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EDITOR-IN-CHIEF’S NOTE

Separating the doodh from the paani ne of the fallouts head-in-the-sand assessements where the of the government moolah is invited without rights or reasonable bailing out Air India rights to return on investments. Civil Aviation maybe a tweaking of the seems to be treading the same path. The Foreign Direct Investment government provides its own logic on how K Srinivasan (FDI) policy to allow FDI should proceed and the industry is foreign airlines (viewed as strategic investors) completely split on the wisdom of bringing in to invest in the aviation business in India. If it investors from overseas. hasn’t happened so far it is because of the The Federation of Indian Aviation (FIA) indefatigable energy of one man—Naresh that went down on bended knees some weeks Goyal—who furiously opposed it on the one or back pleading with the government to two occasions it looked like happening. Apart from that, the FDI proposal has been routinely spelt out in the form of discussion papers that gets discussed, trashed and finally buried only to be exhumed a year later. But the thinking of our airlines is reflected tangentially by its senior officals. Shiv Kumar, Vice-President (Finance) of Jet Airways told a TV interviewer: “The operating environment in India is very tough at this point.” His main grouse was that tickets were being sold at cost price. If that was indeed the case, how is it TOGETHER -- BUT ONLY IN NAME: Photograph from our files shows Jet that IndiGo and SpiceJet are making Chairman Naresh Goyal with CEOs and owners of private airlines. money? Surely the environment is as tough for them as it is for the rest. In fact, if “regulate” fares by reigning in Air India (whose indeed the sarkar decides in its wisdom to open fares they complained were lower than costs) the FDI route both the LCCs will have plenty of will do well to have its own version of the suitors. They are so hot. discussion paper on the proposed policy. At That apart, there are also some differences least that will give on an opportunity to know within the government on how much stake what the thinking is amongst Messers Goyal, foreign airlines should be allowed. The Mallya and Co. Department of Industrial Policy and As the Hindi saying goes: Doodh ka doodh, Promotion (DIPP), which is in charge of aur paani ka paani (One would know the milk investment policy, favours allowing foreign from the water). By wager? That’s most airlines to take up to 26 per cent in a domestic unlikely. The doodh (milk) and the paani carrier, but the Civil Aviation Ministry clearly (water) will stay mixed. It will give everyone an wants that investment of not more than 24 per opportunity to say either doodh or paani as their cent. That will be a critical mistake. Who will mood or circumstances might demand ! want to invest good money when a shareholder doesn’t even have the right to vote on critical issues at a board meeting? One of the reasons why FDI in defence has been a non-starter is precisely these sort of

srini@newsline.in

CRUISING HEIGHTS November 2011

Off the cuff

GPS for landing Landing airplanes with G PS is nota new concept.In fact,itwas used in the early 1990s.But landing transportairplanes in com m ercialairline service is som ething thatis only justgetting to be a regular occurrence, according to gpsworld.com . Before G PS,every airplane pilot used the Instrum entLanding System (ILS)â&#x20AC;&#x201D; the analog system developed around the tim e of W orld W ar II.G PS Localizer Perform ance with Vertical guidance approaches (G PS LPV) allow instrum entapproaches down to 200 ftheightathalfm ile from the runway.As ofM arch 10, 2011,the U S FederalAviation Authority has published a totalof 2,394 LPV procedures at1,260 airports,which is m ore than twice the num ber ofpublished ILS approaches. Canadian North,based in Yellowknife,Northern Canada, has quite a job m aintaining scheduled services in the severe weather in this region.The airline flies to northern outposts and connects rem ote com m unities with m ajor cities like O ttawa, Edm onton,Calgary,W innipeg and H alifax.D uring extrem e weather,Canadian North has had to cancela num ber ofits flights in the past. So when the team ofM ontrealbased CM C Electronics and Logic-Air Aviation Services cam e up with a solution using the CM C high-precision airborne G PS W AAS (W ide Area Augm entation System s;also known as Satellite-Based Augm entation System -SBAS) sensor ,Canadian North becam e a happy operator.W ith a really sim ple ILS look-alike installation, Canadian North now has capability for G PS LPV guidance on one ofits Boeing 737-300 aircraft,and can fly in bad weather.

contents

THE FEEL GOOD FACTOR p46 At last, the air cargo industry is making its presence felt by charting its own future course of action. The feel good factor has finally arrived for the industry as it gears to be equated at par with passenger services. The phenomenal growth that the air cargo industry has registered will further help the sector to claim its rightful place.

FOCUS

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ICAN 2011 conference was inaugurated by President Pratibha Patil as India negotiated bilateral air traffic rights with 35 nations. The conference was attended by all the major stakeholders of the civil aviation circles.

CRUISING HEIGHTS November 2011

NEWS DIGEST

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Kingfisher Red is on the brink of closure as the airline grapples with financial woes while IndiGo leaps forward registering profits like never before thereby garnering more market share; GVK raises its stake in Mumbai and Bengaluru airports.

contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST Volume VI No 7

In the choppers section, an interesting item about the evolution of first-ever manned electric helicopter while Prince Harry gears up to undergo training in US for an Apache attack helicopter course. Plus, in-depth interview of Air Chief Marshal (Retd.) Fali H Major on the chopper business in India.

Editor-in-Chief

K SRINIVASAN Managing Editor

TIRTHANKAR GHOSH Group Consulting Editor

R KRISHNAN

Consulting Editor

H C Tiwari

FOCUS ON CHOPPERS

CRUISING HEIGHTS

NANDU MANJESHWAR Deputy Editor

NET EXPRESS

p35

Scott Durchslag, President, Expedia Worldwide in an interview talks about the strategic partnership of Expedia and AirAsia; Delhi Airport gets a Facebook page. Plus: Travelport emerges as AsiaPacific’s best GDS.

PC SINGH

Assistant Editor

JUSTIN C MURIK Copy Editor

ASHOK KUMAR Sub-editor-cum-reporter

PUNIT MISHRA Senior Designer

RUCHI SINHA Design

NAGENDER DUBEY, MOHIT KANSAL Picture Editor

PRADEEP CHANDRA

CARGO

Photo Editor

p54

HC TIWARI ——————————

Air cargo stakeholders in the Punjab region are optimistic about the future. The reason: more and more international flights are starting again, from the holy city of Amritsar to Britain and Europe.

Director (Admin & Corporate Affairs)

RAJIV SINGH

Sr. Executive (Subscription)

BACK PAGE

p74

Sir Richard Branson was on a roll again when he opened the Spaceport. There was more to the inauguration than the champagne who had gathered were treated to the WhiteKnightTwo and SpaceShipTwo — soaring through the skies of southern New Mexico.

CRUISING HEIGHTS WOUNDED PRIVATE CARRIERS CAN ONLY RESORT TO TATTLING

GLOBETROTTING

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Read in the Globetrotting section the story of a maniac who allegedly carries knife on plane or for that matter a pilot lands a plane unbelievably on the golf range. And a Pilot survives crash and swims to the shore to save his life.

November 2011 ` 90

www.cruisingheights.in

The case for dedicated cargo airports

Air cargo

The air freight industry is emerging from the shadows to make its presence felt after years of remaining hidden behind the glitz of passenger services.

gets a lift

Full Service Vs Low Cost

Doors open for foreign flights

Expedia set to capture India

Kingfisher downs shutters on its low fare version and starts a debate

ICAN 2011 witnessed negotiations on grant of bilateral and Fifth Freedom Rights.

A little late, but Expedia enters India with its tie-up with AirAsia.

Cover Design: Ruchi Sinha

CRUISING HEIGHTS November 2011

ALKA GOSWAMI (Mob. 9650433066)

Executive Director

RENU MITTAL

For advertising and sales enquiries, please contact: +91-9810030533, 9650433088 Editorial & Marketing office:

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

“ PERISCOPE

Down but not out

“The industry has shifted gears downward. The pace of growth in passenger markets has dipped and the freight business is now shrinking at a faster pace.” IATA DIRECTOR GENERAL AND CEO TONY TYLER on the global aviation scenario.

Spilling the beans

LETTERS TO EDITOR

The cover story, A perfect recipe (O ctober, 2011) w as interesting to read as SpiceJet Spiced-up, new is looking to expand operafront opens up tions to Tier-2 and Tier-3 cities even as it expands its fleet. R ecently, the carrier plans to set up five m ore regional hubs in an effort to connect all m ajor tow ns through its 70-seater B om bardier aircraft. W ith these initiatives,the LCC w illredefine the low -cost flying in India.SpiceJet under the stew ardship of K alanithiM aran has charted outm any developm entalm oves and continuing to do so.The able leadership too atthe top has added to the repertoire ofthe airline. Saha,D hanbad

CRUISING HEIGHTS SAN FRANCISCO AIRPORT INVITES DIRECT FLIGHTS FROM INDIA

October 2011 ` 90

www.cruisingheights.in

Showpiece airport gets ready

Cargo community The digital up in arms world of travel

After the renovation of Chennai airport, it will be ready to handle 30 mn passengers annually

Air cargo stakeholders ask Mumbai airport authorities to improve infrastructure and services

A brand new section on trends, options and evolution of the digital space in online travel

A beaming SpiceJet Chairman Kalanithi Maran (extreme left, top) with Kavery Kalanithi, Board Member, SpiceJet, CEO Neil Mills and COO Sivasubramanian Natrajhen poses for a photo after taking delivery of his spanking new Bombardier Q400 NextGen.

I w as taken aback to read D eccan dream s fail to take off(O ctober,2011).Itw as disturbing to know that the m an w ho pioneered the low -cost flying in India w as notable to capitalise on his experience to take D eccan 360 on the next level. In the 1990s w hen he launched the low -cost airline A ir D eccan, he becam e the savior of Indian dream to fly low cost. B ut, I think he has lost the gam e. C aptain G opinath’s business acum en has hit the rough patch.Ithink,he should take one business lesson or tw o or try out another business.It is hightim e he m ustsay goodbye to aviation business forever. K am aalK han,Patna

This is w ith regard to the story “O ur priority is to get an order from an Indian carrier” (O ctober, 2011).The interview w as interesting to read.The Superjet100 has been described as the m ostim portant and successful civil aircraft program m e of the R ussian aerospace industry. R ussian aerospace com pany Sukhoi has done rem arkable research in m aking Superjet 100 aircraft a success that is evident from the fact that it has m ustered orders from the m any aviation giants during the shortperiod. R am D ube,Chennai

JET AIRWAYS' CHAIRMAN NARESH GOYAL on the feasibility of low-cost model in India.

No change as such “There will be no reduction in Kingfisher's fleet size or its network. Our guests will continue to enjoy the benefits of Kingfisher's network that provides connectivity to 60 domestic and eight international destinations.”

SANJAY AGGARWAL, CEO of Kingfisher Airlines, on the airlines' present fleet size and its network.

Rightful inclusion “In fact, after English and Hindi, Arabic is the most spoken language among passengers here at IGI Airport. So we decided to include the language to keep them updated about their flight status at the terminal.” I PRABHAKARA RAO, CEO, DIAL, on the inclusion of Arabic language for public announcements at Delhi Airport.

Bilateral relations at its best “We believe that the direct flights between India and Vietnam shall bring benefits to our customers, creating all favourable conditions to bring the two countries’ traditional and multi-faceted relationship to a more practical and efficient level.” DR PHAM NGOC MINH, PRESIDENT AND CEO, Vietnam Airlines, on flights between India and Vietnam.

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

“With growth mostly coming from the lowfare segments in India, we are undertaking an in-depth review of the business model, including multiplicity of brands being offered in the marketplace.”

CRUISING HEIGHTS November 2011

Tricky situation “In the past 12 months, capacity has gone up by 30 per cent on these routes (South East Asian) and oversupply is causing fares to go down.” BIRD GROUP EXECUTIVE DIRECTOR ANKUR BHATIA on the falling of air fares in the Indian domestic market.

Topping the cargo list

The strong growth in the Asia-Pacific, Middle East and Latin American sectors can be due to a clutch of factors. The top five carriers of 2010, for instance, have three things in common: Reducing fuel consumption; Investing in sustainable technologies, and, Adhering to ever-changing security regulations. Among the others in the top dozen list were: ¾ China Airlines 1347 (tonnage in thousands) ¾ United Airlines 1298 (tonnage in thousands) ¾ Singapore Airlines 1149 (tonnage in thousands) ¾ Lufthansa 1037 (tonnage in thousands) ¾ Eva Air 850 (tonnage in thousands) ¾ Asiana Airlines 745 (tonnage in thousands) ¾ Cargolux 712 (tonnage in thousands)

COLD STATS

The economic instability in Europe and the US, the earthquake and tsunami in Japan, tornados in southern USA, volcanic ash in Iceland, etc have had their effects on air cargo in the past ten months of this year. As a direct consequence of all this, air carriers have lost a lot of their market share to other forms of transport. Even so, according to IATA, airfreight has held its own. IATA has drawn up its list of the top cargo carriers in 2010. FedEx, which took top position, led the pack in both the international and domestic categories, transporting a combined total of 6.94 million tonnes last year. Behind FedEx were UPS Airlines and Korean Air, carrying 4.5 million tonnes and 1.8 million tonnes in 2010, respectively. Emirates and Cathay Pacific Airways ranked fourth and fifth among cargo carriers last year, posting respective tonnages of 1.77 million tonnes and 1.57 million tonnes.

LOOKING GLASS A chopper for weddings! What next? Even this has been taken away from us netas...

Practical optimism “Airbus attaches great importance to the Chinese market, as can be seen from its having built a major final assembly line in the northern Chinese coastal city of Tianjin.” AIRBUS PRESIDENT AND CEO THOMAS ENDERS on the bullishness of the Chinese aviation market.

Palatable market “With big growth rates (in aviation) here in China, we have decided for the first time to put a centre here that would connect back to Seattle.” LOU MANCINI, SENIOR VICE-P PRESIDENT, Boeing Commercial Aviation Services, on the opening of the Boeing Service Centre in China.

CRUISING HEIGHTS November 2011

ICAN

INDIA

or 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 this year by the Ministry of Civil Aviation) held under the aegis of Montreal-based UN body, the International Civil Aviation Organisation (ICAO) provides a platform for aviation negotiators from different countries to conduct bilateral air services negotiations. â&#x20AC;&#x153;India has raised the bar so high that hosts will now find it tough to match these standards,â&#x20AC;? said one participant. It was almost flawless in execu-

CRUISING HEIGHTS November 2011

]

CAN AND DID

THE 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 WEEKLONG 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. A GRAND AFFAIR: 1) A view of the dais as the National Anthem is being played on the arrival of President Pratibha Devisingh Patil; 2) The President lighting the lamp to formally herald the beginning of the proceedings at the inaugural ceremony; 3) Civil Aviation Minister Vayalar Ravi making his opening remarks at ICAN 2011; 4) The President releasing special commemorative coin to mark the 100 years of Civil Aviation on the occasion; 5) Civil Aviation Secretary Dr Nasim Zaidi lighting the lamp; 6)The President of ICAO Roberto Gonzalez talking to AAI Chairman V P Agrawal and GMR Group Chairman G M Rao; 7) Naresh Goyal talking to Air India CMD Rohit Nandan as V P Agrawal watches; and, 8) Civil Aviation Secretary Dr Nasim Zaidi interacting with the President of ICAO and India's representative at the world body, Arun Mishra and Director in the Civil Aviation Ministry Shubha Thakur. Shuba spent long hours in putting together this hugely successful event.

CRUISING HEIGHTS November 2011

ICAN

X tion: day long m eetings, plenty of entertainm ent and a side trip to A gra. N o surprise considering thatC ivilAviation Secretary D rN asim Zaidihas been one ofIndia's m ostsuccessfulrepresentatives atIC A O . *** ***** ***** President Pratibha D evisingh Patil w ho inaugurated the w eek-long m eet w as candid in her observations: “G overnm ents m ust continually negotiate new bilateraltreaties,to allow for and expand access to new and em erging m arkets for their carriers.IC A N provides a very convenient and essential platform ,for a large num ber of States to negotiate these bilateralagreem ents quickly,efficiently and w ith saving of tim e and expenditure.The W orld A ir Transport C onference 2003 paved the w ay forthis efficientsystem ofairservices negotiations, and I com plim ent IC A O leadership for prom oting IC A N successfully in partnership w ith host countries.” She also said: “In the 1990s, for exam ple,there w ere very few dom estic connections betw een the m etro tow ns D elhi,M um baiand others. There w ere long w aiting lists for international flightsparticularly during the busy seasons. C arriers w ere lim ited.D eregulation ofthe dom estic sector and liberalisation of bilateraltraffic rights in the pastdecade has broughtchoices ofcarriers, choices of tim ings and fares. There is a sea change from 500 departures per w eek in the country in 1994 before deregulation, to nearly 15,000 departures daily — a 30 tim es jum p. Today 87 foreign airlines fly to and from India and 5 Indian carriers fly to and from 40 countries. In the last

Z DELIBERATING KEY ISSUES: 1) A panoramic view of the hall at the inaugural ceremony; 2) Civil Aviation Secretary Dr Nasim Zaidi welcoming delegates at the opening ceremony; and, 3) Joint Secretary in the Ministry of Civil Aviation Prashant Sukul making the vote of thanks. Prashant was responsible for the entire conceptualisation in the flawless delivery of ICAN 2011.

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. CRUISING HEIGHTS November 2011

decade, dom estic air traffic has quadrupled from 13 m illion to 52 m illion and internationaltraffic m ore than tripled to 38 m illion.” *** ***** ***** R oberto G onzalez, President, C ouncilof InternationalC ivilAviation O rganisation (IC A O ),w hile speaking at the inaugural session said that by 2030,the num ber of passengers from A sia-Pacific w illdouble from 2.6 billion to 5 billion and a large proportion of these w illbe from internationalflights. G onzalez said that such platform s for negotiations are practical and costeffective and the num ber of bilateral agreem ents signed during this annual event has been on rise.IC A N started fouryearsago,w ith the firstone held in D ubai w hich had participants from only 27 countries. M ore than 300 delegates from 68 countries attended the w eek-long conference.For the record,itm ay be m entioned that delegates from 65 countries held negotiations w ith each other.India has bilateral air services agreem ents w ith 108 countries,72 foreign airlines are currently operating to/from various destinations.Three Indian carriers are operating to 35 destinations in 25 countries. *** ***** ***** C ivil Aviation M inister Vayalar R avi announced the creation of a new C ivil Aviation A uthority that had been a w ork in progressforclose to 18 m onths. “The new authority w illprovide m ore autonom y on operations as w ell as finance related decisions.I have signed the file last m onth.It has been sent to the law m inistry and the new authority w illtake shape soon,” he said.

Letâ&#x20AC;&#x2122;s join hands and write the history of Indian Civil Aviation

On the occasion of the

100 years of Indian Civil Aviation, we invite you to share your experiences, historical icons, photographs, write-ups, letters, stamps or anything that you consider could be a be-fitting subject to publish in the Commemorative Book, to make the Centenary celebration a memorable one.

Your participation will help us to bring back the memories of yesteryears and your contributions will be recognized in the Book. Send your contributions to Chairman@aai.aero or 100CAV@aai.aero For further details please log on www.aai.aero or www.airportsindia.org.in

Hkkjr ukxj foekuu~ ds 100 o"kZ

Airports Authority of India Rajiv Gandhi Bhawan, Safdarjung Airport, New Delhi-110003 Website : www.airportsindia.org.in & www.aai.aero

NEWS DIGEST

Ryanair’s single-toilet plan

worldscrews.blogspot.com

Ryanair’s latest ‘nickel and dime’ initiative has the airline removing all but one bathroom on their aircraft to make room for more sellable seats. Ryanair’s fleet consists of around 300 Boeing 737-800 aircraft, which the airline has outfitted with 189 seats each, the maximum allowed under current regulations. But by removing two of the three lavatories, Ryanair hopes that Boeing will re-certify the plane for six more seats. On one hand, the extra seating would lower air fares by about 5 per cent for all passengers. While it’s nice to see Ryanair using the initiative to lower costs, on the other hand, the extra seats would bring the plane’s capacity to 195 passengers, all sharing a single bathroom. Ryanair does say they plan to only deploy the modified aircraft on shorter routes, though… at least initially.

Heathrow Airport will create a special terminal for Olympic athletes and coaches to fly out of Britain after the end of the games. Around 10,000 athletes and support staff will go through the “Special Games Terminal” in the three days after the closing ceremony on August 12, 2012.The day after the closing ceremony is expected to be the airport’s busiest day ever. The temporary terminal will only be used by Olympic athletes and their staff but is designed to minimise disruption for all passengers travelling through Heathrow at that time.

A Guinness record…

airliners.net

Heathrow’s special terminal for Olympians

THE COUNT FROM THE ALLIED PILOTS ASSOCIATION IS THAT 129 AMERICAN AIRLINES PILOTS TURNED IN THEIR RETIREMENT PAPERS ON ONE SINGLE DAY IN OCTOBER. THAT’S ON TOP OF THE 111 AMERICAN PILOTS WHO RETIRED A MONTH EARLIER. THE APA SAID THE AVERAGE RETIREMENT EACH MONTH IN 2010 WAS 11 PILOTS PER MONTH, WITH A HIGH OF 24 RETIREMENTS IN AUGUST 2010.

Slater sentenced to one year’s probation Steven Slater says he is moving to California and plans to write a memoir about his 20 years in the airline industry. A fed-up flight attendant whose spectacular exit down an emergency chute made him a US sensation completed his court-ordered treatment programme recently and was sentenced to a year of probation. Slater avoided jail time for his stunt when he pleaded guilty to attempted criminal mischief and agreed to undergo counselling and substance abuse treatment. He was allowed to withdraw the plea on the more serious charge and plead guilty to a lesser charge after successfully completing his year long programme.”That was one moment, that was not indicative of who I am,” Slater said, adding that he was moving from New York to California and that he is planning to write a memoir about his 20 years in the airline industry. “I feel like I'm in a much better place. I have control over my life.” The former JetBlue attendant admitted he pulled the emergency chute on Flight 1052 from Pittsburgh on August 9, 2010, after the plane landed at JFK airport in New York. He went on to the public address system, swore at a passenger who he claimed treated him rudely, grabbed a beer and slid down onto the tarmac. Slater, 39, said his memoir would be dedicated to overworked flight attendants everywhere.

Qatar scores a century Qatar Airways has taken delivery of the carrier’s 100th airliner: a Boeing 777-200LR. “This aircraft type quickly became the backbone of our long-haul fleet,” Qatar Airways CEO Akbar Al Baker said. “This is an airplane that can take us anywhere in the world we want from our hub in Doha (Qatar).” Boeing Commercial Airplanes President and CEO Jim Albaugh said: “We are very pleased that the 100th airplane they received is one of our 777s. … They started off 10 years ago and here they are today one of the premium airlines in the world.” In other airplane news, Al Baker said Qatar Airways expects to get its first 787 Dreamliner around the middle of next year. He said that was delayed from a recent expectation of February because of certification issues with some of the equipment the airline plans to install in the aircraft. “It will be the most luxurious 787 flying in the sky. I promise you that,” Al Baker said. But he declined to elaborate, saying the airline would release details at the ITB Berlin exhibition, in March 2012. Asked about potential interest in Boeing’s planned upgraded 777, Al Baker said he would have to wait to see what Boeing does. He also reiterated concerns about Airbus’ competing A350-1000, saying: “We do not feel confident that that aircraft will do what it is proposed to.” Al Baker also said Qatar Airways has ordered more super-jumbo Airbus A380s, but won’t publicly announce the order until the Dubai Airshow, in November.

CRUISING HEIGHTS November 2011

Budget carrier easyJet has ramped up an ad spat with British Airways by launching a big bucks TV commercial. The budget airline took a swipe at BA’s new £20million “to fly, to serve” campaign by publishing adverts with the headline “to fly, to save” last week. Now, the Luton-based carrier is going head-to-head with BA’s television ads with its own commercials as part of a multimillion pound marketing drive using the slogan “Europe by easyJet”. The move comes as easyJet prepares for a dogfight with its founder Sir Stelios Haji-Ioannou, who announced shock plans to launch a rival budget airline called Fastjet.

airliners.net

More 737s but Willie tricks to cut costs less 787s ! Willie Walsh, Chief Executive Officer of the

Boeing has said it has begun building the first single-aisle 737 at the programme’s new production rate of 35 airplanes a month, up from the previous 31.5 airplanes a month. To meet burgeoning worldwide market demand for single-aisle jets, the 737 production rate will increase to 38 airplanes a month in the spring of 2013 and to 42 airplanes a month by the summer of 2014. Meanwhile, Boeing lost a major customer for its new 787 with China Eastern Airlines cancelling its order for 24 of the long-delayed planes after saying it has waited long enough. The Shanghai-based airline swapped the 787 order for 45 of Boeing’s smaller 737s instead. It also placed a new order with Boeing competitor Airbus for 15 new A330s, which are in roughly the same size class as the 787.

Mile high caper sparks probe

merged British Airways-Iberia, favours growth at the UK carrier and will carve up its partner to cut costs, the head of the Spanish unit’s pilot union said. Michael O’Leary, CEO at Ryanair, Europe’s biggest low-cost airline, said recently in an interview that the unveiling of the Iberia Willie Walsh Express may have “more to do with its negotiations with pilots” than the genuine foundation of a discount unit. “No flag-carrier airline in Europe has had any credibility or success in setting up a low-fare subsidiary,” O’Leary said in Frankfurt. “They’ve all tried and Iberia already claimed to have a low-cost subsidiary in Vueling, and now they’re back talking about another. It has no chance of success whatsoever.”

Rolls-Royce and Pratt & Whitney new JV Rolls-Royce and Pratt & Whitney have formed a new partnership to develop mid-size aircraft (120 - 230 passengers). Both will be equal partners in a new JV that will develop the next generation engines for the aircraft that will replace the existing mid-size fleet. There is also likely to be restructuring of the Rolls-Royce and Pratt & Whitney IAE partnership, which produces the V2500 engine. Under the terms of the agreement Rolls-Royce will sell its equity and programme shares in IAE to Pratt & Whitney for $1.5 billion and in addition receive an agreed payment for each hour flown by the current installed fleet of V2500-powered aircraft for 15 years from completion of the transaction. Japanese Aero Engine Corporation (JAEC) and MTU Aero Engines (MTU), partners of IAE and the PurePowerPW1100GJM (Geared Turbofan) programme for the Airbus A320 New Engine Option (NEO) are likely to join the new collaboration.

