EDITOR-IN-CHIEF’S NOTE
Seeking a framework ahul Bhatia was blunt and straightforward when he said K Srinivasan that in America if one failed to pay salaries for months on end, it would be the end of the road. “In USA, a FAA is equivalent to the DGCA. If they were confronted with a situation where the crew is not paid for months, be it pilot or technical staff, I guarantee they would shut the airline on safety grounds,” he told the Indian Chamber of Commerce in Kolkata. The government was not amused and issued a stern rejoinder: “…On the issue of safety of airlines, it is stated that the Directorate General of Civil Aviation (DGCA) has been regularly monitoring the safety-related issues of all airlines. The DG has also decided to quarterly monitor the safety records of airlines as per the industry norms. Further, there are no regulatory frameworks anywhere in the world allowing cancellation of the license of airlines merely for failing to pay salaries to the staff. The comments of Shri Bhatia in this regard are uncalled for and baseless.” What unfortunately the Ministry has failed to address is the fact that, if indeed, there is no framework to address issues for a failing and a sinking airline, will it continue to watch the fun and let the airline collapse or will it get its act together and provide a framework? In the last several months, the dynamic Mr Ajit Singh has provided a framework for several issues that were long in the works. He sorted out the ATG tangle, issued a framework for the infamous ‘first right of refusal’ that governed all Air India flights overseas and said that he was setting up a framework for more PPP interventions in the airport sector. So, why is he coy when it comes to handling the mess at Kingfisher?
R
CRUISING HEIGHTS September 2012
One of the reasons why we have a Ministry for Civil Aviation is that it can provide a set of guidelines and gently direct the sector from time to time. In effect, provide a vibrant and dynamic leadership to the aviation business in this country. It is distressing that one of the country’s bestknown airlines is sinking beyond redemption within years of its arrival and the government continues to wait and watch and take guidance from the tweets of Dr Vijay Mallya. When the infamous Kandahar hijacking took place, the government discovered to its horror that it virtually had no system in place to deal with a disaster of the sort that it was saddled with. There was literally no framework, no systems, no Standard Operating Procedures (SOP) in place. Post the hijack, some of the cobwebs were cleared and systems were put in place. Is Mr Ajit Singh waiting for a Kandahar-like episode in the case of Kingfisher before he thinks of a framework? Or, would the smart thing be to create the framework to deal with failing airlines that are most certainly a safety hazard. After all, if pilots and engineers aren’t being paid, it needs no Sherlock Holmes to deduce that even suppliers would be getting the short shrift and maintenance would have gone for a toss. For the 74-year-old Kharagpur-trained engineer that should be a commonsense decision to take.
srini@newsline.in
3
Off the cuff
Airports for groceries Brits who take long holidays abroad will have reason to smile as Tesco has taken a leap to fulfill their demands of providing them groceries soon after they get home. These holiday-makers will be able to choose their groceries at the airport and the groceries will be delivered at their doorstep once they get back home putting an end to the trouble of trudging to the supermarket or the neighbourhood store after returning home. UK’s online grocery store Tesco, the world’s third biggest retailer, recently introduced the first interactive virtual grocery store located in the departure lounge of Gatwick Airport. Tesco allowed customers to tap on four interactive screens on large virtual fridges that one can slide to expose shelves with a collection of 80 products. One merely had to scan an item’s barcode with a smartphone for the basket of goods to be delivered home. “When we came up with the idea for the virtual store at Gatwick, we really wanted to provide a helpful service for busy families,” Tesco.com Senior Marketing Manager Mandy Minichiello said in a statement. The Tesco store comes close on the heels of the first virtual store launched — also by Tesco — last year in South Korea. Tesco’s Internet Retailing Director Ken Towle exemplified in a statement: "Our business in Korea has taught us a lot about how customers and technology are transforming shopping. It gives us a unique opportunity into the future and the chance to try out exciting new concepts.” "The virtual store brings together our love of browsing with the convenience of online shopping. It’s an opportunity to demonstrate what we can do to the 30,000 people a day who depart from Gatwick’s North Terminal, many of whom will need to fill their fridges before they get home, and we’re looking forward to hearing what they perceive about the concept,” Towle added.
4
contents
INDIA IS IN MOOD INDIGO
p32
QUALITY DELIVERY AT A STEADY BEAT. THAT'S WHAT LOW-COST CARRIER INDIGO IS ALL ABOUT. FROM ITS FIRST FLIGHT ON 4 AUGUST, 2006, THE CARRIER HAS CLIMBED TO BECOME THE NO 1 AIRLINE IN THE COUNTRY— BEATING HEAVYWEIGHTS AIR INDIA AND JET AIRWAYS. LED BY AN ALMOST INVISIBLE RAHUL BHATIA AND HIS EQUALLY RETICENT CEO ADITYA GHOSH, INDIGO HAS CREATED A NICHE FOR ITSELF WITH ITS ON-TIME PERFORMANCE AND ITS INNOVATIVE FACILITIES. CRUISING HEIGHTS TRACES THE RISE OF THE CARRIER AND FINDS OUT WHY IT IS SO POPULAR AMONG FLYERS.
NEWS DIGEST
p16
Jet Airways has, after a long time, managed to post profits in Q1 as has low-cost carrier SpiceJet. The government has refused to entertain increase in bilateral entitlements sought by top Gulf carriers. Plus: Patna airport’s problems. CRUISING HEIGHTS September 2012
BIZ AVIATION
p44
The general aviation sector is showing signs of revival: business jet sales have increased in the year ending June 2012. Plus: Two major surveys have put Embraer Executive Jets among the top three companies in the aviation industry.
contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST
CARGO
CRUISING HEIGHTS
p55
Volume VII No 5
Saudia Cargo is upbeat about India and it is banking on its bold and visionary policy to gain the marketshare it deserves from the region. Plus: While air cargo infrastructure receives a boost in a number of cities in the country, a dynamic parcel service which promises sameday delivery is on the verge of being launched.
Editor-in-Chief
K SRINIVASAN Managing Editor
TIRTHANKAR GHOSH Group Consulting Editor
R KRISHNAN Consulting Editor
NANDU MANJESHWAR Assistant Editors
JUSTIN C MURIK, NIDHI SHARMA
NET EXPRESS
p49
Amadeus has announced that the low-cost carrier SpiceJet would now be available to users of Amadeus e-Travel Management (AeTM), Amadeus’ online mult-global distribution system corporate booking tool. Also a look at how iPads are being used in a number of ways by airlines and airports.
Copy Editor
SNIPPETS
p68
While IndiGo has introduced two new flights to Dubai — from Hyderabad and Delhi — in its network, GoAir is keen to increase its presence in the North and the South and in the West, Deccan Shuttle has launched daily charter flights connecting key economic centres of Gujarat.
ASHOK KUMAR Senior Sub-Editor-cum-Reporter
PUNIT MISHRA Design Consultant
ARTWORKS Design
MODASSAR NEHAL, MOHIT KANSAL NAGENDER DUBEY, CHANDERJEET Picture Editor
PRADEEP CHANDRA Photo Editor
HC TIWARI Photographer
HEMANT RAWAT —————————— Director (Admin & Corporate Affairs)
RAJIV SINGH Director (Marketing)
RAKESH GERA Senior Manager (Sales & Marketing)
PRAVEEN SHARMA Manager (PR)
ASHUTOSH MISHRA Sr. Executive (Coordination)
ALKA GOSWAMI
CHOPPERS
p39
The Sikorsky-Tata Group joint venture has fructified: the S-92 helicopter with the airframe made by the Tata Advanced Systems Ltd (TASL) in Hyderabad took to the air when it was delivered to Lider Aviacao of Brazil. Plus: An interview with Sikorsky’s Bob Kokorda, Vice President, Sales & Marketing.
Subscription
ASHNA PANDIT, ANJALI ALEX, CHARU SHARMA (9650433044)
BACK PAGE
p74
Rabia Fatehully has created a record of sorts: She was the first Indian woman to fly in her ‘trademark’ sari and still remains the only one to have done so. Pg 30
CRUISING HEIGHTS TURF WARS READY TO RING THE CURTAIN DOWN ON PATNA AIRPORT
www.cruisingheights.in
SEPTEMBER 2012 I `90
GO India,GO! A model of a modern global airline, low-cost carrier IndiGo’s slow and steady climb to the top has come through quality, team work and an almost invisible leadership.
Jet claws back to black Naresh Goyal’s Jet Airways and Jetlite are once again in profits after five successive quarters of losses
Sorry, no more flights Civil Aviation ministry turns down requests from Gulf carriers for seats and destinations to create a level playing field for Indian carriers
Cover Design: Artworks
Cover Photo: H C Tiwari
The total number of pages in this issue: 72+4
6
CRUISING HEIGHTS September 2012
Executive Director
RENU MITTAL For advertising and sales enquiries, please contact: +91-9810030533, 9810159332 Editorial & Marketing office:
Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013, Tel: +91-11-41033381-82 All information in CRUISING HEIGHTS is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase- I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase- I, New Delhi-110020.
“ PERISCOPE
Profit and loss “I am not so sure that an increase in fees charged by airport operators results in higher revenues.” GoAir CEO GIORGIO DE RONI on the airport development fees charged by airport operators in India.
LETTERS TO EDITOR
The cover story on the Farnbrough Air Show, Show Stopper (Cruising Heights, August 2012) made a very interesting reading. The fact that the airshow was successful despite a Eurozone crisis and saw deals conducted to the tune of $72 a show! billion, bears testimony to the fact that there is light at the end of the aviation tunnel. This was an event that was of great significance to the entire industry. Chiranjeev via email
CRUISING HEIGHTS
Simply flying “Deccan has identified the need for regular passenger air transport to connect India. For this gap to be bridged Deccan has launched a first of its kind non-scheduled daily charter air shuttle service named Deccan Shuttles, which will connect all the airports in Gujarat.”
TONY TYLER ON BUILDING A SUCCESSFUL INDIAN AVIATION SECTOR Pg 12
www.cruisingheights.in
AUGUST 2012 I `90
Troubled future ahead for AAI
Air India’s delayed dream
AFS to the rescue?
Moves are on to pull the curtains down on the country’s top airports operator
Induction of Dreamliners and the pilots’ strike have all but brought the Maharaja to his knees
Stakeholders demand more air cargo stations near major airports in the country
What
KING, N0 PAR S SAY
MIAL
Despite fears that the global downturn would have its impact on Farnborough 2012, the air show beat all expectations and even recorded quite a few orders
More power to the backbone “Governments around the world are recognising the important role of tourism in driving economic growth. Aviation is the backbone of the tourism industry. On an average, some 50 per cent of international tourists arrive by air.” IATA's Director General and CEO TONY TYLER on the aviation industry's contribution to tourism.
The Mumbai International Airport Limited (MIAL) imposing high penalty charges on non-Mumbai private aircraft for overstaying their allotted time, Penalty charges by MIAL leave BAOA livid (Cruising Heights, August 2012) at parking bays has brought a very important issue before us: Can a private company be authorised to levy such penalties? I am certain the users of private jets do not park their planes for the fun of it! Laxmi Vaidyanathan, Mumbai
No more lost bags, thank you SITA (Cruising Heights, August 2012) should bring joy to thousands of international travellers. Anyone who has lost a bag on a flight can understand the trauma it causes. Today, when IT specialist SITA has worked out a software that eliminates lost bags, it must be praised. Not only would the travelling public be benefited but also the airlines that have been shelling out compensation in thousands of dollars. D Patel, Ahmedabad
Guru gyaan “We like to grow gradually. We don't like to just come with a huge aeroplane and dump capacity into anybody's market.” Chief Executive of Qatar Airways, AKBAR AL BAKER on the Qatar Airways' business strategy.
Optimism in the air “Indian aviation is set for transformational growth. Capa projections show airport passenger traffic growing from 143 million in 2010-11 to 452 million by 202021.”
CAPA's CEO (South-Asia) KAPIL KAUL on the future projection of Indian aviation industry.
Spell-bounded, astonished! These are the best terms to explain what we felt as a reader after learning about the phenomenally-talented genius Yves Rossy. His ability to turn literally into a flying machine comparable to jet, prove the potential of man channelizing his/her energies in the right direction. Divya Shrivastava, Gwalior All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin (East), New Delhi -13, OR mail to cruisingheights@newsline.in.
8
Deccan Charters Chairman G R GOPINATH on starting nonscheduled daily charter air shuttle service in Gujarat.
CRUISING HEIGHTS September 2012
Apolitical views “It's about time the ministry and DGCA realise that safety of passengers is more important than being politically correct.” Member, Civil Aviation Safety Advisory Council, MOHAN RANGANATHAN on the safety of flyers posed by unsafe Indian airports.
the Airbus A380. Indira Gandhi International Airport, India: The airport’s largest runway measures 14,852 ft in length. McCarran International Airport, US: McCarran International Airport has four runways — the longest runway measures 14,510 ft in length and is asphalt-surfaced. JFK International Airport, US: The airport has a 14,500 ft runway, making it capable of accepting large commercial airliners, such as the Airbus A380. New Doha International Airport, Qatar: New Doha International Airport has a runway measuring 14,000 ft, that is also capable of taking Airbus A380 aircraft. Madrid Barajas International Airport, Spain: The longest runway, designated 18R-36L is one of the largest runways in central Europe. It measures 13,000 ft in length.
“
Airport-technology.com recently unveiled some of the world's longest commercial runways. Three airports in the USA made it to top six. The runway at Denver International Airport measuring 16,000 ft long was adjudged the longest commercial runway in the world. In the second place, India's Indira Gandhi International Airport pocketed the honours while McCarran International Airport, US, bagged the third spot. At fourth spot, JFK International Airport, US, ruled the roost while the fifth spot was grabbed by New Doha International Airport, Qatar. And the last spot went to Madrid Barajas International Airport, Spain. The list: Denver International Airport, US: 16R/34L runway at Denver International Airport, measuring 16,000 ft long, is the longest commercial runway in North America and also in the world. It will have the capacity to accommodate new generation airplanes, including
COLD STATS
The world's longest runways
ILLUSTRATION: SATISH UPPADHYAY
LOOKING GLASS
Clear opinion “It is not for us to comment or say whether we accept it or not. The report will go to the Public Accounts Committee which will take a decision.” Civil Aviation Minister AJIT SINGH when asked on the CAG report on Delhi airport. .
Pride and joy
“I am very satisfied with the wonderful (Delhi) airport we have built. It has brought pride to India. After two years now, we made good operational stabilisations.” Chairman, GMR Group G M RAO on the Delhi airport's remarkable performance over the years.
CRUISING HEIGHTS September 2012
9
TRAFFIC DATA
HAIL THE MARKET LEADER!
— 3.16 lakh and Kingfisher — 1.56 lakh. IndiGo emerged as the market leader by dethroning Jet Airways thereby garnering 27 per cent of total passengers who flew in July. The other airlines were Jet Airways (19.4 per cent), Air India (18.2 per cent), SpiceJet (17.8 per cent), JetLite (7.2 per cent), GoAir (7 per cent) and Kingfisher (3.4 per cent). The passenger load factor in July 2012 declined mainly due to the lean season. The highest passenger load factor was obtained by IndiGo at 75.5 per cent (it was 86.5 per cent in June), GoAir’s was 63.2 per cent (76.6 per cent in June), SpiceJet’s was 66.3
0
10
YoY
45.37
100
50.37
MoM
Air India
Jet Airways
JetLite Kingfisher SpiceJet
GoAir
75.5
86.5
63.2
76.6
66.3
80.4
5.3
JULY 2012
62.2
JUNE 2012
71.7
355.52
348.48
200
Growth - YoY (+1.74%) - MoM (-9.93%)
79.8
2012
67.1
2011
300
100 80 60 40 20 0
74.2
Pax Carried (in Lakhs)
Seat Factor(%)
400
per cent (June: 80.4 per cent), Kingfisher’s was 53 per cent (June: 62.2 per cent), JetKonnect’s 71.7 per cent (June: 79.8 per cent), Jet Airways’ was 67.1 per cent (June: 74.2 per cent) and Air India’s was 64.7 (Domestic) per cent (June: 71.3 per cent). IndiGo led the airlines in the overall ontime performance of airlines in July 2012 at six metro airports — Delhi, Mumbai, Chennai, Kolkata, Bengaluru and Hyderabad — with 95.3 per cent. The other airlines that followed were: Jet Airways and JetKonnect 91.6 per cent, GoAir 90.3 per cent, SpiceJet 84.3 per cent, Air India (Domestic) 81.2 per cent, Kingfisher 81 per cent. The number of
PASSENGER LOAD FACTOR OF SCHEDULED DOMESTIC AIRLINES
64.7
354.42 LAKHS PASSENGERS CARRIED BY SCHEDULED DOMESTIC AIRLINES IN JAN-JULY 2012
71.3
As per passenger traffic data issued by Indian aviation regulator DGCA, the number of passengers carried by airlines was 354.52 lakh between January and July 2012 as against 348.47 lakh during the corresponding period of the previous year showing the passenger traffic growth of 1.74 per cent. The total number of domestic passengers carried by scheduled domestic airlines for the month of July 2012 was 45.37 lakh as against 51.08 lakh in June. The break-up for the month of July 2012 was: Air India — 8.24 lakh, Jet Airways — 8.82 lakh, JetKonnect — 3.25 lakh, IndiGo — 12.26 lakh, SpiceJet — 8.08 lakh, GoAir
IndiGo
The passenger load factor in the month of July 2012 has declined mainly due to lean season. CRUISING HEIGHTS September 2012
PASSENGERS COMPLAINTS OF SCHEDULED DOMESTIC AIRLINES IndiGo
0.9
GoAir
1 1.1
Kingfisher
1.4 1.5 1.9 1.9
SpiceJet JetLite All India (DOM) Jet Airways 0
0.5
1
CAPACITY VS DEMAND Capacity (ASKM
Demand (RPKM)
19.4 20.5 17.4 16.6 18.5 15.4 16.3 12 16.8 11 11.9 6.9 12.2 7.9 14.5 10.8
Jul Aug Sep Oct
IndiGo 27.0%
Year over Year
Air India (DOM) 18.20%
Dec Jan Feb
3 2 2.9 9.5 5.8
Mar
Jet Airways 19.4%
Apr Jet Airways + Jetlite = 26.60%
May
JetLite 7.20% Kingfisher 3.4%
Jul
Spicejet 17.8%
OTP AT SIX METRO AIRPORTS
OTP (%)
80
91.6
95.3
84.3
60 40
CANCELLATION DATA OF SCHEDULED DOMESTIC AIRLINES IndiGo 0.1 Jet Airways
1.4
JetLite
1.6
GoAir
1.6
SpiceJet
20 0
2
All India (DOM) Air India (Dom)
Jet Airways+Jet Lite
Kingfisher
SpiceJet
0.16
*Overall Cancellation Rate in July 2012: 2.0%
90.3 81
81.2
-8.84
*% Change over Month
ON-TIME PERFORMANCE (OTP) SCHEDULED DOMESTIC AIRLINES
100
-0.33 -0.53 -4.46
Jun
Go Air 7.0%
2
No. of Complaints /10,000 Pax
Nov
MARKET SHARE OF SCHEDULED DOMESTIC AIRLINES
1.5
Total no. of complaints (July 2012) : 635 No. of passengeg related complaints per 10,000 passengers carried : 1.4
metros. Its on-time performance at Mumbai was 97.6 per cent followed by Chennai (95.9 per cent), Delhi (71.8 per cent) and Bengaluru (92.3 per cent). SpiceJet’s on-time performance at Kolkata was 87.3 per cent. The carrier's performance at Hyderabad was 86.9 per cent, Delhi (81.7 per cent), Bengaluru (82.6 per cent), Mumbai (93.7 per cent) and Chennai (82.9 per cent). Air India's on-time performance at Kolkata was 85.7 per cent. The carrier's landings and take-offs at the other metros were: Hyderabad (84.3 per cent), Bengaluru (80.2 per cent), Chennai (79.4 per cent), Delhi (77 per cent) and Mumbai (90 per cent). According to the data received by the DGCA, the overall cancellation rate of flights in July 2012 was 2 per cent. Leading the carriers was Kingfisher (8.2 per cent) followed by Air India (Domestic) 3.2 per cent, SpiceJet (2 per cent), GoAir (1.6 per cent), JetKonnect (1.6 per cent), Jet Airways (1.4 per cent) and IndiGo (0.1 per cent). The reasons for the cancellations: Miscellaneous 14 per cent, technical 41 per cent, operational 8.1 per cent, weather 16.9 per cent and commercial 20 per cent.
