlene Marwah has a different view, “A stand-alone academy is an academy that gives the student an introduction to aviation and it is more a familiarisation training that prepares them for the ab-initio training with an airline-training academies. A stand-alone training academy gives students more confidence, preparing them for the aviation module both in service and in technical. Grooming them gives the airline a fully groomed candidate. This enables them to achieve better grades in the airline-training academy.” Khanna explains further, “Airline training academies have a brand image mock-ups (simulators), to back up their credentials, airline-specific perspective, practical drills of emergency procedures, etc. and course content pertaining to sops specific to that particular airline only. Stand-alone academy offers practical exposure through internship opportunities, affiliations back up their credentials, perspective drills in theory only, conventional teaching techniques that go beyond and exposures to the students to different global standards. Also the price range of the airline acad-
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emies are on a higher side depending on the brand's value in the market. From another point of view, Mishra believes there is lot of differences when comparing an airline training academy and a stand-alone academy. “Airline training academies run tailor-made courses but academies such as ours, which are IATA authorised training centre, provide training with international standards, i.e. Harvard and Stanford — IATA Aviation Management. These universities are considered under Top 20 business schools/universities in the world.”
PLACEMENT PROBLEMS? Flying Cats and Global Retail School, which offers training modules designed by the prestigious international body Active Solutions Consulting Group (ASCG), a UK-based company that designs training modules for airlines across the globe, claims of having an annual placement statistics of 100 per cent and offers both a one-year diploma and a three-year degree programmes. Bery adds, “It is not difficult to place the students, as the customer service sector is the fastest-growing sector as on
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IN-DEPTH TRAINING: Glimpses of the sessions from various training academies.
“Airline training academies have a brand image mock-ups (simulators), to back up their credentials” Gurpreet Khanna Director & CEO IESP, Airawat Group
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date. Supply exceeds demand. Selection of students in Flying Cats, Kolkata, is done at par with international airlines selection criteria; so the approach is extremely focused and industry oriented.” Like many academies that added new dimensions to their training courses, Frankfinn looks at its success not only from the aviation angle but a part of the three areas of training it provides — aviation, hospitality and travel. Valia explains, “If I talk about last year, because I have statistics from April 2010 to March 2011, students placed in these three industries were roughly about 5,000. The way the spread usually goes is almost 85-90 per cent of students get placed in all the three industries — aviation, hospitality and travel. The way the spread is roughly about 20-25 per cent would go into the aviation sector, another 40 per cent would start their career in hospitality but as they gain experience they would later on end up moving to airlines as well because airlines would also look upon their candidature more favourably once they have six months or a year of experience in hospitality. There is a perception that the aviation industry is not doing good. I would tend to disagree. I say industry
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standards. Emirates and Qatar Airlines are proof of this fact. At a recent campus placement at our academy, Saudi Arabian Airlines took 61 candidates on board from one batch!” Although, Marwah agrees that an international airline is always preferred, she also adds that some prefer a domestic airline for personal reasons as parents and guardians play an important role in their decisions.
INTERNATIONAL STANDARDS?
has grown and will continue to do. The overall number of planes will growing and people will keep flying in the skies. And as long as the planes are up there in the sky, they are going to need people. So, trained manpower is always going to be in demand.” Yet another institute to add a hospitality angle to its training courses, Urasia Aviation Academy's co-owner, Marwah suggests it is not difficult to place potential students who are trained and can deliver the service required with airlines, even though they have their own academies, a student that meets with their requirements can work with any airline. “We had 38 students from our academy who were placed within 60 days with both international and domestic airlines.” International Travel & Tourism Academy which also provides other trainings like ground staff training, cargo training, and international air ticketing claims to have 100 per cent placement record for last 6 months. Adds Mishra, “We have students who have been placed with Air India, Air Mauritius, Malaysian Airlines, Air Traffic Control Centre in Johannesburg, Indigo, and even Air India in Toronto.”
INTERNATIONAL VS DOMESTIC “The attraction is always there for an international airline. It is like anybody who wants to do engineering would probably want to do it from an IIT, like a person who is getting into aviation would like to get into an international airline,” explains Valia. Bery adds, “Yes, definitely there is a preference to work with international airlines because of the attractive pay packages, international exposure and a desire to see the world without paying for it. International airlines too, on their part, are now raking the Indian market for candidates as the manpower delivered is of international
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TECH-SAVVY: Students taking computer lessons in a computer lab of Frankfinn Air Hostess Academy.
“We have students who have been placed with Air India, Air Mauritius, Malaysian Airlines, Air Traffic Control Centre in Johannesburg, Indigo, and even Air India in Toronto” Sanjiv Mishra Owner of International Travel & Tourism Academy
“Training in India is definitely not at international levels,” says Naushad. “How can we be? We have no academy that singularly concentrates on the training of airhostesses, they all train students for both airhostesses and the hospitality and customer service. So often students, end up in BPO jobs or as receptionists. Abroad there are different types of training for airhostess and these types of training we do not offer our students. Academies don't even know which aircraft the airlines have, a Boeing aircraft or an Airbus or the ATR. To succeed in this industry, students must have all the technical knowledge. But academies just provide a small part of the training before sending students off for interviews. It is airlines that recruit the candidates and then give them the training according to their aircraft.” When asked Valia is of a different view, “We are definitely at par with international standards. Because even from an international airline point of view, what they are seeking is somebody who's got the personality and the withal for the good customer relationship person. I would say somebody who is a natural doesn't even need an academy. They would be
TRAINING probably get hired directly by an airline. What we at the institute are preparing them for is that when they go for their interviews they are able to put their best foot forward. And yes, the training they go through with us gives them an edge over the other candidates.”
WHERE ARE THE MEN? This is another interesting question. Are changing times seeing more men entering this profession? Bery believes so. “Though it is a preconceived notion that an airhostess job is only for women, awareness is gradually growing and airlines like Jet Airways and GoAir have a fair share of stewards on board.” Though Valia agrees to this shift he thinks its a slow process. “That's the way the industry has been. Earlier, I would say the ration was 90:10. But there has been a shift and today it's more like 65:35. More men are willing to choose this profession. And even airlines are will to recruit them as flight stewards.” As Mishra says the word “airhostess” conjures up an image of a well-mannered, elegantly dressed lady greeting passengers. It's a fact that demonstrates that the field is still dominated by women. But there is place for men too.
FORMULA FOR SUCCESS “Success in an airhostess career depends largely on various parameters that include physical, personality and emotional quantums,” Bery points out. “Having an attractive persona, a well-groomed outlook, good customer service skills and a high-emotional intelligence will definitely go a long way.” Marwah adds, “Besides looks, communication
“Though it is a preconceived notion that an airhostess job is only for women, awareness is gradually growing and airlines like Jet Airways and Go Air have a fair share of stewards on board” Anshu Bery COO, Flying Cats and Global Retail School
CLEAR VIEWS: Group discussion session in progress.
plays a major factor, while empathy, diplomacy and discipline makes them successful airhostess.” As Mishra explains further, all airhostesses need to be mentally and physically fit to deal with the long working hours and emergencies. “Hard work and patience are the very important. Readiness to work at odd hours of the day, on weekends and holidays is another must for aspiring airhostesses. Typically, any one who wants to pursue this job needs only a high school certificate and good communication skills. Some airlines do, however, prefer applicants who have completed certified airhostess-training programmes. And those who aspire to work with international airlines must also learn to speak a foreign language.” Of 100 students, only 2 per cent get a job and of these many resign within a week of doing the job. Naushad says, “This might look like a glamorous job, but it requires a lot of tedious work. So passion towards the industry is the number one thing. If there's no passion, you can't survive. At some point of time, you will feel like this job is boring or just given up because it's just too difficult. The other things to have is confidence and being proactive. The sustenance to service needs to be there. It's can't just be about the money, but also about provide good service to passengers and understanding them.” So, just looking good does not guarantee success. “I wouldn't say that airlines are only looking for beautiful people. It's not about being faired skinned all the time. Even if you are dark skinned but have a good clear complexion in terms of no scars or acne of any sort, airlines would still look at you favourably,” says Valia. “But the number one thing airlines look for is a good personality and having a pleasant demeanour. Guests want to see a pleasing personality with a smiling countenance when they board the fight — is what it is all about. And to top it all, one needs good communication skills. When I say communication, the requirement is usually English and Hindi in India, and at times even a local language. For example, currently Emirates with whom we have a tie-up for recruitment and is flying into India, has a requirement for Bengalispeaking crew. So it has coming regularly for the last few months to our centres in West Bengal and recruiting Bengali-speaking crew.” Will having institutes like Frankfinn spread across the country help generate enough manpower for the ever-growing industry? Are there students who still want to take up this profession despite all the hurdles? It's great to aspire for a glamorous life, jet setting to exotic destinations, but harsh realities show that a very few actually reach those heights. And one wonders if the industry can help create stead enough platforms to train and nurture a new generation of flight attendants.
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TRAINING FIGHTERS
TO FIGHT FIRE THE AIRPORTS AUTHORITY OF INDIA’S FIRE-FIGHTING SCHOOL IN THE COUNTRY IS RECOGNISED FOR ITS SUPERIOR TRAINING, AS NANDU MANJESHWAR NOTICED, WHEN HE VISITED THE SCHOOL NEAR DELHI AIRPORT.
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NANDU MANJESHWAR
t this moment, the world over hundreds of thousand aircraft are either taking off, landing or in mid-air. In each of these activities, dangers lurk. However, while landings and takeoffs are considered more prone to accidents, the fire services at airports can respond immediately through aircraft rescue and fire-fighting (ARFF) teams. The ARFF team is a special category of fire fighting and tasks entail quick response, hazard mitigation, evacuation and if required rescue passengers and crew of an aircraft in an airport ground emergency. It is imperative that due to mass casualty potential of an aviation emergency, the speed with which emergency response equipment and personnel arrive at the scene is of paramount importance. National governments, which are signatories to the International Civil Aviation Organisation (ICAO), have to abide by the guidelines set out. In India, ARFF service is available at 64 airports and personnel are trained at two centres located in Kolkata and New Delhi respectively under the administrative control of Airports Authority of India (AAI). AAI is mandated to organise, equip, train and operate in such a manner as to fulfil its principal objective of ARFF. It has standardised activities in conformation to ICAO guidelines. The activities of ARFF service at airports entail:
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DAREDEVILRY AT ITS BEST:Firefighters using a water cannon to douse the fire during a drill.
Fire prevention and protection. Fire investigation and analysis. Safety coverage to flight operation as per ICAO. Safety coverage to the airport infrastructure. Mutual aid fire fighting with other fire safety assistance services. Training to fire crew and other agencies at airports. Ambulance services to the passengers. The two training centres have built considerable reputation to be included in the list of Aviation Training Directory of IACO and US Federal Aviation Administration (FAA) Advisory Council. There is no dearth of international trainees being trained in our training centres mentions Subash Kumar, General Manager (FS), AAI. Kumar adds, “This confidence amongst Asian and African nations is indicative of our high standards and quality of training. Visit our training centre to get first impression.” A visit to Delhi's Fire Training Centre (FTC) is an exhilarating experience and at the end of the day one comes back with a feeling that “FTC means business”. The morning session starts with physical training and drill. “Physical fitness is of utmost importance to firemen and drill is for discipline. Both of these are of primary importance,” explained a senior officer. Later, a full-fledged mock drill was on show — an aircraft is on fire, crash fire tenders arrive, spew enormous amount of water and foam, as fire subsides rescue crew in protective gear and breathing equipment rescue passengers. “This is what happens in reality and we monitor response time of every team involved in this operation,” said Mohd Hanif, Deputy General Manager, in charge of FTC. At airports, a quick response is all that matters. After that comes securing the aircraft against all hazards, particularly fire, that increases survivability of passengers and crew on board. Again, a fast response means fire fighters have to instinctively use water, foam, dry chemicals and cleaning agents rather than wait for a senior officer's instructions to extinguish
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“Immediate reaction to a situation is efficiency” Is this fire training centre meant for personnel employed at airports or do you train personnel from other fire services also? Though bulk of trainees is from airports, there are no restrictions for training fire services personnel from other states as well as public sector and private companies. But there is a minimum qualification requirement for enrolment.