CRUISING HEIGHTS November 2011

dailymail.co.uk

Airbus has assembled the first forward fuselage for the composite A350 XWB airliner in Nordenham, Germany. The section is 13 metres long, consisting of four panels and the floor grid. Airbus Partner Premium Aerotec that has constructed the structure will continue structural assembly work in coming weeks before sending the section by boat to Airbus' Hamburg site for systems installation.

EasyJet vs BA

johnnyjet.com

Airbus assembles A350 forward fuselage

A EXPLICIT VIDEO OF A SKYDIVING SEX STUNT HAS SPARKED AN INVESTIGATION BY US AVIATION AUTHORITIES. THE VIDEO, WHICH WAS POSTED ON THE BLOG OF PORNSTAR AND PART-TIME SKYDIVING INSTRUCTOR ALEX TORRES, SHOWS HIM AND A WOMAN HAVING SEX AS THEY FREEFALL OVER KERN COUNTY, CALIFORNIA. IT HAS LED TO CONTROVERSY AND A POLICE INVESTIGATION AFTER PARENTS GOT WIND THAT STUDENTS AT A NEARBY HIGH SCHOOL DISCOVERED THE VIDEO AND BEGAN SHARING IT ONLINE. THE FEDERAL AVIATION ADMINISTRATION (FAA) HAS WARNED THAT ANY ACTIVITY THAT COULD DISTRACT THE PILOT WHILE HE'S FLYING COULD VIOLATE FEDERAL REGULATIONS. THE VIDEO SHOWS TORRES, AN INSTRUCTOR AT SKYDIVE TAFT, AND HOPE HOWELL, THE COMPANY'S SECRETARY, HAVING SEX IN A PLANE BEFORE JUMPING OUT IN TANDEM AND CONTINUING THE ACT MIDAIR. AT ONE POINT DURING THE VIDEO, THE COUPLE ARE SHOWN HAVING SEX IN A JUMP SEAT NEXT TO THE PILOT.

NEWS DIGEST ndia’s m ost aw arded airline is pleased to announce thatithas been conferred w ith the prestigious “Best Indian A irline” aw ard at the Business Traveller Aw ards 2011 cerem ony in London.Business Travellers Aw ards 2011 reflectthe highestaccolade, w hich discerning readers ofthe m agazine bestow on travel and hospitality providers. Based on readers’ poll conducted in the U K ,K ingfisherA irlines w as given this aw ard. W hicheverw ay you look atthis story, itdoes notundervalue the honour.Butthe reality in term s of the airline’s financial w oes tells a differentstory.O n Septem ber 28,2011,K ingfisherA irlines boss Vijay M allya told his shareholders in Bengaluru that his airline w as exiting the low -fare segm ent.In fourm onths itw ould be only K ingfisherClassorthe full-service carrier (FSC) and there w ill be no K ingfisher Red,the low -fare arm ofthe airline. The airline w ould pilot a new prem ium business-class and ground its existing low -costoutfit.M allya said:“W e are doing aw ay w ith K ingfisher Red because w e do notintend to com pete in the low cost segm ent.W e believe there are m ore than enough guests w ho prefer to travelfull-service K ingfisherClass and thatw as evidentin our ow n perform ance w here load factors in K ingfisher Class w as m ore than K ingfisherRed.” K ingfisher A irlines w as started as a

Capt. G R Gopinath

full-service carrierin 2005 and three years later itacquired A ir D eccan,w hich w as India’s first LCC. Later after a m erger, K ingfisher created a distinct low -fare entity called the K ingfisher Red and a full-service entity called K ingfisherClass, w hich had both business and econom y classes. For Captain G R G opinath, the pioneer of the low -costaviation business in the country and the father of A ir D eccan, w hich M allya rebranded K ingfisher Red after buying it in 2007, the decision to shutdow n K ingfisherRed w as sad.H urt,G opisaid on hearing the decision: “G iven K ingfisher’s latest decision to exitthe low -costbusiness,I think itis a good idea to have one brand. H ow ever,I believe itw ould have been a sm arter decision to go low coston allthe dom estic routes and provide fullservice in internationalroutes.W hy do Isay that? Internationally,itis the low -costairlines that have been m aking profits consistently.” A n unfazed M allya,after speaking to shareholders,told journalists,“Yes w e are doing aw ay w ith K ingfisher Red and w e do notintend to com pete in the low -cost segm ent.Butallis notgloom and doom .” A few days later,K ingfisherA irlines CEO ,Sanjay A ggarw alw ho w as him self earlier the CEO of SpiceJet,a LCC,said in a m edia statem entor rather provided a justification for the rationale of getting

IS FSC the way forward?

Sanjay Aggarwal

outof the low fare business.Referring to costs,he said thatthe operating costs of the LCC and FSCs w as the sam e in term s of fuel,airportcharges,engineering and m aintenance, and crew costs. But the FSCs incurred additionalcosts on global distribution, inflight catering, ground am enities and FFP (Frequent Flyer Program m e).But these additional costs w ere m ore than recovered through higher yields. Referring to capacity, Sanjay A ggarw al noted that besides the large aircraft ordered by start-up airlines in 2004-05,the Indian LCCs placed orders for m ore than 250 aircraft in the recent m onths.Perhaps,he had in m ind the order for 180 A 320s placed by IndiG o and another 72 A 320s by G oA ir.These over 252 new plane orders com e on top of the order for 30 Boeing 737-800s placed by SpiceJet late last year. In the last tw o years,the capacity induction ofthe LCCs outstripped the dem and grow th in the dom estic m arket. O vercapacity w as leading to declining yields. Sanjay A ggarw al then referred to prem ium travel,w hich,he said,rem ained alive w ith continued econom ic grow th in the country.In fact,the rising econom y w as generating m ore business-related travelw hich m eantm ore preference for full service carriers (FSCs) as it cam e w ith ease ofbuying tickets,FFP and other conveniences.These travellers w ere not

CRUISING HEIGHTS November 2011

Vijay Mallya

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END OF A CHAPTER: A Kingfisher Red plane on the runway on the way out.

as price sensitive as those w ho clearly preferred LCC. Leading his argum ent to yields, he said a detailed study of his airline’s last six m onths, w hich coincided w ith high fuel prices, K ingfisher A irlines Class generated higher yields and load factors. This w as consistentw ith the assessm ent that business travel segm ent w as m ore sustainable than the extrem ely pricesensitive LCC passengers.The analysis show ed thatofthe increm entalyield,only 25 per centw as spenton providing extra services associated w ith a FSC flightand the rem aining 75 per cent w as a net contribution to the bottom line. Sanjay A ggarw al then referred to com petition w here he said there w ere five airlines in the LCC m odule butonly three FSCs,nam ely A ir India,JetA irw ays and K ingfisherA irlines.This com petition w as tem pered because of the FrequentFlyer Program m e (FFP) loyalty of each FSC. H ence, K ingfisher believed that com petition w ould be m ore severe in LCC than thatin FSC space. A s an extension to this argum ent,he then referred to seat occupancy or the load factors. The K ingfisher CEO said since his airline did notofferdualclass or rather business class in all its flights,it w aslosing business,nam ely in K ingfisher Class.W ith O neW orld on track, he felt thatthis w as the bestw ay to go forw ard; thatis dum p K ingfisher Red and confine only to K ingfisher Class. But then it w ould notbe its earlier self or w hatitis now. W ith a com plete m akeover set to happen by Feburary 2012, K ingfisher A irlines is busy reconfiguring all its A irbusA 320 aircraftincluding itssingle -cabin aircraftinto dualcabin planes w ith a reduced prem ium business class and increased full service econom y class leading to a 10-per centrise in capacity w ithoutactually adding new aircraft.

In this context,ithas been pointed out thatK ingfisherA irlines has on date only fourA irbusA 320 on ground asagainst14 a year ago.Tw o of these w illbe up and flying in tw o m onths from now. Thus, there w illbe no reduction in the airline’s fleet size or its netw ork, w hich is 60 dom estic and 8 internationaldestinations. So, the discernible pattern is: Vijay M allya announces the decision of K ingfisher A irlines to quit the low -fare segm ent on Septem ber 28 and his CEO Sanjay A ggarw alcom es outw ith a m edia statem ent justifying this by listing the reasons on O ctober6,2011.Even as they said allthis,there w as no hintas to how the airline w ould m eetits financialw oes, w hen it w ill fly out of dark financial clouds and how soon. M aybe having repeated num erous tim es in the past, it did not require a reiteration thatits totaldebtatthe end of fiscalended 2010-11 w as ` 7057.88 crore but w hat is not know n as to how m uch m ore has accrued to the losses since then or in the firsthalf of currentfiscal201112.Butan em barrassm entof som e kind did confront K ingfisher A irline in m idO ctober 2011 w hen fuelsupplier H PCL suspended sale offuelto itand as a result that day all its flights during the peak evening hours in practically allits m etros had to be stalled up to five hours.In fact, the passengershad to rem ain sitting ducks in m any ofits flights atfew airports. If this is not enough, K ingfisher A irlinesem ployeeshave also been getting their share of problem s. For instance, m any of its em ployees did not get their salaries on tim e, w hich norm ally gets credited into their account before the seventh of each m onth. CEO Sanjay A ggarw al in an em ail to his em ployees said:“You are aw are thatK FA has been trying to raise capitalfor som e tim e now. But due to uncertain econom ic clim ate, CRUISING HEIGHTS November 2011

the airline has notbeen successfulin that attem ptyet.H igh oilprices,lean season, low yields and devaluation of rupee have all com pounded the issue causing occasionaldisruption in the operation and delay in salaries.” The airline’s attem pt to raise G D R from $ 250 m illion to $ 350 m illion rem ains in lim bo as its closing share pricesin BSE,w hich w ould determ ine the benchm ark forthe G D R issue,is very low and hence w ould com pel the airline prom oterto partw ith m uch largershare of the equity.In fact,this has also delayed the dom estic rights issue. The parting new s from A ggraw al w as interesting w hen he said that 75 per cent of the em ployees had been paid for Septem ber 2011 w hile the rem aining w ould be paid by O ctober17,2011. A s insiders say,there is stillno new s of any upw ard flow of revenue to take care ofthis irritantin the nearfuture until the peak period traffic attracts m ore passengers and, therefore, higher loads com bined w ith higher fares and hence higher yields.Butto so assum e w ould be like asking for the m oon. A gainst this background,the aw ard or the 38th aw ard the airlines received from readers in London does notm ake a difference to the public perception back hom e that M allya’s airline though good in term s of service is really tottering for need of finances.Putboldly,K ingfisher airlines needs m ore m oney infusion than passengers to stay in the air. The list of reasons given by Sanjay A ggarw aljustifying the exitofK ingfisher Red and the eternaloptim ism in term s of higher yields from business-cum econom y class in a full service concept m ay not have m any takers. True w hen asked by m edia,he said that he did not w antto com m enton JetA irw aysm odelof m oving in the opposite direction by

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IMPORTANT DIFFERENTIATOR: Good inflight service is the key to any airline popularity.

increasing the com ponentof the low -fare segm entand reducing the fullservice. Just days after he left the com pany, the form er Executive D irector of Jet A irw ays,SarojD atta,told the m edia that the Indian dom estic air services m arket had becom e very price sensitive over the past tw o years. W hile traffic from prem ium segm ents m ightbe expected to continue, the proportion had, how ever,

drastically reduced.In fact,bulk of the Indian flyers had m oved tow ards low -fare traffic. This w as notw ithstanding the sam e airportcharges,high fuelprices,etc. The latter actually rem ains a huge challenge forIndian carriers. Elaborating his thesis,D atta said that in the last tw o years,a com pletely new segm entof travellers had em erged on the dom estic air traffic scenario w here

Former President Dr Kalam and (right) Minister Vayalar Ravi at the ATC Guild celebrations.

hisyear'sATC day celebrations w ere notjusta reaffirm ation of O ctober20 as the International ATC D ay. It w as also a celebration of 100 years of Indian Civil Aviation.The icing on the cake w as the fact that it also happened to be the golden jubilee celebrations of IFATCA , the International Federation of A ir Traffic Controllers'A ssociations. The ATC G uild (India) organised a tw o-day sem inar entitled "A celebration of past, a w indow to future". Inaugurating the sem inar,CivilAviation M inisterVayalarRavilauded the Indian A ir Traffic Controllers for their extraordinary contribution in keeping

Multiple celebrations for ATC Guild the skies safe.H e w as allpraise for the tenacity,patience and concentration,the key attributes ofthe sentinels ofthe sky. H e prom ised his com m itm ent to im provem ents in technology w hich w ill

CRUISING HEIGHTS November 2011

passengers w ere firstlooking atthe fares before choosing the airline.In fact,the greatdifferentiator like ‘W e are the best’ or ‘Fly sm art’or ‘A great product’had hardly any im pact on such travellers. D atta predicted thatbusiness class w ould rem ain butw ould grow very slow ly.Ifw e superim pose D atta on Sanjay A ggarw al — w hich w e,perhaps,can do considering the rich experience of D atta w ith Jet A irw ays, that w as started in M ay 1993 and acquired the status of a greatproduct long before M allya cam e in, w ith his K ingfisherA irline 12 years later in 2005, and his conceptofdefining passengers as his guests — m ay be the younger CEO w illneed to re-reflecton his boss’s thesis. A recent new s story stated that just days after the intention of K FA to go all fullservice w as m ade public,itbegan to offer tw o-w ay flights for one w ay fare to its FFP m em bers and w here this w as not possible,itcutfares to gethigher loads. W e don’tknow w hatallthisw ould add up to buta fine productthatK ingfisher is it should notbecom e a high-fare,low -load carrier or low -fare,high-load carrier.A s one alw ays hears,the truith is som ew here in the m iddle butunfortunately forIndian carriers there are m any in the m iddle looking forthe sam e truth.

assist the controllers to outperform them selves. H is visit to the Chennai Integrated A ir Traffic Services Centre, he said, w as an eye opener to the significant strides m ade in U pper A irspace H arm onisation and Radar Integration,how w ellprocedures can be planned and technology can be harnessed to benefitallusers including the travelling public. A A I Chairm an V P A graw alin his rem arks w hile participating in the sem inar touched upon the Indian A N S initiatives,the significantstrides already m ade and the plans for the near future, thus show casing how w ell India is bracing itselfforthe huge challenges. M em ber(A N S)V Som asundaram in his keynote address noted the significant contribution m ade by the ATCs,the only physical link w ith the flight crew, through the extraordinary journey of100 glorious years ofIndian civilaviation. A n extraordinary special session w as a very special address from the form er President of India, D r. A PJ A bdulK alam .H isim m ense w isdom and dom ain expertise coupled w ith an extraordinary connectleftthe audience charged w ith a renew ed zealto achieve the nationalvision on aviation.

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The overseas story and the three years of profit

Aditya Ghosh

Rakesh Gangwal

n the last five years since launch, prem ium low -costcarrierIndiG o has carried 33 m illion passengers and garnered a m arketshare of 19.7 per centin the dom estic Indian air space.A s its President A ditya G hosh put it: “W e w antto offerlow -costhigh-quality airline and thatis w hy w e are popular w ith both budgetcarriers and high-levelcorporate.” M aybe the w hole IndiG o story has been oversim plified by G hosh and fortunately for him ,his airline has w eathered every storm in its ow n w ay instead of getting into the series of air pockets w hich other com peting airline w hether LCC of FSC have gotinto. G hosh’s rem ark thatcom panies such asTata,W ipro and industrialists such as R P G oenka and Vikram O beroipatronise it and its record for im peccable punctuality being responsible forits success seem s to be an over-sim plification ofa com plicated business like flying in India w here every param eter — be it parking and landing charges, fuel costs, pilot salaries, m aintenance charges — is above the international benchm ark. H aving said that, it w ill be interesting to see the narration of the IndiG o story by its President,how ever,patchy itm ay appear to be. In 2005,w hen IndiG o placed orders

Rahul Bhatia

for 100 A irbus A 320 aircraft,the critics openly said that this w as only a dream , w hich w ould turn into a nightm are soon. A prom inentairline ow ner said thatitis fine for you to do w ell till you had 25 planes butthe m om entitw enthigherthan that,running an airline business becom es a differentballgam e.The factthatithas not happened goes to show the w ay the LCC has becom e a prem ier airline in India in its ow n right.W e need to w atch and w ait before one can say it has succeeded in replicating it on its internationalroutes. In the fiscalyear 201011 (ending M arch 31, 2011) IndiG o bucked all usualtrends in the aviation industry, particularly in India,and posted a profitof `650 crore w hich w as 18 percentoverthe netprofits of ` 550 crore it had registered in the previous financialyear. This, according to G hosh, w as m ainly because of various factors including cost control m easures, strict m aintenance, low er distribution costs and alm ost no interestcost. A s he said,the airline w as sufficiently capitalised and notlooking atraising debt CRUISING HEIGHTS November 2011

or equity at the m om ent.If readers can recall that m ore than 18 m onths back, there w ere a num ber of stories in the m edia w here it w as prom inently stated that IndiG o had engaged consultants to value the com pany pending its desire to raise m oney either through an IPO or private placem ent. But all of that w ent dow n w hen the airline stocks fell especially at a tim e w hen the M arans acquired SpiceJet and their subsequent plan to acquire m ore shares did notclick. Even then and m ore so now,the scrips of Jet,K ingfisherand Spice are ata new low. O bviously,to expectA ditya G hosh or his boss-prom oter Rahul Bhatia to seek outside help by w ay of an IPO or private placem ent m akes no sense.In fact,any speculation m ay w ellhave to w aittillthe governm ent finalises its m ind on w hich w ay it w ill invite FD I in the aviation business especially from foreign carriers, w hich is prohibited now.There m ay be m any com petitors, but Bhatia’s IndiG o can harvestthe bestcrop.IndiG o has 44 planes — allA 320s — and w illadd 16 m ore before the end of D ecem ber 2012. A tthe end of 2010-11,ithad 38 planes, 3750 em ployees or 99 em ployees per plane: a record of sorts anyw here, especially in a country, w hich has A ir India. W hen rising crude oil prices are hurting airlines’bottom lines, IndiG o is w orking to reduce its costs.The airline is focusing on low ering its operating fuel costs and has a dedicated team to w ork on this issue.So,how is the airline m aking m oney? W ellitis and should be a m illion- dollar question. Insiders like G hosh say com pared to full service carriers,IndiG o spends far less on sales and distribution and m aintenance cost. W hile this is true as w as m ade evident by Sanjay A ggarw al in the case of K ingfisher A irlines’ distribution cost,w hatis notclear as to how IndiG o’s m aintenance costcould be cheaper unless its contractto purchase so m any A 320 aircraft had such a built-in clause? G hosh is on record to say that his airline does not participate in global distribution system s,its distribution costs

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SMART MARKETING: IndiGo will be banking on good inflight service to woo customers.

are m uch low er and w ith a single fleet resulting in com m on training and spares helps reduce its expenses on such activities.Butthe biggestelem entof the IndiG o story has been its sm art w ay of buying the 100 A irbus A 320s,w hich left itw ith m ore residualm oney than w hatthe m anufacturerm ade on the dealas insiders in both places say. W hen tim es are good and the m arket isreally going up,you can alw aysselland lease back your aircraft depending on how the airline prom oter has structured his dealorpurchase.Ifhe has gota great discount com pared to the publicly available listprice,then w hen the m arket is up and there is a greatdem and for the sam e type of aircraft,you could m ake a killing on the “Sale Lease Back” deal ,w hich is w hat IndiG o also did as its com petitors. W ith every A 320 bought being sold and leased back,itis reported to have m ade atleast$ 4 m illion on each transaction, w hich m eant practically a free aircraft available for com m ercial operation each year — that is virtually zero rental. O bviously, you w ill m ake m oney thatw ay and this is the sm artest thing w hich Prom oter Rahul Bhatia is doing. M edia reports quoted G hosh as saying “operational efficiencies and steady earnings from sale and lease back of aircrafthas helped IndiG o posta net profit of ` 650 crore in 2010-11 com pared to ` 550 crore in 2009-10 and IndiG o revenues rose by 48 per centto ` 3946 crore”.Butthis is notthe end ofthe story as picture abhibakihaim ere dost. So w ill the international foray help IndiG o repeat w hat it did and is doing dom estically? This is a m illion-dollar question.A ditya G hosh has stated that hisairline w illdedicate 15 to 18 planesof

total capacity tow ards international operations by the end of M arch 2012. The airline hoped to break even and m ake som e m oney in internationalroutes butthe targetof the airline is to keep the w hole com pany and w hole business profitable and sustainable. This is the third consecutive year of IndiG o’s profitability. H ow ever, the currentfiscal2011-12 m ay notturn out the w ay ithas been in the previous three years as is being feltby other airlines in India or even w orldw ide.H igh fuelcosts and the w eakening Indian rupee vis a vis dollar are som e of the m ajor critical challenges confronting the carriers in India. It m ay be m entioned here that A irbus Industrie has offered JetA irw ays brand new A 320s eitheron lease oreven outright purchase at rock bottom prices and incidentally the lease rental for A 320s has fallen sharply as is true of com peting Boeing 737 N G s but not across the N G series as is evident from stillhigher lease rentals com m anded by the Boeing 737-800s.W hatw illthism ean for IndiG o in term s of its sale and lease back route? Butthis in no w ay dim inishes its greatm anagers w ho have puttogether a great airline w hose punctuality,quick on-tim e service and lightsnacks on board despite no hotbeverage continues to be a greatdraw. Back to IndiG o’s foreign flightstory. A s A ditya G hosh has stated,his airline is looking at100 percentA sian m arketasthat isw here the businessisand from w here the passenger capacity is getting generated. The plan is to offer all its existing 29 dom estic destinations for foreign destinationsto itsA sian travellers.Thisw ill happen progressively,as by end of2011,it w illhave 48 aircraftand by the end of2015 allthe 100 aircraftithad ordered in 2005. CRUISING HEIGHTS November 2011

But the reality m ay be different as there w illbe som e replacem ents and som e new. Beyond that it w ill begin to get its new order of 180 A 320s of w hich a big chunk w illbe A 320 N eos w hich w illdeliver far m ore fuelefficiency. Being the launch custom ers for the A 320 N eos, w e are sure IndiG o has already captured the sale and lease back m arket for this aircraft for itself and again fly som e of its planes on no rental basis as itdid in the past!A fterall,there is no w ay fuelprices w illcom e dow n as the m ajor consum ers w ill from now on face even m ore dem ocratic nations in the G ulf and the M iddle East than dictators w ho can be fixed! R egarding fares on its G ulf and South EastA sian sectors,IndiG o is of the view thatw hen the flight duration of a D elhi-Bangkok flight is the sam e as those to K erala, w hy should the passengers pay m ore for sam e duration foreign flight? IndiG o is getting into another segm ent, w hich w as till now the exclusive preserve of full service carriers: holiday destinations.IndiG o is in talks w ith the Tourism A uthority of Thailand and Singapore Tourism Board. Itm ay even starta w ebsite soon in Thai language besides offering travel bookings through travel agents. It is planning G aya in BiharorBodh G aya to Bangkok flights w hich w ill cater to international Buddhist religious travellers from the Far East such as South K orea and Japan.A llthese orsuch passengers have to do is fly to Bangkok from w here IndiG o w ill ferry them to Bodh G aya and back to Bangkok.By the year2015,IndiG o’s principalInterG lobe also plans to have in place 95 hotels in India w ith a tie-up w ith the w orldrenow ned A ccorG roup.

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Expanding airports, increasing costs V K Pow er and Infrastructure Lim ited (G V K PIL) has got m ajority stake in M um bai International A irport Lim ited (M IA L) after its subsidiary G V K A irport H oldings Pvt Ltd acquired 10,80,00,000 equity shares of `10 each am ounting to 13.5 percentequity in M IA L fora consideration of $ 231 m illion or ` 1134 crore from Bid Services D ivision (M auritius Lim ited). W ith this G V K ’s holding in M IA L has risen to 50.5 per cent or m ore than halfw ay m ark. Itw as in M arch 2011,G V K entered into a share-purchase agreem entw ith Bid Services and ittook nearly eightm onths before the dealw as clinched.M IA L got the m andate in A pril2006 to develop the ChattrapatiShivajiInternationalA irport (CSIA ).The com pany is now building a new integrated term inal at Sahar w ith state-of-the-art infrastructure and facilities to caterto passengertraffic of40 m illion peryear.The sealing ofthe M IA L deal w as reported on O ctober 18. Tw o days later, Bengaluru A irport and Infrastructure D eveloper Pvt Ltd (BA ID PL) yet another subsidiary of G V K PIL,acquired additional5,38,44,000 equity shares of ` 10 each am ounting to 14 per cent stake in Bangalore International A irport Lim ited (BIA L) from one of the original prom oters Siem ens Project Ventures G m bh for a consideration of`613 crore. In A ugust 2011, G V K said it w ould raise its stake in BIA L to 43 percentfrom Siem ens.The latterasoriginalinvestorhad to stay invested for atleastthree years as per the contractw ith the governm entif it w anted to dilute itsholdingsby 14 percent. That period got over in June 2011. If it w anted to com pletely exit the business, then aspercontractualterm sitw illhave to rem ain invested forseven years.G V K first

entered BIA L in D ecem ber 2009 w hen it acquired 17 per cent stake in BIA L from otherprom oterinvestorLarsen and Toubro for `686 crore. Before that in N ovem ber 2009,G V K boughtoffZurich A irport’s 12 percentstake for` 484.6 crore.Both these deals w ere priced at` 105 pershare.W ith thisacquisition,G V K ’stotalstake in BIA L rose to 43 per centfrom 29 per cent.Itis notknow n,ifG V K w ould w ish to increase its stake to above 50 percentin BIA L and if yes then w herefrom it proposed to acquire additional stake. W hile L& T has sold its entire stake,Zurich stillhas 5 per cent stake after selling off 12 per cent in N ovem ber2009.A A Iand K arnataka State Industrial Investm ent D evelopm ent Corp Ltd ow n 13 percenteach. BIA L gotthe m andate forbuilding the G reenfield airport in July 2004 at D evanahalli,about40 km from city centre. In the currentfiscal2011-12,the tw o airports underG V K hope to handle a totalof 43 m illion passengers.N ow thatG V K has a m ajority stake in M IA L and justshortof

KEY PEOPLE: (Clockwise from top left) Kiran Grandhi, G V Sanjay Reddy, Dr Nasim Zaidi and Yashwant Bhave and (above) inside Delhi and Mumbai airports.