40* 30 20 10 0 -10 -20 -30 -40
passenger complaints recorded by scheduled domestic airlines in July 2012 was 635. The number of passenger-related complaints was 1.4 per 10,000 passengers carried. Jet Airways and Air India (Domestic) had the highest passenger complaint rate of 1.9 per cent while JetKonnect had 1.5, SpiceJet 1.4, Kingfisher Airlines 1.1, GoAir 1 and IndiGo 0.9. IndiGo's on-time performance at Bengaluru was 95.4 per cent. The carrier's performance at Delhi was 94.3 per cent, Hyderabad (96.1 per cent), Chennai (93.1 per cent), Kolkata (95.4 per cent) and Mumbai ( 97.2 per cent). Jet Airways and JetKonnect's on-time performance at Chennai was 98.8 per cent. At other's airports it was: Kolkata (93.6 per cent), Hyderabad (91.7 per cent) and Bengaluru (89.6 per cent). The carrier’s performance at Delhi (87 per cent), and Mumbai (91.4 per cent). GoAir flies to only five of the six metro airports. The carrier's on-time performance at Mumbai was the highest at 98.1 per cent. In the other four metros, it was: Delhi (88.4 per cent), Kolkata (90.9 per cent), Bengaluru (90.9 per cent) and Chennai (87.4 per cent). Kingfisher flies to four
GoAir
IndiGo
3.2
Kingfisher
8.2 0
2
4
6
8
10
Cancellation Rate (%)
CRUISING HEIGHTS September 2012
11
OFF THE RECORD
DOCTORED POST I A K Shrivastava, CMD, Pawan Hans and Joint Secretary, Civil Aviation
A HOPPING GAME I
nterviews to shortlist a candidate for Pawan Hans Helicopters India Ltd(PHHIL) which has been headless for a few months now was scheduled for August 28.Now it’s learnt that the entire process has been postponed and the interviews are unlikely for another two months. No one knows why the delay, but the premier helicopter organisation of the country continues with ad hoc leadership till a full-time CEO can be found. This, in the silver jubilee year of its existence. The present incumbent, A K Shrivastava, a Madhya Pradesh cadre IAS officer, is holding additional charge of this job along with his duties as Joint Secretary in the Ministry of Civil Aviation.
f anyone is in any doubt about who calls the shots in the Ministry of Civil Aviation, let there be no doubt. It is Prabhat Kumar who continues to be listed as the Director - Business and Country Relations (New Delhi) of the UN Agency ICRISAT (International Crop Research Institute for semi-arid tropics); at least, that’s the status at the time of writing this piece in the last week of August! Now how is that Dr Prabhat Kumar-a 1985 batch civil servant from Uttar Pradesh-continues to hold a critical job as Officer on Special Duty to Civil Aviation Minister Ajit Singh while still employed at ICRISAT is anybody’s guess. He has been travelling with the Minister, attending to his chores, looking at confidential documents and generally interacting with offi-
MR INVISIBLE: Dr Prabhat Kumar, supposed to be Officer on Special Duty (OSD) to Civil Aviation Minister Ajit Singh, but there is no mention of him in the MoCA website. PHOTO: FLICKR
12
CRUISING HEIGHTS September 2012
cials in the Ministry. That’s all very well, but is there no rules for officials when they tell everyone else about all the rules in the world? That’s been the position for the last eight months - Dr Kumar continues to draw a fat UN salary (it’s rumoured to be several lakhs) and works for the Civil Aviation Ministry. Now don’t get us wrong. We have no issues with Dr Kumar’s formidable presence at the Ministry of Civil Aviation, but when this ministry is dealing with critical issues of regulation, overseeing acquisition, expanding airports and generally beefing up the systems, it surely needs to make sure that its own team is beyond reproach. Just a brief chat with other officials in the Ministry gives one an idea of the disenchantment and anger at the manner in which this issue has been dealt with. Almost everyone’s single-window clearance is through the OSD’s office-all files go to him, he communicates the Minister’s diktats with officials and he is a citizen without a state — at least he has chosen not to opt for one — till now. When he first came as an OSDthe good doctor (he is an MBBS and an MBA) discovered that he could not be an OSD since no one above a Director is eligible to hold this position. Now, he happened to have the seniority of a Joint Secretary. So, Minister Ajit Singh flexed every sinew and muscle in his body to convince the Department of Personnel and the Ministry of Finance to grant an additional post of Joint Secretary for the Ministry of Civil Aviation. This in an era when the Prime Minister talks of a smaller government and pruning of the bureaucracy. That took several months to happen. In the meanwhile, Dr Prabhat Kumar continued to be on the rolls of ICRISAT while working out of the Minister’s office at
OFF THE RECORD
Arun Mishra, Director General of Civil Aviation
K N Srivastava, Civil Aviation Secretary
Rajiv Gandhi Bhawan! Finally, last month the post was created and a series of orders were issued by the DoPT (Department of Personnel and Training) that saw Arun Mishra take over as the DG at the DGCA, A K Shrivastava move from his perch as additional DG at the DGCA to the Ministry as a Joint Secretary and Prashant Sukul move from his position as JS to be India’s representative at ICAO (International Civil Aviation Organization). While everyone else has joined their posts, Dr Prabhat Kumar is scheduled to take over later in September. No one knows why this delay, but surely there has to be some logic to it. But the point is: Why if everyone else was told to comply with the orders, how is it that one
Prashant Sukul, former Joint Secretary
cog in the wheel still refuses to fit in? By the way, the Ministry’s second nominee, a joint secretary level officer is also missing on the Air India board. If one visits the Air India website, Prashant Sukul continues to be director when he is actually in his perch as India’s rep in ICAO by the time this comes out in print. Clearly the automatic nomination has been held up so that Dr Kumar can take his time in saying ‘Ta ta’ to ICRISAT and making up his mind on when to join the Ministry. Dr Kumar was there at India Aviation 2012 in the company of Civil Aviation Minister Ajit Singh - in fact, he flew to Hyderabad in the 787 Dreamliner that landed in the city to participate in the air show. He has travelled on several other
STREET FIGHTER EXTRAORDINAIRE
HC TIWARI
Jet Airways chief Naresh Goyal
here is little to be said about Naresh Goyal. That he is a formidable networker and a man who has his pulse on all things that matter is well known. What is, perhaps, not
T 14
well known is the fact that Goyal is willing to walk the last mile to case his interests. It happened on the last of July — the day Dr Nasim Zaidi was retiring as Secretary, Civil Aviation and several others too were departing from the Ministry to new jobs. But such is the commitment of the man to Jet Airways that he spent almost the whole day at Rajiv Gandhi Bhawan in the company of his senior officials chasing files from one room to another. Not that his interests would be affected by the change in the team; it is simply that the man realised that it would take one long effort to get it back on the tracks again. “You know that is the difference between him and the others. He is a street fighter,” said one official. When asked to react, one senior private carrier honcho said: “I reserve my comments.”
CRUISING HEIGHTS September 2012
occasions with the Minister (one wonders which department underwrites his air fare), sits in on all major meetings presided over by the Minister and continues to be on the rolls of the UN agency. As a matter of rule, all ACC appointments are supposed to be ratified and implemented within a fortnight of the orders being issued. In this case, it is more than a month since the ACC orders for Dr Kumar were issued and more than seven months that he has been at the Ministry without any formal approval on paper. It’s happened in the past in other cases in other ministries and it’s bound to happen in this case too, that the poor secretary, K N Shrivastava, who really has nothing to do with all this, will be left to explain why the ACC orders were not implemented in time? Meanwhile, a huge room is being prepared for Dr Kumar adjacent to the Minister’s office in keeping with his “allrounder” duties as both OSD and Joint Secretary. It is also learnt that he will soon be taking over some of the functions that Prashant Sukul was dealing with - in effect bilaterals, Air India and alliances. There is already plenty of disquiet in the Ministry over the Star Alliance push for Jet, the knocking off of the first right of refusal for Air India, the inflight approval for alcohol supplies to Phoenix, the games for the Airbus A320 acquisition... It’s a long story. We are reserving it for next month.
SMART COOKIE yed Nasir Ali is an indefatigable guy. The livewire who belongs to the Income Tax service has been a director in the Civil Aviation Ministry for several years. Nasir has literally been a Jack-inthe-box handling multiple assignments. He has been a tax man, he has advised governors, he been at a desk job in the Ministry and now as the newly- appointed joint MD at Air India, he will oversee the implementation of the Dharmadhkari Report. That’s not the point, though, on which some at Air India are sore with him. If last reports are to be believed they are preparing a PIL to challenge his accession to this job. “If our new board member, the Director (Personnel) has had to quit the railways to join Air India, how is it that Nasir Ali can be on lien from the IT service? After all, both are ACC appointments and there has to be some uniformity in what the ministry is doing,” said one insider. One is sure Nasir will have the answers. He has always been a smart cookie!
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ALLIANCE NEWS
AA-US Airways merger? IAG CEO Willie Walsh
International Airlines Group CEO Willie Walsh said that a merger between American Airlines and US Airways would be good for Oneworld, according to a Reuters report. Walsh told reporters after a speech at the Washington International Aviation Club that the merger would allow Oneworld members, which include IAG's British Airways and Iberia, to offer customers a larger airline network. Said Walsh: “A small stake in American could reinforce American’s participation in the Oneworld alliance, which includes British Airways, Iberia, Japan Airlines and Qantas.” The IAG CEO had commented earlier that a stronger AA not only benefited its customers, employees and shareholders but also benefited its partners.
MAS ready for oneworld Malaysia Airlines’ Senior Vice-President Germal Singh Khera has said that the carrier expected to conclude all work and officially join the Oneworld alliance in the first quarter of 2013 although there had been announcements that the carrier would join the Oneworld alliance in the fourth quarter of this year. However, Oneworld Communications Executive Michael Blunt told Australian Business Traveller recently: “We have not set a firm joining date for Malaysia as yet…These things generally take around 18 months to complete. So from its invitation to join in June last year, that would make it late this year/early next.” Blunt also said that MAS was on track to join by around the turn of the year — “but we’re not 100 per cent firm yet whether that will be the Gregorian New Year or the Chinese New Year!”
JET SEEKS STAR A recently-published report in Mint points out that Jet Airways has sought the government's permission to join Star Alliance Services. In a letter to the then Civil Aviation Secretary Dr Nasim Zaidi, Raj Sivakumar, Jet Airways Senior VicePresident, Planning and Alliance, wrote: “In order to build the right global partnership and to support our future expansion plans, Jet has been evaluating the potential of joining a global alliance. We are pleased to inform you that we have made the decision to join Star Alliance.” The letter also requests the ministry’s approval to join the alliance since “this would allow us to complete the comprehensive integration process as soon as
Star is the best Star Alliance bagged the Best Airline Alliance title at the Skytrax World Airline Awards, winning this category for the sixth time in the last seven years. Accepting the award, Lee Hock Lye, Vice-President (Products and Services), Star Alliance said, “This award could not have come at a more appropriate time, as we are celebrating Star Alliance's 15th Anniversary and we would like to thank our customers for their years of loyalty. As the results of this survey show, the over 18 million travellers who voted have a clear alliance favourite.” Earlier, Star Alliance was the first airline alliance to receive the Best Alliance
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Award from Skytrax when the category was first introduced in 2005 and has since held the award six times. The Skytrax passenger survey for the 2012 awards covered over 200 airlines, from the largest international airlines to small Star Alliance CEO Mark Schwab domestic carriers, and measured standards across more than 38 different items of airline front-line product and service. CRUISING HEIGHTS September 2012
possible in order to be better prepared for our planned international expansion”. On its part, Star too was interested in Jet’s membership. Mark Schwab, CEO Star Alliance, sent a letter to Jet Airways’ chief Naresh Goyal saying, “I am writing to confirm the interest of our members in naming Jet Airways in Star Alliance. Our members feel that the membership of Jet Airways in Star would be of mutual interest to them and Jet Airways, evidenced by the continuing discussions over several years. We trust that you share the same view.”
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Air Canada, beware the language! Canada’s fetish for two official languages — English and French — has put the country’s eight airports at ‘attention’. A watchdog body under Official Languages Commissioner Graham Fraser has gone undercover to ensure if travellers were being served equally in English and French. Fraser said his office would conduct more than 1,500 anonymous observations at airports in Halifax, Quebec City, Montreal, Ottawa, Toronto, Winnipeg, Edmonton and Vancouver to check out whether both the languages were displayed or not. “I’ve been interested in the language rights of the travelling public really throu-ghout my mandate,” Fraser was quoted. The Commissi-oner was interested in checking out Air Canada about which he had received a number of complaints. The Commissioner will find out if signs were in both official languages, if staff were offering a bilingual greeting to travellers and if services were available in French in predominantly English-speaking parts of the country and in English in French-speaking areas.
Walsh looks Boeing-Comac push for biofuel Boeing and China’s for a slice of Comac opened a new joint-venture American facility in Beijing International Airlines Group (IAG), the owner of British Airways and Spanish airline Iberia, is seriously considering taking a stake in American Airlines (AA). ‘’It is something we would consider,’’ an IAG spokeswoman said confirming what IAG boss Willie Walsh had said. According to Walsh, a small stake in American would reinforce American’s participation in the Oneworld alliance that includes British Airways, Iberia, Japan Airlines and Qantas. Incidentally, British Airways had a joint venture with American on North Atlantic flights and IAG was ready to buy a stake ‘’if we can make the case that there is additional strategic value to be achieved’’, said Walsh. AA is presently going through a reorganisation process after it filed for bankruptcy. Walsh, in fact, had said that AA would become a stronger airline.
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recently to study biofuels refinement and improvements to air traffic management. Its first project involves a study of the prospects for refining-used cooking oil into sustainable aviation biofuel. Funded by both companies and part of Comac’s new Beijing Aeronautical Science and Research Institute, the Boeing-Comac Aviation Energy Conservation and Emissions Reductions Technology Center collaborates with Chinese universities and research institutions on both sustainable energy and efforts to improve ATM efficiency. The Boeing-Comac Technology Center’s first research project aims to identify contaminants in cooking oil and processes meant to treat and clean it for use as jet fuel. China consumes approximately 29 million tonnes of cooking oil annually, while its aviation system uses 20 million tonnes of jet fuel. Finding ways to convert the discarded cooking oil into jet fuel could enhance regional biofuel supplies and improve biofuel’s affordability, according to Boeing.
Routes Asia to be held at Sarawak Routes Asia will be held in Kuching, the capital of the Malaysian state of Sarawak, in 2014. It will be jointly hosted by Sarawak Tourism Board and Malaysia Airports Holdings Berhad. This will be the fifth time that a Routes event will take place in Malaysia. In 2003, the first Routes Asia event, also the first-ever Routes regional event, was held in Sepang, hosted by Malaysia Airports Holdings Berhad, that hosted Routes Asia for the following two years and World Routes 2008 in Kuala Lumpur. Since those early days, Routes Asia has become stronger and in Chengdu this year, it saw 672 delegates. “We are delighted that Routes Asia will be in Sarawak in 2014,” said David Stroud, Executive Vice President, UBM Aviation Routes, continuing, “Our regional events began in Malaysia almost 10 years ago, and once again the passion and commitment of the airport and stakeholders impressed our selection team. Sarawak, though, will offer delegates an experience like no other, a real ‘once-in-a-lifetime’ location unlike any place we have ever held a Routes event; a stunning choice for the 12th Routes Asia event.” Tan Sri Bashir Ahmad, Managing Director of Malaysia Airports Holdings Berhad, commented: “We are delighted that Routes Asia will once again reach Malaysia in 2014.”
Yes, Southampton is recycling chewing gum Southampton Airport has become the first airport in the world with chewing gum recycling bins. According to Airport Managing Director Dave Lees, 25 pink Gumdrop bins have been put around the airport in an effort to get rid of gum “splattered on the floor”. A brainchild of Anna Bullus, the idea of recycling chewing gum was conceived when she was at university. Today, the bins are emptied and the gum is recycled to produce car tyres, toys and mobile phone covers. Bullus said that cleaning chewing gum entailed a huge amount of taxpayers’ money. CRUISING HEIGHTS September 2012
SIA for new lounges Singapore Airlines has appointed renowned architectural and interior design firm Ong & Ong to develop a new design concept to be applied to all of the airline’s airport lounges worldwide. The appointment is part of a more than $20 million investment programme in SilverKris Lounges for the next five years intended to enhance
the travel experience of its flyers. The new design concept will be rolled out
progressively to the airline’s lounges from the middle of next year. The SilverKris Lounge at Sydney Airport will be the first to be fitted out with the new design concept. Customer engagement will be a part of the design process, and a mix of customers will be involved from the initial conceptualisation to the testing and evaluation of prototypes. “Many of our customers tell us that the moment they step on board a Singapore Airlines aircraft, they feel an immediate sense of ‘home’. We hope to replicate that ‘home away from home’ experience in our lounges, along with the warm Asian hospitality that Singapore Airlines is renowned for,” said SIA’s Senior Vice President Product & Services, Tan Pee Teck. Singapore Airlines has 15 SilverKris Lounges at airports around the world, inclusive of new lounges at Delhi and Seoul airports.
Etihad’s global ambition Etihad Airways is interested in buying Ryanair’s near 30 per cent stake in Aer Lingus. Etihad chief James Hogan said that his airline, which already owns three per cent of Aer Lingus, would be “very happy to have that discussion…Dublin is a strong, profitable route for us and we’re very keen to strengthen our partnership there”. Etihad has also held talks about buying out the government’s 25 per cent stake in Aer Lingus as it invests in overseas airlines to help bolster traffic through its Abu Dhabi hub. Etihad has invested in Air Berlin, Virgin Australia Holdings and Air Seychelles, as well as secured 36 codeshare agreements, to assemble a global network. The Etihad bid will pit it
directly against Ryanair. Incidentally, Ryanair’s offer to pick up a stake in Aer Lingus has been criticised and has even prompted a review by European Union regulators, who blocked a similar takeover in 2006.