MOHD. HANIF DY GENERAL MANAGER, FIRE TRAINING SERVICE, NEW DELHI, ON THE TRAINING AND PREPARATION OF FIRE FIGHTERS.
How is the status of fire services at Indian airports? Our airports have the latest equipment and are as good as any in the world. Training is conducted on similar machines and equipment so that after training when they are on an actual task, the personnel are not found wanting. India is a signatory to the ICAO guidelines and we have to adhere to the laid-out standards.
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Is there any quota system for those outside your department? Each year a calendar is prepared for training people. We primarily have to fill the need of our requirement and the balance is offered to outsiders. We also get personnel from neighbouring countries as well as from African countries. Last year, we trained about 70 people from Asian and African countries. With your experience, what are the usual cause(s) of an accident? There is no text-book case for any accident. Irrespective of the causes, the fire services at the airports are operational 24x7. Immediate reaction to a situation is the crux of efficiency.
Do you offer consultancy service? We offer consultancy when asked, but we
burning aviation fuel in and around to maintain a path for evacuating passengers to exit the fire hazard area. There is misconception that a fire fighter's job is only to deal with fire. “It is different at the airports, but a fire fighter has to deal with many disasters which people do not realise. These men are the first one to react to disasters such as a building or a bridge collapse, a tsunami as it happened a few years ago in the South and earthquakes. And we train to deal such incidents,” mentioned Hanif. At the FTC, personnel handle the latest machinery and equipment, which are used in actual relief operations. Similarly, fire crash tenders are the latest in use around the world such as Rosenbauer, and the personnel are trained on this. The instructions imparted are not merely
do not have separate consultancy services department. When AAI is called for consultancy, especially foreign government, fire services becomes part of that service.
ALERT MINDS: Officials attending theory classes to understand the basics
on the drill ground, but in the classrooms as well where cut-out models of all types are kept and trainees are explained the rescue operations for each aircraft. In the laboratory, they are taught as to how chemical agents react with aviation fuel. “In the last fiscal year, we trained almost 1,500 people combined in both training centres, in all 23 courses. The courses range from basic training course to firemanship course and fire safety management for senior executives. The bulk of trainees are for basic training and firemanship courses,” mentioned Subash Kumar. Another unique feature is that residential accommodation, classrooms, dining hall, library and laboratory are air-conditioned. “This is not luxury. The trainees go through a rigorous schedule everyday and they need to relax to be fit for the next day's schedule,” said Hanif. Apart from AAI and private airport personnel, FTC trains personnel from shipping companies, Oil India Limited, Jindal Steel and Power Limited, Reliance Industries Limited, Indian Navy and Indian Air Force. “Recently, a high powered delegation from Indian Air Force had come to assess our training,” mentioned Hanif. AAI has set its sights high. Its aim is “to be a world-class organisation providing leadership in air traffic services and airport management and making a major hub in Asia-Pacific region by 2016”. The way AAI's fire service is progressing one need not wait till 2016: the aim will be achieved much earlier.
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AMRITSAR AIRPORT USHERS IN CAT-II
INSTRUMENT-LANDING SYSTEM
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s part of its continuing efforts to improve the air navigation facilities for the aircraft and passengers at all the airports in the country, the Airports Authority of India (AAI) has recently taken up the initiative of upgrading the existing instrument landing system to Category-II at Amritsar for supporting safe and smooth aircraft operations. The upgradation of the system to Category-II required improvement in airport infrastructure, removal of obstacles in and around the airport, training for the Controllers and the Maintenance Personnel. Having com-
A SIGHT TO WATCH: Amritsar Airport presents a dazzling look at night.
pleted all the requirements and on obtaining the regulatory approval, the ILS CAT-II has been operationalised from on December 23, 2011 at Shri Guru Ram Das Jee International Airport, Amritsar. The advanced landing system would reduce the visibility requirement for an aircraft for landing at Amritsar Airport from the existing 650 metres to 350 metres. The implementation of ILS CAT-II system will be a big boon for the passengers of this pilgrim city particularly during winter when the visibility goes down well below 650 metres. The
aircraft would be able to land safely even during poor visibility (up to 350 metres) at Amritsar reducing the chances for diversion of the aircraft to other airports in such cases. Aircraft would be able to take-off from Amritsar even when the visibility is as low as 400 metres. The implementation of ILS Cat-II would benefit the airlines in terms of increased safety, avoiding diversions, minimising holding for visibility improvement with consequent gains in operating costs and lesser fuel burn and substantial environmental efficiency.
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AAI
AAI SIGNS MOU TO DEVELOP DEOGHAR AIRPORT
LUXURY REDEFINED: New furniture has been placed in the reserved lounge area at Patna Airport.
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irports Authority of India keeps on providing new facilities for the passengers and airlines as a regular exercise at its various airports. In this respect, many new passenger facilities have been introduced at Jai Prakash Narayan International Airport, Patna, for the comfort of passengers such as new cyber cafĂŠ, shoe shiners machine, additional visitor chairs, money exchange counter, mini- snack and pharmacy counter outlets. For the safety and security of passengers which is the prime responsibility of AAI, following ini-
tiatives have been taken: (1) Provision of new fire and rescue vehicles (2) Perimeter lighting (3) Runway re-carpeting (4) Provision of new ambulances (5) Increase in the height of boundary wall in operational area (6) Additional ramp for parking of airline equipment. In addition, CCTV have been installed and barrack accommodation has been provided for CISF Personnel. Also new furniture has been placed in the reserved lounge and a new look has been given by beautifying the city side of Patna Airport.
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CHANDIGARH AIRPORT INTRODUCES SWAGAT SEVA
SERVICE AT ITS BEST: A "Swagat Seva Facility" (paid-porter service) started at Chandigarh Airport for passengers. 166 I CRUISING HEIGHTS I MARCH 2012
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NEW PASSENGER FACILITIES AT PATNA AIRPORT
SPREADING WINGS: V P Agrawal, Chairman AAI (left), signing the MOU. Also seen in the picture is Arjun Munda, Chief Minister, Jharkhand (3rd from left).
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MOU was signed for development of Deoghar Airport between Govt of Jharkhand and Airports Authority of India in the presence of Chief Minister of Jharkhand, Arjun Munda. Sibu Soren was also present in this MOU signing function which was attended by other senior officers of Jharkhand Government and AAI. The MOU included development of the airportinitially for ATR-72 type aircraft operations and subsequently for A-321 type of aircraft operations depending upon the demand and traffic potential.
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n order to meet the expectations of travellers, Chandigarh Airport, Civil Enclave, has introduced Swagat Seva facility (a paid- porter service) for passengers, new snack bar counters in domestic as well as in international security hold area at the airport for air passengers. In addition, a new restaurant, eatâ&#x20AC;Ś at Chandigarh, has been established in new integrated terminal building. For the medical needs of passengers, a Medical Inspection (MI) room has been setup in association with Fortis Healthcare. News channel facility has also been introduced for passengers transiting from international security hold area, immigration waiting hall and domestic security hold area. Chandigarh Airport has recently been declared a customs airport and international flight operation from Chandigarh airport are likely to start soon.
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PUNE: THE GATEWAY TO MAHARASHTRA
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ing-up in front of the une city is the oricheck-in counters and gin and hub of varhelps in expeditious ious movements security clearance. such as social, religious, Spacious check-in and educational, political, security hold areas economic, agricultural, and facilities like cultural and literary. In restaurants, book stall, short, it is a gateway to spa services and variMaharashtra. The airous shops make a port reflects the imporpleasant experience to tance of the city. travel through. The The fascia of the spacious departure Terminal Building is of and arrival areas ease partial glass panes the congestion on the measuring approxi- NEW DIRECTION: Flyers at the check-in counters at Pune Airport. city side. In addition, mately 16.5 feet in there are two aerobridges for comthe new Departure and Arrival terheight and is fully air-conditioned. fort and convenience of passengers. minal with Ground + 1 level measurThe city side of terminal is provided Apart from developing the airport as ing 13.46 feet in height, an open look with beautiful landscaping. We also a whole, it is our constant endeavour has been achieved. What is more have live plants inside the terminal to have a passenger-friendly enviimportant is that it can accommodate which enhance the aesthetics of the ronment. more passengers. This avoids queuterminal. With the construction of
TRIVANDRUMâ&#x20AC;&#x2122;S OLD TERMINAL GETS A MAKEOVER
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o provide spacious terminal space and more facilities to the domestic passengers at Trivandrum Airport, the flight operations for domestic flights were shifted from the existing domestic building to the old refurbished international terminal building in early
December, 2011. The salient features of the building are: Total floor area 6241 sq metres; Number of aerobridges: 2; Number of check-in counters with feeder conveyors and in-built weighing scales: 17; Arrival conveyors: 2; and Car park capacity: 300.
AAI LEADS IN AERODROME LICENSING
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rticle 15 of Convention on International Civil Aviation requires that all aerodromes open to public use under the jurisdiction of a contracting state should provide uniform conditions for the aircraft of all other contracting states. Articles 28 and 37 oblige each state to provide its territory, aircraft and other air navigation facilities/services in accordance with Standard and Recommended Practices (SARPs) developed by ICAO (International Civil Aviation Organisation), Volume-1 Annex-14. Accordingly in compliance with the above international regulations and in conformity with regulations set out in Part XI of Aircraft Rules 1937 (Rule 78) and conditions mentioned in various Civil Aviation Requirements (CARs) issued by DGCA, the Airports Authority of India (AAI), being a major aerodrome operator envisaged on a path to acquire aerodrome licence not only for international airports but also for domestic airports where schedule air transport services are operating. AAI has acquired aerodrome licence for 54 of its airports.
NEW LOOK: Lounge area at the newly-refurbished terminal. MARCH 2012 I CRUISING HEIGHTS I 167
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AAIâ&#x20AC;&#x2122;S PUSH FOR WUSHU
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The championship involved more than 500 players in senior, junior and sub-junior categories and participation by 20 teams in the championship. Many international players also displayed their skills in the championship among who were Asian Games medalist Bimoljit Singh, World Junior Silver medal SPEAKING FOR THE CAUSE: AAI Chairman VP Agrawal addresswinner Gulshal and ing the audience during the inauguration of the three-day Wushu last yearâ&#x20AC;&#x2122;s best player Championship. Sajan Lama. Desh Deepak Verma, IAS, Director three-day Wushu Championship General, Sports Authority of India, was organised by Delhi Amateur while declaring the games open, Wushu Association at Talkatora appreciated the initiatives taken by VP Indoor Stadium, New Delhi. The inauAgrawal, particularly to promote negguration ceremony for the event was lected sports and bring them in the presided over by VP Agrawal, public domain with the support from Chairman, Airports Authority of India the public sector. He also mentioned and President, All India Public Sector that the country needed dynamic leadSports Control Board.
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ers both in the corporate world and the sports arena to keep sports activities on the frontline. Speaking on the occasion, V P Agrawal mentioned that he belonged to the school which not only subscribed but also encouraged participation in sports, especially in the adolescent ages for it not only inculcated a sense of discipline and camaraderie, which in turn contributed to a great extent the development of good character amongst children, it also helped one become a good citizen. He further highlighted the popularity of this event and opined that the All India Public Sector Sports Control Board (AIPSSCB) took the initiative and promoted the event in the public sector undertakings too. He also added that in his capacity as President, AIPSSCB, he would welcome proposals for promotion of such sports from PSUs. He also mentioned that children should visit the AAI website, which provided full details about sports promotion activities supported by AAI.
FREE HEALTH CHECK-UP CAMP AT LUCKNOW AIRPORT
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HEALTH CONCERNS: An employee undergoing BP check-up at Lucknow Airport.
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s part of ongoing corporate social responsibility, Atul Dixit, Airport Director, Lucknow Airport, organised a free health check-up camp at Chaudhary Charan Singh Airport, Lucknow ,recently. The free camp was organised under the supervision of Dr O P Chaudhary Hospital and Research Centre, Lucknow and its dedicated team of doctors.