CRUISING HEIGHTS November 2011

m ajority in BIA L,there are tw o scenarios to be expected. First, w ill the com pany increase itsstakesin BIA L to above 50 per cent and if yes how and w herefrom as argued earlier? Second,w illG V K then go in for fresh valuation of the tw o airport com panies that could now see an upw ard m ovem ent? Follow ing this, w ill G V K divest part of its airport holdings to raise fresh funds? The parentcom pany is already in talks w ith leading private equity com panies w hich are reportedly doing due diligence.O nce this process gets over,itis quite possible that G V K m ay try to earn back all the m oney it had invested in the lasttw o years and m ore,so thatthe acquisition drive it launched since N ovem ber 2009 becam e w orthw hile for future leveraging as is being speculated now. N otw ithstanding allthese,the airportoperators m ainly G V K and G M R are facing serious regulatory blocks as the regulator A irports Econom ic Regulatory A uthority (A ERA ) has been strongly pleading or ratherplaying on behalfofpassengerinterest.The issue ofsingle ordualtillis yetto be resolved w hile the regulatorisclearly in favour of single till as against the airport operators w ho w ant a dual till and som e even a hybrid till. N ew s reports suggest that both G M R and G V K are seriously contem plating to hike airportcharges — be itparking,landing,etc — sharply to m eettheirrising cost m ainly debtservicing of the load they had taken to m odernise the respective airportsat D elhi,M um bai,H yderabad and Bengaluru. A s perofficialsources,D IA L has proposed a 740-percenthike in airportcharges (parking, landing and navigation) w hile M IA L has asked for a 450-per cent increase.Both the com panies have sought a 24 percentreturn on equity.G M R m ade a loss of` 800 crore lastfiscalw hile G V K m ade a profitof ` 197 crore on its airport operations.Itm ust,how ever,be stated that the cost incurred on building the brand new airports at D elhi, H yderabad, Bengaluru airports and M um bai to a certain extent,needsto be re-assessed to see if there w as really an overdrive.

Photos courtesy: ANA

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CELEBRATIONS: Cheering the launch of the 787 and (below) the first passengers of ANA’s flight.

Fulfilling a dream with the 787! inally the 787 took off w ith a salute and a show erby an airport fire tender ending years of delay in crafting the w orld’s m ost m odern aircraft.The A llN ippon A irw ays (A N A ) D ream liner thatflew on O ctober 25 w ith 240 passengers to H ong K ong had a jubilantShinichiro Ito,the airline’s President and CEO on board and he described his brand new plane as a “gam e changer”. H e acknow ledged, how ever, that production hiccups that delayed delivery forthree years had puthis carrier “through hard tim es”. The flight cam e exactly 53 years after Boeing’s firstever jetliner,the 707, began com m ercial services in the Pan A m colours. W ell, as a m atter of fact,the 787 or the D ream liner as it is betterknow n does notfly any fasterthan thaticonic firstjet(like for the 707,A ir India is one of the launch custom ers of

the 787)butitis dram atically different. The aircraft has been designed to m ake itthe m ostcom fortable cabin ever for a passenger and cheaper to fly for airlines battered by the recession and fuel prices. W ith its m ostly carbon-com posite body, Boeing’s technological flagship offers a 20 per centim provem entin fuel efficiency and a 30 per centreduction in m aintenance costs. The D ream liner’s success or failure w ill depend m uch on Japan, the only m ajor aviation m arket w here Boeing clearly dom inates its European rival. M ore than a third of the D ream liner is built by Japanese com panies, including M itsubishi H eavy Industries,K aw asaki H eavy Industries and Fuji H eavy Industries . O f Boeing’s D ream liner backlog of 821 orders built up over the three years of delays, nearly a tenth of them are from Japan.

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The 787 has been sold by Boeing as a “gam e changer”, prom ising to revolutionise air traveljustas its 707 did by allow ing non-stop trans-A tlantic service and the 747 did by ushering in an age ofm ass travel.The 787 is designed to connect cities that m ight otherw ise not have non-stop flights. Planes like the Boeing 747 and 777 and the A irbus A 380 can fly m ostlong-haulroutes,butfinding enough daily passengersto fillthe m assive jets is a challenge.The A 380 typically has 525 passengers butcan hold up to 853. Passengerson A N A’sjetw ere treated to shifting huesofcolour,including a rainbow display as the aircraft lifted-off from the tarm ac in Tokyo, its engines a gentle w histle.A nother feature on the 787 is the w indow s, 19-inches high and 11-inchesw ide,30 percentlargerthan those on traditionalalum inium -body planes. The m ost-prom ising feature of the 787 w ill com e on later m odels:a turbulence-dam pening system . A ccelerom eters in the plane’s nose w ill register a sudden drop and send a signal through fiber-optic cables to the w ings. W hatw ould have been a nine-footdrop is cut to three. N o other plane has this technology.In som e w ays,the D ream liner represents stripped-dow n aviation engineering.Ituses less alum inium than conventionalaircraft,so has few er than 10,000 holes drilled into the fuselage during assem bly, com pared w ith one m illion holes on a 747. Butperhaps the m oststriking w as the curved,aerodynam ic design of the w ing tips,m ade possible by the use of carbon com posites.The m aterialis m uch thinner than before,and its cam ber can be varied during cruising forgreaterefficiency.The gull-w ing design effectively enables the plane to go into glide m ode. For a com m ercialaircraftthatis exceptional.

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Miti and Suvarnabhumi ecallJuly 2007 w hen the heavy m onsoon show ers flooded M um baiand also its airportat Santacruz-Sahar.The M itiriver (it is actually a huge w aste w ater drain flow ing below the airportlevel,across it and even under the runw ay) overflow ed and flooded the runw ay leading to suspension of flights both take-off/ landing for couple of days. There has been no solution to that problem and, perhaps,yetanother heavy m onsoon w ill m ake policy m akers to rethink on this issue.N ow w e have sim ilar prospects at N aviM um baiw here the site located for building a new airport is beset w ith a huge problem of tw o rivers flow ing right through the area. The environm ental clearance w as acquired w ith greatdifficulty and the plan envisages diversion of the tw o rivers as also partflattening of a hillock.Contrast this to the heavy m onsoon in Thailand in the lastm onth or so,w hich saw m uch of thatcountry under w ater and even parts of capital city Bangkok. But its new airport — about five years old — Suvarnabhum i has com pletely survived and there has been no report of any flooding.H ow did ithappen? Sim ple.The policy-m akers w ere w ell

aw are and tackled it m uch in advance. Suvarnabhum iis w ellprotected by dykes and pum ps.The 23.5 kilom etre and three m etre high earth dyke surrounding Suvarnabhum iInternationalA irporthas been checked and reinforced to safeguard itfrom flooding.Inside the dykes,there are canals to drain w ater into six huge reservoirs that can hold a total of 4

m illion cubic m eters of w ater according to A irports ofThailand (A oT). There are tw o pum ping stations south of the airportand each station has four pum ps,w hich can handle 12 cubic m eters of w ater per second or one m illion cubic m etres of w ater per day. So if there is any flooding threat, the airport is w ell prepared com pared to no preparation in Indian airports because of the ‘Jai H o!’ factor. D espite heavy CRUISING HEIGHTS November 2011

CASE-IN-POINT: Suvarnabhumi Airport has been able to withstand the recent flood.

flooding,the num ber of foreign tourists arriving at Suvarnabhum i airport has rem ained norm alat38,000 such arrivals per day. In the current calendar year 2011,Thailand is expecting 19 m illion foreign tourists.W ithin five years of its com m ercial operation, the new international Suvarnabhum i airport has already surpassed its design capacity and congestion is getting w orse each day. D uring the fiscal ended O ctober 2010-Septem ber 2011, the passenger handled at this airport exceeded 45 m illion a year and according to A oT, traffic is expected to steadily increase over tim e.Even by Thaistandards,there w as a delay in im m ediately planning additionalterm inalfacility soon after the new airport began operations in 2006. This has been stated as the m ain reason for the present problem s faced at Suvarnabhum i. A oT projection for passenger traffic atSuvarnabhum isuggests thatitw illrise to 49.4 m illion in 2012,52.1 m illion in 2013,54.9 m illion in 2015 and 68 m illion in 2016. Traffic jum ped from 37.05 m illion in 2009 to 42.49 m illion in 2010. The presentproblem being faced by the airport is expected to be resolved only after yet another new m ulti-bilion baht expansion project is com pleted. Com e 2012, A oT says a brand new term inal w ith capacity to handle 20 m illion passengers is setto begin construction.It w illtake fouryears to com plete.

COLUMN/CHOCKS OFF

A table-turning tale The private carriers have fallen victim to their own game of dropping fares, comments R Krishnan, and now want the government to stop Air India from reducing fares on trunk routes. R Krishnan

t the height of Ratan Tata-Russi Mody battle in 1992, just after the former took over as the boss of the Tata Group which Mody thought was his rightful throne, one often heard in corporate circles an oft-repeated saying : “When the going gets tough the tough get going.” But as it was then, so now, its amended version — “When the going gets tough, the tough go to the government” — continues to hold true. Russi Mody met the then Prime Minister Narasimha Rao to plead his case. Today, when Air India has dropped fares on select but important domestic sectors including trunk routes, all the private carriers made a beeline to the Ministry of Civil Aviation to plead their case. This captures the present mood of the Indian aviation industry comprehensively. Had you not heard a divided Air India and Indian complaining against private domestic airlines that did everything to capture market share including dropping fares? They reduced fares, held beauty shows in the sky and even gave complimentary gifts to passengers. True, the competition was not just to dislodge the stateowned airlines but also each other if they could. The situation became worse after the private carriers got into international skies connecting all those profit making routes on either side of India or should we say Air India — west and east — Gulf and South East Asia or less than five hours’ flying time? As they stepped up flights internationally, capacity was quickly filled by getting new planes to criss-cross India. The fares they offered were unheard of in India and just impossible to even imagine during the monopoly days of Air India-Indian Airlines combine. A CAG report then showed that within five years of the first air taxi operation and subsequent launch of scheduled domestic operations by private airlines (between 1993 and 1999), the market share of official domestic carrier Indian Airlines fell from 100 per cent to 63 per cent. It is a different story that many nonserious players simply disappeared from the market leaving only two private players in the field: Jet Airways and Air Sahara. In less than eight years even Sahara was swallowed by Jet Airways and as a consequence, Jet is suffering from serious financial indigestion. Jet’s idea was to keep Kingfisher Airlines away from the closest quality-conscious com-

What the private carriers told Vayalar Ravi was simply this: Please instruct Air India not to charge fares on various trunk routes, which was even below Air India's cost of operations.

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petitor, Sahara, and compete on foreign routes. Kingfisher did the same by acquiring Air Deccan at a takeover price of `155 per share which was seven-and-a-half-times more than what is being traded today. All this because Kingfisher boss Vijay Mallya wanted to rule the international skies and acquire as many foreign-going guests as possible. His auditors have now questioned if Kingfisher can even be described as a “going concern”. Mallya in order to ensure that his airline remains a “going concern” has decided to chop off Kingfisher Red, the low-fare arm and retain his baby, Kingfisher Class, and offer only full service. In a way both Naresh Goyal, promoter of Jet, and Mallya, promoter of Kingfisher, fell between the stools by taking disastrous decisions of acquiring airlines in order to garner market share. Today, these tough boys are running to the government to help them back on their stools again. Even more hilarious is the team they have constituted under the banner of the Federation of Indian Airlines (FIA), whose Secretary General, Anil Baijal, himself was a senior official of Ministry of Civil Aviation sometime ago. When he headed Indian Airlines and introduced the Delhi-Mumbai flights with his famous brand line, “On the Hour Every Hour”, competitors Jet Airways and Air Sahara were taken off guard leading Sahara’s then boss U K Bose to pioneer the concept of bidding for tickets on important trunk routes using the internet as a vehicle in India. This net-booking concept has caught on since then and has been able to prune heavy distribution costs as well as commissions which airlines are forced to pay for off-line booking. Anil Baijal actually made a difference to Indian Airlines’ bottomline — at least on the DelhiMumbai sector — by virtually sucking out the market. It was ironical when bosses of five of the private carriers accompanied by Baijal met Civil Aviation Minister Vayalar Ravi in New Delhi in mid-October to plead their case. Indeed, what was their case? What they told Ravi was simply this: Please instruct Air India not to charge fares on various trunk routes, which was even below Air India’s cost of operations. To back up their case, Naresh Goyal reportedly said Jet was now making a loss of `5 crore a day, and even IndiGo’s President Aditya Ghosh said his airline was reportedly making a loss of `one crore a day. As for SpiceJet, King-

fisher and GoAir whose bosses were also present at the meeting, they sang the same sad song. All the five airlines said they were making a loss of `20 crore a day and unless Air India was forced to charge fares above or at the level of its cost, there was no redemption for them. Their argument was that Air India had the government to fall back upon and it could do that but they had no godfathers! I can only laugh at the sermon they preached at Rajiv Gandhi Bhavan. Is it not true that when they launched services, they broke all rules of dropping fares below cost? Take IndiGo, for instance. Did it not offer so-called invitation fares when it launched flights to Dubai and Singapore? As a consequence, did SIA not mount more flights out of Mumbai at lower fares to keep up the pressure? Did this not hit Naresh Goyal’s Jet Airways and Mallya’s Kingfisher Airlines? As for GoAir it never looked like expanding for the first five to six years of its operations as it managed to fly with around eight to ten A 320s. But after it placed orders for 72 A 320s, it began to get pre-birth pangs

domestic skies, what will Jet do which also has a plan to increase its fleet size? In the next three years it hopes to add about 50 more aircraft, both wide and narrow body. IndiGo, too, has grand plans to add another 25 aircraft in the next two years and so will SpiceJet. In such a scenario, Air India, unable to decide if it should add more or subtract more from its fleet, decided to play its game of capturing market share by dropping fares. True, it will hurt Air India but the state-owned carrier has been hurt so many times in the recent past that the latest financial gash will not be as painful as the one when the private carriers were let in aggressively without giving it time to adjust immediately after the merger. I am not saying this but this was precisely what Tata-SIA had told the government at the time of bidding for Air India. Please freeze bilaterals for seven years before competition from within is allowed. Let me tell you a true story. The then expat CEO of Jet Airways in 1997-98 told me: “It is not a question of our supporting or opposing the entry of Tata-SIA in the Indian domestic skies. It is just a question of adjustment time, which we think should be at least ten years since we got into this business, which was in 1993.” So, what Jet was saying was that no new entrants should be entertained till 2003. And it happened the way Jet would have liked. But in 2004 or just before NDA quit office, a new concept — LCC — was introduced by Capt G R Gopinath when he launched his Air Deccan, which subsequently RECOVERING LOST GROUNDS: Air India planes lined up at Delhi airport. became Kingfisher Red and now is in the process of dissince it too may wish to fly abroad in the future. appearing. So, Jet got time to adjust and by So, what do these carriers do? A certain dai2005 all the present boys — both full-service ly published an item stating that the governcarrier Kingfisher and LCCs like IndiGo, Spice ment should not reserve the bilaterals for only and GoAir — entered the scene. The LCCs Air India and should also immediately dedropped fares to hurt full-service carriers Jet freeze them so that private carriers can begin and Kingfisher. The latter in turn carved out of flying those routes. The very next day Civil their fleet, a separate low-fare arm. Aviation Secretary Dr Nasim Zaidi rubbished When Air India suffered because of the such reports and said the private carriers were fare-dropping tactics of private carriers, all also Indian as much as Air India. these well-connected tough boys went to the It needs to be mentioned here that Jet Airgovernment. Vayalar Ravi told the private carriways, which takes great pride in its great proders to submit their grievances so that they can uct, is travelling in the opposite direction to be studied by his ministry. I only hope he does what Mallya’s Kingfisher is doing. Jet Airways not fall a victim to this campaign and let the has decided to sharply increase the low-costmarket forces decide. The rule of survival of the low fare segment of its fleet so that it did not fittest cannot apply to only Air India. miss out on price-sensitive passengers. At the (Veteran journalist and long-time aviationwatcher same time it is also offering a small business R Krishnan is Consulting Editor at CH. He can class on such flights as well. Obviously, with be reached at rkrishnanji@yahoo.com.) LCCs garnering increasing market share on the

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All the five private airlines said they were making a loss of `20 crore a day and unless Air India was forced to charge fares above its cost, there was no redemption for them.

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Facebook’s got Delhi Airport

H.C. Tiwari

Here’s another move by one of our own airports to enhance and facilitate passenger convenience. Delhi International Airport (DIAL) has launched its official presence on Facebook and Twitter. While the dedicated page on Facebook will have its id as https://www.facebook.com/DelhiAir port, the Twitter handle will be @Delhi_Airport. Speaking about the need to be on the social media sites, Continued on Page 42 CELEBRATION TIME: (L-R) Bollywood actor Diana Hayden; Scott Durchslag, President, Expedia Worldwide and Suresh Nair, Regional Manager & Country Head-India, Sri Lanka, Bangladesh, AirAsia posing after announcing Expedia AirAsia JV.

Expedia clicks with AirAsia to deliver the best n a first-ever alliance by an online travel company, Expedia has joined hands in a joint venture (JV) with top low-cost airline AirAsia to offer a complete range of flights, hotels, and holiday options for the Indian consumer. The tie-up between the world’s largest online travel company and the carrier globally heralds a new phase in the travel space in India and puts both in a winwin situation. Expedia’s global leadership position has taken a big leap with the AirAsia JV to emerge as the world’s largest and most intelligent travel market place. The JV — AirAsia Expedia — is headquartered out of Singapore with Dan Lynn as the CEO. Under the terms of the agreement, the JV Company has been formed to

operate Expedia Inc.’s branded businesses in Japan, India, South East Asia and other East Asian markets, as well as AirAsia’s AirAsiaGo and GoRooms businesses. The new venture will build on AirAsia’s unique local marketing expertise, along with Expedia’s world leading technology, and both companies’ travel products in the region and beyond. Expedia Inc. will have the exclusive distributorship right (outside of AirAsia.com) to sell AirAsia standalone flights and packages with AirAsia flight components in all other markets. The JV brings unparalleled value for Indian travellers by combining together Expedia’s over 1,40,000 hotel inventory with Air Asia’s wide network across the region to offer incredibly affordable rates to destinations in this region.

As the world’s largest and most intelligent travel marketplace, Expedia is focused on delivering an incredible value and travel experience to its global audience of consumers. The company has set new benchmarks with innovative and unique offerings, including exciting options like “build your trip, Zero fee” for its consumers worldwide. With this JV we have yet again, redefined the Indian travel landscape to deliver to travellers to South East Asia a ‘never before experience’ at the click of a button. Scott Durchslag, President, Expedia Worldwide CRUISING HEIGHTS November 2011

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HIGH AMBITIONS Expedia Chief on India plans and competition.

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IT LEADERS Amadeus and makemytrip receive awards.

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TOPS IN ASIA Travelport is best GDS in Asia-Pacific.

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“We want to be the best Indian online travel agency”

H.C. Tiwari

SCOTT DURCHSLAG, PRESIDENT, EXPEDIA WORLDWIDE, WOULD HAVE BEEN HAPPIER IF EXPEDIA WOULD HAVE ENTERED THE INDIAN MARKET EARLIER BUT NOW THAT THE ENTRY HAS COME - WITH A BANG, LITERALLY, AFTER THE TIEUP WITH AIRASIA, HE IS UNFAZED ABOUT THE COMPETITION. EXCERPTS FROM AN INTERVIEW WITH TIRTHANKAR GHOSH:

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How do you look at the online market in India? Well, it is very attractive. It is growing between 30 and 40 per cent, according to PhoCusWright. The Indian consumers have a very, very savvy nose for deals which is good for us because we can offer better deals than anybody else. Yes, we are competing with some of the local companies here and I wish we got here sooner, believe me! But they don't offer the global scale to be able to bring the same kind of value that we can bring. So that's how we are planning to compete.

Who are your main competitors here? We don't really focus on the competitors; we focus really on the endconsumer: How do we give them the best experience we possibly can? (How do we) Bring the benefits of 140,000 hotels and 438 different airlines. We think we can really delight the end-customer and reinvent travel and we will. So that is really where our focus is. Yes, there are the Yatras and the Makemytrips and other players. But if you take your eye off the ball and focus on how somebody else is playing the game and you don't focus on what really creates value for the end-consumer…. And that's what Expedia and AirAsia are all trying to do together in this joint venture.

Is your inventory growing? Yes we have. We are growing like crazy in terms of our Indian hotel inventory. I do see the growth opportunity rise in terms of domestic travel within India and we want to be able to meet the needs of Indians considering that they move a lot around India. Historically, usually Expedia is strongest with people travelling out of their markets to other parts of the world. When I look forward I think about growth and I think about growth in India and we are investing heavily with our market managers in different cities to build those relationships with hotels and make sure that we can bring value to Indian consumers.

What kind of investments have you made for this venture?

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We cannot give you specific figures but I would tell you that we are talking several tens of millions of dollars…that's in products, that's in technology, that's in brands and that's in people.

What prompted you to come to India? We know Asia really well and we saw tremendous opportunity to grow in Asia. Bringing together the world's largest online travel agency together with the best low cost carrier in the world gave us the opportunity to bring value to the Indian consumer. So that is really good… AirAsia is an amazing brand but it isn't just the brand, it's the quality of their customer service and the value of the deals. I mean nobody else is offering deals like this and that is exclusively available through this joint venture which is only for the benefit of the customers. So that's really the reason for this venture.

The Expedia brand means a lot of things to travellers… Well, I think our brand stands for the best choices. We are globally trusted in a way nobody else is in online travel and I think it is about delight, customer delight. We take care of our customers, we look after them. We believe we bring the best choices, we have the best deals, the easiest user experience and we stand by them with great customer care and that's one beautiful combination. And on top of that, you have the tremendous value and the exclusive relationship we have together with AirAsia, I don't think anybody can compete with us.

NetExpress

around Asia and that's still half of what it is in the US or the UK. That is over a 50 per cent online penetration there. I think there is a lot of room for it to continue to grow and I think the Indian consumer… more and more of them have had good experiences having booked online travel. All that will allow us to continue to accelerate. Word of mouth is important here (in India). have you made any changes on the website for the India market? Yes, we make changes all the time. There is a dynamic packaging tool that we talk about is taking advantage of the trend and the consumer research. We call it the experiential segment and there is the experimental segment that is growing particularly fast in India. It used to be -- when I was here in India (last), for example, the Indian tourists would want to go on a package tour and they made sure they got their food they were happy and comfortable with. They did not want to make a lot of choices. Not so today. They are much more savvy about wanting to customize what hotel they stay at, what activities they do and maybe even what airline they want to fly in. And that is what you can do with the dynamic packaging tool. For that we need partnerships. We have talked about one with Red Bus for bus transportation around India. We are obviously the biggest online travel agency, but we want to be the best Indian online travel agency. Our platform enables that.

What about the influence of the offline travel agencies? India's got a lot of other markets too but there is no question about offline travel agencies in India. They are not going to disappear in India anytime soon. I don't know the number offhand but there are some offline travel agents who have some way of giving real time inventory.

What does your research show on the growth of online travel in India? We expect it to continue to grow and as we can see from the numbers. It is already a surprisingly high number compared to some other markets

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How different is your website from the others in the Indian market? The basic model is similar but the individual dynamics can be different and we have the flexibility to be able to accommodate that depending on the market. Like I told you, we are not focused on competitors, we are focused on end-consumers. When we start (it is with the aim that) we want to delight the endconsumer. And then we engineer backwards everything we need from supply to demand to be able to bring together in a way that creates value for the consumer. And yes, markets are different and we need to adapt to it.

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Continued from Page 39

DIAL CEO I. Prabhakara Rao said, “We wanted to create an effective channel of communication with our customers, in addition to our already existing means like the feedback forms, information kiosks and email. Facebook and Twitter offer us, as well as our esteemed customers, an instant mode of communication and the ability to connect swiftly. Very soon we will be live on other social media platforms as well. Besides providing the required information, we intend sending useful updates on airport related facilities as well as any special offers and promotions that we would be undertaking from time to time.” “In India there are close to four crore Facebook users and also a huge number on Twitter, and both these figures are growing. With the majority of these being flyers or potential flyers, it makes eminent sense for going live on Social Media. In fact, our Terminal 3 has been getting complimentary tweets from all over the world, and with the launch of our official Twitter handle, we should be able to garner all these comments in the future on our page,” Mr. Rao added. According to an estimate by Facebook, Delhi and NCR combined have around 59 lakh users on Facebook and there are as many as 3.75 crore Facebook users in the country. Globally, the number has crossed 800 million. Interestingly, more than 50 per cent of these active users log on to Facebook on any given day. Currently, there are 100 million active twitter users, and of active users, 55 per cent tweet on mobile devices. To facilitate customers, on the Welcome page of Facebook, a micro website like look and feel has been created, which links directly to the mother website www.newdelhiairport.in for various passenger related facilities.

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China: From eyeball attraction to actual bookings

battle is on for eyeballs. Yes, it is in the online sphere in China. According PhoCusWright, travel industry research authority that finds out how travellers, suppliers and intermediaries connect, the on-line travel agencies (OTAs) attract more visitors than any other travel category in China, including supplier websites. PhoCusWright’s China Online Travel Traffic Report, created in partnership with global digital intelligence provider comScore, finds that nearly 30 per cent of visitors to a travel category website in China visit an OTA site, compared to just 5 per cent that visit an airline site, for instance. However, offline booking channels remain critical, even for China’s

online travel leaders. “China is home to one of Asia’s larger online travel markets, and yet only 14 per cent of the country’s Internet population has visited a travel category website,” says Douglas Quinby, Senior Director, Research at PhoCusWright. “China is also home to some of Asia’s great online travel successes, and these local market leaders have recognised that online travel success means robust and sometimes innovative offline support.” With online travel bookings in China projected to spike over the next several years, the competition to attract consumers will intensify — both within and across travel categories, comments PhoCusWright.