Qatar’s crew armed with iPads Qatar Airway’ cabin crew and concierge staff at the airline’s Premium Terminal at Doha International Airport and Premium Lounge at London Heathrow have been given iPads to provide passengers with flight data and other information. The airline’s app provides access to customer information and alerts the crew and concierge staff of special meal or service
requirements, and an interactive seat map highlights the presence of VIPs and Privilege Club members on board. The airline plans to extend its tablet services to include on-board Privilege Club enrolment and introduce value-added services for the redemption of Qmiles for upgrades and purchase of duty-free items inflight (see also pages 50 and 51).
CRUISING HEIGHTS September 2012
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Asia Pacific airlines carried 17.0 million international passengers in June, a healthy rise of +8.5 per cent over a year earlier, according to the Association of Asia Pacific Airlines (AAPA). In revenue passenger kilometre (RPK) terms, international passenger traffic grew by +8.1 per cent, outpacing the +4.3 per cent expansion in available seat capacity, resulting in a 2.8 percentage point increase in the average international passenger load factor to 80.2 per cent for the month. AAPA Director General Andrew Herdman said, “For the first half of 2012, Asia Pacific airlines recorded an encouraging +8.7 per cent increase in the number of international passengers carried, supported by relatively strong regional markets, despite wider concerns about weaker prospects for the global economy.”
BREAKING RECORDS According to Dubai Airports’ traffic report, Dubai International recorded the busiest first half in its history with 27.9 million passengers passing through its three terminals between January and June this year. The traffic reached 27,931,639 passengers in H1 2012, up 13.7 per cent from 24,567,818 in the year-ago period. The average monthly passenger traffic recorded in the first six months of the year stood at 4.65 million compared to 4.09 million in the same period of 2011, the report said. “We are on track to meet the annual projected traffic of 56.5 million passengers, which will bring us very close to Dubai International’s operational capacity of 60 million passengers per annum. The addition of Concourse 3 during the first quarter of 2013 is well timed to boost our capacity to 75 million while upping the game on our already high levels of customer service,” said Paul Griffiths, CEO, Dubai Airports.
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HEAVY PENALTY
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NEW JETS FOR SILKAIR
SilkAir recently said that it would order 54 Boeing 737 jets worth $4.9 billion at list prices and would be the biggest order in its history. The airline said it had signed a letter of intent that included purchase rights for another 14 planes. Financial terms were not disclosed. SilkAir plans to order 23 Boeing 737-800 aircraft and 31 of the Boeing 737 Max that is expected to replace the current 737 models in a few years. The planes will be delivered from 2014 into 2021. “We continue to see very strong growth within the region and these new aircraft will position SilkAir well. They will enable us to spread our wings to even more destinations and increase capacity on existing routes,” said Mervin Tan, the Chief Executive of SilkAir.
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American Airlines may face the biggest punishment ever pursued by the Federal Aviation Administration for safety violations. The airline may face a whopping $162.4 million in fines, according to documents filed by the agency with the US Bankruptcy Court overseeing American Airlines’ reorganisation. “The documents detail both proposed and potential civil penalties in connection with ongoing enforcement cases involving both American Airlines and American Eagle,” the agency said in a statement. “Because these cases remain open, the FAA cannot discuss the details of the individual investigations.” American is aware of the FAA’s potential claims. Michael Trevino, a spokesman for American Airlines, said in an e-mailed statement: “The claims process is a routine part of any Chapter 11 filing.”
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27.9
BACK WITH A BANG
CRUISING HEIGHTS September 2012
SEEING RED Kingfisher Airlines’ net loss widened twoand-a-half times to `650.78 crore for the quarter ended 30 June 2012 against a `263.53 crore net loss in the corresponding quarter a year ago. Curtailed network operations led to an 84.19 per cent decrease in total sales at `301.38 crore for the reporting quarter against `1,907.01 crore for the corresponding quarter a year ago. A media statement said the impact of high fuel costs, high interest rates, the depreciation of the Indian rupee, and extraordinary expenses on account of the return of aircraft to lessors and costs associated with nonoperating aircraft resulted in losses. “Kingfisher continues to believe it will get recapitalised and get on a path of sustained profitability. The airline is in discussions with several strategic and financial investors to bring fresh capital. In Q1 FY13, Kingfisher halved its operating losses to `204 crore from `429 crore in Q1 FY12. This was achieved by reducing the level of operations in this high cost environment through a 20-aircraft-holding operation,” Kingfisher said.
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JET IS BACK IN THE BLACK
HC TIWARI
`4344.92 crore compared to `3842.38 crore and `3320.93 crore. The balance was the other operating income which was `242.35 crore, `199.23 crore and `220.67 crore for the three quarters mentioned above. Compared to this, the total expenses during Q1 20112-13 was `4363.73 crore as against `4164.72 crore in Q4 2011-12 and `3624.58 crore in Q1 2011-12, respectively. In these three quarters mentioned above the aircraft fuel expenses were `1967.41 crore, `1822.46 crore and `1563.69 crore; aircraft lease rentals `275.57 crore, `244.12 crore and `207.25 crores; employee remuneration and benefits `401.71 crore, `410.74 crore and `360.65 BREATHING EASY: Chairman of Jet Airways, Naresh Goyal, during a media interaction crore, respectively. The depreciation fter a long time, Jet Airways seems to be breathing fresh and amortization head accounted for `240.36 crore, `248.81 crore air. The carrier posted a profit of `24.70 crore in the first and `223.47 crore in the three quarters namely Q1 20112-13, Q4 quarter (Q1) April-June of the current financial year 20122011-12 and Q1 2011-12, respectively. During these comparative 13 against a loss of `123.16 crore in the first quarter of the previquarters the selling and distribution expenses accounted for ous financial year (2011-12). The profits in the current Q1 comes `374.10 crore, `337.83 crore and `339.38 crore while other after five successive quarters of losses. Jet Airways delivered a expenses were `1104.58 crore, `1100.76 crore and `930.14 crore, respectively. strong operating performance in Q1 2012-13 with standalone profSignificantly both domestic and international operations postits (excluding Jetlite) rising by 112.16 per cent to `740 crore. This ed much higher revenues. In the case of domestic, during Q1 2-12came on the back of a strong revenue growth of 30 per cent which 13 the revenues were `1985.39 crore compared to `1736.50 crore was 25 per cent and 13 per cent higher than Q3 and Q4 of the preand `1513.32 crore in Q4 and Q1 of last financial year 2011-12, vious financial year (2011-12), respectively. respectively. International operations revenue during these three Normally Q2 is considered to be a dull time for airlines while quarters beginning Q1 2012-13 were `2601.88 crore, `2305.11 Q3 and Q4 are traditionally more profitable when compared to Q1. crore and `2028.28 crore. The total revenue earned by Jet Airways However, high interest costs and aircraft lease rentals shrunk the during Q1 2012-13 was `4587.27 crore compared to `4041.61 net profit to `24.70 crore. Jet said better yields along with increase crore and `3541.60 crore, respectively in Q4 and Q1 2011-12. in demand and stringent cost control measures helped the airline Profits after tax during these quarters was `24.70 crore for Q1 post net profit. While these arguments may be true to a large extent, 2012-13 compared to losses of `298.12 crore in Q4 and `123.16 the fact remains that because of a 200 per cent rise in year-on-year crore in Q1 of previous fiscal 2011-12. It may be mentioned here ‘other income’, the net profit became a reality in Q1 2012-13. that income from leasing of aircraft by Jet Airways earned it About two-fifths of the ‘other income’includes profit on sale and `116.74 crore in Q1 2012-13 as against `136.68 crore in Q1 and leaseback of aircraft — a facility or opportunity that may not pres`110.71 crore in Q4 of 2011-12. For the full financial year of 2011ent itself year after year. 12 the income from leasing of its Boeing 777-300 ER aircraft was The carrier’s main concern seems to be its high debt which is `452.12 crore. During Q1 2012-13 sale and lease back of aircraft over `13,000 crore. Long term borrowings or non-current liabiliand engines brought in for Jet Airways `52.37 crore and `76.09 ties stood at `9995 crore and this was far higher than share-holdcrore, respectively. ers’funds which was only `1300 crore. Jet Airways’market capiThe combined revenue of Jet Airways -- that is including talisation was also lower at `3229 crore. Thus, it is evident that Jetlite — was `5274.80 crore during Q1 2012-13 which was 31.24 unless the airline continuously manages to post much higher revper cent higher on a year-on-year basis. Jet Airways domestic yield enues, yields, and control costs further, the present high debt will was up by 9 per cent while that of Jetlite was up by 43.2 per cent. mean higher cost and, therefore, depress profits. In domestic operations, passenger growth was 10 per cent year on Another silver lining for the airline was that its subsidiary year as against industry average growth was only one per cent. Jetlite also returned to profitability posting a net profit of `11.7 EBITDAR during this quarter was high at `825.5 crore as against crore in the first quarter compared to a net loss of `5.2 crore in the `330 crore in the comparative quarter of previous fiscal 2011-12. same quarter of the previous year. The total income of Jet Airways This showed a rise of 147.9 per cent. For Jet Airways, the systemduring Q1 2012-13 was `4587.27 crore compared to `4041.61 wide ASKM was 10285 million — a 10.4 per cent rise — while the crore and `3541.60 crore in Q4 and Q1 of the financial year 2011RPKM of 8502 million showed an increase of 16.3 per cent and 12. During the same period, income from operation in Q1 rose to
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CRUISING HEIGHTS September 2012
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ABOVE GROUND LEVEL ¨¨ ODISHA PLANS FIVE NEW AIRPORTS The Odisha government has proposed to develop greenfield airports in five locations in an effort to boost intra-state and inter-state civil aviation facilities. The five airports would come up in the industrial hubs of Rayagada, Paradip, Dhamara, Angul and Kalinganagar, a senior official said, adding that proposals were also on the anvil to upgrade existing airfields at Gopalpur, Jharsuguda, Barbil and Rourkela. The state-owned IPICOL, in association with the Civil Aviation Department,
ODISHA has initiated a roadmap for facilitating investment in aviation-related activities to boost intra and inter-state trade and tourism. “A roadmap has been prepared for a period of 10 years from 2012-13 to 2022-23. The proposed areas of development range from creation of night parking facility and hinterland connectivity to establishment of aero city and refuelling hub,” the official said. The state also set a target of creating domestic terminal and connectivity, setting-up of aviation training institutes, operationalisation of international flight, development of cargo hub and airline base, the sources said.
MOHALI TO BE READY WITHIN 16 MONTHS For easy connectivity to Punjab, Deputy Chief Minister Sukhbir Singh Badal said that award for construction of Mohali Sukhbir Singh Badal airport had been given to a multinational company and airport terminal would be ready within 16 months. He was speaking after unfurling tricolor on Independence Day function held at Government College. Punjab government has already acquired land for expansion of Ludhiana airport and latest state-of-the-art night landing instrumen-
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seat factor was higher at 82.7 per cent compared to 78.5 per cent in Q1 of last fiscal. During April-June 2012-13 quarter Jet Airways carried 4.86 million passengers which was up by 19.5 per cent. In the case of JetLite, its seat factor was actually lower at 79.3 per cent compared to 80.1 per cent of Q1 2011-12. But still revenue was higher at `563.20 crore compared to `432.10 crore due to rise in yield. Jetlite, now Jet Konnect, more than benefitted from the demand-supply equilibrium following the virtual demise of Kingfisher Airlines and its serious shrinking of its fleet. Like other LCCs even Jet Konnect reaped higher fares and even higher yields. Besides, the trimming of JetLite network lowered the cost by reducing bases and increased yields. JetLite’s rebranding as Jet Konnect and introduction of eight business class seats in its reconfigured aircraft helped in consolidating yields further upwards. The revenues were up even as departures shrunk. JetLite accounted for one third of Jet’s profits. For Jet Airways, domestic operations accounted for 44 per cent of the total revenues. A Jet Airways statement noted that Q2 201213 will reflect the seasonality in seat factors though yields are expected to remain strong. The industry capacity growth is expected to be very modest (less than 5 per cent for the year as a whole) and this will result in the overall yields and seat factors remaining stable. As for international loads they remain high in Q2 (July-September) 2012-12 reflecting the high seasonal factor or rather a high season. As part of route rationalisation, Jet Airways during May and June 2012 reduced or suspended flights to Sharjah, Riyadh, Colombo, Kuala Lumpur and Johannesburg. It added new flights to Bangkok, Dubai and Kuwait. Jet’s international routes which contribute 56 per cent of the overall revenue of the airline saw high growth both in loads and yields during Q1 2012-13. In the whole of the current fiscal 2012-13, Jet expects that by withdrawing unprofitable routes it would lead to a saving of between `110 crore and `137 crore. Efforts to reduce costs (exfuel) including route rationalisation, contract re-negotiation, productivity improvements, etc. will help Jet to improve operating margins and these have started showing up. The cost per ASKM (ex-fuel) has
remained flattish despite an increase in ROE of around 24 per cent year on year. Jet Airways Chairman Naresh Goyal told the company’s AGM in Mumbai early August 2012 that his airline would retire around `500 crore of its nearly `14000 crore debt in the current financial year 2012-13. At the same time it will have to raise at least `1100 crore to improve the balance sheet. “We are planning to retire around $400 million of our $2.5 billion debt this fiscal. Along with this we also need around $180 million to improve our balance sheet. We will achieve this through sale and sale and lease back of some planes”. As much as 80 per cent of the airline’s debt is asset backed and dollar denominated. About 14 per cent of this debt is short term working capital funds which the airline plans to repay from operational revenue through the year. During Q1 2012-13, Jet sold four of its old 737700s and two engines. It is also planning to sell and lease back eight to nine of its narrow-body 737 aircraft in the coming quarters. Another strategy is to shore up topline by doubling the income from its ancillary or non-ticket revenues over the next two and half quarters. Goyal said no new international destination would be launched this fiscal. Jet CEO Nikos Kardassis said: “Fuel cost increase, depreciation of the rupee weighed heavily on the industry’s profitability. ATF was 13 per cent higher than in Q1 2011 and 3 per cent higher than Q4 2011-2012. During Q1, Jet spent `1967 crore on fuel. He said fuel prices had come off from a high of $120 per barrel to between $100 and $105 per barrel. But the rupee dropped from `44.70 to `55.65 to the dollar during the quarter under review year-on -year basis. This 24 per cent depreciation exerted pressure on Jet’s dollar-denominated costs. Despite having a natural hedge because of the US dollar denominated earnings, Jet had to recognise forex loses to the extent of `170.3 crore in Q1 2012-13 on account of exchange rate fluctuation. But, on the other hand, Jet’s earnings were lifted by other income of `124 crore. Kardassis said while the airline’s earnings exceeded expectation, sustaining the performance would be difficult as challenges include higher user charges at Delhi’s T3 and finding room to increase fares further. In an outlook state-
`5275 cr
Combined revenue of Jet Airways, including JetLite
CRUISING HEIGHTS September 2012
ment, Jet said, “Higher crude prices, rupee depreciation, economic slowdown till impact operating margin in the short run. Domestic traffic trends in Q2 will reflect seasonality in seat factors though yields would continue to be strong. During Q2 2012-13, the airlines intends to complete transactions for another 8 to 9 narrowbody under the sale and lease back. This will help it reduce balance sheet debt and release cash. In view of these factors impinging on revenue earnings and hence on profitability, Jet Airways is looking to increase its ancillary revenue by nearly $300 million and tap business opportunities in loyalty programme management and cabin crew and pilot training. The airline earned $170 million in ancillary revenue during the last fiscal 2011-12. Such revenue typically includes on-board sales, advertising, fee on baggage, etc. At the AGM, Jet management secured share-holders’approval to create a company to manage loyalty programme and start a crew training academy. At present the airline is earning around $3 to 3.5 per passenger as ancillary revenue and would like this to
increase to $8 to 9 in a year. Jet Airways Vice President Commercial Strategy and Investor Relations, KG Vishwanath said the loyalty management business would give it a new distribution channel and help increase yields. At present Jet runs in-house Jet Privilege FFP. He said today 85 to 90 per cent of miles accrual happens because of flying. That ratio will change with the addition of new programme partne` as transactions other than flying will generate miles. All the accruals will start happening towards the partner’s side but redemption will happen on Jet Airways side. It will become a larger retail based loyalty programme to unlock commercial value. This way the outsourcing will help Jet clean its balance sheet or that of the parent organization and transfer the programme management and liability to the new company. Vishwanath further said the airline is phasing out expat pilots and pulling out of loss making routes, renegotiating all contracts with vendo` and showing up ancillary revenue. Jet has 220 high cost expat pilots and intends to bring the number down to 50 by the end of 2012. “We are planning to bring the unit cost
`171 cr
Jet airways forex losses in Q1 2012-2013
CRUISING HEIGHTS September 2012
ABOVE GROUND LEVEL ¨¨ tation have been already installed at airport. He said that with the expansion of Ludhiana airport Boeing-320 planes could be able to land at Ludhiana airport. Domestic flights from Bathinda airport would start next month and Punjab government has already approached Union government to allow civil flights from Adampur Army Airport. Badal said that with the completion of all these airports, Punjab would be the only state in the country that would have international airports at the distance of every 60 km.
NOW, VISA ON ARRIVAL AT TRIVANDRUM The Trivandrum International Airport will be issuing Tourist Visa on Arrival (T-VoA) to travellers from Finland, Japan, Luxembourg, New Zealand, Singapore, Cambodia, Vietnam, the Philippines, Laos, Myanmar and Indonesia. The Ministry of External Affairs has approved the visa for visitors from France, Germany and Russia, while a nod from the Bureau of Immigration (BOI), which functions under the Ministry of Home Affairsis awaited, according to a report. Those applying for the visa should neither
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ABOVE GROUND LEVEL ¨¨ be residents of India, nor should they be working in India. Their passports must have minimum six-month validity. On receipt, the T-VoA will be valid for 30 days. According to BOI norms, the purpose of the visit should be recreation, sightseeing, or meeting friends and relatives. The Airports Authority of India (AAI) informed the BOI that it could allocate a facilitation centre, an exclusive visa desk, a foreign exchange, a holding area counter, signboards and facilities for taking photographs of visiting foreign nationals at the international terminal. Trivandrum figures along with Goa and Bengaluru on the short list of BOI for granting T-VoA.
SOON, 24X7 CUSTOMS CLEARANCE The Prime Minister’s Office (PMO) has paved the way for round-the-clock customs clearances at identified sea ports and airports. The four airports where the facility would be available are Delhi, Bengaluru, Chennai, and Mumbai; for the four ports the locations are Chennai, Kolkata, Kandla and JNPT and Mumbai. The facility would be made available on a pilot basis, with customs operations and complementary services. With customs clearances, other government agencies, such as the port or airport authority concerned, drug controller, Food Safety and Standards Authority of India, quarantine and private players, Customs House Agents, banks and transporters, would also have to work 24x7 in tandem. “This would be initially for four months, after which efforts would be made to expand similar operations at other locations,” the PMO said in a release.