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At the inauguration of the health camp, the Airport Director highlighted the importance of corporate social responsibility of Airports Authority of India and also narrated the activities undertaken in this regard. In the camp, the fire personnel and officers were made aware about the precautions to be taken for disease related to heart, kidney, diabetes and BP so that they can keep themselves fit and
perform their duties with full energy, dedication and zeal for saving the lives of others. The two-day camp was also attended by various employees of Airports Authority of India and residents of nearby villages and they were sensitised about the importance of good health, particularly the periodic check-up. The gathering was provided advice by doctors through slideshows for the easy understanding of the participants. At the end of the camp, the Airport Director expressed his commitment towards corporate social responsibilities and functions of the AAI. All the persons who benefited from the camp thanked the hospital and AAI for holding such programmes.
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CAUTION IS
THE WATCHWORD THE ECONOMY AROUND THE WORLD IS STILL REVIVING FROM THE MAULING IN 2011 — EVER SO SLOWLY — AND THE GREEN SHOOTS OF GROWTH CAN BE SEEN. ACCORDING TO THE ECONOMIC SURVEY, EXPORTS CONTINUED TO RISE AND THE CURRENT INDICATIONS ARE THAT INDIA WOULD ALSO ACHIEVE THE TARGET OF $200 BILLION (2010-11). TIRTHANKAR GHOSH TALKED TO A FEW AIR CARGO STALWARTS TO FIND OUT HOW THE YEAR IS GOING TO PLAY OUT.
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CARGO
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here is a bad news and a good news for the cargo sector. The International Air Transport Association (IATA) pointed out that cargo markets contracted by 0.7 per cent for the year; but there was a positive demand growth in December of 0.2 per cent. This was quite unlike the passenger sector where demand rose by 5.9 per cent compared to 2010, in line with long-term growth trends. The growth in demand lagged capacity increases at 4.1 per cent for cargo putting downward pressure on load factors. The average freight load factor was just 45.9 per cent, down from 48.1 per cent in 2010. Commenting on the low loads —both in passenger and in cargo, Tony Tyler, IATA’s Director General and CEO said: “Given the
The growth in demand lagged capacity increases at 4.1 per cent for cargo putting downward pressure on load factors
weak conditions in Western economies the passenger market held up well in 2011. But overall 2011 was a year of contrasts. Healthy passenger growth, primarily in the first half of the year, was offset by a declining cargo market. Optimism in China contrasted with gloom in Europe. Ironically, the weak Euro supported business travel demand. But Europe’s primarily tax and restrict approach to aviation policy left the continent’s carriers with the weakest profitability among the industry’s major regions. Cautious improving business confidence is good news. But 2012 is still going to be a tough year.” Air freight markets turned up at the end of the year after shrinking through much of the summer and autumn as business confidence
CATHAY PACIFIC
THINK LOCAL, ACT GLOBAL: A Cathay Pacific freighter at one of the Indian airports.
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World air cargo traffic would triple over the next 20 years and cargo rates should mirror that demand.” Jim Edgar, Regional Director of Cargo Marketing, Boeing
across major economies, and export orders, slumped. Surveys have shown that business confidence — a leading indicator for changes in cargo markets — in December 2011, suggesting that industrial production and international trade may be stabilising. Although international freight markets contracted 0.6 per cent for the full year and 0.8 per cent in December, compared to a year ago, December international demand was 1.5 per cent ahead of the level in November, while domestic demand was up 3.2 per cent compared to November and 5.5 per cent compared to December 2010. Freight markets, according to the IATA, have shown sequential month-over-month growth in November and December 2011, adding evidence to the view that international trade may be stabilising. However, the situation for airlines in these markets has deteriorated significantly. Freight load factors declined considerably to 45.9 per cent in 2011, as measures to match capacity with demand by reducing the freighter fleet have been offset by introduction of new twin-aisle passenger aircraft. Tyler said that improving business confidence and encouraging news from the US economy were heartening developments. “But it is far too early to start predicting a soft landing for 2012,” he said. He said that the euro zone crisis was far from over and the failure to achieve a durable solution would have dire consequences for economies around the world. That would “most certainly tip the airline industry into the red”, said Tyler. The IATA chief also said that airlines had made investments in new fuel-efficient, environmentally-friendly aircraft. The main challenge was to deploy them profitably into a dynamic and uncertain market. At the same time, governments have to take a strategic view of the airline industry that recognises its value as a catalyst for economic growth. “Over a third of the value of goods that are traded internationally is transported by air. Getting people and goods to their destinations more efficiently improves competitiveness. Infrastructure investments to enable aircraft to land and take off with a minimum of delay and fly the most fuel and carbon-efficient trajectories will return a far greater payout to global GDP than shortsighted and narrowly-focussed tax grabs. Let’s hope that 2012 will be the year when politicians put the required political capital behind important projects such as the Single European Sky and NextGen in the US,” said Tyler.
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The IATA, therefore, has made it amply clear that the short-term outlook for the air cargo industry is bleak. In fact, in 2012, IATA has downgraded its forecast for airline profits from $4.9 billion to $3.5 billion for a net margin of 0.6 per cent. This was almost contrary to Boeing’s forecast. Jim Edgar, Boeing’s Regional Director of Cargo Marketing, pointed out that world air cargo traffic would triple over the next 20 years and cargo rates should mirror that demand. Edgar was quoted as saying that till 2029, Boeing expected world air cargo traffic to grow at an annual rate of 5.9 per cent with Asia continuing to be at the forefront of the air cargo industry. The routes associated with Asia would continue to experience the world’s highest growth rates over the next 20 years, at 6.8 per cent. Putting that beside Tony Tyler’s words, the picture is confused. “The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the Eurozone sovereign debt crisis. Such an outcome could lead to losses of over $8 billion-the largest since the 2008 financial crisis,” according to Tyler. In India, the dim prospects were echoed by air cargo carriers. Bharat J Thakkar, President, Air Cargo Agents Association of India pointed
The IATA has made it amply clear that the short-term outlook for the air cargo industry is bleak
CARGO out that 2011 had been an eventful year. “The freight forwarding community weathered the storm of recession in 2009 and 2010 and recovered — to an extent — in the first quarter of 2011,” he said. However, the good times did not last. Thakkar said, “Before we could breathe easy, the industry was pushed to the back foot. All through the year, our customers have had to encounter increases in transaction costs over the rise in the price of air turbine fuel, resulting in increase of Fuel Surcharge adding to the forwarder’s burden to make ends meet. There is very little being done about it.” Thakkar squarely blamed the infrastructure for the air cargo industry not doing as well as it should. He said, “ATF prices apart, the industry has had to bear up with the infrastructure — or rather the lack of it — available at almost all international airports around the country.” He went on to point out that the airport operators had done little to salvage the situation. “Whatever airport operators might say and promise, improvements through 2011 of the infrastructure have been slow. In Mumbai, for example, ACAAI in tandem with the Bombay Custom House Agents’ Association (BCHAA), the Federation of Freight Forwarders’ Associations in India (FFFAI), the Association of Multimodal Transport Operators of India (AMTOI), the Western India Shippers Association (WISA), the Federation of Indian Export Organisations (FEIO), the Confederation of Indian Industry (CII), the Associated Chambers of Commerce and Industry of India (ASSOCHAM) amongst others, has been very vocal with MIAL (Mumbai International Airport Limited), to place
In India, the dim prospects were echoed by air cargo carriers. Bharat J Thakkar, President, Air Cargo Agents Association of India, pointed out that 2011 had been an eventful year
TOWARDS GROWTH: Cargo terminal at Hyderabad airport.
improvements before the peak season of 2012 for exports which is currently on the decline.” Imports too would need topmost priority, said Thakkar, as its rapid annual growth of 20 per cent-plus will increase further. The ACAAI President also said that the association was eager to discuss the proposed Master Plan that had been put forward by MIAL at a recent air cargo seminar in New Delhi. ACAAI would like to see exports and imports on a fast track and dwell time going down. As for the air cargo industry, other than the first quarter of 2011, “it has been an uphill task despite the fact that the country’s achievements have propelled it to the front rows of global power,” said Thakkar. This, despite the fact that “some of us did well - what with India being one of the few countries that overcame the slowdown with 12 per cent increase in business traffic in 2010-11. Today, with the deteriorating economic situation in Europe and the USA, the spectre of a fresh downturn is once again staring us in the face. In fact, we have started feeling the impact. Added to the high price of aviation fuel, there is the falling value of the rupee and export uncertainties. This,” said Thakkar, “requires more attention along with fast-track improvement at all airports to meet the growing demand for imports.” Thakkar’s views were echoed by Jay Shelat, Vice President, Cargo, Jet Airways. He said, “2012 would be more difficult than 2011.” He had his reasons: “I say this keeping three factors in mind — fuel costs, the Eurozone crisis and the employment/manufacturing situation around the world.” Pointing out that fuel
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The freight forwarding community weathered the storm of recession in 2009 and 2010 and recovered — to an extent— in the first quarter of 2011.” Bharat J Thakkar, President, ACAAI
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prices would play an important role in the rise or fall of the air cargo industry, Shelat said, “No one knows which way or how far up the fuel prices will rise through the year. If it does, air cargo will be the most affected. Fuel prices,” he emphasised, “are unlikely to settle. The events in the Middle East continue to have their effect on oil markets resulting in supply/demand imbalance which in turn will continue to unsettle the industry.” Coming to the Eurozone crisis, Shelat said that the air cargo industry had “been feeling the effects for quite some time now. Exports to Europe have been difficult through 2011 and 2012 will be even tougher.” He pointed out IATA data, according to which the Eurozone crisis had caused severe risk on the 2012 outlook. “If the Eurozone crisis turns into a global recession,” said Shelat, “the aviation industry around the world could suffer losses exceeding $8-10 billion in 2012. The ripple effect is being felt - and will be felt - throughout the manufacturing industries… 2012 is election year in the USA and that may have an impact on improvements in the manufacturing and employment figures in the second half of 2012.” As for the intra Asia-Pacific region and the Indian domestic market, suffice it to say that it is these two regions that have helped keep some positive trends, according to the Jet cargo chief. “While 2011 was a difficult year — in comparison to 2010 — the figures were steady for the first three quarters of 2011. In the last quarter of the 2011, we felt the impact of the high fuel prices, etc. and the ripple effects would continue in 2012 making the year even more difficult than 2011.” Asian carrier Cathay Pacific is, however, bullish about 2012 and freight from India. Keen to develop its Hong Kong hub, Cathay launched services to Bengalaru in India a few months ago. In addition, the carrier also launched a new market in Europe with its new scheduled freighter service to Zaragoza, Spain in the middle of November last year. The new freighter destination will be operated as an extension of one of the airline’s existing freighter services flying from Hong Kong to
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Asian carrier Cathay Pacific is bullish about 2012 and freight from India. Keen to develop its Hong Kong hub, Cathay launched services to Bengalaru in India a few months ago
Delhi, then onward to Amsterdam and Zaragoza, returning to Hong Kong via Dubai. With this new service, Cathay Pacific became the first and only airline operating a freighter service linking India and Spain, bringing to five the number of European destinations that shippers in India can choose from, including Amsterdam, Frankfurt, London and Paris. As the biggest freighter operator in India, Cathay is optimistic that conditions will improve. Said Ashish Kapoor, Regional Manager Cargo - South Asia, Middle East and Africa, “From the Indian perspective, 2011 has been a very exciting year as we launched biweekly freighters from Chennai to Frankfurt, Bengaluru to Hong Kong and a new destination, Zaragoza in Spain. We will continue to look at potential new markets in the coming year.” “Sitting on the Mainland’s doorstep, we feel bullish about the future of cargo in this region and the role our airline will play. We are investing to be able to take on this market and it’s exciting to see these investments now becoming a reality,” said Kapoor. With cargo accounting for one third of the airline’s total revenue, Kapoor said that, “Projections for the next two decades say that world air cargo traffic will expand at around 6 per cent annually, and much of this growth will be focussed in Asia— and China in particular.” However, he agreed that while an “extremely strong 2010 for cargo was always going to be difficult to beat, a downturn in the two key markets of Hong Kong and Mainland China turned 2011 into a challenging year.” As for 2012, Kapoor mentioned that the outlook was marginal towards the beginning of the year. “There is no sign of cargo uptake for the first few months. However, as cargo is volatile, the later part of the year may see better times and a gradual upturn. If the market runs down its inventory and the demand comes back it has to be built up again. So while we may be in for a bumpy ride in the coming months, we should keep a positive mindset and keep a clear focus on the many good things that are happening.” The good news is that, according to the
There are several initiatives such as e-Freight and Cargo 2000, which do bring in some aspects of innovation into the air freight industry.” Sankalp Saxena, President and Head - Aviation Operations & Cargo Lines of Business, IBS
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HEAVY TRAFFIC: Loaded vehicles in a massive traffic jam near the cargo centre in Mumbai airport.