IT for improved passenger experience nvestment in IT by airports is rising as airports seek to meet the increasing expectations of passengers for self-service and a hasslefree experience, according to a new global survey launched recently. IT investment, as a percentage of revenue, rose to 4.4 per cent in 2010 and 81 per cent of airports expect IT budgets to remain the same or increase in 2012. Top investment projects for airports in the next three years are IT infrastructure upgrades and mobile services. The 8th annual SITA Airport IT Trends Survey co-sponsored by Airports Council International (ACI) and Airline Business, tracks airport technology trends. It is based on responses from almost 100 airport operators, representing the views of 198 airports, including more than two thirds of the top 100 airports by revenue, responsible for 43 per cent of global passenger traffic. The survey, which was launched at the 20th ACI North America Annual

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EASY NAVIGATION: IT has facilitated electronic check-in at many airports.

Conference in San Diego, found that ‘improving customer service’ is the top driver for new technology investment in airports with 63 per cent considering this their highest priority. Improving airport safety and security is also a high priority (53 per cent) with increased investment in technologies such as biometric identification, which is already implemented by 28 per cent of respondents at border control. Reducing

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madeus India, leading transaction processor and provider of advanced technology solutions for the global travel and tourism industry, Amadeus India has been awarded the ‘Excellence in Backend system’ award at the first ever Times Travel Awards 2011. Times Group launched Times Travel Honours 2011 to celebrate the excellence in Travel and Tourism, for remarkable achievements and celebration of extraordinary industry benchmarks. The awards were launched to recognise leaders in the travel and hospitality industry, including airlines, railways, tourism

the cost of business was ranked lower this year but remains a high priority for most airports (46 per cent). Overall, almost six out ten airports are planning major investments to upgrade their existing IT infrastructure to support new passenger and workforce solutions Airport IT spend in 2010 rose to 4.4 per cent of revenues compared with 3.6 per cent in 2009 with airports in Asia, the Middle East and Africa leading the way, reflecting the level of infrastructure investments in these regions. Airports in Europe are more cautious about future investments, with most keeping their IT spending static. The global outlook for 2012 looks positive with 81 per cent of airports expecting budgets to remain the same or increase. Passenger self-service continues to grow. Despite high levels of adoption, 53 per cent of airports are planning to increase the number of check-in kiosks. Some 25 per cent plan to introduce kiosks for new services including bag tag printing, flight transfers, and selfscanning of documents such as

recent addition by Microsoft’s Bing has been welcomed by flyers in the USA. The Bing search engine, which provides airline ticket search functions, launched the interior maps of 42 American airports. According to reports, the design allows flyers to get to the maps by searching for the airport’s name through Bing maps. And if Bing is queried for flight status, the reply serves an airport map link — an useful feature for navigating around any of today’s modern airports. Although most regular travellers know their way around, they too could get lost and that is where these airport maps come in handy. In fact, these maps would be very useful for travellers armed with smarphones - as most are — and would get rid of the chore of printing out airport maps. According to knowledgeable Googlers, Google has airport maps. However, they are often incomplete and without the check-in counters and restaurants available on the Bing map. Google is trying its utmost to provide uptodate maps and has even moved to the indoor mapping space, going so far as to provide Street

Amadeus India and Makemytrip receive Times Travel Honours

Deep Kalra

NetExpress

Ankur Bhatia

boards, taxi services and ticketing firms. Speaking on the achievement Ankur Bhatia, Managing Director, Amadeus India, said “This further strengthens Amadeus’ commitment towards developing breakthrough products and solutions for its partners and customers.” Along with Amadeus, Makemytrip.com was awarded as the Best Online Travel Services firm and as the Best Domestic Tour Operator. In fact, the Gurgaonbased travel portal’s founder Deep Kalra was named the Deal Maker following the firm’s successful IPO listing in the US.

passports. By 2014, some 38 per cent of respondents will have introduced e-gates for self-boarding and 42 per cent will have e-gates for check points (9 per cent have them today), both of which will help to reduce queue times and speed up processing. And 51 per cent will have introduced common-use bag drop locations by 2014. The survey highlights the continuing growth of social media channels to communicate with passengers and public communities, particularly to handle complaints, give flight information and emergency updates. Nearly half of respondents already use mobile services to provide flight information and operational updates with over 80 per cent saying they will by 2014. Another IT solution identified by airports to improve operational efficiency is passenger flow monitoring. The data enables airports to identify bottlenecks and queues so that they can take action to reduce congestion and wait times, which helps improve the passenger experience.

CRUISING HEIGHTS November 2011

Bing your way around an airport

View shots inside businesses for Google Business Photos. It will be able to provide a Street View for airports soon. In the meanwhile, Bing has the right answer — although it is restricted to 40-odd US airports. While it is of great value to the genuine user, there are fears that terrorists could make use of these airport online maps instead of scouting out the locations ahead of time.

NetExpress

D I G I T A L

Travelport is Asia-Pacific’s best GDS recent addition by Microsoft’s Bing has Travelport, the business services provider to the global travel industry, which has been named ‘Best GDS’ in the AsiaPacific region for the third year running. Announced at the 22nd Annual TTG Travel Awards Ceremony held in Bangkok, the award reaffirms Travelport’s position as Asia-Pacific’s leading GDS provider. “We are delighted to be recognised by our industry peers once again in what’s been three very exciting back to back wins. This achievement reflects and further reinforces our commitment to delivering the best in class technology, products and service to the industry,” said Simon Nowroz, President and Managing Director, Asia-Pacific, Travelport. “As we celebrate our 40th anniversary this year, 2011 has proven to be an important milestone for Travelport with the successful launch of three ground breaking products, including Travelport Universal Desktop, Travelport Smartpoint App and Travelport Rooms and More,” Nowroz added. According to JB Singh, CEO, Interglobe Technology Quotient, “We are very excited on Travelport receiving this coveted recognition once again. This only reaffirms Travelport’s commitment to the industry and its long standing performance record that has been maintained for years now in the Indian travel industry.”

J B Singh

T R E N D S

F O R

T R A V E L L E R

E X P E R I E N C E

Facebook will impact travel n article by Travis Pittman, coHowever, I still believe there may be founder and CEO of TourRadar, some ramifications from this latest points out how Facebook would update: have an effect on the travel industry. 1. Travellers Pittman writes: Watching the As more businesses integrate the new livestream of the Facebook F8 event, I frictionless sharing feature of the Open was curious to see what ‘BIG’ news the Graph to their websites and Fan Pages, young billionaire Mark Zuckerberg was there is an increased chance of friends about to announce. being inspired by their friend’s activities Curious on one hand to know how during the planning phase and potentially their updates would affect my own joining them (or at the very least, telling business, but also curious to see how them which sites their friends use in their Facebook was going to extend its lead travel planning). over the recently launched Google+ I’m sure it would be platform. interesting/distracting for people who are Facebook promised a lot and, in some about to plan a trip of their own, are ways, delivered on that promise. having a bad week at work or haven’t As with any Facebook update (when taken a holiday in a while when they see a you have 800 million users to please), flow of messages like: there has been many an opinion already “Travis booked a flight on thrown out to the Expedia to Cape Town”, blogosphere and tech world. “Travis read a review about Opinions ranging from xyz hotel in Cape Town on praise for its Apple-like TripAdvisor”, “Travis foresight of producing a compared 5 tours of South product that we didn’t know Africa on TourRadar”, etc. we needed until they built it …to eventually things for us, to more angered like: opinions at how Facebook is “Travis boarded his flight attempting to further to Cape Town on Virgin infiltrate everything we do by Travis Pittman Atlantic”, “Travis ate a steak becoming the ultimate online at a Cape Town steak restaurant”, “Travis receptacle for our entire lives. was at Kruger National Park” and “Travis In the last couple of days I’ve dug added 154 new photos to the album further into the new Open Graph “South Africa Safari” developer documentation Facebook. In doing so, I have attempted to briefly 2. Businesses summarise how the Open Graph changes Even before this change, Facebook may affect its users and the travel provided a great channel for businesses to industry. engage socially with its customers. With With its “Gestures” update, Facebook this update, the opportunity is now even has gone from a single-dimensional bigger and it would be very naive for any “Like” button to something so multibusiness to ignore Facebook. dimensional and limitless that it makes Whether this created easily by adding Google’s new +1 button look a little, well, pre-built apps to your Fan Pages (where basic. A year ago, the use of the “Like” 3rd party app developers have to deal button went crazy as soon as Facebook with the complexities and continual allowed people to integrate it to any updates of the Facebook developer website. platform) or through custom apps built to So what started out as Facebook users heavily integrate into a business’s going all out and liking everything and website, mobile apps, etc to capture and anything has now scaled back to a point broadcast information back to Facebook where people are much more selective in about the stuff people are doing. what they appreciate digitally these days. I see the challenges for businesses So, Facebook needed a way to turn this will be in what messages they push from trend around and start another content their apps to the ticker. Too many sharing explosion. Now instead of just messages about every single activity a being able to “like” a book, users will be user does will flood the ticker very able tell friends when they have “read” a quickly and cause a user’s friends to book… Or, in the case of the travel select the “Report story or spam” option industry, “booked” a flight, “hired” a car, — a move which no doubt will harm the stayed” in a hotel, “done” a tour, performance of the app. “reviewed” a point of interest.

CRUISING HEIGHTS November 2011

P42

P44

BELL FLIES HIGH

ECO WARRIOR

Textron Inc bags contracts in Russia, Europe.

n what is being described as a major innovation towards making helicopters safer, Eurocopter has tested a hybrid chopper that combines a turbo shaft internal combustion engine with an electric motor. The success of this technology has opened the way for further enhancements in rotary-wing aircraft safety. For the initial breakthrough in exploring the hybrid concept, Eurocopter used the supplemental electric system to increase manoeuvrability of a singleengine helicopter during an autorotation landing â&#x20AC;&#x201D; which is performed by helicopters in the event of a main engine failure. Eurocopter used a version of its highly successful light single-engine AS350 to demonstrate the viability of this technology. The technology demonstrator has

www.navy.mil

Courtesy: Bell

FOCUS ON â&#x20AC;&#x2DC;COPTERS been equipped with a supplementary electric motor, so that in the event of an engine failure, the electric motor would provide power to the rotor, allowing a pilot to control the helicopter very easily during the descent to a safe touchdown. The next step of course is to bring this concept to maturity and evaluate its implementation on Eurocopter's series production helicopters. "Eurocopter's R&D efforts are used every day to push the frontiers by increasing helicopter safety and performance for the benefit of our customers, and we are proud to have brought the first helicopter equipped with an internal combustion engine and electric propulsion system to flight," said Lutz Bertling, Eurocopter President and CEO. He further added that, "Hybrid propulsion is an important element of

US Navy UAV chopper takes off on biofuel. Eurocopter's innovation roadmap in developing the next generation of helicopters. It offers new opportunities for improvements in safety, along with the potential for reducing fuel consumption and emissions." The highly compact electric motor and lithium ion polymer battery are installed in the centre area of the AS350 hybrid demonstrator helicopter. Thus, the electronic controls enable precise deployment of power delivered by the electric motor during the period of autorotation. Eurocopter's AS350 is one of the most successful helicopters, with more than 4,000 aircraft in service worldwide having logged more than a million flight hours as of 2010. It excels in hot conditions and very high altitudes, holding the record as the only helicopter to have landed on top of Mount Everest.

New hybrid chopper creates waves

CRUISING HEIGHTS November 2011

FOCUS ON â&#x20AC;&#x2DC;COPTERS

Bell Helicopter bags contracts in Russia, Europe

IAF to hire choppers!

Due to an acute shortage and the low serviceability of its existing transport fleet, the Indian Air Force (IAF) is seeking to lease helicopters from the private and public sectors to meet operational needs in border areas. Private operators and public sector companies have been invited to participate in an open tender for airlifting stores and personnel for the Indian Army in the Eastern and Northern sectors. This is an unusual move because the Indian Air Force has relied on its own resources to transport supplies and men to forward locations so far. The IAF wants to hire helicopters to fly to posts along the Line of Control on the border with Pakistan and the Line of Actual Control on the border with China, including border landing strips in Tawang and sensitive locations in Jammu and Kashmir. In the tender, the IAF has mandated that only Indian firms will be allowed to participate and the air and ground crews will need to be Indian nationals and will be vetted by the Intelligence Bureau. The Indian Air Force requires private operators to airlift supplies to 60 locations in the northern sector besides 24 locations in the eastern sector. The requirement is for choppers that can carry up to 2,000 kg of supplies and can land and take off from high-altitude locations. The requirement has been floated due to the growing necessity to airlift supplies and winter stores to Army troops located along the border, according to sources. The last time private operators were roped in was in the 1950's when Kalinga Airlines flew transport sorties in the North-East.

Bell Helicopter, a Textron Inc. company, announced the signing of three purchase agreements, received during the sixth International Business Aviation Exhibition Jet Expo in Moscow and the Helitech Conference in Duxford, United Kingdom. The contracts include agreements for Bell 429 and Bell 407GX choppers. The agreements are proof of Bell's continuing growth in the European and Russian markets. "The Bell 429 features a state-of-the-art glass flight deck that enhances crew situational awareness for the demanding European and Russian markets," said Patrick Moulay, Bell Helicopter's Managing Director for Europe, Russia and CIS regions. Entering service in April 2010, the Bell 429 continues to gain market momentum with orders placed in more than 20 countries around the globe and recently, Bell Helicopter received Russian certification. Currently, the Bell 429 is operating in all of the major industry segments, including the helicopter emergency medical services, law enforcement, oil and gas and corporate/VIP.

Mexican state takes delivery of S-70i

The Jalisco state government in Mexico has become the first to acquire the newest variant of the world's most-employed military utility aircraft: the S-70i Black Hawk helicopter. Jalisco state police will deploy the helicopter for law enforcement. The S-70i Black Hawk helicopters are manufactured at Sikorsky's production facility in Mielec, Poland and designed specifically for the international marketplace. This delivery to Jalisco marks the fourth successful export of an S-70i aircraft from PZL Mielec in a span of 60 days. The S-70i aircraft arrived in Mexico aboard an IL76 cargo plane from Poland less than four months after the state placed the order with Sikorsky.

CRUISING HEIGHTS November 2011

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FOCUS ON ‘COPTERS

UAV chopper takes off on biofuel

The MQ-8B Fire Scout Unmanned Aerial Vehicle (UAV) of the US Navy has been successfully flown on biofuel. This makes the unmanned helicopter the US Navy's first UAV to use biofuel technology when it took off on a blend of JP-5 aviation fuel and plant-based camelina. The US Navy says that the use of this blend cuts carbon dioxide output by 75 per cent when compared to conventional aviation fuel. The Fire Scout flight is part of an effort by the US Navy towards increasing energy independence and clean-energy economy. Seven aircraft have been tested using biofuels in total, including the supersonic F/A-18 Super Hornet. The Northrop Grumman-manufactured Fire Scout is designed to operate from all air-capable ships. With its autonomous takeoff and landing capabilities it is already in use at sea and the system is currently providing intelligence, surveillance and reconnaissance support.

Russian helicopters arrive in India

Fed up of the rush hour gridlock in London, Hollywood heartthrob Brad Pitt has hired a helicopter to fly over the traffic snarls. According to the Daily Mirror newspaper, the 47-year-old actor chartered the chopper so that he could avoid the "sick" traffic rush while travelling to various parts of UK to shoot his latest movie, World War Z. The movie involved filming all around the UK, including in Cornwall, Billericay and Essex. And that meant that Brad and partner Angelina Jolie used to spend considerable time on the road commuting from Richmond in south-west London where they had set up base. Incidentally, the Hollywood hunk was zipping around in a chopper that belonged to supermarket chain Iceland.

India withdraws choppers from UN mission

India has withdrawn all its attack and transport helicopters from the United Nations mission in Congo, citing their requirement in domestic security roles. The last four of the Russian-origin Mi-35 attack helicopters — used for close-air support during assault operations on ground targets — that were operating in Congo in aid of UN blue berets have returned to India and will soon join their duties in support of the army troops. Eight Mi-35 and Mi-25 attack helicopters and another nine Mi-17 medium-lift cargo helicopters were deployed in the UN peace enforcement mission in Congo. The Mi-25s and Mi-17s were withdrawn earlier this year in a phased manner. The IAF had informed the Defence Ministry

Brad Pitt hires chopper to beat traffic

that it was forced to cannibalise parts out of other helicopters to maintain its Mi-35 and Mi-25 attack choppers in Congo in fighting-fit condition. The cargo choppers have already been redeployed in India in traditional logistic duties in support of army troops in Jammu and Kashmir and the northeastern states, and in domestic security roles in aid of state police and central paramilitary forces fighting the Maoists.

CRUISING HEIGHTS November 2011

www.ofcelebrity.net

The first batch of a new lot Russian Mil Mi-17 helicopters has arrived at an air base in the Indian northwestern state of Punjab. For years, India's Air Forces has been using Russian Mil Mi-17 helicopters in the rough mountain terrain in the states of Ladakh, Arunachal Pradesh and Himachal Pradesh. The latest batch consists of upgraded versions of the helicopter to be used for the transportation of troops and military vehicles and for rescue and emergency operations. The $1,354-billion contract for the supply of 80 helicopters was clinched in 2008. The assembly work and the checks on the new arrivals were performed by Russian experts accompanying the cargo.

LAST IN/FIRST OUT

IATA caution on shrinking air freight market

LIKE A FALLING star, the decline in freight markets has been accelerating. The 3.8 per cent contraction in freight markets recorded in August was more than double the pace of July’s 1.8 per cent decline, according to the International Air Transport Association (IATA). “The industry has shifted gears downward. The pace of growth in passenger markets has dipped and the freight business is now shrinking at a faster pace. With business and consumer confidence continuing to slump globally there is not a lot of optimism for

improved conditions any time soon,” said Tony Tyler, IATA’s Director General and CEO. Comparisons of July to August more clearly indicate the slowdown. The total cargo market fell by 1.3 per cent. During the second half of 2010, weakness in air freight represented a loss of market share to other transport modes. In 2011, air freight reflected the lack of growth in overall world trade volumes. This latest decline shows a further deterioration in global economic conditions. The decline has been most prominent in the largest markets. North American carriers reported a seven per cent fall in cargo volume for August (compared to the previous year), followed by carriers in Asia-Pacific (-5.4 per cent) and Europe (-1.8 per cent). Operators in Africa (+2.2 per cent), Latin America (+5.4 per cent) and the Middle East (+3.7 per cent) remained positive. Overall, utilisation on freight markets has declined four percentage points since the second quarter of 2010. Coupled with falling volumes this has made the freight business a very difficult market in which to sustain profitability.

TIACA wants end to ETS THE INTERNATIONAL Air Cargo Association (TIACA) has called upon other associations, businesses and international governments — India is one of them — to intensify efforts to bring about a review of the European Union’s Emissions Trading Scheme (ETS) after the Advocate General of the Court of Justice of the European Union (CJEU) recommended that the inclusion of international aviation in scheme is compatible with international law. TIACA, in a letter to EU Climate Action Commissioner, Connie Hedegaard, asked the EU to suspend implementation of the controversial programme in favour of the development of a global agreement on aviation carbon emissions by the International Civil Aviation Organisation (ICAO). This approach, it stated, was in keeping with the recommendations of The Kyoto Protocol, which designated ICAO as the body with authority to set international aviation’s greenhouse gas policy. TIACA also highlighted a number of key concerns about the Emissions Trading Scheme to the Commissioner, stating it was in violation of international law and treaties. The Association said not only would the scheme impose massive new taxes of aviation, it was also unlikely to improve the environment. It also gave evidence of how the scheme might encourage airlines to fly less direct routes.

“The significant hurdle to growth and efficiency remains our perennially inadequate and inefficient airport infrastructure, as also the absence of any coordinated initiative to effect the required changes.” ) Bharat J Thakkar President,AirCargoAgentsAssociation ofIndia,on the issuesthatconfront India’saircargo industry.

CRUISING HEIGHTS November 2011

TRENDS

Pre-emptive measures SWISSWORLD Cargo chief Oliver Evans offers a few word of advice in his blog on how to counter the downward movement of the air freight market. Pointing out that “numbers are heading downwards in region after region. Optimism is Oliver Evans hard to find when the euro is threatened, and unprecedented amounts of debt are piling up like snowdrifts in a blizzard”, Evans wonders whether this is a full-scale recession. While it is too early to say, he says it is time to prepare for the unknown. His first advice: Be aware. “To the sharp-eyed, an economic crisis is preceded by a multitude of signs that are open to observation, interpretation, and action,” he says. “Pay even closer attention to numbers”. Add to that awareness and experience and lastly, “this elusive thing called gutfeeling.” Evans says in his blog that all this does not sound like scientific research but it is “awareness which we need as we scrutinise the horizon for developments such as structural shifts in trading patterns or changing moods in certain markets. Why? Because it will cut down on our reaction time when the weather really is changing for the worse”.

COVER STORY

A BOOST FOR FULL LOAD: An Emirates SkyCargo plane being loaded.

LONG HIDDEN BEHIND THE GLAMOUR AND GLITZ OF PASSENGER SERVICES, AIR CARGO SEEMS TO HAVE FOUND ITS VOICE – AT LAST. NO LONGER IS IT CONTENT TO BE A HANDMAIDEN: IT NOW WANTS TO BE THE BRIDE. TIRTHANKAR GHOSH LOOKS AT AIR CARGO AND AND ITS FUTURE. 46

CRUISING HEIGHTS November 2011

AIR

Things are moving ahead and the signs on the air cargo front are encouraging. While the Rajiv Gandhi International Airport has launched the country’s only dedicated Pharma Zone, at Delhi, plans have been drawn up to take cargo facilities to the big leagues.

CARGO, BUT... A

The growth and potential notwithstanding, there are some disturbing strands: Homegrown dedicated cargo carriers have never really taken off. Start-ups like Capt G R Gopinath’s Deccan 360 and Capt Mukut Pathak’s Aryan Cargo Express (ACE) have had to suspend services.

lways considered an ‘also ran’, the air cargo industry in the country has raised its head to make its presence felt. Those connected to the industry have been making demands to be considered at par with the passenger all these years but theirs was a voice in the darkness heard often but never really paid attention to. As Bharat Thakkar, President of Air Cargo Agents Association of India (ACAAI), the apex body of the international airfreight forwarders, put it rather bluntly, “ACAAI’s role until recently was whispered.” Today, as the country moves ahead in the race towards globalisaton, the air cargo fraternity’s presence — that has been always felt by all civil aviation stakeholders throughout - is at last being acknowledged. Air cargo has indeed moved at a fast clip. Since the end of last quarter of 2009 (the 2008-2009 period was a gloomy one), business has blossomed with 2009 -2010 witnessing a resurgence in air cargo: the sector saw a growth of roughly 6.8 per cent with international air cargo registering an even stronger growth of about 7.5 per cent. In fact, former ACAAI President J Krishnan had predicted a year ago — on the eve of the 2010 annual ACAAI conference in Bengaluru — that the country’s air cargo industry was expected to double its growth rate in the last fiscal year ending March 2011. “Things have changed. There is positive growth this year,” he had said. He went on to say that in fiscal year 2010-11 (April 1, 2010 to March 30, 2011) the industry was expected to grow 12 per cent to 14 per cent as intra-Asia trade was gaining a lot of momentum. Added to that contribution from the Special Economic Zones. The Vision 2020 paper prepared by the Ministry

AIR POCKET: File photo of Capt G R Gopinath (centre) at the launch of Deccan 360

CRUISING HEIGHTS November 2011

COVER STORY of Civil Aviation too projects an optimistic view. The air cargo industry will be expected to reach 9 million MT by 2020. According to the vision, the aviation sector will have the potential to absorb up to $ 120 billion of investment during the period while the sector will have the potential to absorb three million jobs directly. With such a growth and with changing times, the air cargo industry’s participation and role have become wider and vocal. On its part, the civil aviation authorities too have come forward. Taking off from the CACG (Civil Aviation Cargo Group) that was set up in 2007 and later renamed the Forecasting Committee, we have a group that is formulating an Air Cargo policy. At the beginning of this year, the Ministry of Civil Aviation set up a working group on air cargo/express service industry under the Civil Aviation Economic Advisory Council. The move followed the decision that had been taken at the first meeting of the Council held in December 2010. Additionally, the Ministry was also aware of the the projected rapid growth in air freight. Comprising representatives from the airline industry, airport infrastructure developers, cargo associations, airport operators, Customs and the Ministry, the working group has been entrusted with the preparation and presentation of the current status of the industry, assess its growth potential in India and formulate a draft policy. The working group — it has had a number of meetings — has also studied the existing system of air cargo/express delivery services in the country and pinpointed the areas that will require enhancements. Even before the working group submits its Air Cargo Policy, things are moving ahead and the signs are encouraging. Take the privately-controlled Rajiv Gandhi International Airport (RGIA), for example. Last year, it launched the country’s only dedicated Pharma Zone in an airport. According to Hemanth D P, Chief Operating Officer at GMR Airports, “With double-digit export growth of pharma in terms of percentage in the last five years and the same projected for the next couple of years, we (at Hyderabad) realised the need to focus on this segment of the market.” Spurred by the pharma industry, Lufthansa Cargo and the GMR group (promoters of RGIA) signed a Memorandum of Understanding to promote the airport as a South Asian cargo hub, especially in the supply chain of pharmaceuticals. Today, Lufthansa supports the terminal with increased widebody freighter frequencies, capacities and sophisticated state-of-theart temperature-controlled transport solutions for time and temperature-sensitive pharmaceutical products.