AIRPORT WAITS FOR AEROBRIDGES The new terminal of the Kolkata airport has missed four deadlines in supply of aerobridges that are supposed to link the terminal directly with aircraft parking bays. If flight operations commence at the airport’s new terminal from October — as committed by the Airports Authority of India (AAI) — only seven aerobridges will be available instead of the 18 passageways that were actually planned. It may take another couple of months to install the rest. “Officials from AAI headquarters have just completed inspection of the first lot of seven aerobridges in Indonesia. Sections of the aerobridges
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excluding aviation turbine fuel by 5 to 8 per cent year on year. We are re-negotiating all contracts including engine and components.” The CCO of Jet Airways Sudheer Raghavan said Jet was evaluating plans to offer commercial pilot trarining and there are external parties that are interested in it as they see a potential in India. Raghavan said the Indian domestic aviation market will grow to 220 million by 2020 and that boom would create requirement for additional pilots, crew and ground staff. “There is an opportunity for us to use the value of Jet Airways brand to train aviation professionals”. As on March 31, 2012 the promoters of Jet Airways held 80 per cent of the company with Naresh Goyal holding 0.01 per cent and Tailwinds, his
offshore company owning 79.99 per cent. Institutions held 13.64 per cent and nonpromoters including individual investors held 6 per cent. Jet Airways currently operates a fleet of 103 aircraft which includes 10 Boeing 777-300 ER; 12 Airbus A 330-200, 61 Boeing NG 737-700,800 and 900 and 20 ATR 72-500 turboprop aircraft with an average age of 6.11 years. Jet has one of the youngest fleets in the world of aviation. It has 74 flight destinations. About Jet Konnect, the airline statement said with the consolidation of erstwhile Jetlite and Jet Airways Konnect brands, the new Jet Konnect service is a dedicated product designed to meet the needs of the low fare segment. Jet Konnect offers also premier service in certain select routes.
SPICED UP FOR BUSINESS picejet reported a profit after tax of `56.15 crore for Q1 2012-13 as against a loss of `71.96 crore for the same quarter a year ago. In a statement, the airline said its revenue for Q1 2012-13 rose by 51 per cent to `1407 crore compared with `931 crore and its Average Revenue Per Passenger (ARPP) for Q1 2012-13 rose by 24 per cent to `4068 from `3283 in Q4 of the previous financial year 2011-12 or January-March 2012. As per its published unaudited results, the total income from operations for Q1 2012-13 was at `1466.69 crore compared to `1113 crore in the immediately preceding quarter or Q4 201112 and `945.64 crore in Q1 of 2011-12. While the net sales from operations was `1406.74 crore, `1102.09 crore and `930.75 crore, respectively, the airline’s other operating income was `59.94 crore, `10.09 crore and `14.88 crore for the three quarters referred to above. The total expenses for Q1 2012-13 was `1404.26 crore compared to `1326.05 crore in Q4 and `1011.92 crore in Q1 of 2011-12, respectively. The share of expenditure on ATF for these three quarters was `669.67 crore, `620.50 crore and `505.17 crore followed by aircraft lease rentals of `196.25 crore, `172.32 crore and `131.93 crore, airport charges of `76.56 crore, `73.32 crore and `56.31 crore, aircraft
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maintenance charges of `134.11 crore, `172.32 crore and `99.66 crore, respectively. With the expansion of the airline following the induction of more Q 400 Bombardier turbo-prop aircraft, the employee benefit expenses also rose to `131.34 crore in Q1 2012-13 from `127.46 crore in Q4 and `76.93 crore in Q1 of 2011-12, respectively. The profits from operations accordingly was `62.43 crore for Q1 2012-13 compared to losses of `213 crore and `66.28 crore in the previous two quarters. Other income showed by the airlines was `12.16 crore, `7.23 crore and `3.34 crore. But profit after tax for Q1 2012-13 was `56.15 crore which was a first time profit after five quarter losses previously. According to an airline statement, though load factors and yields have been holding firm, the high cost of operations influenced by a weak rupee prevented the company from posting better results. The company’s operating results have been materially affected by various factors particularly high ATF cost, significant fall in rupee value vis-a-vis US Dollar, general economic slowdown. To counter many of such factors, SpieceJet has been implementing various measures such as fare and route rationalisation,
`56.15 cr
SpiceJet’s profit after tax for Q1 2012-13
CRUISING HEIGHTS September 2012
HC TIWARI
ABOVE GROUND LEVEL ¨¨
ON MOVE: Passengers at a SpiceJet check-in counter
increa-sing aircraft utilisation, improving operational efficiencies, renegotia-tion of contracts and other cost-control measures. In addition, SpiceJet continues to explore various options to raise finance in order to meet its short term and long term obligations with the promoters infusing additional capital in the current quarter. These steps will not only result in sustainable cash flows but also enhance SpiceJet’s plans for expansion. In a nutshell, the airlines performance in Q1 2012-13 included a 26.1 per cent increase in passenger carried, 16.7 per cent rise in ASKM, 43.9 per cent rise in departures, 51.1 per cent increase in revenues, 24 per cent rise in yields, and profit before tax of `62.44 crore. CEO Neil Mills said that “while we expand our footprint in domestic as well as international sectors, the excessive taxation on ATF in India and the weakening of Indian rupee compared to the US dollar, are matters of serious concern. The sharp increase in airport charges and other levies in various forms pushed up the cost of air travel without bringing additional revenue to the airlines”. The auditors of Spicejet, SR Batliboi & Associates in their report to the Board of Directors of the airline said no provision had been made for interest of `7.47 crore up to June 30,2012 relating to earlier year’s inter-corporate debt taken by the company. Had the same been accounted for, the airline net profit for Q1 2012-13 would have been lower by `5.97 crore. Besides, the airline has not accounted for forex differences on foreign currency borrowings to the extent that they could be regarded as
an adjustment to internal cost. In the absence of information relating to interest on comparable local borrowings, the report said the auditors were unable to comment on the consequential effect on net profit for the quarter ended June 30, 2012. As on that date, the airlines accumulated losses had substantially eroded the net worth of the company. Notwithstanding such comments and happenings, billiona-ire investor Rakesh Jhunjhunwala picked up 25 lakh shares of SpiceJet at a price of `30.77 per share for `7.7 crore between April-June 2012. The promoter Maran family owns 43.59 per cent shares of the airline. Bank of America Merrill Lynch (BofML) in its report after the Q1 results upgraded SpiceJet scrip to `42. It said human resources problem in Kingfisher Airlines and Air India helped SpiceJet to gain market share in Q1 which went up to 18.6 per cent with daily operation of 300 flights to 37 domestic and three international destinations. While the airline hiked fares, it also took delivery of 12 Q 400s which helped establish the airline in capturing fast growing Tier-II and III cities demand which is currently underserved. With the virtual pull out of the Kingfisher fleet, SpiceJet has been able to stabilize its Q 400 fleet. In the current financial year, the Bank said it expected the yields of SpiceJet to rise by 20 per cent led by supply constraints, both due to reduction in the fleet of Kingfisher and shift of capacity to international routes. But the most important factor has been the pricing discipline across industry.
`62.44 cr profit before tax for SpiceJet
CRUISING HEIGHTS September 2012
AWAITING AEROBRIDGES: The new terminal of the Kolkata airport
will be packed into crates and loaded on a freight ship for transport to Kolkata,” Kolkata Airport Director BP Sharma said recently.
AAI TO EXTEND ROUTES TO OTHER CITIES After introducing green routes between Mumbai and Delhi, Airports Authority of India (AAI) is now planning to introduce similar air routes between other busy sectors too. On July 26, AAI introduced direct routes between Mumbai and Delhi where aircraft could fly straight to the destination without having to chart its course through Ahmedabad, Jaipur and Udaipur. The move was enabled by the use of RNAV 5, a satellite-based communication device, which helps the aircraft keep its path without monitoring from the ground agencies. Since most aircraft in the country are now RNAV-equipped, AAI is planning to extend the routes to other cities. The direct route, according to officials, is also a more fuel-efficient route, which will also reduce carbon emissions. “When an aircraft takes the direct route, it flies faster and at the optimum altitude. This reduces carbon emissions too,” explained a senior AAI official. AAI is planning to extend these direct routes to sectors such as Delhi-Chennai, Delhi-Jaipur, Delhi-Udaipur, Chennai-Bengaluru, etc. ACTION AGAINST AIRPORT LITTERERS Do not drop, litter, spit or smoke anywhere at an airport. If you do, be ready to pay a fine. Dumping garbage on the landside and the airside, misuse of passenger baggage trolleys, rash driving and speeding on the airport premises and stationing of vehicles and equipment in no-parking areas are among the
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ABOVE GROUND LEVEL ¨¨ offences that will attract fines from the Airports Authority of India (AAI) that has issued a circular for imposing fines ranging from `100 to `500.
MUMBAI T2 HAS FIRST AUTOWALK IN ASIA Chhatrapati Shivaji International Airport (CSIA), Mumbai, has been rated as the third best airport in the world and the second best airport in India in 2011 by ACI in the 25-40 mn passenger capacity. Mumbai International Airport Pvt
CREATING EXCELLENCE: Mumbai has been rated as the third best airport in the world
Limited (MIAL) is currently implementing a master plan to build an integrated terminal with a vision and framework to modernise this airport as one of the best airports in the world. MIAL has installed the world’s flattest autowalk technology at T2. The autowalk — completed by KONE — was inaugurated recently. Owing to the innovative pallet return mechanism and a new kind of motor solution, each KONE autowalk is so flat that, unlike conventional solutions, it can be installed entirely on the finished floor level.
SEMINAR ON AVIATION SAFETY AT BENGALURU As part of its commitment to promote a culture of safety in aviation along with implementation and strengthening of Safety Management Systems, Bengaluru International Airport Ltd (BIAL) organised a two-day seminar titled ‘Safety First, Together We Can’. The seminar was well attended with over 120 representatives from other airports, airlines, safety experts, Indian Air Force, HAL airport, ground-handling agencies and BIAL senior management. It had a combination of professionals such as pilots, ground-handling agencies, aircraft maintenance engineers, regulators, airport operators, etc. across all levels. It consisted of key safety personnel in aviation, responsible for planning and implementation of SMS with an
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A LEVEL PLAYING FIELD — AT LAST fter riding and expanding on the huge Indian passenger base, a few top Gulf carriers sought further increase in their bilateral entitlements from India to which the present Ministry of Civil Aviation conveyed a flat ‘No’. Unlike in the past when bilateral entitlements were given to the likes of Emirates, Etihad, Qatar, Oman and even Saudi Arabian airline very liberally, there has been a full stop for the last couple of years. Breaking the lull in this, some of these Gulf-based airlines approached the Ministry of Civil Aviation with the request for some more entitlements. But the Ministry refused to grant more bilateral flight entitlements to at least three of these carriers. They had sought increase in the number of seats per week or at least allow them to increase the number of destinations in India they could fly to. Against nearly 10 such ports of call in India, the Indian carriers do not get more than one and rarely two destination points in the Gulf. Since there is a restriction to fly beyond, the Gulf carriers have been carrying hordes of Indians to their home bases and then flying them to various European and American destinations and at times even South East destinations. In an interview to an Indian newspaper recently, the CEO of Emirates, Tim Clark, said his airline wanted to pick up passengers from Indian airports at least
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COVERING DESTINATIONS: An Emirates plane at one of the foreign airports
CRUISING HEIGHTS September 2012
10 times a day and was looking for an increase in its seat entitlements to 10,000 per week. He also expressed serious interest in flying Emirates’Airbus A 380 to India. An internal study by the Ministry of Civil Aviation has shown that convenient onward connections from the home base of most Gulf carriers, primarily Emirates followed by Etihad and Qatar, skimmed away 25 per cent of Indian passengers who would have otherwise chosen an Indian port. Dubai, Doha, Sharjah, Abu Dhabi and Muscat in all accounted for traffic diversion or leakage — whichever way you look at it — to the extent of 5.36 million passengers each year. This was nearly 40 per cent of international traffic for India. The decision of the Ministry of Civil Aviation to counter this trend and strengthen Indian carriers, it decided to end the monopoly of Air India in terms of first right of refusal and alternatively offer many more rights to Indian private carriers as well. Jet Airways, SpiceJet and IndiGo, besides, of course, Air India, have been asked to furnish information about which routes they were already operating overseas and how many more new flights to other destinations they wished to operate in the next three schedules, i.e. till the summer of 2014. The proof of this pudding was already available beginning this sum-
`23 crore. In the context of such an outstanding debt of mainly PSU banks and a couple of private banks, the need for maintaining higher fares and, therefore, higher yields has become imperative for Indian private carriers. In fact, the first quarterly results for the current financial year 2012Axel Hilgers Tim Clark 13 showed that both Jet mer. IndiGo bagged right to 28 services Airways and SpiceJet had entered the to Dubai and seven to Jeddah of the total profit zone. It is also true that unquoted 63 new services. Its other services or privately-held IndiGo and GoAir included 14 to Singapore, seven each to have also made profits during this quarKathmandu and Bangkok. SpiceJet has ter and even Air India domestic has 14 flights to Dubai, seven to Riyadh, 14 shown substantial increase in revenues to Male and seven each to Kabul, rising on much higher domestic yields Guangzhou, Colombo, Bangkok and on a comparative basis. So, better pricHong Kong. Jet Airways is mounting 14 ing power, higher yields and route ratioflights to Kuwait, seven to Dubai, seven nalisation is now the key for financially each to Bangkok and Male, 14 to stressed Indian carriers. Pricing power Singapore and four to Dhaka. improved following the slower than In a recent interview to an Indian expected expansion in supply or capacimedia, Axel Hilgers, Lufthansa’s ty. True, the likes of IndiGo and Director for South Asia said at last SpiceJet did add to their capacity — be Indians seem to have realised that Dubai it narrowbody jets or narrowbody turbowas the real hub of India and not props — but then these did not Delhi which has had a devasmake up for the sharp contractating effect on Indian carrition in the capacity of ers while it did not hurt Kingfisher Airlines which Lufthansa or some other at one time had 89 airEuropean carriers. craft that came down to Money owed by 66 and now it is perhaps Shifting the focus towards home, it seems aviation companies not even flying more the domestic aviation than 10 aircraft. All this to banks market may continue to happened in two to three witness the same pricing years. power which has governed the According to Bank of domestic market for the last three or America Merrill Lynch, the domesso quarters. Obviously, unless these airtic yields will rise further in the current lines -- that is whatever is left of the financial year once the lean season ends Indian aviation after the virtual demise at the end of Q2 or July-September of Kingfisher Airlines and near eclips2012. Compared to earlier estimates of ing of Air India following the long strike yields rising by 10 per cent year on year, by its foreign going pilots — there has the expectation now is it could be as to be increase in revenue to at least pay high as 15 per cent. back the huge debt the banks are carryDespite a projected GDP growth of ing. In a recent written answer to a quesbetween 5.5 per cent and 6 per cent, tion in Lok Sabha, Finance Minister P supply growth (that is induction of new Chidambaram said aviation companies aircraft) of 5 to 6 per cent and higher owed `40,621 crore to banks as on June prices or fares will remain in place 2012 and of which the outstanding loan because of the pricing discipline from of SBI was `5000 crore. Banks disfinancially weak and challenged carribursed `47.056 crore to airline compaers. A few of the market watchers said nies between 2009 and June 30, 2012. the way the capacity reduction has hapThe total outstanding at the end of June pened, the higher pricing will remain in 2012 was `40,621 crore. Details of the place for the remaining part of the curbreak-up showed that SBI had an outrent fiscal. However, what will happen standing of `5120 crore, Punjab if there is a continuous fall in passenger National Bank `4010 crore, Bank of growth. For instance, in the quarter endBaroda `4133 crore, Canara Bank ing June 2012, Indian domestic passen`2327 crore, IDBI Bank `2550 crore, ger growth actually fell 0.7 per cent Yes Bank `770 crore and HDFC Bank even as capacity rose by 4.5 per cent.
`40,621cr
CRUISING HEIGHTS September 2012
ABOVE GROUND LEVEL ¨¨
ON THE GO: An IndiGo aircraft at Bengaluru airport
overall aim of achieving continual improvement in aviation safety. AIRPORT PROJECTS ON A HIGH Minister of Civil Aviation Ajit Singh informed the Rajya Sabha that the growth in the investment in the airport infrastructure in the country had been higher than the growth of economy because air passenger traffic had been consistently moving at a higher growth rate than the GDP. Passenger traffic from 2001-2002 to 2011-12 (last 10 years) has grown at a rate of 15 per cent as against the GDP growth rate of 7 per cent to 9 per cent. To cope up with the higher growth of air traffic, the investment in airports was made keeping with the growth in the traffic. At the end of XIth Plan Civil Aviation Minister Ajit Singh (2007-2012), total passenger-handling capacity at all Indian airports was 197.77 million as against the demand of 162.30 million passengers that is capacity is ahead of demand. MANGALORE RECORDS `9.5-CR PROFIT According to media reports, an operating profit of `9.5 crore has been registered by Mangalore airport for 2011-12. The Mangalore Airport Director, M R Vasudeva on the occasion of the airport’s diamond jubilee celebration unveiled that the airport had also incurred an expenditure of around `32.5 crore during the year. The airport had come a long way since 2002-03, when it suffered a loss of `2.5 crore, during 2002-03, the income of the airport was `4 crore and expenditure was `6.5 crore, said Vasudeva. It also informed that civil and electrical works pertaining to air cargo complex at Mangalore airport had been finished at a price of `45 lakh. On the other projects at the airport,
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NEWS DIGEST
ABOVE GROUND LEVEL ¨¨
MAKING PROGRESS: An inside view of the Mangalore Airport
Vasudeva stated that about 20 per cent of the work on the construction of an air traffic control block had been completed at the airport and the civil works on this project could be completed by January. CHENNAI RAPID EXIT TAXIWAY ON FAST TRACK The Airports Authority of India (AAI) at Chennai airport has started ramping up a rapid exit way from the airstrip for flights. The taxi track work is anticipated to be completed by October at a cost of `16 crore. “As part of airport expansion, we had
RAMPING UP: A scene outside Chennai airport
planned building of angular taxi track. But for some reasons, we could not take it up then. Two months back, we started building it. It will be ready in another two months,” said Chennai Airport Director H S Suresh. BIA USHERS BIGGEST AIRCRAFT Bengaluru International Airport (BIA) will now be able to receive the largest aircraft like the Boeing 747-8i and A380. BIA was certified by the Director General of Civil Aviation (DGCA) as being Code F compliant. “The BIA has done the safety risk assessment for Code F aircraft and has received approval to permit regular operations of this type of aircraft at this airport from the DGCA. Additionally, Code F-compliant stand is being created as part of T1 expansion and it will have the capability to accommodate A380 type of aircraft,” said a BIAL spokesperson.