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Economic Survey tabled in the Lok Sabha recently by Finance Minister Pranab Mukherjee, India’s cumulative export growth in April-December 2010-11 stood at 29.5 per cent with cumulative exports reaching $ 164.7 billion during the period. The exports continued to rise with exports rising at the rate of 13.6 per cent in 2008-09. The current indications were that India would not only achieve the target of $ 200 billion but surpass it in 2010-11. The survey observed that the direction of India’s trade with USA, which was in first position in 2007-08, had been relegated to third position in 2008-09, with the UAE becoming India’s largest trading partner, followed by China. This position continued in 2009-10 and the first half of 2010-11. In 2009-10 and 2010-11 (April-September), India’s exports to the UAE were higher than imports, while exports to China were lower than imports. Export-import ratios showed that among its top 15 trading partners, India had bilateral trade surplus with five countries, namely the UAE, USA, Singapore, the UK, and Hong Kong in 2009-10 and the first half of 2010-11. With these kind of figures, FedEx is optimistic about India. Said Kenneth F Koval, Vice President, Operations, India of FedEx Express Europe, Middle East, Indian Subcontinent and Africa (EMEA), “We expect overall economic growth to continue at a moderate pace. India,” he emphasised, “has been enjoying sustained economic growth in the recent past. However, now on account of the global economic situa-
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The good news is that, according to the Economic Survey tabled in the Lok Sabha recently by Finance Minister Pranab Mukherjee, India’s cumulative export growth in April-December 2010-11 stood at 29.5 per cent
tion and domestic factors like impact of tight monetary policy, the revised growth projection for the Indian economy has come down to 7.5 per cent for this fiscal year.” According to Koval, FedEx continued to be extremely confident in India for many reasons. To begin with the country’s freight industry is expected to grow at 10 per cent per annum by 2014 with the air freight sector set to expand by 8.5 per cent per year for the next five years. FedEx anticipates a lot of opportunities in several key industry sectors to propel the growth of the express logistics industry in India. Ecommerce, pharmaceuticals and healthcare as well as gems and jewellery are some of the sectors that we believe will offer several growth opportunities for the express industry, said Koval. Koval elaborated that phama was growing at a pretty healthy pace in the country and contributed to about 8 per cent of the total output of pharma products in the world. With Indian pharmaceutical exports poised to grow at 30-35 per cent in 2011-2012, the industry was developing and growing rapidly. “We see it growing to being in the top 10 in terms of foreign sales in the next couple of years. The sector’s need for specialised services such as packaging solutions and temperature-controlled ground and air-transport facilities will offer the express industry tremendous opportunities in the coming year,” he said. Along with pharma, the ecommerce industry has also resulted in a steady growth in contribution of the sector to
I believe that the contraction of air freight volumes this year is a sign of turbulence ahead for both local and global economies.” Jay Shelat, Vice President, Cargo, Jet Airways
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There is no sign of cargo uptake for the first few months. However, as cargo is volatile, the later part of the year may see better times and a gradual upturn.” Ashish Kapoor, Regional Manager Cargo - South Asia, Middle East and Africa, Cathay Pacific
FedEx’s business. “We believe that we will also see additional growth for this specific sector coming from Tier-2 and Tier-3 cities in India which will over a period of time come to an equal balance of growth between metros and Tier-2 and 3 cities,” he said. With all these opportunities coming up, would the air cargo industry get back to the boom of 2010? Shesh Kulkarni, President and CEO of Bengaluru-based freight forwarding startup, UFM, who has been hoping for good times, does not think so. “I have for last few months prayed that the world economy hits its bottom fast for once it get there, the only way for it to move is up… but my fear always is when it hangs mid-air. The early part of 2012 will continue to experience the mid-air scenario…it does not look good and does not look bad either,” said Kulkarni. It will be this experience that trade and business will have to get used to for a long time to come, as this does seem to be the trend for many quarters to come. “One will have to be incredibly aligned to stay on top: 2012 is the year to keep costs in check, revenue will only look meaningful to those who can keep costs in check,” advised Kulkarni. Jet’s Shelat put it simply when he said that 2012 would be a year when “we will have to move with caution”. Taking lessons from the past, he pointed out that, “Global figures show a 4.6 per cent fall in October 2011. I believe that the contraction of air freight volumes this year — and the story may be repeated around the world— is a sign of turbulence ahead for both local and global economies.” Amidst the cautionary approach, the IT majors that have been providing solutions will move ahead in 2012. Sankalp Saxena, President and Head - Aviation Operations & Cargo Lines of Business, IBS Software Services, agreed that the air cargo industry had not had many ‘pathbreaking’ innovations in the recent past. “However,” he said, “there are several initiatives such as e-Freight and Cargo 2000, which do bring in some aspects of innovation into the air freight industry, but these are logical extensions of existing business processes. Several
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Amidst the cautionary approach, the IT majors that have been providing solutions will move ahead in 2012
initiatives that are fairly well established in SCM practice such as lean logistics, 3PL, pick and pack, multi-modal transportation are still waiting to be adopted into the core air cargo industry processes.” Saxena went on to say that the captains of the industry including major airlines were already thinking of such concepts along with enablers such as piecelevel tracking, RFID/GPS-based tracking and monitoring and electronic processing. “The future,” he said optimistically, “looks exciting and the time is ripe for change and we are ready and keen to be the catalyst for change.” On its part the government has made some moves to ensure that the air cargo industry in the country is not hampered by the lack of infrastructure. In fact, the Indian aviation sector has started dreaming big. “India,” according to Dr Nasim Zaidi, Civil Aviation Secretary, “has the potential to emerge as a global transshipment hub.” He was speaking at a recent air cargo seminar. Dr Zaidi has been taking a special interest in air cargo and has initiated moves over the last year or so to ensure that the sector is comparable to those in developed nations. In fact, his initiatives have earned him the title of “the guardian of the airfreight industry”, from the Air Cargo Agents Association of India (ACAAI). Dr Zaidi was instrumental in the setting up the Working Group on Air Cargo/Express Service Industry. The Working Group had been entrusted to address the issues related to the air cargo industry and prepare the current situation of the industry and assess its future growth potential. The Group, comprising representatives from the airline industries, airports, cargo associations, the Customs department and the Ministry, has completed a detailed study of the existing system of services available and identified areas that require further improvements to seize the emerging opportunities in international trade and in the context of the faster pace of economic growth in India. The work done by the civil aviation ministry was emphasized by Bharat J Thakkar, President of ACAAI, “The government and the civil avia-
We believe that we will also see additional growth for the express sector coming from Tier-2 and Tier-3 cities in India.” Kenneth F Koval, Vice President, Operations, FedEx Express India. MARCH 2012 I CRUISING HEIGHTS I 177
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I have for last few months prayed that the world economy hits its bottom fast, for once it get there, the only way for it to move is up.”
tion ministry in particular have made commendable progress in just seven months since the announcement of the setting up of the Working Group on Air Cargo /Express Industry. All stakeholders were invited for meetings to get a complete picture from all stakeholders and under the chairmanship of M Kannan, Economic Advisor to the Ministry of Civil Aviation, a policy on Air Cargo/ Express Industry — a first in India — is expected,” he said. The group, incidentally, is readying the final report— which is expected to be submitted to the government in a few weeks - and is expected to not only make recommendations but also incorporate the best international practices in the Air Cargo/Express Service Industry and their suitability in the Indian context. Aware of the bottlenecks at Indian airports, Dr Zaidi said there was “a need to decongest cargo terminals with simplification of customs procedures, greater use of mechanised handling and speedy clearances of shipments” and the Civil Aviation Ministry has geared up to infuse new life in the sector. As Secretary Zaidi pointed out, the government was working on a new Civil Aviation Policy that would specifically seek to promote private investments in the ailing sector. “We have decided to frame a new civil aviation policy that will help meet the challenges of the next decade. The challenges are wide-ranging from viability of the sector to human resources. The policy will encompass all that,” Dr Zaidi said. The policy will be applicable for 10 years and will be the foundation for a promotion board for air cargo. “We have about five months to complete the process,” said Dr Zaidi. Meanwhile, he emphasized, the air freight stations at Mumbai and Chennai — the two were set up some time ago but have yet to start functioning — would start operations soon. The Secretary also hoped that to keep up with the booming traffic in cargo, customs procedures would have to be reviewed for speedy clearance of cargo. The Secretary’s assurance about the new policy comes at a crucial time. There was an urgent need to help the air cargo industry to not only stand steady on its feet but march ahead. Dr Zaidi underlined the fact that GDP had been growing annually at nearly eight per cent and that the air cargo industry had recorded an average annual growth of 12 per cent. Indian airports, in fact, had handled a total of
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Shesh Kulkarni, President and CEO, UFM
NEED OF THE HOUR: Air cargo scanning in process at one of the airports.
In the short term, the situation does not look too encouraging although there are indications, according to air cargo pundits, that point to a brighter future
2.33 million tonnes of cargo in 2010-11. While domestic cargo was expected to increase from 0.8 million tonnes to 1.7 million tonnes by 2016-17, international cargo will move from 1.5 million tonnes to 2.7 million tonnes during the same period. In the short term, the situation does not look too encouraging although there are indications, according to air cargo pundits, that point to a brighter future. A major indicator is the Foreign Direct Investment (FDI) limit in cargo airlines that was raised by the government from 49 per cent to 74 per cent. The move has attracted players from abroad — especially those from the Middle East — to expand their Indian network. The other indicators are technological advances. IT has evolved over the last two or three decades from an information processing tool to one that is helping corporations decide current and long term strategies. Said IBS’ Sankalp Saxena, “IT strategy these days is seen to be tightly in sync with business strategy and is not a separate entity or a derivative. Air cargo business is no exception to this. In recent times, we saw the revolution which was led by a handful of companies, which has completely shifted the air cargo industry’s dependence on cumbersome legacy-based platforms to smart and lean ‘new-generation’ systems that enable business as well as IT users to derive a host of benefits.” What remains to be seen is whether the future would see the start of a smarter new breed of Indian-cargo operators and, of course, better air cargo facilities.
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A brave new world
for air cargo IT IS TIME TO CHANGE THE RULES OF THE GAME IN 2012, ADVISES D J GHOSH, AND PLAY DIFFERENTLY. ONCE AIR CARGO STAKEHOLDERS DO THAT, IT WILL BE POSSIBLE TO HAVE A SINGLE INTERFACE BETWEEN THE AIR CARGO COMMUNITY AND THE ULTIMATE CUSTOMER.
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f 2012 is to look any different from any of the previous 50 years in air cargo, a lot of the mindset in our business needs to change. In this process, the air cargo proposition for the final customer will need to shift from multiple offerings from a myriad of suppliers, to a single interface between the air cargo community and the ultimate customer. “Total Supply Chain Visibility” will need to become the new siren song of this business. Air cargo shippers already have their hands full dealing with the multiple entities that comprise the global supply chain, each with its own set of priorities and agendas. What the new order calls for is the likes of a “Global Event Planner” (GEP) that can bundle all the multiple offerings of the various vendors in the chain, and then stitch them into a seamless supply chain offering. Today's customer is demanding reliability, predictability, and total visibility and transparency, all of this at a reasonable price. Such service offerings already exist in air cargo. Integrators such as FedEx, UPS and DHL have taken the “bundling” of various air cargo functions to a new level with their “time definite” and “overnight” products, and have earned handsome returns in the process. By owning or controlling all of the assets in the supply chain, and reinforcing the chain with the best that information technology has to offer, they have created fortress like structures that spinoff mountains of cash, while making it almost impossible for newcomers to enter the business or compete with them.