The Airports Authority of India (AAI) has started to enhance cargo operations at its airports. V P Agrawal, Chairman, AAI, said: “The Authority is in the process of developing regional airports in southern India so that Chennai airport may be developed as a cargo hub for the southern region”

It is not only at Hyderabad that cargo facilities are looking up. The country’s privately-managed airports at Delhi, Mumbai and Bengaluru too have been seeing changes. Mumbai and Delhi, for instance, will soon have world class cargo handling services provided by Cargo Service Center India (CSC India). Led by Radharamanan Panicker, CEO, and backed by a team of more than 700 trained staff, CSC hopes to bring about a sea change in the handling of the air cargo business. At Delhi Airport’s cargo facility, CSC has chalked out plans to take it to the big leagues. The Delhi Cargo Services Centre (DCSC), a special purpose vehicle (SPV) of Delhi International Airport Pvt. Ltd. and CSC, has signed on Siemens to set up a state-of-the-art cargo handling equipment for the Integrated Cargo Complex at the airport. The 70,000-square metre Greenfield air cargo complex at the airport will comprise two terminals. The complex, entailing an investment of $80 million, will have the capacity to handle close to a million MT of cargo when fully completed. While the first phase of the project is ready for commissioning by July 2011, the project is scheduled for completion by March 2012. The Delhi move follows the CSC’s first facility for Mumbai airport. Designed, developed and built on an area of 2,000 square metres, the Perishable Cargo Terminal at Mumbai airport caters to perishable and temperature-sensitive cargo. Capable of processing and handling 40,000 MT-45,000 MT of cargo per annum, the “new Centre,” Panicker said, “will aim at restructuring the basic cool chain logistics approach to achieve a quantum leap as far as performance is concerned.” Bengaluru International Airport Limited (BIAL) too is getting ready for cargo growth - it is expected to grow at around 9

TOP OF THE LINE: Hyderabad Airport's cargo facilites are the best available in the country

CRUISING HEIGHTS November 2011

per cent during 2011-12 - and a number of new initiatives have been taken. Hari Marar, President-Airport Operations, BIAL, recently told this correspondent that the airport was being positioned as the future cargo hub of South India, that would connect the West to the East. Among the initiatives are the setting-up of a transshipment facility, plant and animal quarantine facilities, a drug controller office along with a textile committee office to aid garment exporters. On its part, the government-controlled Airports Authority of India (AAI) that handles 125 airports - big and small - has started to enhance cargo operations at its airports. Looking at the high growth rate of exports, V P Agrawal, Chairman, AAI, said: “The Authority is in the process of developing regional airports in southern India so that Chennai airport may be developed as a cargo hub for the southern region.” The airport at Chennai, for example, is being revamped to serve as a cargo hub for the southern region once all the construction activities are complete. Looking at the huge opportunities in the perishable sector, the AAI has launched a programme to set up centres for perishable cargo. While such centres exist at Kolkata and Chennai airports -both airports are under AAI-the government, too, has initiated a policy to encourage cold storage facilities at airports. In fact, perishable centres have been set up at a number of places such as Amritsar, Coimbatore, Guwahati and Lucknow airports. Perhaps, one of the major issues that confronts the air cargo stakeholders in the country today concern the charges that are levied by airport operators. In their bid to put an end to these galloping charges, air cargo stakeholders have appealed to the Airports Economic Regulatory Authority (AERA) to come to their rescue. Unfortunately, the two-year-old (it completed its second birthday in May 2011) Authority’s Chairman Dr Yashwant Bhave admitted that he could do little because the cargo part of Indian aviation remained outside

PLEADING: (Left) ACAAI President Bharat Thakkar addressing ACAAI and Bombay Customs House Agents Association to press for better services from MIAL and (right) the congestion outside the cargo area at Mumbai airport.

ACAAI mentioned that while the air cargo industry's progress was gaining momentum despite the deficiencies in infrastructure, once the facilities improve it “can ultimately revolutionize the Indian air cargo industry” CRUISING HEIGHTS November 2011

his purview. Speaking at an aviation summit sometime ago, Blue Dart Managing Director Tulsi Mirchandaney pointed out, on behalf of the air cargo sector, that while AERA was looking closely at matters related to airport economics, there was no one to look at issues that governed the economics of the air cargo industry, especially the way in which the airport operator levied charges and changed them at will. This was in addition to the poor infrastructure facilities faced by the air cargo community. Mirchandaney said that the last 30 years had seen changes in the profiles of air cargo customers — much of it brought about by globalisation and outsourcing. The two had, in fact, changed the economics of the air cargo industry. According to a World Bank study, efficient logistics have seen country GDPs moving up by 0.5 to 1.5 per cent. Airports across the world have played a major role in ensuring efficient logistics. Unfortunately, despite rising GDP over the last decade and a virtual explosion in exports in the last three or four years, India today ranks 47 in air cargo movement in 2010, according to a survey. It may be mentioned that while India was witnessing major changes in airport economic reforms, cargo has not yet got the necessary priority in India which other Asian giants had -- and continue to -- given it even today. Take the case of charges levied for air cargo movement in South Korea in the last two years: these had actually dropped rates by 20 per cent. In India, however, it rose eight times. With air cargo charges not under the purview of AERA, it is not surprising to find airports levying hefty airport charges. It has come to such a pass that a large section of air cargo stakeholders are hesitant to make investments. Many have pointed out to this correspondent that there were, for instance, discounts for all scheduled airlines if they paid their dues to airports on time. However, such facilities were not

COVER STORY

n its background paper circulated to air cargo stakeholders, ACAAI has adopted a cautious approach. It pointed out that “our economic environment has been severely challenging, and yet not as harsh as that faced by the Western economies”. Even though the pace of change around us remains rapid, it is slower than had earlier been forecast and the interdependence of globalised markets has never been felt in a more pronounced manner as it is today. The apex trade body has mentioned that the common agenda that cuts across all stakeholders is one of “basic survival for many, and for the more fortunate, retention of markets, margins and manpower”. Heralding the new alliances that are being forged while “erstwhile relationships” are being redefined, ACAAI said that core competency had started receiving greater

available to the cargo industry. Air cargo stakeholders said that these factors had continued to impact the air cargo industry and were having a direct bearing on the quality of services rendered. The charges for airport facilities had to reflect the infrastructure and services. “Increase in tonnage, for example, does not require expensive extensions of vast corridors of carpeted terminals or additional food courts warranted by increase in passenger numbers. Cost competitiveness has a direct impact on the air express operator’s costs and the customer and the country’s trading competitiveness,” mentioned Mirchandaney. India’s exports have been going up: exports were worth $ 24312 million in August 2011. The exports amounted to 22 per cent of India’s GDP. While gems and jewellery constituted the single-largest export item, accounting for 16 per cent of the exports, there were textile and engineering goods, chemicals, leather manufactures and services. With such figures, the industry argued, AERA needed to look into the fees levied by airports and force the promoters to adopt non-discriminatory charges and levies. However, what AERA Chairman Yashwant Bhave had said was not reassuring at all. In fact, he pointed out that the regulation process in India was still evolving and it would not be possible to import any ready-made framework from abroad. The air cargo stakeholders would have to wait till the new Air Cargo Policy is accepted and, of course, implemented. The growth and potential notwith-

STAKEHOLDERS’

AGENDA

attention. The search is on for new methods, new deliverables as new revenue streams intensify in every industry vertical. The paper cautioned that there were still a lot of problems that the industry faced with the most significant hurdle to growth and efficiency being “our perennially inadequate and inefficient airport infrastructure, as also the absence of any coordinated initiative to effect the required changes, improvements, streamlining, rationalisation and productivity enhancement so critically required”. This is the environment in which the Indian airfreight forwarder oper-

The facilities available at all airports were grossly inadequate to handle current levels of cargo. The only answer would be the setting up of offairport facilities like cargo villages and airfreight stations CRUISING HEIGHTS November 2011

ates, states ACAAI. At almost all the yearly ACAAI conventions, the organisers make it a point to bring together all the players in the industry - the airlines, airports, custodians, handling agents, forwarders, civil aviation authorities, technical experts and service providers - and most importantly, the customers who all these serve to iron out the issues that give rise to the speed bumps faced by the sector. Said President Bharat Thakkar: “This year's convention will focus attention on the opportunities that beckon us to conquer the air cargo skies, the specific challenges faced by the Indian air cargo industry, the seemingly insurmountable airport infrastructure imbroglio, and the solutions being jointly sought by industry leaders.” He went on to say that “important issues will be debated, such as decongesting our airports, global benchmarking of all

standing, there are some disturbing strands. Homegrown dedicated cargo carriers have never really taken off. In fact, the start-ups — Capt G R Gopinath’s Deccan 360 and Capt Mukut Pathak’s Aryan Cargo Express (ACE) — have had to suspend services for a variety of reasons. On the other hand, cargo carriers — whether transported as belly or maindeck — especially those from the Middle East have also ramped up services. And so have carriers that serve the China market like the Hongkong-based Cathay Pacific. Cathay Pacific, incidentally, has been looking at the “growing” Indian market closely and between June and August this year introduced new freighter flights from the southern cities of Chennai and Bengaluru. The biggest freighter operator in India, Cathay, in fact, did a lot of background work before the launch of its freighter services to Chennai. Said Tom Wright, Cathay’s General Manager- India, Middle East, Pakistan, Nepal, Bangladesh and Sri Lanka, “Ever since the freighter services were launched from Chennai to Hong Kong in 2006, the route has performed well.” Cathay’s move to link India with Europe has taken the competition to the doors of the European carriers. Buffeted by the onslaught from the Middle East — with carriers like Emirates and Qatar —keen to boost their own hubs in Dubai and Doha, Lufthansa and other carriers could find the going tough over the next few months. Take the Middle Eastern carriers, for instance. Bucking the recession, the

operational services and deliverables; immediate steps to improve the infrastructure, process efficiency and costs at the airports; as also cooperation and mutual accountability between all players”. With an eye to the future, the delegates attending the convention will examine the establishment of off?airport Air Freight Stations (AFSs), forwarders' bonded terminals, the cargo village concept, etc, and corollary issues. One of the major points of TIME TO LIGHT UP: The inauguration of the 2010 ACAAI conference in Bengaluru discussion will be the regulatory environment in which the air cargo Over the last few years, ACAAI has industry operates. This will include been carrying on a dialogue for the Customs initiatives and EDI, a practical IATA Indian Air Cargo Programme, approach to aviation security, indirect which seeks to re?define the crucial tax enigmas, and the rationale for airrelationship between the airlines and port charges. forwarders. The matter is still to be

UAE-based Etihad like its sister Gulf carriers - Emirates and Qatar - has gone into fast forward mode and taken the competition to the very doors of the European airlines. Etihad has enhanced its freighter services spreading wings to newer destinations. This year the carrier announced that it would boost frequencies on five key European routes in 2011 and increase capacity on other routes. All would touch the Abu Dhabi hub. Etihad Crystal Cargo, the carrier’s cargo division, is keen to ensure that the Abu Dhabi International Airport turns into a cargo hub that can compete with the ones at Doha and Dubai. The government at Abu Dhabi has every reason to boost cargo: Last year, air cargo volumes grew to 438,000 tonnes at the airport — a whopping 16 per cent growth primarily due to the new A330-200 freighters that Etihad inducted into its fleet. These freighters with a capability of transporting 65 tonnes each bring in cargo to the Abu Dhabi hub from where it is sent out on Etihad’s passenger carriers to Europe, the US, etc. In a move that would raise the status of the cargo hub, the Abu Dhabi Airports Company (ADAC) has planned to hive off the cargo facilities to private operators. One of the major reasons for the push towards privatisation is the fact that the present cargo centre is, according to James Bennett, ADAC’s CEO, old and “with limited expansion abilities”. Barely 300 km away from Abu Dhabi, Qatar Airways is looking forward to the Doha International airport opening in fourfive months. With the government’s proaviation policies, Qatar recently surprised

The Vision 2020 paper projects an optimistic view: the air cargo industry will be expected to reach 9 million MT by 2020 and the aviation sector will have the potential to absorb up to $ 120 billion of investment during the period CRUISING HEIGHTS November 2011

resolved. Despite agreement on a number of issues, “certain tangential re?thinking has obfuscated the settlement of this vital dialogue and a dedicated session on this subject will explore the way forward,” said Thakkar. Another major subject and one that ACAAI has been pursuing over the last few years is the role of technology that has become crucial for the air cargo supply chain. On its own, ACAAI took the initiative to launch the industry EDI platform UPLIFT that was developed by Kale Logistics Solutions. At the convention, there will be “discussions on the areas in which technology will enhance processes, reduce both cost and time, and enable the delivery of services at global standards,” said Thakkar.

the international air cargo industry when it took a 35 per cent stake in Europe’s leading cargo airline Cargolux. It was a well conceived move: Qatar has now got a firm grip on the global cargo business radiating from Cargolux’s Luxembourg hub. This, of course, will be an addition to the belly cargo transported to Qatar Airways 100plus destinations and the more than 30 international destinations touched by the carrier’s dedicated freighters. The move to boost cargo is part of a chalked-out plan that aims to catapult Doha International Airport as a leading regional and global cargo hub. It is no wonder then that Qatar Airways CEO Akbar Al Baker pointed out that the deal with Cargolux would “fuel our growth plans by further developing our air freight business as a major part of our overall product offering and develop Qatar as a leading global cargo hub and one of the major players in the international freight market by 2015”. A mere four years away — to its avowed intention of becoming a major player on the cargo scene — Qatar has started inducting planes in its fleet. Aviation analysts have pointed out that the carrier is also looking at logistical investments for the football World Cup 2022. Today, the airline operates a freighter fleet of five planes: three A300-600s and two B777s. Four more B777s are scheduled to join the fleet in the coming years. Also, the carrier will be the launch customer of Boeing’s next-generation wide-body 747-8 F with 13 of the aircraft-type on order. In addition, Qatar’s cargo-carrying strength

COVER STORY

has now got more muscle with the 11-strong B747 freighters from Cargolux. Over the next few years, the carrier will see its freighter numbers rise to 31 when its A330s are converted. In fact, as many as 15 A330s could be sent for conversion by 2015 “depending on how many slots we get for the conversion from Airbus with their centre in Germany”, according to Akbar Al Baker. Other than adding more planes, Baker has launched a slew of new routes for the cargo services increasing the number to 29 destinations. In India, its freighters are touching Kozhikode and Bengaluru in addition to its passenger and cargo flights to 12 cities. The additional freighter service to Kozhikode and Bengaluru will complement the existing cargo operations to Kolkata that will also see daily passenger flights. The other destination for its freighters this year was Hanoi. Last year, Qatar Airways launched its first North American cargo route with dedicated freighter operations to Chicago. Air cargo operations apart, there is still a lot to be done on the ground. The situation is improving but not at a pace it should. Former ACAAI President J Krishnan has often pointed out that the inadequacies of infrastructure in air logistics seems to be increasing by the day and past few months most of our metro airports have become dysfunctional. Blaming the airport operators among others, the ACAAI chief said that many of the inefficiencies were manmade and could be resolved if all the agencies involved could see the situation dispassionately and address the genuine concerns of the trade. The air cargo stakeholders have been repeatedly demanding that performance parameters must be established on the custodians of air cargo facilities at the six major airports in the country: Delhi, Mumbai, Bengaluru, Hyderabad, Chennai and Kolkata. In addition, to ensure reliability of operations at the cargo facilities there

IMPROVING INFRASTRUCTURE: Construction work at the Chennai airport in progress.

Way back in 2009, the idea of setting up offairport facilities was suggested by air cargo stakeholders and it was done after consultations with the Customs authorities. That resulted in the establishment of the first-ever airfreight station (AFS) at Chennai CRUISING HEIGHTS November 2011

was also the need for an independent audit to monitor the performance. In a recent country report, ACAAI mentioned that while the air cargo industry’s progress was gaining momentum despite the deficiencies in infrastructure, once the facilities improve it “can ultimately revolutionise the Indian air cargo industry”. Krishnan underlined the fact that the current Infrastructure was under immense strain — a fact that air cargo stakeholders across the country have time and again pointed out. The facilities available at all airports were grossly inadequate to handle current levels of cargo — leave alone the predicted volumes in the near future. The only answer, advocated ACAAI, would be the setting-up of offairport facilities like cargo villages and airfreight stations. Way back in 2009, the idea of setting up off-airport facilities was suggested by air cargo stakeholders. In fact, it was done after consultations with the Customs authorities and that resulted in the establishment of the first-ever airfreight station (AFS) at Chennai. Even as that station struggles to become fully functional, the second AFS was notified at Mumbai in 2010. In most air cargo conferences, the Customs department is taken to task for delays and this convention will be no different. One of the fundamentals of air carriage is speed and timely deliveries, said Krishnan and in a seamless flow delays often lead to cost escalations. “Customs should become facilitators rather than enforcing agencies,” he said. Along with other members of the apex air cargo body, he agreed that there could not be any compromise on safety and security “but under the guise of such measures retarding free flow would not be in the interest of the economy. The idea of transporting cargo by air is defeated due to cumbersome customs documentation, procedures, etc.” Customs, advised ACAAI, must come up with new systems and procedures for expeditious clearance of cargo. The department must review its Risk Management System and streamline it in such a way that only a few consignments need to be checked at the airports. The stage has been set. It remains to be seen whether this convention is different from the others. It could be. Considering the fact that it is being held this time at Amritsar (closer to Delhi than Bengaluru certainly where the last one was staged), the presence of important functionaries from the Civil Aviation Ministry would be a welcome change. And, what action is taken by these functionaries, would be more important than anything else to the air cargo fraternity in the country.

CARGO

Networked Customs could be a reality The government recently launched the pilot Authorised Economic Operator scheme. If the scheme succeeds, it will bring about a refreshing change ending nightmarish delays in the clearance of import and export cargo. A report. he country’s freight forw arding com m unity and air cargo stakeholders have had to find w ays to live w ith chronic congestion atthe internationalairports and it is alm osta daily battle of sorts to overcom e these problem s.Added to thatis the fact are delays faced in the clearance ofcargo — m ostofw hich due to the large am ounts of paperw ork involved in the Custom s procedures. There is,how ever,a ray ofhope.Som etim e ago, India’s CentralBoard of Excise and Custom s (CBEC) — a partofthe D epartm entof R evenue under the M inistry ofFinance deals w ith the tasks ofform ulation ofpolicy concerning levy and collection ofCustom s duties,prevention ofsm uggling and adm inistration ofm atters relating to Custom s — hosted Custom s officials from Belgium and South Africa to signalthe launch ofthe pilot Authorised Econom ic O perator (AEO ) schem e that aim s to fastforw ard Custom s inspection and clearance. Sim ply put,players in the internationalsupply chain like im porters and exporters, w arehouse ow ners,Custom H ouse Agents,forw arders and carriers under the schem e w ould be given a secure tag thatw ould allow their goods to m ove through Custom s in countries w ith sim ilar facilities.As sources in the CBEC pointed out, am ong the countries that already have such a system are U S,Japan,South Korea

and China.India,in fact,has started talks w ith these countries to have a m utualrecognition agreem ent. According to S D M azum dar,Chairm an, CentralBoard ofExcise and Custom s and the initiator of the project,“Trade facilitation is high on governm ent’s agenda and the AEO program m e is one big step in this direction.W ith AEO system ,the focus w illnow be on globally netw orked Custom s.”

they struck w ork adding to the confusion and cargo piling up.Instead ofaround 1200 shipping bills cleared on an average every day,only 250-odd w ere cleared. Sim ilar delays atD elhi and M um bai— the country’s tw o principalexport-im port points — are com m on. Perhaps,w hatm akes m atters w orse is the factthat Custom s clearance ofgoods can be done by bending rules.Atthe end ofitall,the

ON THE MOVE: The Union Finance Minister, Pranab Mukherjee interacting with the Probationers of Indian Customs & Central Excise Service (IC&ES) along with S D Mazumdar (to his left), Chairman, Central Board of Excise and Customs.

The nightm arish delays is fresh in the m inds offreight forw arders and air cargo stakeholders from Chennai. In Aprilthis year,around 600 m etric tonnes ofgoods had piled up atthe airport because ofdelays in clearances— firstby the airport custodians and then by the Custom s authorities. Apparently,Custom s clearing clerks w ho had to w ork late to clear the cargo w ere so fed up w ith the inefficiency of the cargo handling agency to m ove the consignm ents that

freightforw arder has to face the custom er w ho cannot understand delays.O n its part,the Custom s departm entalso has had to bear up w ith its ow n problem s like new rules and regulations, com puterization,etc. Allthis w illend once the AEO is in process.India along w ith South Africa and Belgium had jointly bid atthe W orld Custom s O rganisation (W CO )to starta netw orked custom s program m e thathas resulted in the AEO . The program m e has been

CRUISING HEIGHTS November 2011

w orked outas per the guidelines ofthe W CO ’s SAFE FoS (Fram ew ork ofStandards) of 2005.Its aim is to ensure security in the globalsupply chain from the pointof exportto the pointofim port. SAFE has detailed Custom sto-Custom s standards about supply chain m anagem ent, cargo inspection authority, m odern technology in inspection equipm ent,high risk cargo,advance electronic inform ation,etc. Sim plifying the AEO ,a CBEC source said,thatitw as like a green card thatallow ed the processing ofconsignm ents w ithoutCustom s inspection. The objective of the AEO seeks to provide businesses w ith an internationally recognised quality m ark thatw illindicate its secure role in the internationalsupply chain and that its custom s procedures are efficientand com pliant, according to the source. As for the com puterisation,the Custom s departm ent’s latestversion ofICEG ATE (Indian Custom s ED I G atew ay) has been putinto operation and is slow ly doing aw ay w ith the physicalpresence for custom s clearance of im port/ exportgoods,delays and long queues for paym ent ofduties.According to Custom s officials,ICEG ATE receives m ore than 7.49 m illion hits per day benefiting 9,000 custom house agents, 10,000 CBEC officers and nearly 800 institutionalpartners.ICEG ATE has m ade Custom s clearance processes transparent.

CARGO

Cargo ready Amritsar

With more international flights from the holy city of Amritsar to Britain and Europe starting again, the air cargo stakeholders in the region are optimistic about the future, as our correspondent found out.

Addressing the m edia,BM I he Indian diaspora in CEO W olfgang Prock-Schauer Britain and Europe said thatthe new connection have often had to London offered reasons to pine for vegetables and fruits from the unprecedented convenience m other country.Their desires to travellers and cargo from Punjab and w ould strengthen w illnow be fulfilled.As w e go econom ic and culturalties to press,one ofIndia’s new estinternationalairports, betw een the tw o regions. The A 330-200 that the SriG uru Ram das Ji services the route,according (SG RJ)InternationalAirport to BM I,is presently on lease atthe holy city ofAm ritsar to Turkish Airlines butw illbe w illbe ready to startcargo returned soon.W hathas and perishable operations to encouraged the perishable Britain and Austria. This w illbe the second startfor the Perishable Cargo centre atthe airportand this tim e around freight forw arders and allthose connected to the perishable trade are upbeataboutthe British M idland International (BM I)and Com telAir flights connecting Am ritsar to Britain and Austria.BM Ihas Uday K Dholakia on the anvilthree flights a w eek on the London-Alm aty- Brand Ambassador for Asian Markets, Am ritsar route thathas Birmingham Airport started from O ctober 14.

cargo stakeholders is the fact thatthe A330 has a 44tonnes capacity:enough for consignm ents offresh vegetables. Though exporters offresh produce — the state ofPunjab produces a w ide variety of fruits and vegetables — are happy w ith the introduction ofthe internationalflights, they are keeping their fingers crossed and hope thatthese w illnotbe stopped suddenly as w as the case som etim e

“The econom ical benefits to be reaped if directflights w ere in place w ould be significantand w ould be a dem onstration of the links thatexist betw een Birm ingham and India.”

ALL SET: A view of Amritsar's international airport at night

CRUISING HEIGHTS November 2011

ago.Air India had a flighton the Am ritsar-LondonToronto route thatw as doing quite w ell.Both the flights w ere w ithdraw n — Air India’s,in fact,tw o years ago — and exports ofperishable goods dropped drastically. O ver the lastyear or so, Birm ingham Airportin Britain has been trying to convince Air India to restart the flights from Am ritsar. U day K D holakia, Birm ingham Airport’s ‘Brand Am bassador for Asian M arkets’,w ho is pushing the initiative pointed outthat Birm ingham w as the U K’s second-largestcity and hom e to five tim es m ore people of Indian origin than M anchester.In fact,the W est ofthe M idlands region accounts for 15 per centofthe totalnum ber ofIndians living in England:around 200,000 people. From a cargo perspective, the M idlands offers an

established,ready m arketfor Indian perishables and highvalue heritage products.W ith dedicated freighthandling facilities and the Birm ingham Airport’s close proxim ity to the biggestw holesale m arkets in Birm ingham and m ajor superm arketdistribution centres w ithin an hour’s drive,fruitand vegetables could be on the plate less than 24 hours after leaving Am ritsar,D elhior other m ajor m etros ofIndia. The W estM idlands is also hom e to m anufacturing pow erhouses such as Jaguar Land Rover,and directair links to the region can only benefitboth the M idlands and India.D holakia w ith his tw o decades ofexperience of brand developm entand internationalm arketing plus directexperience ofroute and cargo developm entand launching new routes has held a num ber ofdiscussions w ith a range ofcarriers.H e also said,“Potential econom ical,socialand culturalbenefits to be reaped ifdirectflights w ere in place w ould be significantand w ould be a real dem onstration ofthe natural links thatexistbetw een Birm ingham ,the M idlands and India.” Additionally, Birm ingham airporthas gone in for a m ajor rebranding exercise thatis helping it reach outto new m arkets.

According to D holakia, “Birm ingham Airporthas invested in new term inal facilities,w hich are totally geared up to offer long-haul carriers.Its facilities and vast Asian m arketm ake the airporta com m ercially sound link for their operations.” Follow ing the Air India w ithdraw al,a num ber of other carriers like Singapore Airlines and JetAirw ays — thathad an Am ritsar-London flightto service the burgeoning traffic from Punjab to London — stopped operations due to high-landing charges.This February,how ever,Air India started flights on the Am ritsar-Toronto route that have becom e im m ensely popular w ith Indians from

Canada. As for cargo,vegetable exporters are hoping that Punjab’s baby corn,snow and green peas,m angoes,guavas and kinnow s,w hich are popular and cheaper in com parison to those sent from Africa or South East Asia,w illtake up m ore belly space.W hathas also encouraged the exporters is the initiative ofthe governm ent-controlled Airports Authority ofIndia (AAI)thatm anages the airportto boostperishable exports.The AAI has established a separate perishable centre for export ofperishable cargo.O perated by the governm ent-run Councilfor Value Added H orticulture ofPunjab

Ready for the world The cargo terminalwas constructed byAAIon an area of 2256 sq.mtr.and a paved area of 2888 sq.mtr.and was ready for operation in November 2004. The facilities atthe aircargo complex include: ¾ Customs EDIsystem i s well equipped with EDI1.5 version for computerised process ofalltype ofshipping bills. ¾ Exportand i mportwings with two X-ray machines installed forscanning ofcargo. ¾ Si x weighing scales have been provided forweighing of cargo.