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CURTAINS FOR PATNA AIRPORT? n 2000, an Alliance Air flight from Kolkata to Patna crashed in a residential area near the Patna Airport claiming the lives of all 58 passengers on the board. The subsequent enquiry report suggested steps to improve safety measures including expansion of the runway and removal of different obstructions along the area or relocation of the airport. Except for passing the buck, the Government of Bihar and the Ministry of Civil Aviation have done nothing and failed to ward off the threat of possible eventualities in the past 12 years. The war of words between Bihar Chief Minister Nitish Kumar and the Airports Authority of India (AAI) reached alarming proportions and as a result, air connectivity between the Patna and the rest of the country remains at stake. Both sides took recalcitrant stands to protect their respective contentions. While the AAI was steadfast in its denial to continue operations at the Patna airport unless safety measures were ensured, the Chief Minister refused to succumb to the pressure mounted by the AAI to prune thousands of trees along the airport area. Consequently, the AAI slapped an ultimatum on the State Government to close down the airport if the matter was not resolved by June 15 and in reply, the Chief Minister reminded the AAI about its responsibility to ensure operation of airport in the State and refused to allow the pruning of trees in the capital’s green belt. A total of 2,917-odd trees at the nearby Patna zoo was identified by the AAI as a major threat to the safety of air passengers and has to be cut down. The dense forest along the airport reduces visibility during landings and take-offs. Since the runway cannot be changed, the landing distance available (LDA) has been reduced from 1820 meters to 1089 meters. Patna airport has one of the shortest runways in the country and can be used for only ATR-sized aircraft. Flights of B 737s and A 320s would have to be stopped if the tangle is not resolved soon. If the AAI’s demand to cut the trees down is not followed, only two flights a day are expected to be operated from Patna airport against the present operation of 16 flights a day. The state government has been
I
CRUISING HEIGHTS September 2012
dragging the issue on one ground or other. If the CM initially refused to allow felling of trees, he put the ball in the Centre’s court by claiming that the trees were from the reserved forest and felling them would require clearance from the Union Forest and Environment Ministry. Authorities in the state government also claimed that the AAI had identified that stretch of forest for pruning of trees which had been earmarked for the relocation of wild animals. Contesting the State Government’s arguments, the AAI authorities claimed that a clearance was required for felling of the trees in a protected forest area and not for pruning them. Senior officials in the Aviation Ministry believe that the CM was not interested to settle the issue and was only trying to compel the union government to relocate the airport to Nalanda where he has political interests. Arvind Dubey, Director, Patna Airport, claimed that the AAI was ready to expand the airport but it was not possible unless the state government lent its support to prune trees and acquire land. The proposal for continuing the operation of larger aircraft from Patna airport, however, awaited the final call from the Directorate General of Civil Aviation (DGCA) and the body finally chose to stand by the safety of passengers when it set August 16 as the deadline to stop operation of big aircraft. Nitish Kumar then shot off a letter to Civil Aviation Minister Ajit Singh asking him to stop curtailment of operations from the airport. Kumar wrote: “I have already directed the concerned authorities to take necessary action as per law for removal of obstructions including pruning of trees in the vicinity of Patna airport,” and added that most of the obstructions on state government land had been removed. About the pruning of trees at the zoo, he said the AAI had decided to reconsider the demand. In addition, the state’s BJP President Dr C P Thakur and JD(U) MP N K Singh also met the Prime Minister and briefed him about the steps being taken to remove the obstacles threatening flights at Patna airport. The PM assured them that he would hold a meeting with Civil Aviation Minister Ajit Singh on the issue. —D P Sharan
WE SELECTED INDIA BECAUSE IT HAS A VERY INTERESTING AVIATION MARKET One of the most important factors that could inhibit the growth of the aviation sector in the country would be the shortage of skilled managerial manpower. In a first of its kind EU-India Institutional Capacity Building for the Civil Aviation Sector initiative, managers from the sector can take an Aviation Diploma awarded by the Faculty of Business and Law at the University of Applied Sciences Professor Yvonne Ziegler in Frankfurt am Main (UAS Frankfurt). CRUISING HEIGHTS talked to Professor Yvonne Ziegler, Dean of the Business and Law faculty, about the newly-introduced MBA (Aviation Management) in India and how it will prepare students for the challenges arising from the rapidly growing aviation sector in India. Excerpts from the interview:
three weeks. The programmes would be organised in such a way that we have two 10-14 days teaching blocks per semester and in between the people can continue with their regular work. Our professors will come from Germany but we will also have Indian professors from UPES as part of the programme.
¸ What made you take up India to start the aviation management course? The initial contact for coming to India was when we were planning our MBA Aviation Management programme in Germany. We wanted to design it in a very international way. Our students should receive an international exposure. We selected India because it has a very interesting aviation market with a booming aviation industry. We decided then to have one of the modules of our German MBA Aviation Management in India at the campus of the University of Petroleum and Energy Services (UPES) in Dehradun.
¸ Are these courses recognised by IATA or other international bodies? Our university degree is quite recognised within Europe and one can also enter a PhD programme.
¸ How do you see the market shaping up in the next few years? The big advantage of our programme is that it is a part-time programme. So, students don’t have to quit their jobs for a full-time programme and do not have to struggle to enter the market when the market is down. So, they will keep their safe place in jobs. During our programme in Germany our students doing MBA programmes are getting high visibility in their own companies and as a consequence one-third of our students have been promoted in the first semester already.
¸ Do you want to mention anything special about the course? There are several very special aspects about our study programme. First, it is the industry focus. Second, it is that we are also focusing on the personality development of the students. We have got 360-degree feedback at the beginning and at the end of the programme. 360-degree feedback is used as a development tool and includes direct feedback from an employee’s subordinates, peers, and supervisor(s), as well as a self-evaluation. So the students get a feedback on how they are perceived by their subordinates, peers, and supervisor(s) and can work on weak aspects of their leadership behaviour.
¸ Have you already signed them up? Yes, it will be the same faculty that we are using for the German programme. With UPES we have signed a partnership agreement in which they will provide us with their teaching faculty and support the set-up of the MBA Aviation Management programme. ¸ Do you feel after the graduation, the students will be able to move on to other challenging positions? To start with, there have been promotions. The students have moved up to their managerial positions and I think we have prepared them quite well for this move.
¸ So how much India-centric will the course be? The modules have been finalised but regarding the content we have some flexibility. For example, what we do in Germany is that we select a set of strategic challenges that are important to the aviation industry. These challenges might vary from country to country. Through the discussions with Indian ¸ What is the response corporates we have to the course? learnt that they are very At the moment, we have interested in customer got initial enquiries from services, revenue both students and industry WISDOM LESSONS: Students attending a lecture in a classroom at Frankfurt University. management and also partners. As you know, we security. So we can also have now just started with the marketing and the promotion of the modify the content and make the aviation modules more Indiaprogramme. centric.
¸ The German faculty would be coming to India for two or
CRUISING HEIGHTS September 2012
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COVER STORY
GO, INDIGO, GO! “In this business, every little thing matters. We are just focused on being able to take those little pieces and being able to deliver them better than anyone else” RAHUL BHATIA IndiGo Co-owner
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CRUISING HEIGHTS July 2012
SIX YEARS’ TIME IS NOT TOO LONG IN THE LIFE OF AN AIRLINE BUT FOR INDIGO, IT HAS BEEN ONE OF STEADY BUILD-UP TO SUCCESS. WHERE OTHERS HAVE FAILED MISERABLY, INDIGO HAS SCORED AND IS TODAY TOP OF THE MIND RECALL FOR MOST INDIAN FLYERS. CRUISING HEIGHTS PIECES TOGETHER THE MYSTERY THAT IS INDIGO AND ITS FLIGHT TO THE TOP…
wo things happened last month that put IndiGo, the Gurgaonheadquartered low cost carrier (LCC) squarely in the news — something they detest and hate with as pure a passion as they love the business of flying. To start with the reticent promoter of the airline, Rahul Bhatia, hit the news with a few outspoken barbs at a business chamber meeting in Kolkata that raised the ire of the Ministry of Civil Aviation and before that could die down, the July numbers were out and what had been viewed as an inevitability for a long time was now a reality. It was exactly six years to the day that IndiGo had started flying. During this short span, not only has the airline captured the imagination of every flyer in India but also moved up swiftly to capture the top spot in Indian domestic aviation in terms of market share. This commendable performance is reflected in its high profitability and earning it the distinction of being the only Indian domestic carrier to continuously make profits in the last three years. IndiGo is doing
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A year before it started operations in June 2005, IndiGo surprised everyone by announcing the biggest aircraft purchase order at the Paris Air Show the same thing – flying people – but differently compared to its competitors whether full-service or low-cost carriers. And also making money in the process! But what is it that is different is what the mystery really is about. A few months ago IndiGo President Aditya Ghosh told the Business Standard: “There is nothing unusual about it. There must be many low-
fare carriers in Europe, but not all of those are as profitable as RyanAir. We focus on costs and running safe and efficient operations. And, this has a direct impact on running our operations efficiently. There are several such small things, which bring the difference. I would not like to explain it further, as that is our trade secret.” Let IndiGo keep its secret but its management may well have to answer some questions, which industry watchers have been asking in private as well as publicly. But that’s cutting the story short. His boss and the co-owner of IndiGo, Rahul Bhatia had summed it up even more succinctly in an earlier interview to CNBCTV 18: “I may not be in a position to share openly the sort of secret sauce. In this business, every little thing matters. It is not about doing one or two big things that is going to differentiate between success and failure. It is about all the little things that you would do and in the airline business it is built over zillions of little things that companies do day-in and day-out. We are just focused on being able to take those little
COVER STORY
HITTING THE RIGHT NOTES July 9, 2012: Inks agreement with Pratt & Whitney for 150 A320neo engines. June 28, 2012: Becomes first airline in India to implement Required Navigation Performance. February 10, 2012: Takes delivery of its 50th Airbus A320 aircraft. June 15, 2011: Goes international by starting services from Delhi to Dubai. Jan 13, 2011: Creates history by placing orders for 180 single-aisle Airbus A320 passenger jetliners. December 18, 2010: Notches second spot in market share. September 3, 2010: Takes delivery of 25th A320 aircraft.
June 20, 2007: Creates history by acquiring 10th aircraft in a period of 10 months since its birth.
June 18, 2009: Achieves best on-time performance among national airlines. April 16, 2009: Launches flight status service on mobile.
Dec 8, 2006: Expands route network from Delhi. Introduces flights to Goa, Jaipur and Kolkata. Aug 4, 2006: IndiGo announces launch of operations of its inaugural flight from Delhi to Guwahati.
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pieces and being able to deliver them better than anyone else.” IndiGo commenced operations in August 2006 and established itself as one of India’s leading airline using the low-cost model. In January 2011, it got the rights to fly international and in pursuit of this, IndiGo began operations to Dubai from Delhi in September 2011 and is now on the road to expand its international presence which Aditya Ghosh says will be confined to Middle East and South East Asia in the immediate term. A year before it started operations, to be precise in June 2005, on the occasion of the Paris Air Show, IndiGo surprised everyone by announcing the biggest aircraft purchase order. Airline promoters Rahul Bhatia and Rakesh Gangwal (Incidentally, the troika — Gangwal, Bhatia and Ghosh — speak and connect regularly on phone to sort out all issues.)and the parent firm InterGlobe Enterprises announced purchase of 100 Airbus A320 aircraft, which was to be delivered over the next ten years that is 2015. While the first aircraft joined its everyoung fleet on July 28, 2006, a year after placing the big order, the airline had by July-end this year taken delivery of 58 A320s and in the next four years ending 2015, all of its 100 aircraft on order would be delivered. Indeed, commendable is the fact that when the global financial crisis hit the scene in 2008-09, perhaps IndiGo was the only airline which did not cancel any of its pending orders or even stagger deliveries by years. Well into receiving aircraft from its first order, in January 2011, IndiGo again shook the aviation world by placing orders for 180 Airbus A320 aircraft of which 150 will be A320 neo (new engine option) and the remaining the same A320 including, perhaps two A321s. Since launch in August 2006, IndiGo had till February 2012 flew nearly 40 million passengers in about 278,000 flights. In February 2012, IndiGo occupied the second top slot among Indian carriers in terms of market share determined by percentage share of total domestic passengers flown by all domestic carriers. By March 2012, the LCC was flying 307 flights daily to 31 destinations. And by July, it was number one! Reiterating its pre-eminent position, CAPA (Centre for Asia Pacific Aviation) said of IndiGo that it was the only airline, rather an anomaly in the Indian aviation market, to make profits in the fiscal 201112 ending March 31, 2012. But it is also
CRUISING HEIGHTS September 2012
STRONG AND SILENT: Some aircraft from IndiGo’s fleet at Delhi airport
feeling the pressure of a very difficult operating environment. Minister of Civil Aviation Ajit Singh told the Lok Sabha in March 2012 that all scheduled Indian carriers except for IndiGo were incurring losses based on returns filed with the DGCA. Between 2007 and 2010, the Indian airline industry reported `26,000 crore losses, which is expected to be in the region of `10,000 crore in 2011-12. With IndiGo bucking this loss-making trend, it is not surprising that there is a great desire to unravel this mystery. As Singh said, the spiralling cost of fuel, global economic slowdown, low yields due to intense competition and the consequent widening of the gap between revenue and expenses contributed to the losses. The difficult operating environment referred above is indeed evident from a recent comment made by Aditya Ghosh when he said that IndiGo would witness a slump in profits in the current financial year (2011-12) on the back of higher fuel prices, low margins. In fiscal 2010-11, IndiGo saw 18 per cent growth in profits to `650 crore based on a profit margin of 18.6 to 20 per cent on a revenue of `3500 crore. In the previous fiscal 2009-10 the profit
MARKET SHARE OF SCHEDULED DOMESTIC AIRLINES
PASSENGER LOAD FACTOR OF SCHEDULED DOMESTIC AIRLINES
Air India
Jet Airways
JetLite Kingfisher SpiceJet
GoAir
75.5
86.5
63.2
Air India (DOM) 18.20%
76.6
66.3
80.4
JULY 2012
5.3
62.2
71.7
79.8
67.1
74.2
64.7
71.3
Seat Factor(%)
JUNE 2012
100 80 60 40 20 0
IndiGo 27.0%
Jet Airways 19.4%
Jet Airways + Jetlite = 26.60%
IndiGo
The passenger load factor in the month of July 2012 has declined mainly due to lean season.
Go Air 7.0% JetLite 7.20% Kingfisher 3.4%
margin was higher at 25 per cent to deliver profits of `550 crore. Profit margin is a measure of profitability arrived at by calculating the net profit as a percentage of revenue. This is also explained by the increase in fleet size and, therefore, more passengers carried and the drop in profit margin (not net profits per se) due to squeeze in margins or yields. The only way to compare IndiGo’s performance is to place it in front of another LCC, SpiceJet. In March 2011, SpiceJet had 13 per cent market share in terms of passengers carried and was about to post a profit of `175 crore.
“We focus on costs and running safe and efficient operations…” ADITYA GHOSH IndiGo President
(The actuals were different.) These profits of SpiceJet were supposed to be operational and without inclusion of sale and lease-back income. In contrast, IndiGo had a market share of 20 per cent and accordingly its profits should have been `370 to `400 crore. Aviation and financial analysts do agree on such a possibility but it still did not in any way minimise the great performance of IndiGo. Nonetheless, there are a few issues on which IndiGo management held different views from its competition for the very reason of competition. When Kingfisher Airlines showed clear signs of going under and its promoter Vijay Mallya was lobbying hard to get Foreign Direct Investment (FDI) by foreign carriers in Indian domestic carriers, one of the first to raise the banner of revolt and opposition was IndiGo prime mover Rahul Bhatia. In an interview to an economic daily in November 2011, CRUISING HEIGHTS September 2012
Spicejet 17.8%
Rahul Bhatia said Air India would end up a loser if foreign airlines were allowed to buy into domestic carriers. He remarked that in the coming year, air traffic in India would jump sharply and the opportunity it would create should belong to Indian carriers. Bhatia further said that his opposition to FDI by foreign carriers besides the Air India angle was that any investing foreign airline after putting money in a local carrier would create a network between that Indian airline and itself. This would severely damage Air India and people must be cognizant of it. The foreign carrier will align that local carrier to itself which will enable it to come up with a global network that would fly in the face of what may be in the interest of Air India. This way, he said, foreign carriers would not only extract value of their bilaterals from their end but also from the Indian side. It would cut both ways. Rahul Bhatia referred to the US capping foreign investment by foreign carriers at 25 per cent besides the often- used or misused argument of “security”. He said the local franchise needed to blossom, according to the daily that interviewed him. Bhatia, in a virtual cautioning of the government, said that just because a domestic carrier had serious problems, the official policy should not be tweaked to suit the ailing carrier. It was not for the first time that the issue of FDI by foreign carriers had been raised. It was a hot topic 14 years ago when the Tatas wanted to team up with SIA. Later, the same policy-makers who Bhatia wants us to believe should not be influenced, were indeed influenced for barring the Tatas from getting into the airline business even after they gave a commitment that there would be no foreign airline FDI. Significantly, IndiGo management needs to know that in 1998 there was no policy bar on FDI by foreign carriers as one of the big boys of today had it in his
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COVER STORY
HEAD-ON ahul Bhatia said he had nothing to tell us, but sources at IndiGo said that he was ‘pissed off’ that the Indian Chamber of Commerce (ICC) in Kolkata had invited the media to what was supposed to be a “closed door, free and frank off-the-record discussion”. Bhatia realised that the media was in the room long after he had made his view known. It literally set the cat amongst the pigeons and a fuming Civil Aviation Ministry issued a point by point rebuttal. Bhatiaspeak • In US, a FA (federal aviation administrator) is equivalent to the DGCA. If they were confronted with a situation where the crew is not paid for months — be it pilot or technical staff — I guarantee they will shut the airline on safety grounds. • What we didn’t know and regret is the government’s relentless effort to keep inefficient private operators in business. Government must take decisions that are for the good of the industry and not for the good of a select few. • We always knew we will have an artificial competitor in Air India. Air India in its current state and form will always have issues. What we did not know was the government’s relentless effort to keep it afloat. • We (IndiGo) are probably the only zero debt company pitched against competitors who keep getting sop after sops. This game would not go on for long. Companies with low-cost structure will survive. • On paper we are allowed to fly to other countries. But when we make an application, the government gives the right to a selective few. We would love to fly but the government holds on to those rights. This is severe discrimination and it is frustrating. • Our principle issue has been why the government is tinkering with policy for a select few in the industry. When do you stop giving relief to people who are inefficient? The Sarkari take • IndiGo has been allocated traffic rights based on their requests for international routes. • Government being (the) owner of AI is well within its rights to promote the national carrier and prepare it for competition. • On the issue of safety of airlines, it is stated that the DGCA has been regularly monitoring the safety related issues of all airlines…Further, there are no regulatory frameworks anywhere in the world allowing cancellation of the license of airlines merely for failing to pay salaries to the staff.