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Air cargo shippers already have their hands full dealing with the multiple entities that comprise the global supply chain, each with its own set of priorities and agendas
Fortunately, however, not all air cargo can afford to travel in the luxury afforded on board the main decks of a FedEx, UPS or DHL freighter. The vast majority of remaining air freight while urgently needing supply chain visibility cannot afford to pay the usurious rates of the integrators. Thus, what the world needs today is an entity that can provide this function, with personalised service and without overcharging. While many airlines are large and have a global footprint, they seem either unwilling or unable to perform this role. The last major foray by an international airline into this space was the attempt by KLM to bypass the forwarders and directly solicit freight from the shippers. As history will show, they failed miserably, and quickly had to retrace their steps. Similarly, trucking companies, warehouse providers and ground handling companies are ill-equipped to provide a global offering that today's savvy customers demand. With 80 per cent of all air cargo being controlled by 20 large forwarders with their global footprints (the time honoured 80/20 rule), they seem to have all the necessary qualifications to become the new “Global Event Planners” (GEPs) and unleash the dynamics of the modern air cargo business. With their ability to garner massive volumes of freight from multiple shippers they have the unique ability and buying power to contract with and unite multiple vendors in the supply chain, either through outright purchases of suppliers or through “very long-term contracts”. These will include contracts for trucking, warehous-
ing, and security, IT and ground handling, airport usage and aircraft. At the end of the day, somebody has to put “skin in the game”, and make the commitment to either buy assets or enter into long-term contracts with suppliers. Without this, supply chain visibility will continue to be a pipe dream, and we might as well continue to operate the next 50 years as we have in the previous 50. The new GEPs thus need to take a page out of the books of the integrators to update their game plan. They must then incorporate “personalised service” to endear themselves to different sets of customers. Outdated cargo airline model, a legacy of passenger operations, where the owner or operator takes on all the risk of owning and placing the aircraft assets and operating on a schedule, based on short-term contracts of shippers and forwarders, is doomed to failure. In this scenario, freighter operators have almost zero-pricing power and almost all the risk, leading to paper thin returns on capital, if any. The air cargo world is littered with the carcasses of “wannabe” freighter operators who committed vast amounts of cash without thinking through this simple premise. The same goes for operators of expensive ground handling equipment. In the new air cargo landscape, both freighter operators and ground handlers need to change their focus and become “vendors and sub-contractors” in the supply chains of the GEPs, secured by long term contracts with performance guarantees for quality of service and assurances for a fair return on capital. The new world order demands that both the passenger and freighter airlines understand that they do not control the freight anymore, nor do they directly service the final customer. Thus, their new masters are the GEPs who are closest to the customers, and who take on on the entire risk of providing these customers with a seamless supply chain offering. Adopting such a new mindset will undoubtedly shake up airline boardrooms across the globe and force senior airline executives off their high pedestals. A shining example of this dynamic is the relationship between legacy airlines and regional carriers in North America, where the regional carriers operate as sub-contractors on behalf of their legacy carrier parent companies under long-term contracts of 10-12 years. Their only purpose of existence is to do the bidding of their legacy carrier masters. This model seems to have worked since almost all regional carriers are profitable and are incentivised to provide new equipment and exceptional service, while constantly sharpening their offerings. Thus, the new supply chain will emerge as a string of independent vendors of sub-contracted air cargo services which have been vet-
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TOUGH TASK: Fedex and UPS freighters lined up on the tarmac at one of the US airports.
The new world order demands that both passenger and freighter airlines understand that they do not control the freight anymore, nor do they directly service the final customer
ted and certified to provide the reliability and predictability that is required to complement the global delivery model of the GEPs. Each of these vendors will be measured against Key Performance Indicators (KPIs) and will be grounded in the latest Six Sigma processes. A key component of this global delivery model will be the use of Information Technology, which will not only unite the different technology platforms of individual “sub-contractors” but also provide visibility and transparency, while identifying excursions from established standards. All of this will up the ante in an industry with a very incomplete and divisive offering. The lingering question is how we get these so-called GEPs, be they large forwarders or other independent organisations, to get their “skin in the game”. How do we “de-risk “this whole process to make it easier for such organisations to get into the game of either asset ownership or long-term contracts? Can we borrow another page, this time from the financial sector? Wall Street investment firms help mitigate financial risk by pooling investments in different industries into mutual funds, which are then easily marketable. If the small shipments of multiple customers with regular orders could be aggregated through a technology platform to “bundle” up different consignments, this might provide the beginnings of “risk mitigation” for longer-term contracting in the industry for both small and larger forwarders. Something to think about as 2012 unfolds! (The writer is President, American Friendship Cargo [www.american-friendship.com]).
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s 2011 faded away leaving India’s aviation sector in dire straits, quite a few aviation stakeholders — and that includes the government — came up with cures that would revive the sector. The sector is groaning under a debt burden of `one trillion during 2000-10 and losses of `200 billion in the past three years. According to the Centre for Asia Pacific Aviation (CAPA), Indian carriers lose $25 every time a passenger takes a flight. CAPA’s Outlook 2012 points out airlines in the country will lose a whopping $2.5 billion in 201112. Kapil Kaul, CAPA’s South Asia CEO was reported as commenting that, “2011 is the worst-performing year for the sector. These are record losses in the history of Indian avia-
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tion. Such losses have never been there even in FY08 when the fuel went up to $150 and operating environment was hard... The appetite for losing money is the highest in India. We expect a very, very tough 2012.” Bringing in a fresh ray of hope, the ASSOCHAM (Associated Chambers of Commerce and Industry of India is the country’s premier apex chamber covering a membership of more than 200,000 companies and professionals across the country) has put forward an eight-point strategy bouquet for the aviation industry to put it back on the growth path in 2012. Said Secretary General D S Rawat, “With the right vision, roadmap, policies, regulatory framework and a relentless focus on quality and cost, India would be well
OPPORTUNITIES APLENTY THOUGH ALL OUR AIR CARGO VENTURES HAVE FAILED TO TAKE OFF, IT DOES NOT MEAN THAT THE COUNTRY DOES NOT HAVE THE POTENTIAL. WITH THE RIGHT INPUTS FROM THE GOVERNMENT AND ADEQUATE BACKING FROM THE PRIVATE SECTOR, INDIA'S AIR CARGO STAKEHOLDERS COULD LOOK FORWARD TO A WHOPPING GROWTH OF FIVE TIMES THE PRESENT TONNAGE IN THE NEXT 20 YEARS. A REPORT.
LOGISTICS OF FUTURE: The Pharma Zone at Hyderabad airport.
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CARGO set to claim its rightful place in global civil aviation industry.” One of the points is the permission by the government to three major airlines — Jet Airways, Kingfisher Airlines and SpiceJet — to offload 49 per cent of the promoters’ stake to foreign airlines to raise `2,550 crore. Whether Parliament will allow that to happen or not is a million-dollar question but the foreign direct investment (FDI) route to bring in capital and technological expertise, according to ASSOCHAM, will not only allow easier access to global routes by Indian carriers to increase yields but also enhance air traffic management infrastructure. Keeping in mind the strong growth in cargo and passenger traffic, ASSOCHAM said that if the government put progressive policies in place along with a collaborative approach between itself and industry, the moves would propel India to the top five aviation markets globally by 2015. The Civil Aviation Ministry has put into place enhancement of capacity at a number of airports in metro and non-metro cities. In fact, the government’s 12th Five Year Plan (2012-17) will see infusion of at least `67,500 crore in airport infrastructure.
ASSOCHAM has advocated the creation of an empowered air cargo promotion board to fix quality of service and responsibility of each stakeholder
Prepared by the ASSOCHAM Civil Aviation Council, the strategies for growth analysed the aviation sector’s performance over the past three years and suggested creation of an infrastructure development fund to build airports in Tier-II and Tier-III cities and bringing parity with global aviation turbine fuel prices. As for air cargo, with freight traffic at airports increasing by nearly 11 per cent over the past five years to reach 23.3 lakh tonnes in 2010-11, ASSOCHAM has advocated the creation of an empowered air cargo promotion board to fix quality of service and responsibility of each stakeholder while upgrading the present air cargo infrastructure with hi tech automation and streamlining of customs procedures. This would make India a transshipment hub for east-west cargo. On its part, the government has adopted a pro-active mode with Prime Minister Dr Manmohan Singh personally overseeing the fulfillment of targets. The Prime Minister’s office announced a slew of initiatives towards the end of December 2011 with deadlines for the civil aviation industry’s revival. Among these are, of course, the finalisation of the turnaround plan for Air India, the finalisation of the policy to enhance the utilisation of traffic rights by Indian carriers, the framing of an Economic Regulatory Policy to promote investments in airport infrastructure and even the establishment of a National Aviation University. It will be worth pointing out that the domestic air cargo industry is at a crucial juncture. Not one domestic freight carrier — Captain G R Gopinath’s Deccan 360 and Captain Mukut Pathak’s ACE — exists today although Quikjet is all set to enter the market in its second avatar. Even so, the potential is immense. As Dr Naseem Zaidi, Secretary, Civil Aviation, said at the inauguration of a recent cargo meet: “If growth potential of the air cargo segment is appropriately harnessed, Indian airports could become cargo hubs in the region.” He was referring to the new national air cargo policy that is looking at the projected five times the present air cargo growth in the next 20 years. Dr Zaidi announced to the world at the conference that while a roadmap was being chalked out keeping in mind the future, the working group on air cargo that had been set up by the Civil Aviation Economic Advisory Council, was in the process of finalising its report and a framework to tackle air cargo issues. “That,” said Dr Zaidi, “will form the basis of the national air cargo policy.” M Kannan, Economic Advisor to the Ministry of Civil Aviation, one of the speakers at the meet, enunciated the government initiatives that will be taken for the civil aviation industry in the immediate future that will
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have a beneficial effect on both the air cargo industry and its sustained economy. He also explained the changes that have been taking place in the Indian air cargo industry — the country is now the ninth largest aviation market in the world — and the main challenges to the air cargo industry’s growth: inadequate infrastructure, slow adoption of technology and unskilled manpower. The country needs to match its supply chain efficiency with global air cargo supply chains to bring in profitability and stimulate growth. It is not that we are not trying: India has aroused the interest of airports around the world. According to D P Hemanth, Chief Operations Officer (COO) for Hub Development at GMR Airports, the presence of a number of airports at ACI was proof enough that the country’s air cargo infrastructure was being noticed. He put it simply: “Airport infrastructure is as critical to the supply chain as it is to the airlines and freight forwarders and we (from the GMR Airports) were able to showcase our pharma zone facilities which Lufthansa has certified as ‘worldclass’ anywhere outside Germany.” Others like Mohamed Parkar, Vice President Commercial and acting Chief Operating Officer, Maximus Air, echoed Kopp. Banking on Indians, the largest group of investors in the UAE, Maximus displayed its international ambitions at ACI — this was its first ever appearance at a major show in its new avtar as Maximus Air — focussing on the Indian sub-continent as one of the key regions for the growth of its business outside the Gulf. The show, according to Parkar, presented an opportunity to showcase how the carrier had grown to become a key player providing end-
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The country needs to match its supply chain efficiency with global air cargo supply chains to bring in profitability and stimulate growth
FLYING HIGH : A Blue Dart plane at the air cargo terminal in Chennai airport.