A strong room forkeeping valuable goods available forboth importand exportsides. ¾ A separate storage area for dangerous goods with trained manpoweravailable forhandling dangerous goods. ¾ Exami nation/bonded and palletisation are earmarked on each side. ¾ Ampl e truck docking area available on both sides. ¾ Separate cargo bay i s available forparking freighters. ¾ The whol e cargo complex from city to airside is covered by a CCTV system. ¾

CRUISING HEIGHTS November 2011

(CVAH P),the centre includes pre-cooler cham bers,X -ray m achines for scanning of perishable cargo and cooled room s.The capacity im port and exportcapacity of perishable goods from the centre is 80 m etric tonnes per day. H ow ever,itis notonly perishable cargo thatthe region exports.O ne ofIndia’s highly industrialised zones — com prising the cities of Jalandhar,Ludhiana,Am bala and Baddi— there are thousands ofsm all-scale units producing m achine and auto parts for BM W s and M ercedes,household appliances,hosiery,w oollen garm ents and pharm a products.The air cargo com plex is capable of handling Bonded Cargo Trucking,X -ray screening and certification and express cargo. M eanw hile,a recent trend augurs w ellfor the air cargo trade.A num ber of private-held equity firm s have show n their interestin investing in logistics com panies.According to KPM G ,the trend has been prom pted by the governm ent according infrastructure status — and therefore low taxes — to storage,transport and m ega food parks.As such,a num ber oflogistics m ajors have been foraying into cold chain.

CARGO

Away with barriers,

urges TIACA

Air cargo liberalisation will offer nations 'new economy highways in the sky' and bring in its wake prosperity for the people. em oving a bilateralsystem that is ‘stuck in the past’and creating a liberalised air cargo industry w illcreate ‘new econom y highw ays in the sky’and provide countries w ith quick and efficient globalsupply chains and m arket accessibility,The InternationalAir Cargo Association (TIACA) recently told the AsiaPacific Econom ic Cooperation (APEC) U SA 2011 conference in San Francisco. Addressing the them e of

exam ple,air cargo has allow ed otherw ise rem ote agriculturalregions to access w orld m arkets.As a result,flow ers,exotic fruits and vegetables are becom ing substantial export earners.Prosperous localbusinesses have developed on the strength of this capability such as produce grow n in K enya that is picked and packed to the specific requirem ents of m ajor superm arkets in the U K and arrives at the store just hours later, straight to the shelf.U sing traditionalocean transportation,exporters in

Courtesy: www.cargofacts.net

‘Air Cargo,Trade and Econom ic G row th’,TIACA’s Secretary G eneral,D aniel Fernandez,highlighted how the partnership betw een air cargo and m anufacturing fosters econom ic developm ent.This is because,he said,airfreight and integrated air express are criticalto tim e-based com petition and allow ‘large pools of labour to connect w ith the needs of w ealthy W estern European, N orth Am erican and N ortheast Asian m arkets’. H e added:“In addition to the appareland electronics industries,for

WAITING FOR MAJOR PUSH: Airfreight business will get a major boost once air cargo is liberalised world over.

CRUISING HEIGHTS November 2011

m ost developing countries are at a considerable shipping tim e disadvantage com pared to dom estic producers.Air cargo goes a long w ay tow ards levelling the tem poralplaying field for developing country producers.” The conference also heard from officials from the U S D epartm ent of State,the N ew Zealand G overnm ent,Boeing,the W orld Bank,Cisco System s, JanelG roup,M edtronic, the Express Association of Am erica,and Pacifica Skincare as w ellas senior APEC representatives.

Addressing the need for m ore liberalisation, TIACA’s Secretary G eneral told delegates:“W e believe that countries should view air routes as highw ays in the sky,a com petitive public good every bit as im portant as surface transportation infrastructure.U nder a fully liberalised aviation environm ent,num erous new internationalhighw ays in the sky are possible w hich w ould m arkedly im prove the speed and accessibility of a nation’s businesses to their global suppliers and custom ers.In so doing,the com petitiveness of a nation’s businesses w ill increase,m ore foreign direct investm ent w illbe attracted and econom ic developm ent prom oted. “U nfortunately,the transportation of air cargo is stillregulated by rules established over 60 years ago in the 1944 Chicago Convention w hen alm ost all airlines w ere nationalflag carriers and the air cargo industry w as stillin its infancy.Change is overdue.” Fernandez said:“W e need to get over the assum ption that 20th century rules stillapply in today’s globaleconom y. Airlines are com peting in the 21st century but the bilateralsystem is still stuck in the past.It does not offer airlines the freedom to selltheir products w here there is dem and and to m erge operations w here it m akes financialsense.Bilateral agreem ents,as im portant as they are,ignore the needs of the em erging fast and flexible supply chain practices.” The flow of airfreight is geographically unbalanced, TIACA said.“Increased governm entalliberalisation w ould allow the m ore efficient use of air carrier resources.W e live in a

GACAG to focus on sustainability of air cargo he G lobalAir Cargo Advisory G roup (G ACAG )has com pleted the form ation of four Task Forces to focus on security,e-com m erce, custom s and trade facilitation,and sustainability ofthe global air cargo industry. Each Task Force w illbe responsible for addressing G ACAG ’s objectives — based on representation from allaspects ofthe air cargo supply chain and custom ers — and to present recom m endations to the G roup’s Steering Com m ittee. The intention to create G ACAG w as first announced in N ovem ber 2010 by its four founding m em bers;FIATA,the InternationalFederation of FreightForw arders Associations,the InternationalAir Transport Association (IATA),The InternationalAir Cargo Association (TIACA)and the G lobalShippers’Forum (G SF).In M arch 2011,the

w orld in w hich the com ponents of a product m ight be m anufactured in M alaysia,China and M exico,then assem bled in the U S for shipm ent to m arkets in Europe. N ationalpride or prejudice play little part in the

Daniel Fernandez, TIACA's Secretary General

G roup’s new ly-form ed Steering Com m ittee signed the Basic Principles ofthe G lobalAir Cargo Advisory G roup. Said M ichaelSteen, Chairm an ofG ACAG :“W ith the form ation ofthese Task Forces,w e are getting dow n to business in beginning to focus on the priority areas w e firstidentified in M arch ofthis year (2011).Each G ACAG m em ber has com m itted high level resources to the Task Forces and w e are confident this com bined expertise, know ledge and talentw ill enable us to identify and develop w ays to im prove the air cargo supply chain for allparticipants.Each Task Force w illnow com m ence exploring its subjectm atter in detailand w illalso consultw ith other experts in each specific field to increase their levelof understanding.The G ACAG Steering Com m ittee w illact on the recom m endations proposed by the Task Forces.”

location or outsourcing decisions by m anufacturers.Production or assem bly facilities are built or relocated at short notice to those countries w ith the low est costs and best access to the m ost efficient transportation

“U nfortunately,the transportation of air cargo is still regulated by rules established over 60 years ago in the 1944 Chicago Convention.”

CRUISING HEIGHTS November 2011

options. “M ost parts of the freight transportation industry can respond to such shifts w ithout restriction.Container ships sailto any ports they choose.Freight forw arders have also grow n into global entities,operating w ith little restriction in allparts of the w orld.Air transport cannot,” he added. W here air traffic rights had been liberalised, TIACA said that it had resulted in m ore capacity in the m arket,low er rates, and increased com m ercial opportunities and econom ic developm ent,giving exam ples of the U S dom estic m arket,the EU ’s Com m on Aviation M arket and D ubai. “TIACA supports the fullliberalisation of the aviation industry.H ow ever, w e realise that due to politicaland structural im pedim ents,this m ay be too m uch to try to achieve in one fellsw oop.That’s w hy w e favour a stepped approached tow ards full liberalisation.The first step is to separate cargo bilaterals from passenger agreem ents.O nce cargo has a separate bilateralsystem , regionaltrading blocks can provide m om entum tow ards im plem entation of m ultilateralagreem ents. “U nder this approach,a new generic agreem ent for cargo flights w ould grant the sam e rights and privileges,on a reciprocal basis,to allsignatories. The aim is the establishm ent of a m ultilateralgroup of countries perm itting fullcargo freedom rights.The econom ic benefits derived from cargo liberalisation w illprovide the incentive for fullliberalisation of passenger services and this is a position that has been endorsed by the European Shippers’Council,A CI,and FIA TA ,” Fernandez told the A PEC 2011 conference.

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A case for dedicated cargo airlines D J GHOSH

One business model for air cargo does not suit all, argues D J Ghosh, and now that the opportunities are there, air cargo entrepreneurs ought to take a shot at launching dedicated cargo airlines. But before they do so, they must understand the dynamics of the business. ndia’s rapidly developing dom estic econom y and grow ing trade w ith the w orld is creating unprecedented opportunities for prospective aircargo operators.H ow ever, judging by the poorattendance ofIndian delegates at international air cargo forum s,and a generallack of know ledge and expertise in air cargo operations, it appears that m any m istakes w illbe m ade as the country’s dedicated aircargo operations getoffthe ground. W ithoutunderstanding the unique dynam ics and cycles of the air cargo business,and proceeding w ithoutproperresearch and intelligence, significant fortunes are bound to be lost. Passenger carriers in India have had the good fortune of having “rich uncles”.W hile the country’s erstw hile “nationalcarrier” A ir India continues to live off the largesse of the state,w hile continuing to m ake losses,private carriers such as K ingfisher, IndiG o and G oA ir have been launched using the good creditand tim e tested balance sheets of their corporate parents.A s the lastfew years have show n,notallthe private airlines have done

Numerous studies conducted by aircraft manufacturers such as Boeing and Airbus have repeatedly highlighted the differences between passenger and cargo business cycles. 58

w ell.In fact,ifthey w ere stripped oftheircorporate support,m any of these carriers w ould stop operating overnight. It is entirely possible that this sam e scenario of corporate sponsorship w ill again be played out in the launching of dedicated air cargo operations in India.The corporate and large business houses w ill reason that if they could do it for passenger operations, they could definitely do itfor cargo.They w illalso assum e that passenger and cargo operations are no different.This is w here the w aters get very m uddy. N um erous studies conducted by aircraft m anufacturers such as Boeing and A irbus have repeatedly highlighted the differences betw een passenger and cargo business cycles. True, w ith m uch of cargo m oving in passenger bellies for m ostof the lastfive decades,the line betw een these cycles w as blurred.H ow ever, the adventofdedicated freighters and freighter operations has hastened the m ove to treatthese tw o disciplines as com pletely separate,even though the aircraft fram es that they use are very sim ilar.

INSPIRATION: A bird’s eye view of the air cargo terminal at Delhi Airport.

CRUISING HEIGHTS November 2011

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Courtesy: Fedex

Itis quite possible,thatas the air cargo business becom es m ore dedicated and sophisticated,m ore and m ore custom -built airfram es and engines w ill be built to cater to the special types of cargo operations, including H eavy-lifts,package freight,and tem perature controlled freight. Ifthere is a single m istake thatthe Indian air cargo industry should never m ake before the startof a very exciting aircargo journey into the future,it is this. N ever treat any air cargo as general cargo.. The sooner you stop using the term “generalcargo” the better.It is of param ount im portance to rem em berthatunlike low -costpassengerairlines,w hich cram the m axim um num berofpassengers into a single aircraft type w ith a standardised seat pitch and a cookie cutterservice offering, Indian air cargo professionals m usttreateach type of cargo as exciting and very different. Cargo airlines, cargo m anagers and forw arders in Europe and N orth TOUGH BUSINESS: Workers busy arranging cargo packages at Fedex cargo warehouse. A m erica bem oan the low m argins ofthe gener- aircraft such as Cessna Caravans and ATR’s alcargo business,w ithoutadm itting thatthey and defining theirunique service offering. have done absolutely nothing to study the W hile setting up international operations intrinsic properties and unique transportation using m edium w idebody and w idebody airrequirem ents of the products that they trans- craft,rather than taking the entire risk of runport. ning the airline,Indian ventures need to first The challenge therefore forthe new Indian obtain “long-term block space com m itm ents air cargo professionalm ustbe to scientifically of up to 10 years” from air freightforw arders study the characteristics and dynam ics of each and cargo agents,to insure thatthey too are at type of cargo,and develop the transportation risk and have “skin in the gam e”.The W estern of these products into a separate discipline. m odelw here the aircraftoperatortakes allthe H erein liess the profitm argins ofthe business. risk is doom ed to failure from the onset, In the U SA , com panies such as FedEx have unless the venture has corporate backing. m ade the transportation ofsm allpackages into India needs to set up an exchange w here a separate science and a highly profitable busi- such block space agreem ents can be electronness. ically spliced into a com m on denom inator as In this endeavour the Indian air cargo low as a kilo and then traded on a forw ard entrepreneur should partner w ith India’s exchange. This process w ould insure the w orld-class Institutes of Technology and spreading,m inim isation and diversification of cutting-edge IT solutions providers. If the risk to the low estcom m on denom inatorofthe country could bypass obsolete land line tech- air cargo business,viz.one kilo,thus taking nology w ith m obile solutions to keep over600 the crushing financialburden offthe airline. m illion telephone users connected,they could The biggest secret in the air cargo busicertainly create a new platform forresearching ness is thatw hile everybody thinks thatithas unique and highly profitable air cargo supply been around a long tim e, it is a fairly new solutions. business w here m ost of the grey hairs com e Thus the new m antra in India’s air cargo from the heads of cargo m anagers w ho have jargon should be specialisation and differentia- spentm ostof their lives as passenger execution.Every type of productor service requires tives. M ost of the rules and procedures are a tailored solution.Internalpackage freightto still dictated from passenger agendas.Thus, sm aller Indian cities m ay need to m ove in as the renow ned econom ist Joseph Schum sm aller gauge regionalfreighters of w hich the peterw ould say,there is stilla lotof“creative country now has very little know ledge of.In destruction” to be done.M aybe itis tim e that the U nited States,over 52 regional freighter the Indian air cargo com m unity spearheads airlines currently feed the package freight of this process of“creative destruction”. FedEx and U PS from the larger cities into the (The writer is President,Am erican sm aller tow ns,and alm ostallof them are conFriendship W orld Air Cargo Corporation, sistently profitable.Indian industry needs to New York,U SA.) startthinking aboutthis m arketusing sm aller

Thus the new mantra in India's air cargo jargon should be specialisation and differentiation. Every type of product or service requires a tailored solution.

CRUISING HEIGHTS November 2011

CARGO Courtesy: www.fraport.com

Gagging

Frankfurt

at night

No more flights — landing or taking off — at night. That's what the German court told Frankfurt airport. And the biggest losers: air cargo. It is time Indian authorities took preventive steps from such an event taking place for if it does happen, the air cargo industry will be doomed. he ban on night flights — in Europe, for the m om ent— has been driving freighters aw ay from passenger hubs to dedicated cargo airports.Joerg Schum acher,M anaging D irector ofFrankfurtH ahn Airport(a cargo airport around 125 km from Frankfurt) observed before the recentcourtim posed ban on Frankfurtcam e:“W ith the discussion on the ban of nightflights atFrankfurt M ain in fullsw ing, internationalinterestin our flightcapacities is grow ing.” Indeed,itis tim e our airportauthorities, corporates and those interested in air cargo, started thinking about establishing dedicated cargo airports.The day is notfar offw hen som e saviour ofthe environm entsuddenly w akes up to starta m ovem entto ban flights atnight.W ould w e be ready then? As itis, the hom e-grow n air cargo sector has had a hard tim e and ifrestrictions are im posed,itcould be death

EYE-CANDY : A night view of the apron at Frankfurt Airport.

knellofthe sector. Look atw hathas happened in Europe.Even as this issue ofCR U ISIN G H EIG H TS goes to press Europe’s third-largest airport,Frankfurt,is getting ready to dow n shutters at night.From O ctober 21,2011 — the day the fourth runw ay opens for operations — all takeoffs and landings betw een 11:00 pm and 5:00 am w illbe stopped as per a courtdecision thatfollow ed a 2008 law suit,w hich dem anded a com plete ban on nightflights from the airport. W hile on one hand,there w ill be no flights atnight,the new runw ay is going to enhance the airport’s capacity from 82 m ovem ents per hour to 126.Incidentally, the fourth runw ay cam e as a resultofa political com prom ise w ith the airport’s neighbouring com m unities for stopping the nightm ovem ents.The court hearing apparently stopped Lufthansa from investing in a new logistics centre at FrankfurtAirportto replace the 27-year-old cargo centre

in the CargoCity N ord. O n its part,Frankfurt Airportauthorities have left no stone unturned to stop the ban.Itis a m ajor blow for Frankfurt’s anchor airline Lufthansa — especially Lufthansa cargo — w hich has gone on record to state thatit w illhave to face m ajor financiallosses because of the cancellation and changes in flighttim ings.Am ong the other airlines thathave been affected by the ban are leisure carrier Condor and Air Berlin.Both have early m orning departures and late nightarrivals. Lufthansa Cargo too w ent into a fast-forw ard m ode to stop the ban.Its W orkers Councillaunched an inform ation offensive for the retention ofnight-tim e cargo flights.M aintaining that FrankfurtAirportw as one of the m ostim portantairfreight hubs in the w orld,its outstanding inter-m odal netw orking and its infrastructure,w hich has developed over the long term ,W illiR oerig,Chairm an ofthe Council,pointed out:

CRUISING HEIGHTS November 2011

“A ban on nightflights w ould cutexportnation G erm any offfrom the international flow ofgoods and lead to a relocation ofproduction and logistics com panies.As a result,the role ofFrankfurt as an internationallogistics hub,and as the seventhlargestfreightairportin the w orld,w ould be seriously threatened.” In recession-ravaged Europe,the inform ation cam paign by the W orkers Councilalso focused on the concerns ofaround 3,000 Lufthansa Cargo em ployees in G erm any.Said R oerig: “W e w antto underline our dem ands once again here. Freightneeds the night.A shutdow n ofthe airport betw een 23.00 and 05.00 hours w ould threaten the continued existence of Lufthansa Cargo and put thousands ofjobs in our com pany and atnum erous other logistics com panies at risk.” W ay back in the m iddle of2009,Lufthansa Cargo and the W orkers Councilhad started a cam paign w ith a

FOUNDING MEMBERS OF THE ‘CARGO NEEDS THE NIGHT’ INIATIATIVE: Ir Mathias Jakobi (ACD), Thorsten Holser (SLV), Heiner Rogge (DSLV), Carsten Spohr (Lufthansa Cargo AG), Ewald Heim (Managing Director), Dr Adolf Zobel (BGL), and Martin Gaebges (BARIG).

sim ple m essage:Freight needs the night.According to Frankfurtairportauthorities, the grow th in cargo and m ail tonnage by 2020 w ould be w ellover 70 per centto reach a totalof3.16 m illion m etric tonnes.In turn,flights w ould be expected to rise from the 490,000 m ovem ents in 2005 to about700,000 m ovem ents a year in 2020. O ther than the airport authorities and the airlines, G erm any’s transportand logistics industry too cham pioned the need for com petitive operating tim es atthe country’s com m ercial airports.The Association of

G erm an FreightForw arders and Logistics O perators (D SLV),the Federal Association ofR oad H aulage, Logistics and D isposal (BG L),the Forw arding and Logistics Association of H essen/R heinland-Pfalz,the Board ofAirline R epresentatives in G erm any (BAR IG ) and the Air Cargo Club G erm any (ACD ) joined w ith Lufthansa Cargo in Frankfurton June 24 in 2010 to prop up the “Cargo needs the night” initiative.At a press conference at FrankfurtAirport,the M anaging D irector ofthe initiative,Ew ald H eim ,

presented the aim s ofthe alliance:“The logistics sector is the backbone ofG erm any’s exportbusiness.The basic prerequisite for its success in w orld m arkets is reliable, trouble-free air cargo connections.The ‘Cargo needs the night’initiative w ill therefore press hard for com petitive operating hours atcom m ercialairports in G erm any.” The initiative highlighted the im portance ofthe logistics industry for G erm any’s econom y.About 40 per centofthe value of dom estic exports is transported w orldw ide by air and nightflights are a key com ponentin functioning globalsupply chains. According to the body, politicians and the public at large m ustbe m ade m ore aw are ofthe im portance of air cargo for the G erm an industry,w hich has been dependenton exports. N ow thatthe ban has been im posed,the effects are being felt.Lufthansa Cargo has started adjusting its flightschedules.O n an average,the carrier operates 11 nightflights.Flights to China w ere the m ostaffected w ith the Tianjin flights cancelled altogether w hile the Beijing and G uangzhou freighter flights w ould be routed via Cologne.W ellknow n aircargo ezine,Air Cargo N ew s Flying Typers, talked to analystD irk Steiger ofFrankfurt-based Aviainform G m bH ,w ho said thatthe rerouting ofthe freighters w ould m ean that “the vastm ajority of shipm ents w illhave to be trucked from R hein-M ain, w here they are consolidated to Leipzig/H alle.This w ill lead to further congestion on the G erm an Autobahns and negatively influence the nation’s am bitious footprint on greenhouse gas em issions.” As for the financialim pact,w ith cancellations and the reorganisation ofLufthansa Cargo’s freighter fleet,

CRUISING HEIGHTS November 2011

Steiger said thatitw ould totalapproxim ately €30-50 m illion. As ifon cue from the environm entalists in Frankfurt,the people of Zurich Canton have also registered their protest againstany enlargem entof the existing runw ay atZurich Airport,Sw itzerland’s m ost im portantgatew ay,and construction ofadditional runw ay capacity.In addition, another group ofpeople have dem anded thatapproaches from southern flightpaths should be com pletely forbidden due to noise,since the route leads over m any populated areas.Allthis w ill be decided on N ovem ber 27 w hen there w illbe a referendum on w hether further im provem ents atthe airportshould be allow ed or strictly prohibited by law . As in G erm any,in Zurich too,the ‘pro ZRH ’m ovem ent has been started. Spearheaded by the national airline Sw iss,and its air freightdivision,Sw iss W orldCargo,the m ovem ent has highlighting the factthat 180,000 people w ork in Sw itzerland’s aviation industry accounting for 30 billion Sw iss Francs annually to the nationaleconom y. Sw iss CEO H arry H ohm eister and chairm an ofthe supervisory board,Bruno G ehrig,have em phasised that one-third ofthe country’s exports leave the country by air.The need,therefore,is to enlarge and m odernise Zurich airport.To convince the people,Sw iss W orldCargo has started an aw areness cam paign w ith an old Volksw agen,w hich is driven to nearby m unicipalities and engage the locals in dialogue. “W e do our utm ostto convince people thata blockade ofthe airportw ould lead to a m ultitude of negative im plications,not only for us atSw iss or the airportbutthe entire econom y ofthis country,” said Sw iss W orldCargo chief O liver Evans.

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ACAAI must become an influential body SHESH KULKARNI

Once freight forwarders have a body like NASSCOM will they be considered the most important cog in the wheel of the nation's progress, writes Shesh Kulkarni. ¾ ¾ ¾ ¾

M arketcontinues to slow dow n Freightcapacity continues to increase Freightprices are show ing signs ofreduc tion C lients have started re-negotiating con tracts

s recession here? Jeff Im elet,G lobalCEO of G E, on his recent visit to Bengaluru announced that sentim ents w ere m ore depressing than business at the m arket place!True orfalse? M aybe itistrue and false.Study the balance sheet of A pple,Cisco,G E,Exxon M obil and m any other large globalcorporates – they have m ore cash in the bank than m any governm ent treasuries.Ifthey decide to deploy a percentage oftheircash into business developm entactivity,itw illsteer big activity through the supply chain. Is that possible? W ill that help econom ies? Thatneeds debate ...again it’s a yes and no! The Indian autom obile industry has seen a huge slum p and dropped significantly in tw o quarters.O ne schoolof thoughtsays the easy w ay to study the econom y ofany country is to study the m anufacturing sector of the country and autom otives top the sector. W hen that posts a slow dow n,ithurts since connected to these industries is a large chain of com panies, the financialm arket,the freightindustry,etc. Result:a huge im pacton the flow ofinventory. It has the ability to create cash blockages at various levels and that clubbed w ith the Reserve Bank of India hiking interest rates hurts the logistics business since the logistics business is like ham or cheese betw een the bread.Letm e presentan exam ple. Increased capacity by carriersaffectthe per kilogram rate.The lesser the rate,the low er is the absolute earnings for the forw arder. A s business shrinks,clients negotiate,leaving little on the plate for the forw arder.The slow dow n in the business increases the paym ent cycle and forw arders w ho run the lastm ile are the firstones to be im pacted:theircreditin the m arketgoes up,increased bank interestrates resultin the costofcapitalgoing up and,lastly the w orst,rise in defaultrates.Bad debts shoot up leaving the forw arderin the w hirlpool. W hat should forw arders do, besides to

It is time to start groups and forums at various regional levels and based on collective inputs draw up a specific initiative under the umbrella of ACAAI. 62

CRUISING HEIGHTS November 2011

expectand hope thatlarge corporations loosen theirpurses and focus on the econom y? In m y hum ble opinion, the follow ing actions w illim pactthe freightindustry: A . Freight industry m ust have one visible, vibrant and active body facing and cham pioning the industry's causes like N A SSCO M (N ationalA ssociation ofSoftw are and Services Com panies)is forIT. B. A large section ofthisindustry ispartofthe SM E (Sm alland m edium enterprises or sm all and m edium -sized enterprises) sector; hence, they m ust m ake representations through this body to negotiate a preferential interest rate. A dditionally,the body m ustbe blessed by the governm ent.Itm ustseta standard and pass a resolution on the interest rate applicable if clients delay beyond the agreed term s ofcredit. C . Consider arbitration panels to address and resolve disputes. D . Create a panelof law yers w ho could go to experts on trade so that m any issue can be addressed forcollective good. E. Partnerw ith Custom s to plug and elim inate m iscellaneous expenses — this w illdrive efficiency and help check costs. Itis tim e to startgroups and forum s atvarious regional levels and based on collective inputs draw up a specific initiative under the um brella ofA CA A I (A ir Cargo A gents A ssociation of India).Lastly,A CA A I m ustconsider having a full-tim e CEO w ith a business school background w ith PR skills to cham pion the initiatives,reportto the m anaging com m ittee,sim ilar to w hatN A SSCO M or CII does.This w ill help draw up and organise the agenda — both long term and shortterm — and w illallow the forw arding com m unity to have an im partial face forrepresentation. It's tim e forw arders stopped being the m ere ham or cheese betw een the bread.Forw arders are the conduitw ho facilitate the supply chain process for larger industry and trade and are actively engaged in creating value forthe econom y as a w hole.Ibelieve so and so does everyone else in the forw arding industry. (The writer is Presidentand CEO ofa leading logistics com pany which provides com plete logistics solutions and can be reached atcruisingheights@ newsline.in)

CARGO JOTTINGS Emirates shows it means business Emirates SkyCargo came to the rescue of a ship undergoing repairs when it transported a 36-tonne rudder part - the heaviest single item ever carried by the freight division of Emirates Airline. The rudder stock— 9.16 metres long and 1.05 metres wide — was required for urgent repairs to a vessel at Dubai Dry Docks. The part — tailor-made by Korean steel manufacturer Taewoong — would normally be transported by sea, but a quick solution was required to reduce the cost of the ship being out of service. In conjunction with Dubai-based charter broker Air Charter International, it was transported on an Emirates freighter — a Boeing 747-400F — from Seoul to Dubai and tested ground-handling operations at both airports to the fullest. “Transporting a piece of cargo this heavy requires the highest degree of care and special handling,” said Hiran Perera, Emirates’ Senior Vice President Cargo Planning & Freighters. “Two cranes - capable of lifting 50 tonnes each — along with two high loaders were required, while more than 30 workers in both Seoul and Dubai made sure the intricate loading operation went smoothly.