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airline but supposedly withdrew his foreign partners to help change the policy to bar the Tatas. The second time the FDI issue was discussed was when the Civil Aviation Ministry under Praful Patel floated a vision document that had indicated FDI by foreign carriers. Mallya was active even then but the same big boy (IndiGo was a very small boy then) used all his lobbying power with constituents of UPA-I to shoot down the proposal. Today, the big boy says he is neutral to FDI by a foreign carrier. Bhatia trashed Mallya who was busy in November 2011 addressing newspersons in Mumbai just when the large-scale flight cancellations brought Kingfisher on the front pages of every newspaper and occupied prime time of electronic channels. Mallya had stated that it was untrue that an LCC was making profits on operations. “...it has been downhill for civil aviation except for one airline that defies the odds and claims to be profitable, however unlikely that may be,” he wrote in a memo to employees. Its profits mainly originated from sale and lease back. Mallya further noted that there was nothing like low cost as most costs were common to all airlines whether full service or no frills. In this context, he said that when fuel cost was same, aircraft same, maintenance cost same, there was no room for low cost. Another rival told the media that net profit margins in the airline business hovered around the four per cent mark even for the best. But there was always revenue from one-off inflows like sale and lease back that bloated your books into profit. Bhatia’s response as reported in the media was blunt: he did not own the intellectual property right on sale and lease back and every airline operator had the freedom to do so. Moreover, his balance sheet was available with the DGCA and anyone could see it. As for costs, Bhatia said that there was ample scope for cost arbitrage, which a low cost carrier could bring and which was the prime reason to attract passengers in India, who were very cost conscious and, therefore, fare conscious. IndiGo’s motto is to deliver at reasonable cost a good quality product. Its refrain was: do not take up costs that cannot be taken off. There was even a reference to serving of virtual champagne and caviar by Mallya. Today, Mallya does not even have the aircraft, leave alone
serving the sizzling sea food to his passengers in business class. There are hardly any “guests” as Mallya used to endearingly address his passengers to sip his champagne! According to the airline President Aditya Ghosh, the emergence of IndiGo as a top airline was mainly due to strict adherence to its strong business plan based on low cost. But with the rapid rise in its fleet, it is facing a few challenges on the staffing front and maintenance of service standards. Added to this, he said that profitability was going to remain under pressure due to the weak rupee, high taxes, rising airport fees and high fuel costs. As is widely feared if these beyond-control costs rise further, there could be a negative impact on the rising Indian domestic air traffic. Ghosh, in a way, acknowledging this, said that if the fares were low and fuel prices were high, it would create pressure on margins or yields. Obviously this happened in fiscal 2011-12 — he had already cautioned that IndiGo’s profits in fiscal ending March 31, 2012, would be only a fraction of what it was in the previous year. Aditya Ghosh who is a clever talker like a good lawyer, told newsmen on few occasions, “As long as we can keep our heads above the water, which basically means we have money for spares, hiring people, recruitment, etc that is what profitability means for us…Low cost is not low quality. Ontime performance, clean aircraft and good on-board service at reasonable fares is all that matters to passengers.” Perhaps, no other airline was and is on a hiring spree like IndiGo, which has over 500 pilots for its 58 fleet aircraft and another 200 pilots on roll. So, in the event of any expansion by way of induction of new aircraft would not be a problem: IndiGo has pilots to fly them. Obviously, many new commanders and co-pilots have deserted Mallya and his Kingfisher Airlines to secure their future with IndiGo. On the issue of FDI by foreign carriers, when a reporter asked Ghosh this question in January 2012 he said that they were not looking for investors – either foreign or domestic. He, however, asked if FDI by itself could be a solution to the many problems faced by the Indian aviation industry. While Ghosh admitted that FDI could bring money, the issue was how it would be utilised. Later in March 2012, in an interview to a
When Vijay Mallya was lobbying to get FDI, one of the first to raise the banner of revolt was IndiGo prime mover Rahul Bhatia
CRUISING HEIGHTS September 2012
TV channel, Aditya Ghosh speaking about FDI, said that any avenue which brought in new technology, business and money would always be welcome. This would increase competition and keep carriers on their toes. However, Ghosh’s disconnect was whether that would become the Holy Grail to success or profitability. Claiming that he had no particular view on FDI, he said that he would be more concerned about how an airline was run and how the industry or policies encouraged two things: growth and other rewards and efficiency. Ghosh said that airlines like his own which were growing efficiently, needed to be rewarded by concession on fuel prices. It may be mentioned here that Ghosh told newsmen that, at present, margins were indeed under pressure because the average price of fuel was higher than what it was in 2009-10. Though there has been a growth in revenue and the airline will turn out to be profitable at the end of March 2012, the profits will be only a fraction of what it was in the previous year: `650 crore. If his boss wanted the government not to tweak policy to favour the ailing and failing Kingfisher of Mallya, Ghosh wanted the policy tweaked differently to suit and reward efficient operators like IndiGo. In this context, he said that if the government could reward by offering discounts in fuel and airport charges that would serve as an incentive to all operators, to perform better and fix their house. Aditya Ghosh cautioned that one could not have a situation where capacity shrank when domestic traffic was rising by 15 per cent. Obviously, if the fares rose there would be an impact on the number of people flying and the whole growth story would start crashing down. Addressing the FICCI-IBA summit in Delhi in August 2011, Ghosh was quoted as saying: “I don’t believe in fare hikes. I just believe in lots more people flying and being a profitable airline.” So far so good, but if margins come under even greater pressure, can IndiGo be immune to fare hikes? Obviously, no business model can be inflation proof. In piecing together this story we drew upon the views and news given out by CAPA. But the consulting organisation and its CEO, Kapil Kaul, somehow failed to unravel the whole mystery, which Ghosh described as their trade secret. It is quite normal for airlines these days not just the LCC types but even full-service carriers to outsource important functions of airline operation. This not only keeps the employee-to-aircraft ratio low but also keeps its balance sheet clean. The employee-to-aircraft ratio at the beginning of January 2012 was 150 for Jet Airways, 111 for Kingfisher Airlines, 118 for SpiceJet, 185 for GoAir
and 102 for IndiGo. Aditya Ghosh said that his airline was making profits because of strict cost controls and not deviating from its model which included paid-for meals, higher aircraft utilisation and tightlyframed maintenance contracts. Besides Sri Lankan airline maintaining some of its fleet, IndiGo has also agreed to get a 320 aircraft serviced by Lufthansa Technik, Philippines. IndiGo has hired them to conduct lease return checks on seven of its A320s. The profitability was evident from 2010-11 figures of IndiGo when it earned revenues of `3946 crore and incurred expenses of `3229 crore. During that fiscal, it even hired 1097 people including pilots, cabin crew, etc. The critics have been making intelligent guesses on its sale and lease back route as also lease rentals. Sources indicate that IndiGo’s lease rental costs are too low and it is a wonder how other airlines are not able to get such a deal. There is a view, which IndiGo management will never confirm, and that is part of the lease rentals may or could be indirectly subsidised by the engine suppliers. When IndiGo initially ordered 100 A320s, it chose IAE engines V 2500 to power them. Mallya also ordered the same engines for his aircraft. When the problem arose, Mallya grounded his fleet but IndiGo got IAE to fix the silver screw problem immediately. The reason IndiGo wasn’t decimated by the maintenance and grounding is because of a superb ‘power by the hour’ contract with IAE — the entire responsibility on performance delivery is on the manufacturer. The airline has identical Airbus for the airframe plus for other critical components. IndiGo simply had the vision to make sure they factored in any unforeseen issues. Kingfisher too, had an engine maintenance agreement, but without full guarantees that costs more. We are not making any insinuation of any kind or allegation of any kind. It is only an intelligent guess. It is not unusual for airlines to give bulk orders to engine manufacturers and get them to write a cheque to subsidise their aircraft lease rentals. As for maintenance costs, it has been argued by Indian carriers that their maintenance cost is low because their aircraft are brand new and do not require the expensive C and D check over time. But every lease agreement does carry a maintenance clause towards which the airline operator using the leased aircraft deposits money to keep maintenance adequately funded. For instance, a C check is due in seven years or depends upon how the aircraft in question has been utilised. High Aircraft Utilisation like that by Air Arabia of 14 to 15 hours a day would mean earlier C check than otherwise. The C check maintenance CRUISING HEIGHTS September 2012
SEATS, PLANES AND MARKET SHARE ast year by IndiGo’s fifth anniversary on August 3, it had a fleet of 42 Airbus 320 aircraft and a market share of 19.2 per cent. On its sixth birthday this year, its fleet has grown to 58 aircraft, having added 16 aircraft in the last 12 months. Eight aircraft have been added to IndiGo’s fleet since January and two more will come by the yearend. No wonder it will make the maximum of the decimation of Kingfisher — mopping up its numbers far better than anyone else including Jet whose domestic capacity has hardly grown. But it doesn’t seem to impress the competition. Jet Airways CEO Nikos Kardassis told the media that what mattered were benchmarks like total revenues and on-time performance. These were the real differentiators, he said. “We are the market leaders where it counts. Revenue. We generate more revenue in the domestic market than any of our competitors. We are also the market leader by total revenue (over $3.6 billion). What matters is financial strength and excellence in operations and on time performance. And we are the leaders in all,” Kardassis told the media. Jet Airways has moderated its domestic capacity growth since last few years with capacity growth largely due to changes in aircraft configuration, which increased more seats with launch of Jet Konnect while IndiGo has increased weekly capacity by over 30 per cent in June 2012 compared to June 2011. Of the 58, only 50 of IndiGo’s aircraft service domestic routes, while for Jet Airways that number is much higher: 58 B-737s and 20 ATRs on domestic routes. In spite of this, IndiGo is able to offer higher capacity – of 180 seats per plane – but Jet Airways does not as its ATRs are 7080 seaters and not all B-737s have single-class configuration, which reduces the number of seats offered per plane.
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HC TIWARI
COVER STORY cost is actually funded based on the average number of hours of engine rotation or flown or rather that accrues every hour. This is basically meant to avoid lumping up expenses at the end and hence the need for funding maintenance reserves. No aircraft lessor leases an aircraft, even if it be a part of sale and lease back route, without a maintenance fund being part of the lease rentals. Obviously, the airline must have done a great deal when it placed a huge order in June 2005. In one interview, Ghosh said: “To date, we have ordered in the region of 280 aircraft – so the next 14 to 15 years are set and we have enough on our plates. This includes the order for 150 Airbus A320neos and 30 A320s at the Paris Air Show (2011). Having said that, it’s a fact that India is a highly underserved market and, therefore, if there is a need for more capacity, then we will evaluate our needs. The average age of our fleet is 2.1 years at the moment and will never exceed 2.5 years.” One is not sure if it got the same deal when it placed orders for 180 A320 aircraft in 2011 but chose Pratt and Whitney engines or the new engines for its proposed 180 aircraft deal. That is as much on the maintenance part of the IndiGo story. There are also some issues on which there is no clarity. For instance, as part of its outsourced services like others, IndiGo gets its ground handling done by an agency, which is not part of the airline and, therefore, neither the people employed nor the equipment used is part of the airline’s account books. If the airline pays very little lease rentals for the ground handling equipment used to load and unload its plane as well as tow them, etc, the account books remain clean and unburdened by these charges. Perhaps, it will be interesting to take a page out of what Accenture had recommended when the Air India-Indian merger took place. Among other things, Accenture recommended that Air India must have six Separate Business Units (SBUs). In pursuance of this, since the legal merger became a reality in August 2007, Air India management decided to hive off its maintenance and ground handling units. This would take away between 7000 and 10000 people out of Air India’s pure flying operational expenses. Obviously, the revenue it will earn from flying will be divided over
FOUNDERS AND MOVERS: Rahul Bhatia (centre) with co-owner Rakesh Gangwal (right) and IndiGo’s first CEO Bruce Ashby (left), now CEO of oneworld.
much less heads as well as overheads. The bottomline will improve and Air India could possibly rise again. The point made about Air India is only to suggest or show how the cost could be kept away from aircraft operations to yield a different image which in the process also shows higher margins or yields than hitherto. In real terms, however, IndiGo’s greatest success is its ability to attract and source talent and keep them happy. As Rahul Bhatia opened out in a rare interview with Moneycontrol.com: “We truly believe that one of the key differentiators that get us to deliver what we are to customers, which obviously translates into income, is really our people. I think the company is very focused on finding the right set of people. This is the mantra that we have followed like a religion over the years. It is our view that finding people with the basic competence to do what they do on a day-to-day basis, I think is a relatively easy task. But to find people who not only have the competence, but also this commitment to excel, have the passion to actually surpass expectations, that sort of cocktail really is the recipe for success.” Two classic examples should suffice: For the complex acquisition and leasing operations, they found CFO Riyaz Peermohammed, who was coaxed to move from Emirates where he was a superstar. Apparently Gangwal wasn’t too happy with the choice, but Rahul persuaded him. If insiders are to be believed, Gangwal is happy he listened to Rahul. IndiGo has a six-year sale and lease back agreements for most of its planes. Translation:
The emergence of IndiGo as a top airline was mainly due to strict adherence to its business plan, according to IndiGo President Ghosh
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CRUISING HEIGHTS September 2012
The plane goes back to the leaser after that period and IndiGo inducts another brand new aircraft. It keeps the fleet young, saves on maintenance and provides a peppy set of planes at a marginal cost. Critically, the ‘D’ check is out. That’s the nuts and bolts maintenance check when the aircraft is in its bare bones literally put through the scanner. It happens when you are older than six! On daily operations, IndiGo’s operations head till last year was Shakti Lumba. Lumba should have been head of operations in Indian Airlines where he worked for years long back, they overlooked him and IndiGo reaped the benefits. He put the systems in place. It is now run by Capt Saleem Zaheer. Wi-fi flight dispatch was first introduced by IndiGo; they monitor their aircraft with digital flight data recorders. There are a whole lot of such initiatives including taxiing on one engine, etc. to save fuel. Talk to any of their hostesses on a flight and they’ll tell you it’s hard work. “We have to really work hard, but it’s fun and we love the airline,” exclaimed one of them during a recent flight. There is little attrition, or at least not on the level that plagues other airlines and that’s a huge positive. “I think the company actually is very energetic about finding such individuals because as we all know in life, in business, especially things can go up and down. We just talked about fuel, fuel can go up and down. It is our view that when the going is good a lot of stuff can be shoved under the rack, but when life gets a little bit more difficult we really believe that it’s our people who will make the difference between success and failure. And I think a lot of that comes to the fore,” Bhatia said in conclusion. He is perhaps right! *Rahul Bhatia and Aditya Ghosh were approached a number of times to comment for this story but were unavailable. n
FOCUS ON ‘COPTERS P40
P43
BULLISH ON INDIA
NAVAL TENDER
Sikorsky’s Bob Kokroda on the American giant’s plans for the Indian market
WORLD BEATER: Technicians working on the S-76 airframe at TASL
T
he S-92 airframe was made by the Tata Advanced Systems Ltd (TASL) in Hyderabad, which manufactures the cabins, and equips them with components made by the Tata-Sikorsky joint venture company, TARA. The helicopter is being delivered to Lider Aviacao of Brazil, which charters both aircraft and helicopters for multi-applications, including servicing offshore oil installations. At present, there are two manufacturing facilities in Hyderabad in partnership between Sikorsky and Tata Group compa-
Indian Navy’s LUH tender has excited global chopper manufacturer
Indian Sikorsky airframe flies in Brazil The fruit of the joint venture between Sikorsky and the Tata Group has taken wing in Brazil nies that supply the global Sikorsky supply chain. Tata Advanced Systems Ltd (TASL) makes S-92 cabins and then sends them to the Sikorsky facility at Coatsville in Pennsylvania in the US. Tata Aerospace Systems is a joint venture (JV) between the Tata Group and Sikorsky Aircraft signed in 2009 to manufacture aerospace components for Sikorsky in India, including components for S-92 helicopter cabins. Located in Hyderabad, the JV has now commenced production of over 4,000 CRUISING HEIGHTS September 2012
detailed components, which can be used for both rotary and fixed-wing aircraft. The Sikorsky S-92 is a large, twin-engine helicopter that can be used for both civil and military purposes. Buoyed by the strong demand for the S-92, TASL plans to ramp up its annual capacity from 12 to 26 and then scale it up to 36 per annum. So far, Sikorsky has sold 160 S-92 helicopters for a variety of uses ranging from defence, offshore oil exploration, search and rescue, VIP travel and internal security.
39
FOCUS ON ‘COPTERS
“
We struck gold when we came to India
Bob Kokorda, Vice President, Sales & Marketing, Sikorsky, is upbeat about his company's prospects in India. In this interview with K Srinivasan, on the sidelines of the recent Farnborough Air Show, Kokorda along with Air Vice Marshal (Retd) Arvind Walia, Executive VicePresident, India & South Asia, talks about the Sikorsky's facilities in India, the Naval helicopter deal and much more. Excerpts:
ON THE INDIAN MARKET It's not just the Indian government. It's the commercial operators in India; it's the growing infrastructure in India. We feel like we have a lot of value that we can bring to the Indian market. We also want to make sure that people realise that we are there to stay. We want to become part of the fabric of India which is why we have a permanent workforce already there. We are doing joint manufacturing; we are doing a lot of work and it has nothing to do with just selling helicopters. It has everything to do with really establishing ourselves as a long-term presence in India. So that's why the tourLegacy of Heroes- had the flavour that it did. In the world we want to represent ourselves as a great, strong company and it is the partner for India that
“
FOCUS ON ‘COPTERS brings a lot of value. And we are more about, like I said, bringing value than we are about selling our products. ON THE HYDERABAD FACILITIES I'll tell you - I was just there in March. I have seen Sikorsky set up manufacturing facilities in many different locations both in and out of the US and I was very impressed with the Indian work. I think we struck gold when we came to India and set up our own manufacturing because we are going to receive great benefits from the workforce. Their enthusiasm and motivation was some of the best I have ever seen and I've seen our set up, as I said, in many places around the world. So we are very optimistic. We know already…we already have visions for how to grow. We are watching them carefully making sure that we don't try to grow them too fast because we want them to succeed. On the way things have moved (Smiles) Extremely happy. On the Naval helicopter deal? We are ready to serve the needs of the Indian government, the Indian Navy and we have submitted our proposal; we have granted an extension of that proposal and we are waiting for their response to us. On the feedback We have only received the feedback that what we've submitted is positive. We haven't received any negative feedback. We are re-working our positions because it is taking a long time. So, we are constantly internally re-evaluating in preparation for being called in but, no, we haven't received anything that would make us think otherwise. On not competing in the 75 multi-role chopper deal? Air Marshal Walia: Where did you get this information? The Request for Information (RFI) has been responded to and we have provided the right solution that is required by the navy. In fact, we are looking forward to the release of the RFP (request for proposal) and when it comes we will bid for it. On offering the Black Hawk to India You know I saw this news from a friend of mine actually in another company, who sent it to me from the
our product is and our customers or patrons, they know what they have evaluated. We believe in their intelligence, we believe in their honesty, we believe in their integrity.