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to-end solutions. He also made it clear that Maximus’ presence along with other carriers from the Gulf attested the “strong position of the UAE and its role as an important hub for servicing the neighbouring economies. Our expanding operations out of the UAE capital of Abu Dhabi mean we are well placed to service the needs of those businesses into the wider Arab world countries.” Perhaps, Emirates’ Ram Menen comment at the air cargo meet best summed up the opportunities for the air cargo trade. “India,” he said, “definitely is the happening place!” The Gulf carriers’ are not the only ones that are keen to build and strengthen their India links. Experts have pointed out that the beeline for India by the Gulf cargo carriers was primarily to boost their respective hubs — Etihad Crystal Cargo, for instance, is keen to ensure that the Abu Dhabi International Airport turns into a cargo hub that can run with the ones at Doha (Qatar Airways) and Dubai (Emirates Skycargo) has recently been joined by Royal Jordanian (Queen Alia International Airport) — the carriers have maintained that the Indian market has a lot of potential. To cash in on the potential, a new entrant MASkargo (formerly known as Malaysia Airlines Cargo Sdn Bhd)) — has started showing interest. Incidentally, the 108-acre KL International Airport (KLIA) main hub is undergoing a massive makeover. Once it is completed, the hub will be able to handle one million tonnes from the present 600,000 metric tonnes. The hub will have the potential to push up the tonnage to up to 3 million metric tonnes. One of the destinations that MASkargo is looking at is Hyderabad and its facilities for
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pharmaceutical exports. Lufthansa Cargo and the GMR group, which operates the Rajiv Gandhi International Airport at Hyderabad, signed a memorandum of understanding aimed at jointly developing the airport into a major cargo hub of Asia for the transport of temperature-sensitive pharmaceuticals. Lufthansa has stationed its Opticoolers at the airport for pharma carriage. In fact, Lufthansa has opened a new cold cargo facility in Frankfurt to add to the pharmaceutical hub in Hyderabad. Over the next few years, Lufthansa has plans to put in six of its MD-11s by 2015 to handle pharmaceuticals as five of the B777s ordered will start coming in by the end of 2013. Hyderabad has the first-of-its-kind pharmazone and the airport has a cargo capacity of 100,000 tonnes; 80,777 tonnes of cargo was handled in 2010-11 of which 55 per cent was international and a whopping 60 per cent of that comprised pharmaceutical products. The authorities point out that other than Lufthansa, a host of other freight carriers have been invited to utilise the facilities at the airport. According to Chief Operating Officer Hemanth D P, the airport was in discussions with five major freighters to start operations from Hyderabad. For the time being, MASkargo does not have freighters coming to India and depends solely on belly capacity of Malaysia Airlines daily flights to Mumbai, Chennai, Delhi, Hyderabad and Bengaluru. But India is on the carrier’s growth plans and on its sights are Chennai and Delhi. Specifically for its Southeast Asian routes, China, India and the domestic routes within Malaysia, the carrier has ordered as many as 55 new Boeing 737800s. Also on the purchase list are 15-odd
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EASY PICKINGS: Inside an air cargo complex at one of the Indian airports.
Hyderabad has the first-of-itskind pharma zone and the airport has a cargo capacity of 100,000 tonnes
Airbus A330 planes that will be inducted in the fleet between 2011 and 2016. Pharma is where the market will be. Incidentally, the downturn did not affect the pharmaceutical industry and even the present condition — where freight is not doing too well — would not be affected. At the end of last year, India’s President Pratibha Patil while inaugurating the 71st World Congress of Pharmacy and Pharmaceutical Sciences pointed out that the country had a potential to emerge as one of the top five innovative hubs in the global pharmaceutical sector, contributing 50 per cent to the drugs discovered worldwide. The country’s pharmaceutical exports are predicted to grow 23 per cent every year till 2015 as the quantity of generic drugs increases. Among these generic drugs are those for HIV treatment which are sent out to Africa by chartered flights — many of them originating at Hyderabad. Not many are aware that with more than 100 manufacturing plants, India is the only country that has more US-approved pharmaceutical manufacturing facilities than anywhere else. However, once again, the lack of adequate infrastructure has been curbing the growth of the pharma sector’s exports. It may be mentioned that the Federation of Indian Chambers of Commerce and Industry (FICCI) in its study found out that around 30-35 per cent of the country’s 60 mt of fruits and vegetables produced is wasted due to lack of cold storage and other facilities. The Confederation of Indian Industry (CII) recently estimated that the country’s cold-chain infrastructure would require at least US$4.5-billion investment over the next five years to meet the growing requirement of this facility.
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SHESH KULKARNI
Crying out
for logistics A LOT IS BEING DONE TO IMPROVE INFRASTRUCTURE — PORTS, AIRPORTS, ROADS, ETC. — BUT THE TRUTH IS THAT EACH COMPONENT IN THE SUPPLY CHAIN HAS BEEN FUNCTIONING IN ISOLATION. THE ONLY WAY OUT IS TO ENSURE THAT SUPPLY CHAIN STAKEHOLDERS COORDINATE MOVES TO BOOST LOGISTICS, WRITES SHESH KULKARNI.
I
n last few weeks, the Supreme Court of India has made a few landmark judgements — be it with regard to the Vodafone tax-related matter, 2G, or even tabling an observation in the issue related to the age of Indian Army Chief. What has emerged is very interesting. The outcome, incidentally, is not a big surprise to the common man who follows a logical and rational approach to the decision-making process. It now appears that the population in the urban areas relate to the outcome and are appreciative of the Supreme Court’s intervention and direction associated with it. India and Indians who largely in the urban domain are seemingly educated, well-travelled and well-informed choose to turn the other way when faced with issues of national or larger importance outside their personal domain. If this be the outlook or attitude of the population at large, imagine the fate of the logistics business which is isolated and stands alone amongst giants like the infrastructure providers, airlines, government, legal systems, etc. This is the 65th year of our country’s Independence and if one were to write a story of the significant achievements of the country, we cannot write much. It might sound cynical but the truth seems that we have only one story to tell: we do have a robust democracy that in many ways is the beginning and end of it. By now we should have built many worldclass roads, highways, ports, airports (we
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Our slow progress in deregulating the interstate tax structure is a significant deterrent for the growth of the Indian economy and the logistics business
have got only part of this right) railway stations, eliminated all the backlog significantly in our law courts, established accountability in our political system and bureaucracy and almost everything that touches the life of common citizens and businesses. Have we? Where are we going wrong? I love my country and am a proud Indian too! However, of late, in the last year or two, I have often woken up feeling guilty about the continued indifference all around and feel as much party to it. This Chalta Hai attitude needs to be arrested! One could always argue: What is the hurry now? We have, as a nation, come along this far and continued to post single-digit or double-digit growth. What then is the need? This, in my opinion, is the key reference point. One only need to take a look at global economies. For the sake of argument, take a look at the American economy, a multi-trillion dollar economy. When an economy of that magnitude shows a positive swing of just one per cent, the effect it has on the world is significant. That one per cent has the ability to swing the mood and morale of many economies around the world including India. Hence, it is important to study the country and its growth in the proper context and not in isolation. Our slow progress in deregulating the interstate tax structure is a significant deterrent for the growth of the Indian economy and the logistics business. Imagine and calculate what we as nation are doing to deprive Indian businesses. To
begin with, we are failing to leverage the growth opportunity available in the interiors of this country by not introducing one federal tax structure (GST). The delay in the implementation is affecting business, and that in turn is affecting the economy and development. Even if the government were to take a decision on GST in the next year or two, we will still be losing a lot. By not making its intentions known to the larger business community in the public domain will only result in piecemeal delivery and do little to benefit the large section of logistics companies that are keen to invest in infrastructure which will be dependent on clarity. Building infrastructure takes time and if done in a disjointed manner will only add to cost and make products and their deliveries more expensive. It will not be fruitful for a long time. It is important for our ministries and departments to come together in the decision-making process. This will help reduce logistics costs of products. Similarly, India is a significant player in South Asia but has done nothing to leverage its status in the region from the industrial point of view. Our country boasts of the largest coastline in the region in the east, south and west. Would it not make sense to establish free trade zones in these coastal belts and provide support with good warehouses, industrial parks, roads to the interiors of the country? Imagine the impact it will have, both on growth of state economies, local industries and the opportunities these will throw up for logistics industries to mature. The growth will be so high that the country would not be able to harness. It will find itself attracting serious business from neighbouring nations and a large share of the north Asia business will find its way to India helping the the country to grow at a much faster rate than its current one. This will also help the larger Indian business community become more competitive with those in other parts of Asia. Besides, it will see the fast-forward growth of both domestics and international business ex-India. While roads are the key to a successful economy, so is power, water and waste management. It is scary to note that we have power shortage. Why? Because we have not leveraged solar power, wind energy or even thermal power! After 60 years, we should not be groping in dark on these matters. Water is in abundance in India but it is not used properly. So it is with waste which is as much in existence and needs process and management to make it productive. Through all this, logistics has a key role to play. Hence, once again isolated decision-making by ministries will not help anyone but will hurt business the most that in turn will impact the economy. However, if integrated well, logistics cost on the product and produce can be brought down significantly. Accountability and decision-making of any kind are the need of the hour. Politicians, bureaucrats, officials, private industry leaders, trade
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HEAVY-DUTY: A truck loaded with a container at an integrated freight complex.
It is time to reinvent the wheel and as a first step recognise logistics as an industry, give it a status of importance and make it integral to every industry
bodies, etc. all should be made accountable since many a time those in leadership positions take decisions and do not feel accountable. This results in the creation of power blocks which in turn lead to decisions that are based on illresearched facts. The formation of a charter of deliverables is important and should be designed and articulated by people who are experts in their fields with proven track records. Ultimately, any move made by the leadership should focus on the long-term good of the country. These call for special initiatives and can only happen if accountability is put in place. Such accountability should stand strong beyond the tenure of policy and the decision makers. Today, the logistics industry which comprises airlines, shipping lines, the road transport industry, government agencies like Customs, legal machinery and other related authorities, talk to each other in isolation with no long-term vision or agenda. Most of the decisions are momentary and opportunity-based which is not good for anyone, particularly if India has dreams to become a significant player in the Asian market. Our authorities have to bring logistics in the loop; it’s only then that logistics will come down to realistic levels. Current research indicates that logistics cost is almost 20 per cent of a product’s cost! That is not sustainable for the long-term. It is time then to reinvent the wheel and as a first step recognise logistics as an industry, give it a status of importance and make it integral to every industry. Merely building airports, ports, roads, etc., in different phases will not be beneficial for anyone. It is important that the urban Indian population lead this initiative from the front and demand this through a people’s charter. The government and the leadership of the country must focus on growing the economy to get scale while our judiciary can help the people define many key aspects and put accountability in place. It’s only then that we will have supply chain solutions which will deliver larger solutions for the larger good of the country. To achieve this logistics has to be in the centre. (The writer is President and CEO, UFM and can be reached at skulkarni@go2ufm.com.)
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DOMESTIC AIRLINES
SpiceJet starts Surat operations
It was dream come true for Surtis when SpiceJet flight carrying 159 passengers from New Delhi landed at Surat air-
INTO THE SKIES: SpiceJet CEO Neil Mills among others at the launch of SpiceJet’s operations to Surat. port. Passengers who gathered at the airport were given an exciting welcome by different political parties. The organisers even distributed Fafda-Jalebi to all passengers. While SpiceJet crew also distributed diamond-shaped chocolates to all passengers in the flight. After the traditional water salute, the flight took off with 103 Mumbai-bound passengers from the city. SpiceJet CEO Neil Mills said, “We were not aware about Surat’s potential earlier. Once we learned about it, we wasted no
Air India to fly from Vizag to Dubai
The dream of the people of Visakhapatnam to fly to international destinations from the airport became a reality as the Union Civil Aviation Minister Ajit Singh agreed to allow operation of Vizag-Dubai Air India flight and inaugurated the first flight on March 27 in the steel city.
CLEAR SIGNAL: Air India spreads its wings adding new flights to bring connectivity and passengers on its flights. People visiting to and from Visakhapatnam, would benefit a lot from this daily flight operation as many NRIs in the US belong to this North Coastal Andhra region. Rajya Sabha member and former Union Minister from Andhra Pradesh T Subbarami Reddy told The Hindu after meeting with Singh, that the decision would immensely benefit people in the city as well as those in the surrounding districts in Andhra Pradesh as well as Odisha. He commented that two years back when the then Union Civil Aviation Minister Praful Patel visited Vizag to participate in his birthday celebrations, he promised
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time in coming here. It was the demand for air connectivity on Facebook by the people of the city and later the persistent efforts by South Gujarat Chamber of Commerce and Industries pushed us to coming here.” R Natrajan, Director of the private carrier, said that SpiceJet will offer competitive rates from Surat for connecting flights to other big cities like Kolkata, Chennai, Hyderabad, Bengaluru and others. Rohit Mehta, President, SGCCI, who with Union Minister Tushar Chaudhary and Mills, flagged off the first flight to Mumbai at the airport. BJP MPs C R Patil and Darshana Jardosh along with more than 35 of their supporters landed in the city on this new flight from New Delhi and a number of diamond barons and SGCCI members travelled to Mumbai in the same flight.