“Precision planning and the combined expertise of everyone involved at Emirates SkyCargo, dnata, Air Charter International and Atlas Air was crucial to this success of this project,” added Perera. “This is testament to our commitment to meeting even the most challenging customer requirements. We are also committed to facilitating international trade, so it is particularly satisfying that we will have contributed to the vessel’s quick return to service.” “With our client’s needs at the forefront of our efforts, it is crucial to be able to rely on a good partner,” said Claire Brugirard, Commercial Manager at Air Charter International. “We were very pleased with the performance of Emirates SkyCargo in completing this project successfully. This shows that when broker and operator work together as a team, true added value can be provided to the client.” In the 2010-11 financial year, Emirates SkyCargo carried 1.8 million tonnes of cargo across its network, contributing 17.4 per cent — US$ 2.4 billion — of the airline’s total transport revenue. Based out of Dubai International Airport, its $327million 43,600 square metre cargo mega terminal is designed to handle 1.2 million tonnes of cargo a year.

HEAVYWEIGHT: Photographs show the various stages of the loading process of the 36-tonne rudder part in the SkyCargo freighter for the journey from Seoul to Dubai.

CRUISING HEIGHTS November 2011

CARGO JOTTINGS Now, DHL joins Bengaluru with Leipzig

w itnessed the industry veterans, from India and abroad. R epresentatives from allsegm ents of the cargo,m aritim e and logistics trade w ere present in strength for the com prehensive acknow ledgem entofexcellence in the sector.

Lufthansa Cargo volume goes up

DEEP PENETRATION: DHL Express through its vast network will be able to cater to major metros in India.

D H L recently announced the launch ofa Boeing 777F freighter service betw een Bengaluru and Leipzig, in response to the grow ing air cargo dem and into and outofSouth India. O riginating from Bangkok and Singapore,the new service w illoperate five tim es a w eek betw een Bengaluru and D H L’s European hub in Leipzig,G erm any.The new freighter w illbe operated by AeroLogic,a joint venture cargo airline of D H L Express and Lufthansa Cargo. India continues to be a high grow th m arket for D H L Express and there is specific focus on investing in infrastructure,netw ork and people in India to augm entgrow th.

Transworld Head: Maritime Personality of the year Shipping and logistics conglom erate Transw orld G roup recently bagged three aw ards at the second edition of M ALA 2011 (M aritim e & Logistics Aw ards 2011), India’s largest aw ards on Shipping and Logistics industry. Shreyas Shipping and Logistics, a Transw orld G roup com pany w as aw arded ‘Shipping Line of the Year — Coastal O perator’, Balaji Shipping Lines FZCO — another group com pany w on ‘N VO CC of the year’. The group w as further acknow ledged am ongstthe key stakeholders atthe event,w hen R am esh R am akrishnan, Chairm an, Transw orld G roup w as recognized as ‘M aritim e Personality ofthe Year 2011’. The All-India M aritim e and Logistics Aw ards (M ALA) 2011

FedEx starts ground express services FedEx recently announced the launch of FedEx Econom y,an intraIndia, door-todoor, day-definite express delivery service for ground consignm ents. W ith this launch FedEx Express IN FULL SWING: A Fedex van. offers businesses in the country a com plete portfolio ofdom estic shipping services, presenting custom ers w ith a choice ofair and ground services, thereby im proving dom estic connectivity. The service w illbe available from 116 origin cities to 262 destination cities w ithin India. Said Kenneth F Koval,Vice President,O perations,FedEx Express India, “The deploym ent of FedEx Econom y-new

Atthe end ofthe third quarter,Lufthansa Cargo has posted a significant increase in the volum e of freight and m ail transported. From January to Septem ber, the cargo carrier boosted tonnage by 8.4 per centyear-on-year. Capacity w as raised substantially,particularly in the first half-year.At the end of the nine-m onth period,capacity had been increased by 12.3 percent.Since sales also grew sharply by 9.5 per cent,Lufthansa Cargo w as able to achieve a high levelof capacity utilisation. The cargo load factor in the first nine m onths w as 69.3 per cent. “Lufthansa Cargo is w ell positioned in an increasingly dem anding m arket environm ent,” noted Chairm an and CEO KarlU lrich G arnadt.“After the very strong grow th rates in the first half-year,our transport perform ance in the third quarter stabilised at the very high prior-year level.Thanks to excellent productquality and our fastand flexible capacity m anagem ent, w e also succeeded in m aintaining a high load factor in the third quarter.” In recentw eeks,the m arkethad becom e increasingly tough for the entire industry,G arnadt stressed.G row th,particularly in Asia,had been w eaker than in the previous year.H ow strong dem and w ould be this year during the high season in the fourth quarter w as stilluncertain,he added.“D em and-driven capacity m anagem ent and a high degree of flexibility w illtherefore be the key to m aintaining our successfulcourse.”

A helping hand from Blue Dart Blue Edge: Em pow ering Lives, an initiative by Blue D art in association w ith O asis India (N G O ), celebrated its first graduation day in Chennai.Inaugurated in April2011,the first batch com prising 30 young adults from the m arginalised section of society received certificates and trophies from G opa K um ar,Senior Vice President,South,Blue D art Express,and D r Shantanu D utta,Executive D irector,O asis India for their perform ance and successfulcom pletion ofthe program m e. D ivided into m orning and afternoon batches,the program m e

dom estic ground express service-provides an extensive dom estic portfolio offering both air and ground services,and underlines our com m itm ent to offering unparalleled connectivity and seam less shipping to our custom ers in India.” FedEx cares: Team m em bers across FedEx Express recently participated in the seventh annualFedEx Cares W eek, w hich kicked off globally in on Septem ber 12, 2011. The international volunteer cam paign provided FedEx team m em bers across the organisation w ith valuable opportunities to give back to the localcom m unities w here they live and w ork. W ith India joining the cam paign this year along w ith Italy, Sw itzerland,Spain and U nited Arab Em irates,FedEx Cares W eek drew even m ore team m em ber participation. In India,m ore than 450 FedEx em ployees participated in blood donation and tree planting activities in M um bai,D elhi, Bengaluru,Chennaiand H yderabad in celebration of FedEx Cares W eek. The em ployees donated over 144 litres of blood and planted over 90 trees ata w ildlife sanctuary in D elhiand at city schools in M um baiand Bengaluru,w here schoolchildren also joined in the activity.

CRUISING HEIGHTS November 2011

im parts training over a period of six m onths on G eneral Aw areness, VerbalCom m unication, Essential Com puter Skills,Life Sciences and Custom er O rientation. To aid the students,post com pletion of their RECOGNISING THE BEST: Gopa Kumar course, O asis India (Sr. VP & Regional Head, South, Blue Dart organised sessions on Express Ltd.) awarding the Best Performer netw orking w ith Certificate to a student. com panies for job placem ents and interacting w ith H R m anagers regarding their future plans and goals.

UPS’ new cold chain solutions U PS has announced it w ill offer an innovative air freight container for healthcare products,providing an unparalleled level of shipm ent m onitoring and product protection for tem perature-sensitive pharm aceuticals,vaccines and biologics. O nly available through U PS,the Pharm aPort 360 addresses a key industry issue ofsafeguarding healthcare shipm ents in the supply chain by enabling near real-tim e m onitoring and m aintaining product tem peratures in extrem e outside conditions. “Am id the trem endous surge of tem perature-sensitive therapies com ing to m arket, it’s critical to have the m ost reliable solutions in place to help ensure the safe supply of healthcare products w hile also driving cost and operational efficiencies for healthcare m anufacturers,” said M ark D avis, product m anager,U PS H ealthcare Logistics.“The stakes are high w hen there’s a patientatthe end ofthe supply chain,and U PS strongly believes that the Pharm aPort 360 w ill ensure better protection ofpotentially life-saving therapies.”

M anufactured by Cool Containers, LLC for U PS, the Pharm aPort 360 is designed w ith input from both the life sciences and transportation industries. The unit is fully validated and tested and exceeds rigorous healthcare industry standards for tem perature-sensitive com pliance during transportation.The Pharm aPort 360 sustains its protective tem perature range for m ore than 100 hours, w hich is an im portant factor as m ore supply chains extend globally and

Etihad Crystal Cargo ties up with WCA Etihad CrystalCargo has recently signed a M em orandum of U nderstanding (M oU ) to be the first cargo airline to act as a vendor w ithin the W CA Fam ily netw ork. This innovative program m e w ill allow W CA Fam ily m em bers to access Etihad CrystalCargo’s globalnetw ork of84 destinations. W CA Fam ily is the largest grouping of independent freight forw arders in the w orld, w ith close to 4,000 m em ber offices in m ore than 640 cities and ports w orldw ide.Roy Kinnear,SeniorVice PresidentCargo atEtihad stated:“Ata tim e w hen w e are enhancing service from Asia to the Indian Subcontinent and into Africa,w e are very excited about this M oU w ith W CA Fam ily and expect to be able to deliver exceptionalvalue and routings to their m em bers.”

Smooth landing for F1 cars

m etric tonnes in 2006-07.D IAL is presently handling,on an D elhiInternationalAirport's (D IAL) cargo handlers got into average, 10-20 freighters per day. This is due to a m ore the F1 m ode recently w hen the Form ula 1 cars landed.As m any effective and efficientsystem now than itw as in 2006-07. The as 120 pallets from Incheon airport in South K orea cam e introduction of 100 per cent Electronic D ata Interchange bringing in the cars sent by Ferrari,Sauber,Toro R osso and (ED I) at the international side, a Com m on U ser D om estic Cargo Term inal (CU D CT) R ed Bulls.The finalbatch of and organised trucking the racing cars w as services have allcontributed unloaded w ith the state of to m ore efficientprocesses. the art cargo infrastructure Investm ents have been at the airport.From cars to m ade in both the Brow nfield tools to engines,spare parts, and G reenfield term inals to garage equipm ent, upgrade infrastructure.The pneum atic system s,vehicle Brow nfield term inal has system s and m uch m ore w as electric pow ered transfer handled in a tim e-bound vehicles for stacking and m anner by D IAL’s team . handling of pallets. Latest Speaking on the equipm ent like narrow aisle occasion,I Prabhakara R ao, stackers, battery operated the airport’s CEO said that fork-lifts have been “D IAL sees Form ula 1 as not introduced. Autom ated just an event but a m om ent FROM AIR TO LAND: F1 cars being unloaded from a frieghter at Delhi Airport. truck D ock doors and ofim m ense pride in playing a lead role ofproviding logisticalsupportfor such a renow ned levellers have been installed. The G reenfield Term inalw ill event.This is in line w ith our defined vision to m ake IG I the additionally have Autom atic Storage and R etrievalSystem .3 new parking bays have also been introduced.The forecast for Cargo G atew ay for India.” Cargo handled at IG IA has gone up significantly to 0.6 cargo grow th is 15% and D IAL aim s to touch 1 m n m etric tonne m illion m etric tonnes annually in 2010-11 from 0.3 m illion m ark by 2014-15.

CRUISING HEIGHTS November 2011

GLOBETROTTING

Flying upside down z

Psycho on the prowl z Psycho and insane w ords are perfectly suited to D avid A lan A nderson w ho created a ruckus on a flight w hen he argued w ith a passenger over the arm restand leg space and allegedly threatened to slit his throat. Flight attendants alerted the police w ho found a folding knife w ith a three-inch blade in his carry-on bag.O n the top of it,the Salt Lake m an also did not spare FBI agents and threatened them also. Later,a grand jury indicted D avid A lan A nderson,60,w ith having a dangerous w eapon on an aircraft and tw o

Swim, don’t fly z

W hatw ould you calla pilotw ho can sw im also? In a rare incidentof true grit and determ ination, a pilot survived a crash and literally sw am for fourhours to reach the safestplace. The story goes like this:Ross flew his m other in his tw o-seater plane from H yde Field in Clinton,M d.,U SA to Tangier Island,U SA .A fter visiting the island,they w ere beginning their trip back to H yde Field w hen the plane began experiencing problem s.H e and his m other m anaged to exitthe plane after it crashed and before it sank. Ross told police thathis m other w as injured in the crash,butafter exiting the aircraft she w as sw im m ing w ith him .A fter abouta m ile of sw im m ing in rough w ater w ith w aves three-five feethigh,his m other died.Ross continued on and w as able to reach Sm ith Island,U SA . M eanw hile,Ross thathad crashed into the bay south ofSm ith Island earlierthatday m anaged to sw im to Rhodes Pointw asrescued by the police and w as flow n to Peninsula Regional M edical Centerthereafterhe w as released.

counts of intim idation against a federallaw officer by threat of m urder.In his defence to the court,A nderson,a retired attorney, said he w asn’t able to fillhis prescription foranxiety m edication before boarding the flight. W hata lam e excuse?

Believe itor not,due to the pressing of a w rong button by the co-pilotthe aircraftnosedived and spun overthe Pacific.Itallhappened on A llN ippon A irw ays (A N A ) aircraft,carrying 117 passengers and crew, w hich flipped over entirely as itdived 6,234 feetin 30 seconds follow ing the error. A s a result,tw o crew m em bers suffered little injuries and six passengers reported feeling unw ellafter the plane, w hich w as travelling at a height of 41,000 feet,dropped and tilted around 130 degrees to the left.“W e are deeply

Disgracefulexit z Bizarre things happens on flight.A nd this is no exception.In a rare instance,a M uslim w om an w as throw n off a plane after the flight attendant thought she heard her say ‘it’s a go’ on her cellphone. The incidenthappened on a Southw estA irlines flight. Irum A bbasi,a U S citizen w ho em igrated from Pakistan a decade ago, w as seated on the plane ready to departfrom San D iego for San Jose w hen she told her friend on the phone:Ihave to go thereby m aking crew m em bers suspicious of her behavior.A s a result,crew m em beralerted the Transport Security A dm inistration (TSA ). A bbasi,w ho w as w earing a hijab,w as

CRUISING HEIGHTS November 2011

then escorted from the flightby a TSA official. M eanw hile, three days after incident,Southw estA irlines m ade a public apology to A bbasiafter they realised a m istake had been m ade, saying: "W e sincerely apologise for the custom er’s inconvenience.” A s a redem ption, she w as given a seaton the nextflightto San Jose and a travelvoucher.A fterw ards,she said that the verbalapology did notm ake herfeel better.This tim e they said w e w eren’t com fortable w ith the head scarf."N ext tim e,they w on’tbe com fortable w ith m y accent or they w on’t be com fortable w ith m y South A sian heritage,”she said.

'I am impersonating' z

sorry for causing anxiety to our passengers,” said a seniorA N A official. W hile im ages captured from the flightrecorder highlights the extent to w hich the aircraft appeared m om entarily to lose control as it spun around w hile dropping overthe Pacific as a pilot told N H K , the Japanese broadcasters.

A bizarre dram a w as unfolded w hen a M iam i-based A m erican Eagle A irlines flight attendant accused of w orking under a fake nam e and passport w as arrested and sentenced to eight m onths in prison m inus,a $200 fine,and three years probation. Jophan Porter, the culprit w as found to be an illegalim m igrant from G uyana w ho w as also sentenced to pay off an $82,869 student loan he took out under another person’s nam e w hile a studentin centralFlorida. Porter, under the assum ed nam e

In a confused state of mind z

In a rare incident, a young Saudi A rabian m an created terror on a com m ercial flightby trying to open the exitdoor w hile the plane w as stillin m id-air. The m an identified to be a young Saudi A rabian m an A bdulaziz M ubarak A lsham m ari. Passengers aboard the flightfrom N ew York to Indianapolis rushed to pullA bdulaziz M ubarak A lsham m ari,20,aw ay from the doorand returned him to his seatw hile the pilotsaid he heard som eone trying to open the cabin door and saw the interiordoorw arning lightcom e on in the cockpit. M eanw hile,A lsham m ariw as questioned by A irportpolice officerJonathan Brow n w hen the flightlanded atIndianapolis InternationalA irportand stated he did notappearto know w hat he w asdoing and spoke little English.They photocopied a note A lsham m arihad handw ritten in A rabic w hile on board.In the end,A lsham m ariw as notcharged forthe offence.

Stop! Air marshals are here z

A flightw entinto a turm oil w hen an unruly passenger w as restrained, created nonsense by yelling about a hijacking w hile being restrained and handcuffed by air m arshals aboard the flight. The am using incident happened on a D etroit-bound D eltaA irLines

A nthony Frair, landed a job w ith A m erican Eagle allow ing him to fly all over the w orld and have access to passengers’bags and the cargo area. Earlier,he w as arrested in June at M iam i International A irport (M IA ) after a trip to London and D allas.H e had a U S passport, three driver’s licences, an FA A certification, and A m erican Eagle ID in Frair’s nam e, police said.

flightfrom A m sterdam . M ichaelPatrick Shiels,w ho w as on the flighttold The D etroitNews he w as sitting across the aisle from the m an, w ho yelled abouta hijacking and w as restrained and handcuffed by airm arshals aboard the flight. Shiels said he didn’t notice w hat the m an had done before the m arshals restrained him .Itw as afterthe m an w as handcuffed and restrained to his seatthathe kicked repeatedly atthe airplane doorhe w as seated beside and scream ed about a hijacking and asked the m arshals to shoot him , Shiels added. “The passengersw ere quite frightened atfirst.Thisplane is hijacked.Thatcaused people to scream ,”Shiels recalled. A fter the plane landed,uniform ed officers cam e aboard and arrested the m an,he said.

Greener pastures for landings z

In a rare incident,a pilot of a light plane m ade an em ergency landing at a golf driving range in Perth’s southern suburbs. This all h ap p en ed w hen the pilot Toby Israng w ho w as returning to Jandakot A irport from a skydiving trip found his Cessna encountering difficulties. Em ergency services said that they received the call that a C essna had landed on the M elville G olf C entre range nearthe cornerofD iam ond Courtand K arelAvenue in Leem ing.Interestingly,the pilotw as notinjured and the plane also w as notdam aged. Israng said that the landing on the golfing range seem ed like the safest option.“I w as just straight aw ay looking for the best option to land, just do w hat I w as trained to do,”he said.“I letitrollas far as I could to get itaw ay from the golfers and here I am .”

CRUISING HEIGHTS November 2011

SNIPPETS

DOMESTIC AIRLINES Jet's new Pune-Delhi services JET A IRW AY S recently introduced an additionalPune-D elhiPune daily flight into its w inter schedule from O ctober 30, 2011. The new flight allow s the airline’s guests to connect seam lessly from capitalof M aharashtra through the airline’s operationalhub atTerm inal3 in D elhionto im portantdom estic and key internationaldestinations. SudheerRaghavan,ChiefCom m ercialO fficer,JetA irw ays, said, “Jet A irw ays has introduced this new daily m orning service to the capitalon the basisoffeedback received from our guests w ho w anted a convenientconnection to D elhiand other onw ard destinations.Itw illbe particularly convenientfora host ofIndian and m ultinationalcorporates thatnow callPune hom e and w ill be able to undertake business-related travel to destinations on the airlines vastdom estic netw ork.The new additional flight w ill also provide guests seam less and convenient sam e-day connections through D elhi T3 to key internationaldestinations across Europe,the M iddle Eastand the Far East.W e plan to operate a spacious Boeing 737800/900 w ith 16 business class and 138

GoAir adds more daily flights

econom y class seats.” W ins three aw ards: Jet A irw ays w as conferred three prestigious aw ards at the Tim es Travel H onours 2011.A t a glittering cerem ony in M um bai on O ctober 12, 2011, Jet airw ays w as honoured w ith the “M ostTrusted A irline Brand”, “BestD om estic FullService Carrier” and “BestInternational (Econom y)A irline” for 2011 atthe travelaw ards instituted by the Tim es G roup.The aw ards w ere received by G ilbertG eorge, Senior G eneral M anager-Sales,JetA irw ays from Capt.C P K rishnan N air,Chairm an ofThe Leela G roup of H otels,atthe event graced by top lum inaries of the travel and tourism industry. SudheerRaghavan,ChiefCom m ercialO fficer,JetA irw ays, said, “The unique treble, scored by Jet A irw ays at the prestigious Tim es TravelH onours 2011,is a further testim ony to the em ergence ofthe airline asthe preferred choice forguests travelling to and from the Indian subcontinent.These three aw ard hold specialsignificance as they are nothing shortof an endorsem entby ourdiscerning custom ers,ofourrenow ned internationalservice and quality standards.”

G O A IR recently introduced flights from Bengaluru to the cities of G oa and K ochi.These flights have been introduced by G oA ir to cater to the additional traffic expected in w inter.Earlier in O ctober,G oA ir also added three new destinations to its existing netw ork:K olkata,Ranchiand PortBlair. The carrier recently announced the purchase of72 next-generation A 320 N eo aircraft. O n this occasion, a G oA ir spokesperson said, “W e have a convenient evening flight to both G oa and K ochi, from Bengaluru.W e have the lastdepartures on the Bengaluru-K ochi sector,allow ing our passengers to spend the m osttim e in either city,before catching theirflight.”

The flights are expected to provide good connectivity to passengers arriving from northern and w estern India or arriving from abroad and travelling to Port Blair and G uw ahati. The flights w illbe operated by A lliance A ir,a subsidiary ofA irIndia and w illfacilitate directairtravelbetw een the destinations. A variety of fares are available on the new service, including specialprom otionalfares and fares to stim ulate LTC travel.Itis expected thatflights betw een D elhiand PortBlair w ill m eet the long-standing requirem ent for m ore seam less connectivity betw een the national Capital and the A ndam ans. So far passengers could travelto PortBlair from K olkata and Chennaionly.

AI’s flights between Delhi and Port Blair

SpiceJet ushers in five more regional hubs

H O LID AY m akers travelling w ith A ir India have one m ore reason to cheer. The carrier has introduced a direct flight betw een D elhi and Port Blair, w ith a stopoveratBhubaneshw ar. The flight— A I 9603/9604 to be operated w ith CRJ-700, 70-seater aircraft— w illoperate on alldays of the w eek exceptSaturday.In addition to this A ir India is increasing capacity on the D elhi-G uw ahatisector w ith the introduction ofA I9611/9612.The flight,also to be operated w ith a CRJ-700 aircraft,w illoperate from M onday to Saturday,six days a w eek.

SPICEJET plans to set up five m ore regional hubs in an effortto connectall m ajortow ns through its 70-seater Bom bardieraircraft. The carrier, w hich started its regional operations from H yderabad last CAPACITY BUILDING: An Inside view of a m onth,plansto have SpiceJet aircraft. the hubs in Chennai, A hm edabad,Bengaluru,K olkata and D elhi.“W e plan to have

CRUISING HEIGHTS November 2011

five Bom bardier aircraftateach hub.A llthe airports selected provide enough opportunity in the one-and-a-half hour flying hourspace,” said a seniorSpiceJetofficial. H e said thatSpiceJetw anted M um baito be one of its hubs, but had to shift to A hm edabad because of constraints at the airport. The H yderabad base connects A urangabad, Bhopal, Indore, M angalore, Rajahm undry, Tirupati and Vijayaw ada. “There is m ore opportunity in the south and w est.W e w illsoon launch our operations in Chennai and A hm edabad.D ecisions aboutthe launch ofotherbases have notbeen taken yet,” said the official.

DIAL gets Russian public transport honour D ELH IInternational A irport Lim ited (D IA L) received the “G olden Chariot” Russian Transport Public aw ard 2011 at the W orld Routes Forum in Berlin. The prestigious aw ard consolidates D elhi airport’s position am ong the best airports around the w orld.K iran Jain,H ead of A irline M arketing and Route D evelopm ent, received the honour from D r V ladim ir Popov, H ead of the Public Relations D epartm ent, Russian Federation G overnm ent. Com m enting on the recognition,I Prabhakara Rao,CEO , D IA L,said,“Itis a m atter of greathonour to receive a global recognition for the success stories created here in our ow n country. The G olden ChariotAw ard,instituted by the Russian Federation G overnm entatthe W orld Routes Eventin Berlin,is a recognition forD elhi’svery ow n Term inal3,ourteam and forthe spiritthatcontinues to m ake D elhiInternationalA irportIndia’s firstH ub A irport.”

Mumbai airport will host 11th Routes Asia 2013 CH H ATRA PATISH IVA JIInternationalA irport(CSIA )w illplay hostto the Eleventh Routes A sia 2013,an eventfor airline and airportnetw orking. M um bai InternationalA irport Lim ited (M IA L) M anaging D irectorG V Sanjeev Reddy said thatthe eventw illbe the largest A sian aviation forum to be organised atany Indian airport.

"The choice ofCSIA as the hostairporthelps to reinforce its position as India’s forem ostairport.W e are very happy thatw e w ill be hosting the largest A sian aviation forum in India at CSIA ," said Reddy. "Besides being one of the busiest airports in South A sia, CSIA has also em erged as one of the m ostsignificantaviation hubsin the region because ofthe increase in passengertraffic and num ber of carriers flying to M um bai.W hile the city is a critical business hub for the region and key to the regionalstrategy of leading corporates,this status w illfurther be enhanced after the com pletion of the state-of-the-artintegrated passenger term inal T2 in 2013," he added. M IA L CEO Rajeev Jain said thatthe opportunity to hostthe event w ould enable them to show CSIA to a varied range of industry leaders. To handle m ore flights per hour: In a bid to increase

READY FOR MORE: Planes lined up at parking bay in Mumbai airport.

efficiency in operations and reduce delays,M um baiinternational airport,one ofthe busiestin the country,isgearing up to raise the num ber of flight m ovem ents per hour. The num ber of flight m ovem entsthe airportcan officially handle hasbeen increased to 36 from 32.The airportintendsto gradually increase thisto 48 an hour in keeping w ith the recom m endations m ade by N ATS,a U K -based airnavigation service agency. O fficials at the airport said that the m axim um num ber of flights to be handled in an hour w as increased after a series of m eetings w ith A irTraffic Control(ATC),airlines and D irectorate G eneralof CivilAviation (D G CA ) officials.Both m ain runw ay and secondary runw ay w illnow be handling an increased num ber of flights. O fficials said that the rule can be im plem ented properly only ifarrivals and departures are slotted evenly.