AVM(Retd) Arvind Walia
internet and he said, "I didn't know you were going to bring the Black Hawks to India!" So we were surprised actually when we saw this news and I could tell you quite honestly we are ready to talk to them any time they like about the Black Hawk. And that's all I'll say… On the European manufacturers complaints about the Sea Hawk We don't talk about our competitors. Air Marshal Walia: we don't respond to our competition. They can make whatever assertions they'd like. We believe and we know that our product has an excellent track record. The Sea Hawk and all of its variants have been flying in nine different countries outside of the United States and have an excellent track record. So, we are very confident of our products. We don't have any response to that claim because we don't have any data to support it. On defending yourself We have absolutely been open with the Indian government and provided them with every bit of information so that they can make their own evaluation of this product. And every time they have asked us for more information, we provide them with the feedback. So we have nothing to hide and we feel confident that we've provided the Indian Navy and the Indian MoD (Ministry of Defence) with all the information they need to make a good decision. Air Marshal Walia: May I add, we not only provided, but we also proved beyond the expectations of the evaluation team that our product can do much more than what we have stated. So, I rest our case there. We don't respond to others' viewpoints. Everybody's got their viewpoint -- it's a democratic world but we know what CRUISING HEIGHTS September 2012
On the Indian Commercial Market Correct, but most of our products are in the medium and large size. So as the need for those products grows, we are ready to serve the Indian market. Some of the customers have already stepped forward and asked for those size products, have them and are flying them and they are performing well. So we are confident that we are going to serve every requirement that comes out for medium and heavy helicopters in the commercial market. On Homeland security I think I'll answer that. We have been in touch with the departments, paramilitary forces concerned. We have made certain presentations, we have provided the information and as and when their requirements are brought out in the form of RFP we are ready to respond. We have the right products; we have the right machines that can address the requirements of the paramilitary forces for internal security. On modifying machines for internal security? They can be equipped in a variety of ways depending on the mission of that specific agency. If it is disaster relief, you need extra cargo requirements. If it is rescue work, we can do that. If it is for internal security and there are separate military needs, we have lots of equipment we can provide, all of which is of course subject to US State Department's approval. And like I said when we did the Legacy of Heroes, it was to make sure that everybody's aware that we have these great products ready. So we brought it around the country to show everyone that it's real, it's flying, it's in production and selling very well right now. Our S92 is actually sold out this year and next year — a large portion is sold out. On exciting developments for the future? We are always focused on new technology growth. We are a company that is a true innovator. So we have a lot of opportunities coming up with high speed, with autonomy and what we call self-actualisation.
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FOCUS ON ‘COPTERS
Chopper tours from Kochi to Sabarimala
New Chopper service in Mizoram
God's own country got it own chopper service as Delhi-based Chipsan Aviation began chartered helicopter services from Kochi to Sabarimala. State Excise Minister K Babu inaugurated the heli-taxi service, which started from Kochi International Airport at Nedumbassery. He said: “The government would provide all sorts of support to the venture as it aims not only to transport pilgrims to Sabarimala but also to carry out critical operations like rescue services, VIP visits and tourism promotion.” Chipsan Aviation is using the Eurocopter AS 350 B3, which seats six people for the service.
Pawan Hans, the country's largest chopper operator, has launched chopper services in the North-Eastern State of Mizoram. The new chopper service links the district headquarters with other parts of the state including nine towns. While inaugurating it, Chief Minister Lal Thanhawla stressed the importance of helicopter services in the state due to difficulties with the road network and the absence of other modes of transport like inland water and railway. The Union Home Ministry would pay 75 per cent of the `1,308 lakh for annual wet leasing, with the rest of the 25 per cent to be paid by the state government.
Stage set for Boeing’s Apache in India It won't be long before Boeing's Apache gunship touches down at an airbase in India, according to a report in The Times of India. The newspaper quoted an unnamed Defence Ministry official as saying: “It’s just a matter of time before the contract is inked for the Apaches after final commercial negotiations. Most of the hurdles have been cleared.” The Boeing AH-64 Apache gunship reportedly beat the Russian Mi-28 Havoc for the contract for the 22 heavy-duty attack choppers for the Indian Air Force. The Russian chopper failed to pass the air staff qualitative requirements (ASQRs) while theAH-64D Apache Longbow met all the required criteria. The multi-mission AH-64D Apache Longbow is the nextgeneration version of original AH-64A Apache. With its fire-control radar, mounted on top of the rotors, the aircraft is known as the AH-64D Apache Longbow. Without the radar, the combatproven aircraft is called the AH-64D Apache. Current operators of the AH 64 Apache include the US Army, Egypt, Greece, Israel, Japan, Kuwait, The Netherlands, Saudi Arabia, Republic of Singapore, the United Arab Emirates, and the United Kingdom.
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Chinese nod for Bell 429 Bell Helicopter has announced that it has received its airworthiness certificate from the Civil Aviation Administration of China (CAAC) for the Bell 429. The certification follows the first complete assembly and successful flight testing of a 429 at a CAAC 145 service facility. Kingwing General Aviation Company, a CAAC 145 service facility, completed the first reassembly and flight testing of a Bell 429 in China. With the CAAC approval of two Kingwing pilots' Bell Helicopter Training Academy (BTA) 429 flight training, Kingwing signed a Memorandum of Agreement to perform demonstrations of the aircraft at Airshow China in November. The Bell 429 is an advanced light-twin IFR (Instrument Flight Rules) helicopter, developed servicing the full spectrum of segments like air medical, law enforcement, oil and gas, utility, corporate, etc.
CRUISING HEIGHTS September 2012
FOCUS ON ’COPTERS Another tour of duty for K-MAX unmanned choppers
IN THE RACE
For the second time this year, the US Marine Corps has approved the deployment extension of K-MAX Cargo UAS, the first unmanned helicopter to deliver cargo and resupply troops in a combat zone. By supplying forward-operating bases with K-MAX instead of ground convoy or manned aircraft, the Marine Corps has reduced the threat posed to personnel by improvised explosive devices by thousands of hours. Earlier this year, the United States Marine Corps requested the aircraft, a joint effort by Lockheed Martin and Kaman Aerospace stayed in theatre through September 30. The announcement extends K-MAX service in Afghanistan for an additional six months and includes an option to extend its time through September 2013. The use of this aircraft eliminates the need for manned-ground convoys, reducing the number of its warfighters exposed to improvised explosive devices. The K-MAX programme has flown 485 sorties, 525 hours and lifted more than 1.6 million pounds of cargo since it arrived in theater in November 2011. In May, the aircraft performed a historic “hot hook-up,” enabling personnel to attach cargo to the unmanned aircraft while in hover mode. That capability is now used regularly to perform retrograde missions.
Sikorsky S-76B
Eurocpter AS 565 Panther
AgustaWestland AW109 Koala
Boeing celebrates half a century of Chinooks
Race on to supply Navy with Light Utility Helicopters
As Boeing marks the 50th anniversary of delivering the first H47 Chinook military helicopter, the company is nearing completion of a $130-million renovation of its production line near Philadelphia that will help it meet global demand for the latest model, the CH-47F. The production line updates will enable Boeing to continue to affordably increase Chinook production rates. The Chinook has served as the backbone of the US Army aviation since the Vietnam era, revolutionising how it moves troops and supplies in combat, and save lives and deliver aid in times of need. Boeing has delivered more than 1,200 Chinooks to 18 operators around the world since delivering the first to the US Army on August 16, 1962. More than 800 are in operation today, conducting combat, cargo transport and humanitarian relief missions. Chinook is also Boeing's longest continuously running production programme, and according to company officials, it is in greater demand today than ever before. Boeing is scheduled to deliver nearly 60 Chinooks this year and has submitted a multiyear .
There is considerable excitement in the naval helicopter segment after the recent request for proposal (RFP) was issued by the Indian Navy for 56 light utility helicopters (LUH). In addition to Hindustan Aeronautics Limited (HAL), the contenders for the $1-billion deal include a naval variant of AgustaWestland's AW109 Koala, the Sikorsky S-76B, and the Eurocopter AS565 Panther. Textron's Bell and Russian makers Kamov and Kazan might also participate with their respective aircraft. According to the RFP, the Navy wants a four-seat twinengine helicopter with a range of 200 nautical miles and a maximum payload of 1,102 pounds. For anti-submarine warfare, the RFP calls for armament like the ability to launch a light torpedo or depth charge and a mount for 12.7-mm machine guns or two rocket launchers on either side. The chopper would also incorporate foldable rotors and would have a maximum takeoff weight of not more than 4.5 metric tonnes with the ability to operate in adverse weather by day and night from small decks of naval vessels in addition to the bigger decks of aircraft carriers.
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BUSINESS AVIATION
KINGS OF THE SKY: Aircraft lined up for display at LABACE 2012 that was recently held at Sau Paulo msnbcmedia
With an improved outlook, the aviation industry worldwide is on recovery path. However, business jets, with restrained growth, are presenting a new scenario that can change the market scene in a big way. A report. fter the recession of 2008 and 2009 hit every business aircraft manufacturer, the aviation industry is now showing signs of stability and recovery. The results of the first six months of general aviation industry shipments and billings were released by the Washington DC-based General Aviation Manufacturers Association (GAMA), according to which total shipments of general aviation aircraft rose to 918 in the first half of 2012, a year-over-year increase of 5.9 per cent. Total billings for those aircraft also increased, climbing from $7.2 billion to $8.2 billion. “We are
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BUSINESS AIRCRAFT IN RECOVERY MODE starting to see positive signs in the 2012 shipment data,” GAMA’s President and CEO, Pete Bunce, said in a news release. “When coupled with the positive trend we are seeing in the used market, we may finally be witnessing the start of our recovery.” Currently in India, the aviation industry is responsible for 0.5 per cent of the country’s GDP and supports more than 1.7 million jobs. Tony Tyler, Director General and Chief Executive of the International Air Transport Association (IATA) had recently stated at an event: “Aviation’s contribution to the India economy could be much more. If India's 1.17 billion people travelled at the same frequency as in the US, a market of 2.1 billion travellers would be created.” Simply put, there is still a lot of unexplored potential. Typically, corporate profits and the number of used jets on the market have long been key indicators of new business CRUISING HEIGHTS September 2012
jet sales. There is no jet lag for the private plane market in India and corporate entities are buying private jets for their high-flying executives. According to data from the Directorate General of Civil Aviation, Indian corporates, individuals and private jet charter firms bought 20 executive planes and helicopters for roughly $250 million between October 2011 and July 2012. This, incidentally, is a 25 per cent drop from the same period last year. It was charter company Invision Air that took a bulk of aircraft delivery during the previous corresponding period. In this positive scenario, we need to take a detailed look at the business jet segment worldwide. Business jet deliveries increased 13 per cent in the first half of the year, up to 294; Turboprop deliveries increased 10.5 per cent to 243, while piston deliveries fell 1.6 per cent to 381. GAMA reported 504 total worldwide deliveries of all models in the second quarter of 2012, up from 465 in the
BEELINE FOR BRAZIL AVIATION MARKET D
espite the global economic slowdown, there is good news coming from the general aviation sector in Brazil that is rapidly growing. A recently-held major air show in the country's capital, Sao Paulo, turned the spotlight on the booming market, that drew around 100 manufacturers including Canada's Bombardier, Gulfstream and Hawker Beechcraft from the US, Europe's Airbus, and Brazil's Embraer, as well as airplane service, insurance and maintenance providers. Growth in commercial and business aviation over the past decade has saturated Brazil's hub airports, leaving both commercial airlines and business aviation looking for alternatives. At Sao Paulo’s Congonhas airport, 70 planes were on display as part of the ninth edition of the Latin American Business Aviation Conference and Exhibition (LABACE), which organisers say is the second largest general aviation
show in the world after the Oshkosh air show in the US state of Wisconsin. However, it is not as if the country has been untouched by the global woes. The sector soared 6.4 per cent from 2010 to 2011, but is predicted to grow 4.5 to 5 per cent from 2011 to 2012. "The general aviation market has expanded considerably in Brazil unlike in other countries," said Eduardo Marson, President of the Brazilian Civil Aviation Association (ABAG). There is growth in all general aviation categories in Brazil, “but especially business aviation,” said Dorieldo Luis dos Prazeres, an air control expert at the Brazilian Civil Aviation Agency. “The economy is booming, the companies, the number of rich people and this means higher sales of aircraft,” dos Prazeres said. Brazil Secretary of Civil Aviation Wagner Bittencourt announced at the LABACE 2012 that a decree to permit
the private construction and commercial operation of business aviation airports was "in the final stages of consideration". Support for business aviation is very high. At Sorocaba, about 60 miles west of São Paulo, where Dassault Falcon and Gulfstream service centres are already in place, Brazilian Original Equipment Manufacturer Embraer has also announced a new centre. In addition, two more general aviation airport projects have been unveiled for the São Paulo region, one with only sparse details. But the other presented at LABACE, by Catarina Aeroporto Executive, featured a huge model under a tent square in front of the exhibit hall. Its layout showed two runways, the longer one being 8,100 feet, adjacent to a major highway. A condominium development appears behind the runway and a commercial development across the highway.
second quarter of 2011. Although there has been growth, there has not been fullblown recovery. So, what are the reasons that the lag period between economic recovery and a positive impact on business jet demand (that is normally of two years) is continuing this long? Not all of Wichita’s — most of the general aviation manufacturers are based in the US city — major general aviation manufacturers saw their deliveries increase. GAMA data showed that deliveries for majors such as Cessna Aircraft Co., Hawker Beechcraft Corp. have recently gone down though billings are up. According to aerospace forecaster George Tsopeis, Vice President of Operations of Zenith Jet, a Quebec-based aviation services business, the reasons are many. He claims that, to an extent, the assumption that manufacturers building wide-body jets have recovered, while narrow-body jetmakers are still feeling the residual effects of the downturn, is true. “While the recession of 2008 and 2009 hit every business aircraft manufacturer, their recoveries have more to do with the competitiveness of their product lines and less with their focus on wide or narrow-body airplanes,” said Tsopeis. Corporations resorted to cost-cutting to derive profits and not so much on revenue generation. In addition, high net worth individuals, primarily those who
were new to aviation during the last upturn, such as surgeons, CEOs, successful entrepreneurs, private equity types and others, took a hit to their net worth in the downturn, found unattractive financing terms or lost their appetite for ownership. Corporations are hanging on to liquid assets and deploying them elsewhere — which is actually positive for the industry. In addition, today demand is greater from international markets, where buyers prefer new planes. The trend of customers interested in getting a great deal on a used airplane has taken a backseat. In a forecast he just released, Tsopeis predicted that planemakers would deliver 736 business jets this year. That number has been estimated to grow at 17 per cent a year through 2016, when demand will peak. Tsopeis has also projected a slowdown in 2017, but that slowdown will be softer than the downturn that began in late 2008. He has projected deliveries for the 10-year period from 2012 to 2021 to total 10,377 planes, with $265 billion in revenues, based on 2012 pricing. For progress in the overall aviation sector in India, we have to take into account a number of issues. To begin with, fuel taxes are sucking the lifeblood from the Indian aviation sector, making flying a very expensive affair. Ministries at national and state-levels need to take
measures to control the situation. The global average for fuel tax stands at 32 per cent while in India, a combination of excise duty (8.24 per cent) and state fuel taxes (30 per cent), results in fuel making up almost 45 per cent of operating costs for Indian carriers. To top it all, very few airports in our country meet global standards. International airports such as those in New Delhi, Mumbai, Bangalore and Hyderabad cater to international standards and more are coming up, but they hardly provide enough capacity to meet demand. There are other stumbling blocks as well. One glaring example before us is the recent penalties levied by the Mumbai International Airport Limited on non-Mumbai based aircraft for overstaying their approved time slots at the Chhatrapati Shivaji International Airport, Mumbai. However, despite all this, India is still on the radar of global aircraft makers. Major aircraft manufacturers such as Airbus, Boeing, Dassault, Bombardier and Embraer are vying with each other to sell their aircraft to India. According to Airbus’ latest market forecast, India’s market for new aircraft makes it the world’s fourth largest in both number of aircraft and value. Global airline majors, therefore, are looking at opportunities offered by the fledgling Indian aviation market.
CRUISING HEIGHTS September 2012
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BUSINESS AVIATION
RELISHING ON SUCCESS: Daniel Hulme of APOA
Russian boost for in-flight dining Executive jet in-flight dining provider Alison Price On Air, part of the Alison Price Group, has experienced a significant growth in demand from clients travelling to Russia over the past 12 months, with an intense concentration of orders heading to the Moscow region. Between 10 and 20 per cent of total orders, as compared with 3 per cent two years ago, are now going to the Russian capital with most demand focused on the business market. Clients include wealthy Russian individuals, Oligarchs and Russian corporations
IPAD APPS FOR CUSTOMER SUPPORT BY EMBRAER Two new iPad applications by Embraer Executive Jets — the eTechPubs and Customer Support and Services Guide — will provide customer convenience in accessing all technical and customer support information. "These new applications are part of our long-term strategy to continue developing mobile product support solutions and move to tablets and other mobile devices, expanding the paperless concept not only in the cockpit but in the maintenance bay," said Edson Carlos Mallaco, Vice President, Customer Support and Services, Embraer Executive Jets. The eTechPubs applications can eliminate the need to carry the manuals in a 40-pound flight bag and offers, with a touch, real-time information at their fingertips at all times. It will also ease the workload of maintenance techni-
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expanding their business in the region. The growth in numbers of Russian billionaires and the rise in Russian private jet sales over recent years have been well-documented and Alison Price On Air has embraced the region’s expansion. Daniel Hulme, Managing Director of Alison Price On Air said: “Over the past 12 months, we have built on our success in the Russian market and are delighted that discerning Russian business clients are repeatedly choosing us to handle their in-flight business jet catering needs.” cians. The information is updated wirelessly. Customers with a valid technical manual revision service can use the eTechPubs app to download all technical manuals to a single iPad for free. Currently available for Phenom 100 and Phenom 300 customers, the eTechPubs applications will be expanded to the entire portfolio of Embraer Executive Jets later this year.
EMBRAER EXEC JETS IN TOP THREE Two major surveys have put Embraer Executive Jets in the top three companies in the business aviation industry for product support for the first time. Indeed, both Aviation International News (AIN) and Professional Pilot Magazines noted the rapid rise of the company in positive responses from customers who recognise Embraer's work in providing excellent customer support and services. CRUISING HEIGHTS September 2012
“These results are a major achievement and reflect the hard work and dedication Embraer Executive Jets has put into customer support and services,” said Ernest Edwards, President, Embraer Executive Jets. “AIN cited a 13 per cent improvement in our product support rankings over 2011, propelling us to second place. In Professional Pilot, we were awarded third place. But we will not stop there. We must thank our customers for the confidence they have placed in us and pledge to provide even better support in the future.” Embraer rocketed into the top three on both surveys with 10 factors considered in the AIN survey and seven in the Professional Pilot survey. “Improving upon these results will be the guiding principal of Embraer Executive Jets for the future,” said Edson Carlos Mallaco, Vice President, Customer Support and Services.