DIAL trains cabbies
Cab drivers at IGI Airport will soon be a better-behaved lot. The airport management conducted special workshops for drivers — of both radio cabs and regular taxis — and imparted lessons in safety, security, personal grooming and politeness. Mohammed Anuddin, attended a session and said that while he and his colleagues had to undertake obligatory training with his company before they were allowed to operate, the classes gave him and his colleagues an
to bring international flights to the city. Sources said since Dubai is well connected to international destinations, particularly to US and Europe, people visiting to and from Vizag, would benefit a lot from this daily flight operation as many NRIs in the US belong to this North Coastal Andhra region. Presently, the administrative control of the Vizag airport, including the air traffic control, comes under the Indian Navy's air station INS Dega and the integrated new terminal of the airport was inaugurated on February 20, 2009. A new expanded runway, 10,500 feet long, was added to the airport on June 15, 2007, and after that Air Bus A320 flights started landing in the airport. Presently Air India, Spicejet, IndiGo, Kingfisher Airlines and Jetlite flights operate from the airport to various domestic destinations like Delhi, Kolkata, Bhubaneshwar, Chennai, Tirupati and Hyderabad. Announces Silver and Platinum pass: Air India recently announced a revision of the short term promotion scheme, Silver and Platinum Pass for passengers travelling on its domestic network. The Pass is being offered in two variants: Silver Pass for travel in Economy class and Platinum Pass for travel in Executive class. Valid for unlimited travel on the Domestic network within fifteen days from the date of commencement of journey. Travel to be completed on or before April 30, 2012. Travel must be completed within 15 days from the date of commencement of journey. The entire journey must be completed before April 30, 2012.
SNIPPETS understanding of the specific needs of passengers at the airport. “This was like a refresher class. We were told how to behave with the passengers, be polite and open the door for them. We were also told that we should help out with the luggage, especially of women and senior citizens,” he said. “With similar modules, there are two separate segments of the workshop — one for radio-cab drivers and the other for regular taxi drivers. Normally, passengers view the airport and all related services as a single unit, so we wanted everyone associated with the airport to know how to deal with passengers,” said a DIAL official. The modules were based on complaints by passengers and on an ‘on-site’ assessment where interaction of cab drivers with more than 2,000 passengers was observed.
Hyderabad Airport starts second runway
The Rajiv Gandhi International Airport (RGIA), Hyderabad, recently inaugurated its second runway. GMR Hyderabad International Airport Ltd, the operator of RGIA, has obtained necessary DGCA clearances, making it the first greenfield airport in the region with two runways. With the introduction of new runway, RGIA can continue flight operations uninterruptedly during its regular main runway maintenance on every Tuesdays. Airport maintenance is a mandatory requirement for airports around the world. With the second runway being operational, continuity of flight operations on Tuesdays will enhance airside efficiency largely, thus making passenger transit through RGIA.
Jet declared winner for customer loyalty
Jet Airways recently declared the winner for “Customer & Brand Loyalty in Domestic Commercial Airline Sector” at the 5th Loyalty Awards.
WELL-DESERVED: Manish Dureja, V P Marketing, Products & Merchandising, Jet Airways receiving the award from Tim Birchinall, Marketing Director International Development, AIMIA and Jim Sullivan, Partner Colloquy. Manish Dureja, Vice-President (Marketing), Jet Airways, received the award at a glittering ceremony at the Intercontinental, Lalit attended by luminaries from the IT, trade and travel industries. The 5th Loyalty Awards are presented by AIMIA and conceived and managed by the Kamikaze B2B media. These awards are the outcome of a combination of consumer research undertaken in five major cities aided by nominations received from organisations. Sudheer Raghavan, Chief Commercial Officer, Jet
GoAir selects Pratt & Whitney
GoAir has selected Pratt & Whitney PurePower PW1100GJM engines for its order of 72 firm A320neo aircraft. The
ENGINEERING GROWTH: Giorgio DeRoni (left), CEO of GoAir and Todd Kallman (right), President, Commercial Engines & Global Services in front of the PurePower PW1000G demo engine at the Singapore Air Show. agreement represents 144 firm PW1100G-JM engines and is anticipated to include a PureSolutionSM maintenance package. Deliveries are scheduled to start in 2016. “We selected the Pratt & Whitney PurePower engine because we are confident that its performance advantage will deliver significant savings in operating costs, as well as considerable reductions in emissions and noise,” said Jeh Wadia, Managing Director, GoAir. “The PurePower engine is the best long-term solution for GoAir’s growing fleet.”
Airways, said, “At Jet Airways, we are delighted to receive this award, which is a reflection of the airline's commitment to offering its guests the very best travel experience, on the ground or in the skies, which has resulted in a strong sense of brand loyalty amongst its guests.” Declared “Favourite Full-Service Airline” at the Outlook Traveller Awards 2011: Jet Airways recently declared the “Favourite Full-Service Airline” at the Outlook Traveller Awards 2011 in New Delhi. The awards were presented in New Delhi in front of several luminaries from the travel and trade industry. Renowned for the warmth and hospitality of its acclaimed in-flight service, a reflection of the high standards of the airline's rigorous in-flight training procedures, Jet Airways emerged victorious from amongst a field comprising several leading airlines. Ragini Chopra, Vice-President, Corporate Communications and Public Relations, Jet Airways, received the prestigious award on behalf of the airline, from Minister for Tourism, Subodh Kant Sahai at the Outlook Traveller Award 2011 function at a glittering ceremony at the Lalit, New Delhi on February 1, 2011. The awards were given away in 18 categories. These awards, based on exhaustive readers response study conducted across cities, seek to recognise and honour the best in travel, based on an objective study conducted by Outlook Traveller magazine. Under the aegis of the Nielsen Company, the survey is polled through the magazine and website and is an authoritative benchmark of consumer preferences in travel and tourism across 18 categories.
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INTERNATIONAL AIRLINES
United announces new routes
United Continental Holdings recently announced plans to launch year-round and seasonal service on several new routes to begin in the summer of 2012. “We continue to capitalise on the combined resources of United and Continental to create a network that gives our customers more flights to the places they want to go,” said James Starnes, United’s Director of domestic planning. “The flexibility of our fleet allows us to put the right aircraft in the right markets to serve new communities and to add additional flights to communities we already serve.” United will begin daily year-round service between Washington/Dulles International Airport (IAD) and Honolulu (HNL) on June 7, 2012, the only nonstop service between the two points. The flights will operate using Boeing 767-400 aircraft. Since the October 2010 merger of United and Continental, the larger combined fleet has given the
High speed Internet access in Turkish
Turkish Airlines, together with Panasonic Avionics Corporation, recently added high-speed Wi-Fi broadband
SEEING IS BELIEVING: Grab of the Turkish Airlines website. Internet access to its existing live, inflight television service on Trans-Atlantic flights using its IFE platform, PLANET. Passengers are now able to access high-speed, unlimited Internet with laptops, tablets, smartphones or any other device that is WLAN-enabled. Business travellers can also access their company’s Virtual Private Network (VPN). The high-speed Internet service will initially be provided free of charge as an introductory offer. After this period, passengers will be able to access the Internet via an access code, which will be available for credit card purchase on board the aircraft via the service provider’s portal pages. Together with the new high-speed Internet service, seatback screens will continue to provide passengers with live TV, the latest news, as well as online services related to Turkish Airlines’ loyalty programme Miles & Smiles and access to customer relations connections.
AirAsia connects to Tokyo
AirAsia X will increase its flight frequency to Tokyo (Haneda), Japan from its current three flights to six flights weekly effective from March 23, 2012.
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DEMAND AND SUPPLY: Inside an United Airlines' flight. company flexibility to better meet market demand. United has added new routes from its hubs to international destinations such as Lagos, Nigeria; Guadalajara, Mexico; Montreal, Canada; Port-au-Prince, Haiti; Shanghai, China, and Stuttgart, Germany, along with new intra-Asia routes between the Tokyo hub and Hong Kong and between the Guam hub and Okinawa, Japan.
From June 22, 2012, AirAsia X will operate daily flights from the low-cost carrier terminal in Kuala Lumpur to the Japanese capital. In addition, AirAsia X currently flies four times weekly to Osaka (Kansai). Commenting on the added frequency, AirAsia X Chief Executive Officer, Azran Osman-Rani said, “The increase in flights to and from Tokyo is in response to the growing demand for the sector, which continues to see steady increase in passenger traffic and yields from the time AirAsia X first began flying into the Japanese city on December 9, 2010.” “With our wide network and strong brand affinity in Japan, we remain focussed to grow our existing core markets and are geared up to capitalise on the continuous increase in demand for air travel to and from Japan. We will also leverage on our affiliate airline, AirAsia to pro-
SERENE ENVIRONS: CEO of AirAsia X, Azran Osman-Rani, demonstrating the comfort of stretching out on a full row of three seats, available through Optiontown. vide a feeder network for intra-ASEAN travel as the world shifts its focus towards Asia and the emerging markets across ASEAN.” First airline in Asia to introduce innovative empty seat option: Guests onboard AirAsia X can purchase affordable options for the empty seat(s) next to them to spread out comfortably over a full row of three seats. From January 2012, AirAsia X and its technology part-
SNIPPETS ner, Optiontown, have introduced an innovative new service, called Empty Seat Option (ESO), available on Optiontown.com. AirAsia X is the first airline in Asia Pacific to offer its guests travelling in Economy, an option which provides a chance to get all three seats in a row for a nominal fee. Empty Seat Option (ESo) is AirAsia X’s second successful ancillary offering introduced in partnership with Optiontown after the success of its Upgrade Travel Option (UTO) service, launched in 2011. The UTO provides AirAsia X’s guests the opportunity to upgrade to AirAsia X’s premium flatbed seats. The UTO has helped significantly increase AirAsia X’s premium class load factor (by over 22 per cent) and upgrade yield (by over 60 per cent). Options are limited by flight to ensure a reasonable probability of successful upgrades. Each option is dynamically priced.
Etihad offers complimentary visas
Etihad Airways is offering complimentary 96-hour tourist visas to guests transiting through the UAE. The visas, ideal for travellers making stopover visits en route to their final destination, are being offered in cooperation with Radisson Blu hotel on Yas Island. The offer is valid for travellers previously eligible for Etihad Airways’ paid-for visa service including passport
ROCK SOLID: Another facility from Etihad for flyers. holders from Bangladesh, Belarus, Canada, China, Cyprus, Czech Republic, Egypt, India, Indonesia, Iraq, Jordan, Kazakhstan, Lebanon, Morocco, Nepal, Pakistan,
Flydubai marks its magnificent seven
Flydubai chalked up its seventh destination in Saudi Arabia, with the start of its three-weekly flights to Taif in the Makkah Province. Flydubai launched services to the Kingdom in November 2010, and now serves Riyadh, Jeddah, Yanbu, Gassim, Abha and Dammam in addition to Taif with a total of 55 weekly flights across the country. Flydubai's CEO, Ghaith Al Ghaith, said, “The UAE has boosted its commercial links with Saudi Arabia over the past year and the Kingdom is currently the UAE's
Philippines, Russia, South Africa, Sri Lanka, Sudan, Syria, Thailand, Turkey and Vietnam. Launches innovative Guest Miles scheme: Etihad Guest is offering its members an innovative new way to convert their Etihad Guest Miles into cash to spend anywhere, anytime. This is delivered through PointsPay an exclusive, realtime transaction solution that gives Etihad Guest Members unlimited freedom to spend in-store or online at millions of outlets worldwide. Members simply use the PointsPay application (available now as an iPhone app and shortly also via the PointsPay website) to exchange their Etihad Guest miles for funds to be added directly to their PointsPay Visa prepaid card before using the card either in-store or online. For online shopping, they don’t even need a physical card, as the system produces a Virtual PointsPay Visa card for them to use directly on the web.