D irector-Finance said,“By organising this giving w eek,BIA L aim s to create a w indow of opportunity notonly for airport A S PA RT of the Joy of G iving W eek celebrations at the em ployees butfor allthose transiting through the airportto Bengaluru InternationalA irport,the airportw as seen abuzz give in kind or cash, beginning from as low as ` 1. The w ith variousactivitiesallgeared tow ard encouraging people to activities started m uch earlierw ith a blood donation cam p that give in one w ay or the other. A carnival, w ith vibrant collected over300 units going tow ards saving lives. A nd now com m unication across the w ith this activity, w e aim to airportdeclared “food festival bring in the feeling of a to m ove your heartto give”. com m unity w hich believes in O ver 8000 airportem ployees giving.” w itnessed a day-long event The donations m ade in w ith food stalls,volunteerled kind included class room gam e stalls,com petitions and furniture, large quantities of sim ple fun activities. The braille paper, m usical contribution w as seen com ing instrum ents, storage units to from one and all.For som e it form a part of the school w as setting up the stalls and library, sports shoes, for others itw as enjoying the com puters and com puter carnivaland feeling good to tables.Volunteers also signed have contributed. up their tim e for volunteering Speaking about the at neighboring N G O ’s and initiative,BhaskarBodapati, WORK COMES FIRST: BIAL officials having snacks during the lunch break. schools.

BIAL celebrates Joy of Giving week

CRUISING HEIGHTS November 2011

SNIPPETS

INTERNATIONAL AIRLINES Virgin Atlantic develops low carbon fuel V IRG IN A tlantic recently announced the developm entin India of a w orld-firstlow -carbon aviation fuel w ith just halfthe carbon footprint of the standard fossil fuel alternative. The ground breaking partnership w ith INNOVATION AT ITS BEST: (L-R) Dr LanzaTech represents a Jennifer Holmgren, Chief Executive, breakthrough in Lanzatech; Sir Richard Branson, President, Virgin Atlantic and Steve aviation fueltechnology Ridgway, Chief Executive, Virgin Atlantic. thatw illsee w aste gases from industrialsteelproduction being captured,ferm ented and chem ically converted using Sw edish biofuels technology for use as a jet fuel. The revolutionary fuel production process recycles w aste gases thatw ould otherw ise be burnt into the atm osphere as carbon dioxide. Speaking as he announced the partnership,the President ofVirgin A tlantic,Sir Richard Branson,said, “W e w ere the first com m ercial airline to test a bio-fuel flight and w e continue to lead the airline industry as the pioneer of sustainable aviation. This partnership to produce a next generation,low -carbon aviation fuelis a m ajor step tow ards radically reducing our carbon footprint,and w e are excited aboutthe savingsthatthistechnology could help usachieve.”

Malaysia Airlines’ delectable offers M A LAY SIA A irlines is setto delightcham pagne and w ine lovers w hen they nextfly M alaysia’s nationalcarrier.A new selection of prem ium w ine and cham pagne labels w hich are know n for their greatclass and elegance is now served on board. This is a part of the airline’s continued efforts to position itself as the preferred prem ium carrier ofA sia.This service is offered to Business class custom ers on the airline’s N orth A sia,South A sia and M iddle Eastroutes. W ith thisintroduction,Businessclasscustom ersw illtake pleasure in being served an international selection of cham pagne,w hite Rieslings and Chardonnays,and a variety ofold and new w orld reds. Through an in-flight survey carried out by M alaysia A irlines during the firstm onth of the introduction,feedback from custom ers w as extrem ely positive.M any rem arked that the exquisite taste of the w ines enhanced their travel on M alaysia A irlines and enabled them to relax easily on the m edium and long haul flights. The new selection of top-quality w ines com e from France, G erm any, Spain, A ustralia and Portugal.Each serving ofcham pagne and w ine also com es w ith a suggested food m enu to furtherenhance the satisfaction of custom ers in-flight.

Aer Lingus selects IBS’ solution IBS SO FTW A RE Services (IBS) recently announced thatithad signed a contractw ith A er Lingus for the im plem entation of its iFlight Crew M anpow er M anagem ent (M PM ) m odule and business consultancy support, to help in the planning and m anagem entofits cockpitand cabin crew.The solution w illhelp A erLingus optim ise its crew resource planning. A er Lingus,the flag carrier of Ireland,w as founded in 1936 and operates scheduled flights to 75 destinations across 22 countries.The airline is IBS’second custom er to optfor iFlight Crew M PM and the first in Europe.M anpow er planning and m anagem entis an area of specialfocus for allairlines as they search for w ays to rem ain com petitive in a sensitive and rapidly evolving business environm ent.

Cathay unveils latest range of amenity kits

LUXURY PERSONIFIED: The Trussardi pouch in cream white and dark beige for ladies.

CATH AY PA CIFIC A irw ays recently unveiled its latestrange ofam enity kits forpassengers featuring an exclusive design by renow ned Italian fashion house Trussardi. The airline’s fem ale passengers travelling in First Class w ill receive the exclusive Trussardi kits.The leading Italian brand cooperated w ith H ong K ong-based designer M ichael Young as part of a collaboration launched to celebrate the fashion house’s 100th anniversary. The FirstClass am enity kitfor m ale passengers w illbe an expanded version of the current understated yet stylish black pouch from Erm enegildo Zegna, an Italian fashion brand know n for its enduring passion for fabric, innovation and quality.The pouches w illcontinue to feature specially selected skincare products from another Italian luxury brand, A cca K appa, including sandalw ood products designed to keep passengers’skin refreshed and revitalised.

LAN goes for Kale’s REVERA K A LE Consultants Ltd.recently announced thatleading South A m erican airline LA N had selected REV ERA Interline service for processing its passenger interline billings.Com m enting on the occasion,Jurgen H erdin,H ead ofRevenue A ccounting,LA N A irlines G roup said, “K ale’s expertise and track record in revenue accounting is very im pressive.W e are confidentof the benefits REV ERA Interline service w illdeliverto LA N .” N eela Bhattacherjee,H ead -A irlines SBU ,K ale Consultants said that the LA N engagem ent w as another m ilestone in the com pany’s relationship w ith the airline.REV ERA Interline is the only standalone interline solution available in the m arkettoday. Itsim plifies and stream lines the interline processes in passenger revenue accounting and helps airlines achieve im m ediate SIS Com pliance. Built on a w eb-based fram ew ork and service-

CRUISING HEIGHTS November 2011

oriented architecture (SO A ),iteasily interfaces w ith existing airline financial system s. REV ERA Interline is pow ered by A PEX ,the industry-endorsed proration engine.

Air Arabia flies to Moscow A IR A RA BIA recently announced that it had started direct services to M oscow and Yekaterinburg in Russia. The tw o new A ir A rabia destinations are the first in Russia. M oscow and Yekaterinburg w illbecom e the carrier’s fifth and sixth destination in CIS and Russian Federation and its 69th w orldw ide. “W e are extrem ely pleased to announce the upcom ing launch of service to M oscow and Yekaterinburg, w hich represents a significantm ilestone in the history ofA irA rabia,” said A del A li, G roup Chief Executive O fficer, A ir A rabia. H ighlighting, in particular, the strong business ties betw een Russia and the U A E,A liadded thatthe carrieranticipated strong dem and for service to the country.“Based on the high levelof business and tourism traffic betw een the tw o countries,w e are confidentthatour new service to M oscow and Yekaterinburg w illfurther offer our custom ers a greatvalue for m oney option to benefitfrom .” W ith its com prehensive netw ork spread across the Indian subcontinent,the new flights to the Russian cities w ill offer an ideal connection for passengers to benefit from A ir A rabia’s value form oney product.

Designers interpret the Air France logo A IR FRA N CE custom ers are being offered colourful new originalm enus on their flights.The new m enu designs are the product of a w orldw ide com petition betw een team sfrom A irFrance’s ELEGANT: Colourful designs unveiled by Air design agency, France for the menu collection. Brandim age. The them e:a graphic interpretation of the brightred “accent,” in the A ir France logo, a strong sym bol of the com pany’s visual identity. From the design proposals,11 w ere selected to illustrate the m enus,w ith six appearing in the firstyearand the otherfive the follow ing year.A palette ofbrightcolours echoing each design is featured on the second and third page covers of Business class m enus.

BMI arrives in Amritsar BRITISH M ID LA N D International(BM I)recently started direct flights betw een London and A m ritsar w ith specialIndian food and entertainm ent on board.This thrice-w eekly flight m akes BM Ithe only airline to offera directconnection betw een Punjab and G reatBritain,w ith a traveltim e ofjust12 hours. A ddressing the m edia during a press conference ProckSchauer said,“W e are excited to enter the Indian m arketvia the holy city of A m ritsar today. O ur new connection to London offers unprecedented convenience and realvalue to U K -bound travellers from Punjab and w illstrengthen econom ic and cultural ties betw een the tw o regions.” Explaining the excellentonw ard connections for BM I’s Indian custom ers, the CEO added, “Business and leisure custom ers now have a real choice and greater flexibility w hen traveling to London,connecting from there w ithin the U K or flying onw ard to N orth A tlantic destinations w ith one ofourpartnerairlines.”

AirAsia is top LCC for the fifth time A IRA SIA added another feather to its cap as the airline w as nam ed Best A sian Low Cost Carrier by A sia Pacific’s leading travelnew s publisherTTG. W ith 49,000 WELL DESERVED: M L Bovornovadep votes cast by the Devakula, Director of Business Development readers of TTG Thai AirAsia (third from the left) after receiving A sia, TTG China, the award for Best Asian Low-Cost Carrier at the 22nd Annual TTG Travel Awards 2011 TTG m ice,TTG -BT Ceremony. m ice China and TTG A sia e-D aily from June to A ugustthis year,A irA sia cam e out at the top in the Best A sian Low -Cost Carrier category. M L Bovornovadep D evakula, D irector of Business D evelopm ent,ThaiA irA sia,received the aw ard atthe 22nd A nnualTTG TravelAw ards2011 Cerem ony and G ala D inner in Bangkok w here a large num ber of travel industry professionals w ere in attendance. Com m enting on the aw ard,ThaiA irA sia CEO ,Tassapon Bijleveld said,“W e are thrilled to be nam ed the bestlow -cost airline in A sia once again.This is the fifth tim e w e have been given the aw ard and it reflects A irA sia’s com m itm ent to excellence notonly to ourguestsbutalso to industry insiders. M oving forw ard,w e hope to continue serving the region w ith low fares,extensive netw ork and destinations,greatflight frequencies and as alw ays,excellentservice.” C EO is C N BC ’s ‘Travel Business Leaders Aw ard’ w inner:A irA sia’s G roup Chief Executive O fficer, Tan Sri Tony Fernandes w as announced as CN BC’s ‘Travel Business Leader’atthe A sia TravelLeaders Sum m it G ala D innerheld in Singapore. O ther nom inees for the inaugural CN BC ‘TravelBusiness Leaders Aw ard’ Tony Fernandes A sia Pacific included H o K w on Ping, Executive Chairm an of Banyan Tree H oldings; W illiam H einecke, Chairm an and CEO of M inor International; Clem ent K w ok, M D and CEO of The H ong K ong and Shanghai H otels; A run N anda, Chairm an of M ahindra H olidays & Resorts (India); H ideo Saw ada, Chairm an of H .I.S,Yang-H o Co;Chairm an and CEO of K orean A ir;and Tan SriD r.FrancisYeoh,M anaging D irectorofY TL Corp. Said Tony Fernandes, “It is hum bling to em erge tops from the im pressive nom inee list.I am indeed gratefulto receive this recognition from CN BC, and I attribute this aw ard to m y passionate and dedicated team of A irA sia A llstars w ho m ade A irA sia w hatitis today.” W ins W ITovation ‘C ustom er Lover’Aw ard:A irA sia w as recently honoured w ith the ‘Custom er Lover’aw ard by W eb In Travel(W IT) atthe inauguralW ITovation aw ards cerem ony at the Suntec Convention Centre held in conjunction w ith the annualW IT Conference. W IT,a renow ned Singapore-based contentand com m unity platform for the traveldistribution,m arketing and technology space,recognised the airline’sinnovative approach in engaging w ith guests via its interactive one-stop help and inform ation centre A skA irA sia,accessible atairasia.com /ask.

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TRAVEL & TOURISM Expedia Taap boosts package commission EX PED IA TravelA gents A ffiliate Program m e (TA A P) recently announced an increase in the com m ission for its affiliate agents on air bookings w hen itis booked as partof a package through Expedia w ebsite.Effective,O ctober 1,2011, these agents w ill now earn 10 per cent or m ore on land content and 1.5 per centon air contentfor Expedia package bookings no m atter w hat carrier is booked. That m eans agents can earn great com m ission on Expedia packages even w hen the flightis w ith a low -costcarrier,w hich generally offers no com m ission atall.Conversely Expedia w illstop paying com m ission on bookings forstandalone flights. The Expedia TA A P partners w ith Bricks and M ortar travel agents and offers com m ission for bookings m ade through the Expedia w ebsite. “The m assive expansion of destinations supported by our A irline Partners has vastly increased our capacity and com petitiveness in all regions,” said Vikram M alhi, Country H ead,Expedia (India).“W e provide greatpackage productto our A gency partners and enable them to take advantage and earn greatcom m ission on the fabulous rates on Expedia.”

in the country.W e have opened five hotels in India this year,and w e plan to launch five m ore hotels overthe nexteightm onths.A t the currentpace,w e hope to triple ourpresence in the country in the nexttw o years.”

ADTOI: Tourism should get boost

A ssociation of D om estic Tour O perators of India (A D TO I),the nodalbody ofdom estic touroperators, recently held a conference to announce the association’s forthcom ing annual convention-cum exhibition. SETTING THE AGENDA: Members of “W e m ay boast of ADTOI during the press conference. m illions and m illions of dom estic tourists,the true picture is certainly not flattering for tourism industry.The infrastructure isrudim entary and toutsabound everyw here — be itairport,railw ay station and even in m ajorbus term inals.W e as an association body take our problem s to the m inistry and they counter us w ith their problem s and the m atter ends there,” m entioned Subhash Verm a,President,A D TO I. A D TO I executive councilm em bers adm itted there w ere too Hilton opens second Delhi hotel m any fly-by-night tour operators in this trade. “Yes ethics are H ILTO N H O TELS & Resorts recently announced the opening of lacking, honour is m issing,” adm itted Rajat Saw hney, G eneral its full-service,upscale H ilton N ew D elhi-N oida-M ayur Vihar Secretary.H ow ever,D elhigovernm enthas taken one baby-step in undera m anagem entagreem entw ith Eros Resorts & H otels Ltd. issuing an order that all D elhi-based tour operators have to be The 168-room new ly-built hotel is equipped w ith up-to-date registered w ith it. “It is neither here nor there. W hat prevents technology and a com plete array ofam enities and guestservices. operators based in G urgaon or N oida having a free run in D elhi,” Itfeatures tw o restaurants and a lobby lounge and a bar. The questioned Rakesh Lam ba,im m ediate pastPresident.Yes,ethics business and recreationalfacilities atthe hotelencom pass a 24- and honesty are certainly m issing in this trade as m ostofus w ould hour business centre,an outdoor pool,a fitness centre w ith a have noticed a board of an operator,inside a pigeon-hole cubicle, com prehensive range of cardiovascular and strength training displaying prom inently an “A pproved by M inistry of Tourism ” equipm ent and a spa that offers am ong the finest city spa sign. am enities. M artin Rinck, President,A sia Pacific, H ilton W orldw ide, Sarovar Hotels launches Hometel Roorkee said,“H ilton N ew D elhi-N oida-M ayurViharis ourseventh hotel SA RO VA R H O TELS recently announced the opening of its

Marina Bay Sands holds exceptional exhibition

technical innovation and is a testam ent to the vitality of FRO M D ecem ber 14, 2011 to 12 February 2012, the Cartier's w atchm aking heritage. A rtScience M useum atM arina Bay Sands w illpresent“Cartier Louis Vuitton's first m aison: D riven by its unceasing Tim e A rt”, an exceptional exhibition pursuit of innovation and creativity, thatw illtake visitors on a journey to the first-everLouis Vuitton “offshore” the heartof Cartier w atchm aking.The m aison, called the Louis Vuitton A rtScience M useum is the firstvenue Island,w as inaugurated recently atthe in A sia to hostthis exhibition,w hich is Bay Sands. iconic M arina the largest collection of Cartier Internationalcelebrity Cate Blanchett, tim epieces ever displayed in public. Yves Carcelle,Chairm an and CEO of The exhibition travels also forthe very LouisVuitton M alletierand S Isw aran, first tim e outside the birthplace of M inister,Prim e M inister's O ffice and w atchm aking, Sw itzerland, and Second M inisterforH om e A ffairs and presents a unique opportunity for the Trade and Industry, Jean-Baptiste public to discover the secrets and D ebains, President of Louis Vuitton stories behind unique tim epieces EXCEPTIONAL BEAUTY: A night view of Marina Bay A sia Pacific, M ichael Leven, Sands hotel. created by Cartier. Presidentand Chief O perating O fficer “Cartier Tim e A rt” unites the largest num ber of Cartier of the Las Vegas Sands Corporation, and Jean-Christophe iconic tim epieces providing a glim pse into its origins through Tevenin,G eneralM anager of Louis Vuitton SoutheastA sia, to the present day, offering a rare opportunity to discover w ere presentatthe ribbon-cutting cerem ony thattook place in Cartier's creativity. Throughout the ages, this collection of front of the crystal pavilion on the boardw alk w ith 100 creations has successfully m ixed ingenuity w ith aesthetic and m em bers ofthe public w atching on.

CRUISING HEIGHTS November 2011

econom y brand H om etelin Roorkee.This econom y hotelis the third property to be ow ned and m anaged by the com pany after Sarovar Portico in Indore and H om etel in Chandigarh. Brand ‘H om etel’ w as first launched in Bengaluru in the year 2006, follow ed by H yderabad,M um bai,Chandigarh and D elhi. H om etelRoorkee w ith 94 room s and suites is w ellfurnished w ith facilites including LCD television w ith satellite channels,inroom tea/coffee m aker and m ini bar.The hotel is strategically located on N H -73 (D ehradun-SaharanpurN ationalH ighw ay)and is justm inutes aw ay from the heartofthe tow n. A ccording to A nilM adhok,M anaging D irector,SarovarH otels Pvt.Ltd.,“H om etelbrand is a unique proposition,w hich offers everything a guestaspires for ata price thatcom es as a pleasant surprise.Roorkee is an im portanteducation centre ofU ttarakhand, surrounded by places of touristinterestlike D ehradun,H aridw ar, Rishikesh,w hich attractm any visitors and business travellers.W e are confidentthatH om etelw illbe w ellaccepted here.”

Spanish Tourism hails India’s support FIESTA S and Siestas — thatis how Spain is popularly know n.The people are fun loving, leisurely w ith lots of fiestas. “There are lot of sim ilarities betw een Indians and Spanish BUILDING CONFIDENCE: (L-R) Arturo Ortiz, people and that is Director, Tourism Office of Spain, Mumbai and H perhaps one reason E Joan Mesquida Ferrando, Deputy Minister for Tourism and Domestic Trade, Spain, addressing w hy m ore and m ore the media during the press conference. Indian tourists are visiting Spain,” m entioned Joan M esquida Ferrando, D eputy M inister for Tourism and D om estic Trade. The m inister w as accom panied by A rturo O rtiz A rduan D irector overseeing prom otionalactivities ofSpain in India in a press conference. Spain receives alm ost57 m illion tourists a year w hile their population is46 m illion.The large chunk oftouristsare Europeans, m ostly from the colderregions,are lured by sun,sand and surf.The beaches of Spain are extrem ely popular w ith tourists.“A lm ost41 per centof tourists have visited Spain ten tim es and m ore,” said A rduan. Its w eather, 300 days of sunshine and M editerranean clim ate,is the U SP. The deputy m inister,ofcourse,w as trying to em phasise thatit w as notm ere Europeans w ho visitSpain,“W e have been receiving tourists from as far as Brazil,China and India.In fact,I am in discussion w ith K ingfisherA irlines to connectIndia and Spain by directflights.This w illincrease Indians’arrivalsince they do not have to travelthrough European hubs as is happening now.” W ith over 4,500 hotels in 5,4 and 3 star categories currently

Dia Mirza felicitates Yatra golf winners

SPORTING SPIRIT: Dhruv along with Dia and Sahil felicitating Rahul Agarwal on winning the Hadicap Category A at the Yatra Golf Tournament.

yatra.com recently organised its m aiden golf tournam entat D LF G olf course, G urgaon w here cam araderie, com panionship and laughter w ere the order of the day.The m aiden leg of the Yatra G olf tournam entbroughttogether the CEO s of D elhi’s leading corporate houses and glitterati of D elhi under one roof to celebrate the spirit of G olf and to prom ote the spiritofsportsm anship. Com m enting on this occasion,Pratik M azum der,H ead of M arketing and Strategic Relations,Yatra.com ,said,“I w ould like to express our fullest appreciation all our friends w ho m ade this eventa grand success and the entire team of Love BreakU ps and Zindagi especially D ia, for all the support. Through our long-term undertaking to hostthis tournam ent, w e seek not only to prom ote the gam e of G olf but also to fostera spiritof‘H appiness’thatarises from the sport.” The propitious eventhosted by Yatra.com thatsalvaged a platform forthe golflovers w as played atthe picturesque D LF G olf Course, G urgaon follow ed by gala price distribution cerem ony.The w inners w ere felicitated by the sensational bollyw ood celebrity — D ia M irza and SahlilSanga. stand third asw orld’sM ICE destination,Barcelona and M adrid are stillattracting m ore than thatotherdestinations in the country.

Ascott opens Somerset Greenways, Chennai TH E A SCO TT Lim ited (A scott)continuesto expand itspresence in India w ith the soft opening of its first Som erset brand of serviced residences in the country.The debut of the 187-unit Som erset G reenw ays Chennai follow s the com pany’s recent opening ofthe 96-unitCitadinesRichm ond,Bengaluru.Som erset G reenw ays Chennaiis a jointventure betw een A scottand Rattha G roup,a com pany in the field of infrastructure developm ent, leasing and exports in India.

A P P O I N T M E N TS RAHUL JANDIAL APPOINTED GENERAL MANAGER

PAUL GOMES JOINS SAROVAR PORTICO, RAJKOT

Rahul Jandial has been appointed as the General Manager for the recently launched Hometel Roorkee. A hotel management graduate from IHM Pusa, Jandial started his career with KC Residency at Jammu as F&B Executive and went on to become F&B Manager and Rahul Jandial since then there has been no looking back. His prior assignments were Assistant F&B Manager at Majestic Park Plaza in Ludhiana and Manager Operations with Mother India Group of Restaurants at Glasgow, UK.

Paul Gomes has been appointed General Manager of the recently launched Sarovar Portico in Rajkot. A hotel management diploma holder, Gomes brings with him over a decade of professional experience in the hospitality sector. His last assignment was with Hotel Heetal Plaza, Kabul as General Paul Gomes Manager. As the General Manager of Sarovar, Portico Rajkot, Paul will be responsible for the day-to-day operations.

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A step to the

‘final frontier’ FINE EXHIBITION: (Above) Visitors witnessing the spectacular display of dance from the Project Bandaloop Dance Troupe at the dedication ceremony of 'Virgin Galactic Gateway to Space' and (below) Sir Richard Branson himself taking part by joining dance troupe with his son and daughter.

f there was one man who has dreamt about ‘the final frontier’ and worked to fulfil that dream it is Sir Richard Branson. On October 18, as he sprayed champagne while abseiling down the glass-fronted exterior of Spaceport America building with his children, Holly and Sam and members of the dance troupe Project Bandaloop, the Virgin Boss must have felt not only what it means to hang in space but also a sense of joy at having completed a part of a project that man has dreamt of and sci-fi writers have penned down. Said Sir Richard: “Today is another historymaking day for Virgin Galactic. For me, my children and our ever-growing community of future astronauts standing in front of the Virgin Galactic Gateway to Space as it glimmered majestically under the New Mexican sun brings our space adventure so close we can almost taste it.” In his blog, Sir Richard noted: “We were suspended in mid-air and somehow managed to spray the champagne before officially naming the Virgin Galactic spaceport ‘Gateway to Space’. We all got back to solid ground ok — I trust that will be the

Richard’s show were treated to the Virgin Galactic’s commercial space vehicles — WhiteKnightTwo and SpaceShipTwo — soaring through the skies of southern New Mexico. More was to come: there were announcements of new scientific and educational customers for the world’s first commercial space line. The Gateway to Space is a combined terminal and hangar facility that will support up to two WhiteKnightTwo and five first of many safe landings at Spaceport SpaceShipTwo vehicles. In addition, The America!” He went on to say that it was Gateway will house all of the company’s “an absolute joy to celebrate the naming astronaut preparation and celebration of the Virgin Galactic Gateway to Space facilities, a mission control centre, and a with New Mexico Governor Susana friends and family area. There is also Martinez”. space committed to public access via the There was more to the inauguration planned New Mexico Spaceport Authorithan the champagne and abseiling. The ty’s Visitor Experience. 800 guests who had gathered for Sir The iconic 120,000 square-foot building, which meets LEED Gold standards for environmental quality, was designed by United Kingdom-based Foster+Partners, along with URS Corporation and local New Mexico architects SMPC. Built using local materials and regional construction techniques, the facility is sustainable with few additional energy requirements due to the use of a range of sustainable ana Martinez and Sir Sus or features including geotern Gov xico the 'Virgin Galactic THUMBS-UP: New Me e right) after unveiling hermal heating and Richard Branson (extrem cooling. Gateway to Space'. CRUISING HEIGHTS November 2011

RN IN o.D ELEN G /2006/16897 Posting D ate.8-9/11/2011 Reg.N o.D L(E)01/5294/2009-11