Cathay recruits Indian flight attendants
Cathay Pacific Airways recently announced that it would be recruiting flight attendants from India as part of the airline’s expansion programme. Over 2,000 shortlisted candidates of Indian nationality, over 18 years of age and are fluent in Hindi and English, were invited to interview sessions in February. All candidates went through a stringent selection and interview process. Like the last recruitment exercise held in India 15 years ago, the airline will continue to focus on safety and customer service excellence when selecting capable and efficient crew to join the Cathay Pacific family. Cathay Pacific General Manager South Asia, Middle East & Africa Tom Wright said, “India has developed rapidly to become one of the fastest-growing economies in the world and a very important travel market. Cathay Pacific is committed to serving India and contributing to the country’s aviation industry. Recruiting local cabin crew will enable us to fine-tune our services to cater specifically to Indian travellers.”
top non-oil trading partner. By covering the country's main commercial and leisure hubs, Flydubai is supporting these relationships through offering regular travel between the two nations. I would like to take this opportunity to thank the Saudi authorities for their support and assistance in making these flights possible.” Taif has also been at the centre of Saudi Arabia's ancient and contemporary history, with noteworthy attractions including the Wadi Mitna, Shubra Palace, the Rock Carving Site and the Turkish Fort, where legend has it Lawrence of Arabia fought.
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Egypt is gaining its strength back
Egyptian Tourism Office participated in three-day Blue Marble event held across three major cities — Mumbai, Bengaluru and Delhi which brought together some of the leading travel agents, tour operators, hotels and resorts, domestic and international airlines, NTOs, state tourism boards, wholesellers and other travel-relatAdel El Masry ed products and services from across India and the world, on a single platform. Commenting on their participation at Blue Marble in Mumbai, Director of Egyptian Tourism Office in India, Adel El Masry said, “Blue Marble provides us with an opportunity to meet many Major Indian and global players in the tourism industry. This will help us in expanding our network of travel& tour operators in India.” Director of Egyptian Tourism Office in India, Adel El Masry added, “It gives me immense pleasure and joy to promote the new Egypt post-revolution; we are also restarting our joint campaigns with our travel partner/operators which we had to keep on hold due to the democratic movement in the country. We are also launching a new campaign “we’re Egypt” which is straight from the heart of the Egyptian people inviting tourists all across the world to visit and experience the new Egypt. We want our travellers to know that Egypt is now safe and secure for everyone.”
Seychelles and Etihad airways team up
The Government of Seychelles and Etihad Airways recently signed a Memorandum of Understanding wherein Etihad will invest to acquire a 40 per cent stake in Air Seychelles Ltd as part of a strategic partnership alliance initiative between Air Seychelles and Etihad Airways. The deal was announced by Joel Morgan, Seychelles
Minister of Home Affairs, Environment, Transport and Energy and James Hogan, President and Chief Executive Officer of Etihad Airways. Etihad Airways’ investment of $20 million will be matched by an equal capital injection from the Government of Seychelles. In addition, Etihad Airways will also provide a shareholder’s loan of $25 million to meet working capital requirements and support network development. Morgan said, “This is a game-changing strategic partnership for us, establishing Air Seychelles on a sustainable growth trajectory and offering a realistic way forward for long-term commercial growth. The partnership simultaneously provides international presence, strategic penetration and a bright future for our national carrier.”
ITC Gardenia welcomes Shah Rukh Khan
The IPL auction held at ITC Gardenia, brought in Bollywood Badshah Shah Rukh Khan, who stayed at the
GOLDEN HANDSHAKE: Shah Rukh Khan being welcomed at ITC Gardenia. hotel. ITC Gardenia extended a traditional welcome to Shah Rukh Khan over Karnataka’s quintessential sweet ‘Mysore Pak’ ( first created in the kitchens of the Mysore Palace). Inspired by the erstwhile capital city of Karnataka
proud to host 26 per cent repeat travellers from India for Malaysia woos Indian tourists pure leisure. This is a larger slice than any other SouthIn the 10 years since its arrival in India, Tourism Malaysia East Asian Destination — and in 2012 we would like to has grown the country into one of the most popular focus our efforts to grow this burgeoning segment,” leisure destinations for both first time travellers and continued Hj Azizan addressing a gathering of the experienced travellers. The numbers speak for themmedia in Mumbai. selves - from a modest 1,40,000 arrivals from in 2001 to a The campaign for 2012 takes its spectacular 6,93,056 in 2011! cue from the deep-seated interest “This spectacular growth of of the average Indian in Bollywood over 400 per cent in a short time and showcases newer and much, span has ensured that India is one much more exotic destinations for of the top three source flight marthis fast maturing market. The kets for tourists to Malaysia — campaign, entitled Every Dream and is very rapidly closing the Needs a Destination takes the gap with the leader China,” said viewer through a spectacular jourHj Azizan Noordin, Acting ney that traverses the most exotic Director General, Tourism locations to the most modern strucMalaysia. tures in Malaysia — showcasing “More than mere arrivals the the warmth and friendliness of the quality and the interest of the ONE-ON-ONE: Malaysian tour agents interacting people of Malaysia on the way. tourists have grown. We are with buyers and prospective tourists.
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SNIPPETS — Mysore , the royal sweet was served to SRK on his arrival at the hotel. Area Manager and General Manager ITC Gardenia, Anil Chadha greeted SRK at the ‘Grand Foyer’ of the hotel lobby. SRK looked dashing in a purple and gold laced patta extended as a part of his welcome. The personalised amenities in suite for Shah Rukh Khan included Memoirs journal -’The Badshah Returns ‘ containing photographs of his previous visit at ITC Gardenia; SRK’s coffee table book; candid picture collage prepared on sugar paper; customized signature chocolates; framed pics of Gauri Khan and Shah Rukh Khan and framed picture of Shah Rukh Khan.
Austria: Summer destination 2012
The regional tourism boards of Austria, consisting of Vienna, Salzburg, Innsbruck, Zell am See-Kaprun, Tirol and Oetztal Paznaun, were on overdrive promoting tourism in their respective regions. The board held press conferences and workshops in Mumbai, Chennai and Delhi between Feb 6 and Feb 10. Last year (2011) Indian tourist arrival was up by 45 per cent over the previous year. Today India occupies top 10 amongst visitors to Austria. Though Vienna and Salzburg, the world heritage site, are on the radar of India tourists while other regions are less visited such as Tirol or Ischgl or Zell am See-Kaprun or Innsbruck which are West of Vienna. The latter have quaint villages and an hour's drive takes visitors to the Alps. Tirol's representative did not miss to mention that their region is popular with Bollywood film producers. Austrian Tours has Indiaspecific tour costing `89,990 (ex-Delhi), of 7 days/6 nights conducted tour of Innsbruck, Salzburg and Vienna. The cost includes airfare. In addition tourists would be given free rail pass.
Mauritius: Honeymooners’ delight
A honeymoon in Mauritius is simply a dream fantasy. Nothing’s more relaxing than spending time with your partner in a lover’s paradise. It promises scenic views, glistening beach which is perfect for an exotic moment of togetherness.
RARE SIGHT: Mauritius has an abundance of scenic beauty. It is the destination where your search for a wonderful honeymoon destination ends, with sun kissed white sand beaches. The sensual waters of the Indian Ocean in different hues and colours ignite the romantic fire in you. A dream destination of many people attracts a number of tourists from all over the world throughout the year. The capital city of these amazing Islands is Port Louis the most sought-after spot for nightlife, food, shopping, handicrafts and casinos. The city’s capital is a strong blend of heritage, luxury, food, shopping and nightlife. The Central Market is still the heart of local life and traditions, all gathered to capture the true essence of Mauritius: local crafts, bright Sarongs and other local products.
Travelport reveals travel agency views
Travelport recently unveiled findings from a global airline merchandising survey which shows strong support amongst travel agencies to assist airlines in selling ancillary services through the GDS. The survey also highlights the challenges travel agents face in the selling of these services, amid their own pressures to grow revenues, reduce costs and increase productivity. The unbundling of fares and services in recent years has seen the growth of ancillary products such as checked baggage, meals, lounge passes and upgrades. Agency respondents were asked to specify how this change has impacted their businesses. Top impacts included confusion around what services were offered by each airline, productivity and the need to offer these services to remain a full-service agency. Only 16 per cent of respondents saw unbundling as an opportunity to charge or increase fees and 44 per cent of
respondents said they did not impose additional charges for booking optional services. According to J B Singh, CEO and President, Interglobe Technology Quotient (ITQ), “India’s adoption of varied ancillary services also has been on an upside curve as not only the airlines, but the travellers also mature with respect to use of technology. Travelport’s survey will be an eye opener for the industry, with Travelport’s leading GDS functionalities soon to be available for India market as well.”
International skiing destination
Adventure Himalayas recently launched an international Class Skiing and snowboarding destination with a Gondola ride, Paragliding, Mountain Biking, Snow Mobile and Tube Slide at the centre of the Himalayas in India. Did the citizens of India ever imagine telling their friends that they have just come back from a Ski Holiday at the centre of the Himalayas in India? Sounds unreal but thanks to Adventure Himalayas this is now a reality at Solang Adventure Valley (Manali) in Himachal Pradesh. In terms of pristine beauty its India’s answer to Mt Titlis in Switzerland and Aspen in America. “Adventure Himalayas have been given this fabulous opportunity to develop Solang (Manali), a picture postcard as India’s leading adventure destination. We are committed to offer a world-class product with the extremely pro-active support of the Government of Himachal Pradesh,” said Arun Sharma, Chairman of Adventure Himalayas.
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Adieu, sweet jumbo…
I
t was in September 1973 that Singapore Airlines ushered in the brand new B 747 so well known for its hump-like design and roaring engines during take-off and “invited the world on board and showed it a great way to fly”, writes the SIA website. In the forty years since then, SIA and the Singapore Girl have flown from the small city-nation to six continents. Millions of passengers have not only taken trips on SIA’s jumbos — the 747-200 Super B, the 747-300 Big Top and the 747-400 Megatop — but have treasured memories of their flights. The SIA-B747 saga began on September 1, 1973, when engineers and top executives from the carrier with members of the press gathered on Boeing’s tarmac at Seattle to take delivery of twins: two B747-200s. Then the biggest plane in the world, the jumbos boasted of unheard of
The SIA-B747 saga began in 1973, when engineers and top executives from the carrier gathered at Seattle to welcome the Jumbo
FROM THE FILES OF SINGAPORE AIRLINES: Glimpses of the arrival ceremony of the first Boeing 747 plane and the warm welcome it received from the airport authorities and the public. 198 I CRUISING HEIGHTS I MARCH 2012
features like customised wider seats, two lounges, two extra galleys for speedier meal service and a total of 18 cabin crew for 349 passengers. SIA would add dozens of B 747s over the next two decades. Said an emotional SIA CEO Goh Choon Phong, “Saying farewell to the Queen of the Skies will not be easy. Over more than 38 years, the B747 has played an important role in helping SIA become the global airline that it is today. These flights will mark the end of an era, but the spirit of innovation will live on at Singapore Airlines. With every new generation of aircraft that we introduce, we will continue to set new benchmarks in the premium air-travel segment with industry leading product offerings for our customers.” In a fitting tribute “worthy of its legacy”, one of SIA’s 747s will fly for the last time on April 6, 2012, on a special commemorative flight from Singapore to Hong Kong and back (SQ747 and SQ 748) as a celebration of the service that has made SIA what it is today. Those who book for the special flight (incidentally, tickets are available) will be treated to a preboarding party at the departure gate. The celebrations will continue on the hour-long trip with a unique in-flight experience that will comprise a special meal, inflight entertainment, exclusive SIA collectibles and lastly a certificate for each passenger. The first-class passengers will be treated to a special visit to the B747 simulator and cabin crew training facilities, a tour of the SATS Catering Centre and a special gourmet lunch before the flight. Among the more than 300 commercial passengers will be employees who have worked on the aircraft throughout its storied history, as well as a group of underprivileged children and media. The carrier has put up a special website to mark the Jumbo’s retirement (www.SIAjourneys.com) containing milestones and records set over the years, historical photographs and video footage, for example of the world’s youngest B747 commander Peter Leo (now retired), including interviews with staff and customers.
Reg. No. DL(E) 01/5294/2012-14 RNI No. DELENG/2006/16897