EMBRAER, CONVIASA DEAL FOR E190 JETS Embraer has recently announced an agreement with Venezuela's Conviasa Airlines for the sale of six 190 jets. The deal also includes 14 purchase options for the same aircraft model. The value of the order, at list price, is $271.2 million, based on January 2012 economic conditions, and could total as much as $904 million, if all of the options to buy are confirmed. The first deliveries are scheduled to take place by the end of 2012. “We are certain that the E190 will play an important role in increasing the quality and efficiency of air travel in Venezuela,” said Paulo Cesar Silva, President of Embraer, Commercial Aviation. Conviasa is the eleventh customer of the E-Jets family in Latin American and the Caribbean region and Embraer sees a market in the region that is projected to grow at an average of 7 per cent per year over the next 20 years. “We consider the E190 jet to be a fundamental part of the process of renovating Conviasa’s fleet,” said César Martínez Ruiz, President of Conviasa. “These airplanes will allow us to increase connections on both domestic and international routes.” LEGACY 450 FABRICATION LAUNCHED Embraer Executive Jets recently began the fabrication of its newest executive jet, the Legacy 450, setting a major milestone. “Even as we have been making progress on the Legacy 500, we have been anticipating this event for the Legacy 450,” said Ernest Edwards, President, Embraer Executive Jets. “The
first metal cut for the Legacy 450 is a landmark event for the programme and is the latest step in bringing this, the second of our revolutionary jets to reality.” A component of the forward fuselage, the part was milled from a block of aluminum alloy by a five-axis, high-performance machining centre. Fully automated, the milling process drew data directly from a digital mockup of the 2,300-nautical miles-range Legacy 450. Once completed, the part was approved by a quality control process that employed the use of laser devices for design validation with the digital mockup. The Legacy 450 is designed with the latest engineering software, CATIA V5, with production planning for the business aircraft simulated by digital virtual manufacturing software.
AMAC AEROSPACE TO DEBUT AT AIREX 2012 AMAC Aerospace, a leading provider of corporate aviation maintenance and completion services, will be participating at the 9th bi-annual AIREX, the International Civil Aviation and Airports Exhibition at Ataturk Airport, Istanbul, between September 6 and 9, 2012. Its debut presence at the show coincides with the four-year-old company's inauguration of Istanbul-based AMAC Turkey and the completion of a three-storey sales and service centre. The new facility embraces 1,500 sqm of hangarage, 1,200 square metres of shop floor space and 300 square metres of office space. It is expected to be fully operational by the fourth quarter of 2012, with a team of 17 operating from the facility. The new structure will complement the extensive hangar facilities at AMAC's EuroAirport Basel Mulhouse, Switzerland headquarters.
BEST IN THE LEAGUE: The Embraer Super Tucanos
Super Tucanos for Indonesian Air Force Embraer Defense and Security recently delivered four light attack and tactical training A-29 Super Tucano aircraft to the Indonesian Air Force at a ceremony held in its facility in Gavião Peixoto, São Paulo, Brazil. Indonesia is the first operator of Super Tucano in the Asia-Pacific region.
The four A-29 Super Tucano are from the initial batch of eight aircraft purchased by the Indonesian Air Force (IAF) in 2010. The Super Tucano was chosen by the Indonesian Defence Forces to replace a fleet of OV-10 Broncos as part of their equipment modernisation exercise for years 2009-2014.
FLYING AHEAD: Legacy 650
High airports no problem for Legacy 650s
GAMA APPOINTS GM FOR ME, NORTH AFRICA GAMA, the global business aviation and services group recently announced Richard Lineveldt as General Manager, Gama Aviation FZE, with the task of implementing its growth strategy throughout the Middle East and North Africa. Lineveldt has been a key member of the Gama management team supporting a number of recent expansion initiatives in the region. These have included the set-up of the exclusive operation of Sharjah International Airport's Executive Handling Service (Fixed Based Operation) and the successful award of Gama's UAE Air Operators Certificate.
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Embraer’s Legacy 650 has received the High Altitude Landing and Takeoff Operation (HALTO) certification by Agência Nacional de Aviação Civil (ANAC) in Brazil, allowing an increased operating envelope for the large-category business aircraft. Certifications from the European Aviation Safety Agency (EASA) in Europe and the Federal Aviation Administration (FAA) in the US are expected shortly. “This certification comes after the ultra-large Lineage 1000 HALTO certification in March and means all of our larger corporate jets can now operate at the highest airports in the world,” said Luciano Castro, Vice President Programmes, Embraer Executive Jets. “This proCRUISING HEIGHTS September 2012
vides increased flexibility for operators who need this versatility.” The HALTO certification allows the Legacy 650 to access high-altitude airports around the world including those in Argentina, Colombia, Ecuador, Bolivia, Peru, China, India, Nepal and the US. The Legacy 650 will now be able to serve airports located at altitudes up to 13,800 feet including La Paz, Bolivia at 13,357 feet and Shangrila, China at 10,761 feet. Offered as an option, the certification follows HALTO certification for the Legacy 600 by ANAC and FAA. EASA is expected to certify the super mid-size aircraft for HALTO shortly after the approval is granted to the Legacy 650.
NetExpress CRUISING HEIGHTS
D I G I TA L T R E N D S F O R T R AV E L L E R E X P E R I E N C E
Cleartrip launches iPhone app
Amadeus ropes
in SpiceJet by the credit card. Said Neil Mills, Chief Executive Officer, SpiceJet, “Corporate travel is on the rise in India with business travel expected to grow by 10 per cent this year. We are delighted to work with industry leaders like Amadeus, to ensure our fares are available to corporations in India with the potential to reach over 6,000 corporations NEW TECHNICAL MILESTONE: Amadeus recently announced that worldwide.” SpiceJet would now be available to users of Amadeus e-Travel Bruno des ith increasing demand from Fontaines, Vice President Customer travel managers wanting to Solutions Group, Amadeus Asia Pacific book Low Cost Carriers added that the move was a major step (LCCs) in India, Amadeus forward for Amadeus in “growing our has created a framework that delivers AeTM business in India. With the SpiceJet’s full content to Amadeus eexpected growth in corporate travel, Travel Management (AeTM), the especially through low cost travel options company’s online multi-global in India, offering SpiceJet content to our distribution system corporate booking customers in India is well-timed”. tool, users via a direct API development. Fontaines also pointed out that For this leading transaction processor Amadeus’ technology capabilities would and provider of advanced technology help SpiceJet grow on both a local and solutions for the global travel and global level. “Having SpiceJet’s tourism industry, this will be a content available through AeTM milestone, highlighting the flexible will not only enrich Amadeus’ and open nature of Amadeus airline content offering to Indian technology, which is used by both customers but also help full-service, low-cost, international corporations in our network airlines and small and medium-size expand their global travel carriers alike. programmes,” des Fontaines commented. The AeTM platform allows Rakesh Bansal, CEO, Amadeus India organisations to integrate all elements of said, “This announcement will prove to its global travel programmes - including be a beneficial one for both Amadeus and travel policies, preferred suppliers and SpiceJet. Looking at the increasing negotiated rates into one easy-to-use demand of Corporates wanting access to website, saving them time and money in SpiceJet’s content, Amadeus has offered the process. AeTM users in the country this content through AeTM.” will also be able to book ancillary AeTM is like a one-stop shop for a services such as in-flight meals while corporation’s travel needs, as it provides ensuring they are booking negotiated the business traveller with an unparalled corporate fares. Moreover, the users will choice and co ntrol over the trip, while be given the choice of flexible account complying with their company’s travel payment options rather than being bound policies.
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Cleartrip launched its mobile application for iPhone with its special split screen search facility. The split screen design was launched by Cleartrip six years ago. The search form hosts features such as geo-location for selecting departure airport from the current location, recently searched airports and the ability to easily swap the “from” and “to” cities with a tap. Additionally, there are filters that help narrow down the search by sorting results by specific airlines, flight timings or non-stop flights. Payments can be made using credit cards, debit cards or a net banking account. Alternatively, payments can also be made using Expressway by signing into the Cleartrip account.
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APPLES FOR ALL AVIATION REASONS Airlines are using the iPad to cover all spheres of the travel process
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QUICK BAG DROP AT BRISBANE SITA and BCS Group have developed a new bag drop system
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PRINTMYTRIP IS CHOICE OF 1,000+ It has become the choice of 1,000 travel agencies across Asia Pacific
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Apples for all Steve Jobs’ iconic iPad has crossed all boundaries and is being deployed by airlines for passengers, thereby reducing costs
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iPad on the ground The device provides an easy and convenient start to your air journey by making the processes simpler.
Airport service • The Changi Experience Agents, who have been at Singapore Changi Airport since March 2011, each equipped with an iPad, assist passengers with a variety of things.
Airport library • At the ‘Airport Library’ at Amsterdam’s Schiphol Airport, there is a reading table equipped with 9 iPads and these can be used to see the collection, or watch videos about Dutch culture.
Airport food and drink • Since late 2010, Delta Air Lines and airport restaurant operator OTG Management allow passengers to order food and drinks via one of 200 iPads installed at dining areas at New York JFK and LaGuardia airports.
Media bar • Delta and OTG have also introduced the ‘OTG Media Bar’, where passengers can flip through the iPads to see what publications, movies, and music they like, download the content of their choice, and then rent the device for their trip.
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jaunted.com
he iPad is no more just an entertainment device. Its portfolio has hugely diversified and airlines are putting Apple’s versatile device to full use and making it available to passengers in their lounges, rent them out in the air, or use them as a self-service kiosk, a customer survey tool, and a food ordering tool.
CRUISING HEIGHTS September 2012
Airport lounge • KLM has been offering eight iPads in each of its two lounges at Amsterdam Schiphol Airport since July 2010 that can be used to access the Internet, watch content from the airlines’ IFE programming, play games, view KLM images and use a series of pre-installed apps. • Cathay Pacific offers 21 Wi-Fi enabled iPads pre-loaded with applications such as newspapers, magazines and games in its ‘The Cabin’ lounge. • ANA and airBaltic also make iPads available upon request to lounge guests at Tokyo Haneda and Riga.
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aviation reasons in a way that goes beyond imagination, and is covering all spheres of the travel process
iPad tech in the skies The device is not only making processes simpler, efficient and cost-effective on ground, but also creating memories in the air.
Passenger surveys
• The Federal Aviation Administration (FAA), USA, in March 2011 approved the use of iPads in the cockpit but not during all phases of a flight. Alaska Airlines quickly responded by transitioning all 1,400-plus of its pilots to companyissued iPads. The iPads will improve fuel economy by cutting back on the weight on board and also allow for documents to be updated more frequently. • In June 2011, American Airlines (AA) started conducting the first tests of iPads for all phases of flight and it has become the first airline to be granted approval to use iPads in all phases of flight by FAA. • United-Continental in August 2011 announced that it would deploy iPads to its pilots in an effort to create a “paperless flight deck”. These electronic flight bags (EFBs) will replace flight manuals and deliver aeronautical navigation charts via an application. The airline projects EFBs will save nearly 16 million sheets of paper a year which is equivalent to more than 1,900 trees not cut down.
• As part of its Rethink Quality initiative, Finnair in a one-month pilot in November 2010 offered passengers free use of iPads on board select flights between Helsinki and Hong Kong. • On a similar note, from June to August 2010, KLM used three iPads for a survey among passengers on its regional subsidiary KLM Cityhopper to test the feasibility of the device for passenger research.
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In the cockpit
In the cabin
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• British Airways (BA) has armed 1,800 senior cabin crew with an iPad 2 each across its entire long and short-haul fleet in a move to help with on-board customer service. • KLM has also provided a group of 50 senior pursers with iPads on board. • ANA, meanwhile, will provide each of its 6,000 flight attendants with an iPad tablet in a move to reduce training costs. • Spanish flag carrier Iberia has equipped its 600 pursors with iPads so that the cabin attendants are able to offer high-quality service.
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Meanwhile, iPad competitors Samsung (Galaxy) and Google (Chromebook) have partnered with airlines to let passengers try their devices in-flight. American Airlines provides Samsung Galaxy Tabs to its Business and First passengers on selected routes that are served by B757 and B767 aircraft. Google has teamed up with Virgin America to allow passengers to ‘test-fly’ the search giant’s new Chromebook computers for free.
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25-second bag drop at Brisbane
BA gives passengers ‘perfect day’
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In competitive times where speed and efficiency are a must, SITA and BCS Group have developed a new bag drop system that has been recently installed at Brisbane Airport. It enables passengers to complete the bag drop process in just 25 seconds. Passengers on Jetstar’s domestic flights were the first to experience the system and as it progresses it will be expanded to include other airlines flying both domestic and international routes. Roel Hellemons, General Manager Strategic Planning and Development, Brisbane Airport Corporation (BAC), said: “Peak times are already busy and will only become busier, so we are committed to using the best technology to improve operations, enhance the passenger experience and to make optimum use of the space we have available.” He pointed out that the new self-service bag
drop process took less than 25 seconds per bag. The solution also delivered space efficiency to maximise the number of baggage injection points. To use the new service, Jetstar passengers simply check-in at the kiosk, attach the bag tag then drop the bag at the self-bag drop station where it is automatically processed. The bag is then weighed, the tag is scanned, the bag measured and dispatched for the flight.
Lufthansa goodies for logging in
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Lufthansa’s “Blue Legends” Facebook application is one of the first ten “Connected Applications” to be offered as a product of Foursquare’s new development platform. In a nutshell, Foursquare allows developers to create applications that offer customised experiences to customers based on their check-ins. Lufthansa has seized this new
as the “Early-Bird-badge” by checking in before six in the morning. There are more virtual goodies as one travels more on Lufthansa. One of the features of the application is that it’s written in HTML5 which allows it to be accessed from almost every platform — desktop and mobile — with ease, without being confined to a closed application ecosystem (such as iOS or Android). Lufthansa believes that this c u s t o m i s e d experience by offering special virtual badges in recognition for flying the airline will “open a whole new dimension of social travel experience for frequent flyers who can not only track their countries and airports they’ve visited with the application but can compete with their friends to become the ‘Expert Pilot’ on a route between two cities”. This rank is given to the person who has travelled most between two destinations — independent from the Lufthansa flight he took or airport of the city he travelled to. FREEHDWALL.COM
opportunity in the Foursquare eco-system to create official Lufthansa venues (including over 9000 flights named in the format “Lufthansa Flight LH 400?) where users can check-in virtually to get special badges, ranks and rewards. For instance, once connected with Foursquare and Facebook, customers can earn badges such
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E X P E R I E N C E
CRUISING HEIGHTS September 2012
With the launch of a new Perfect Day application for iPhones, British Airways (BA) customers on the move can now capture and share their own ideal personalised travel guides and more. It follows last year’s launch of the Perfect Day’s application on Facebook, which has enabled hundreds of BA customers to share how they would spend their perfect days in locations around the world flown to by the airline. The new easy-to-use iPhone application integrates and extends the existing Perfect Day’s service. This includes creating reviews or ‘travel snippets’ using uploaded pictures and a short description, which are tagged to their exact location on Google maps as a 24-hour recommendation. Each itinerary can be quickly saved, edited and shared as a complete Perfect Day with friends, or other travellers, on Facebook or the iPhone application, when they choose. The application contains a Top Perfect Days feature to inspire anyone in each destination. These include Perfect Days with the most ‘likes’, such as A Family Day in Berlin, A Cycling Tour of San Francisco, A Local’s Madrid, Mumbai Musts, Secret Rome, and Paloma Faith’s New York. The application also includes ‘Meet Me’ function, allowing users to ‘pin’ and SMS an exact location to meet, making it easier for friends to quickly find the location if they’re in an unfamiliar city or destination. Richard Bowden, BAs’ Digital Marketing Innovation Manager, said: “We’ve taken the Perfect Days social media service a step further by providing an intuitive smartphone app enabling customers to instantly view, capture and share their insider knowledge and travel trips about their favourite places, while they’re indestination.”
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Amadeus’ Printmytrip is choice of 1,000+
The new web-based Printmytrip solution by Amadeus, transaction processor and provider of advanced technology solutions for the global travel and tourism industry, has been chosen by 1,000 travel agencies across Asia Pacific in just six months since its 2012 launch. Amadeus first launched Amadeus Printmytrip in 2011, and has improved the interface to be entirely web-based following the enormous success of the launch.
Printmytrip is a complete itinerary management tool that streamlines the creation and delivery of informative, professional and branded travel documentation. This Amadeus solution helps travel agencies deliver bespoke itinerary and increased convenience for travellers while enhancing brand value. Travel agents using Amadeus Printmytrip can feel confident knowing their customers have more of the right information as well as a professional
BluFi provides improved traffic management
Lost! Never at Narita
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AirNarita International Airport has launched a new application — NRT_Airport Navi — that includes a dedicated navigation function, which provides way-finding assistance for passengers. Users of an iPhone or Android smartphone can use the application to determine their current location in the terminal and find directions to a desired destination. Passengers can also register their flight number to automatically receive any changes to their flight information,
such as gate changes. The application also provides flight information, airport maps and information on a variety of airport facilities and services.
SITA doubled capacity for Olympics
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The speed that airlines can exchange the electronic data that is vital for the functioning of the air transport industry, was doubled by air transport communications specialist SITA for the purpose of keeping up with the London Games travel surge. This allowed SITA to manage the major peaks in traffic at airports worldwide smoothly this summer. Electronic data exchange, commonly referred to in the air transport industry as SITA Messaging, underpins every aspect of operations with close to 100 million messages carried between airlines, airports, government regulators, suppliers and partners each day. Airlines transmit information regarding flights, passengers, crew, cargo and baggage and also exchange messages with various partners. At Heathrow Airport, Omni Serv, the ground services provider that manages assistance for passengers with reduced mobility (PRM), has been using SITA’s PRM Data Access Services to feed the
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looking travel document that meets individual travel needs. Bruno des Fontaines, Vice President of Customer Solutions, Amadeus Asia Pacific said: “This new solution can be tailored to suit customers’ individual requests and with its extensive range of document customisation features, has the potential to positively impact a travel agency’s brand. Travellers also benefit from the added convenience of having additional booking information on their itineraries that previously was not possible.”
special service requests coming from more than 90 airlines to its performance management system. This ensures that all passengers with reduced mobility get the best attention at Heathrow. This year, SITA invested significantly in its Community Messaging infrastructure ahead of the summer 2012 Olympic. This was in response to the overall industry trend towards distributing more messages electronically, the changing requirements in information needs and the increasing number of companies joining the SITA messaging community. Rukmini Glanard, SITA Vice President, Communications and Infrastructure, said: “Our recent investment has led to significant improvements in performance that have exceeded even our own expectations. Our capacity to receive messages has doubled and we can now send more than twice the number of messages per second as previously.” CRUISING HEIGHTS September 2012
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To better manage traffic flow before people board the aircraft, BluFi, the Glasgow, Scotland-based Amor Group's airport passenger-tracking system, combines Bluetooth and wi-fi to track airport passengers movement through airport terminals. The system, delivered by partner company BlipSystems, allows terminal operators to track a sample of up to 50 per cent of passengers entering the airport. The BluFi system works as an integrated element of Chroma Airport Collaboration Database and requires blipnodes — hardware boxes roughly the size of standard routers developed by Amor Group partner BlipSystems — to be deployed in each area that is to be monitored throughout the airport. “When a passenger passes through an area with a sensor, the BlipNode records a portion of the unique ID from their device, along with a time stamp,” said Alaistair Deacon, chief aviation technologist for the Amor Group. “It does not capture personal information and is completely anonymous. This data is only held for a 24-hour period and complies with the recognised standards for privacy and data protection.”
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CRUISING HEIGHTS www.cruisingheights.in I September 2012
SAUDIA CARGO IS
BULLISH ON INDIA Keen to get its share of the Indian market, the cargo division of the privatisd Saudia Airlines has forged longterm relationships and is ready for the long haul
Air cargo infra looks up
RED’s ready to roll out same-day services
DHL’s footprint in the North
Facilities for air cargo are being planned in Tier-2 and Tier-3 city airports
A dynamic parcel service with same-day deliveries will hit the nation shortly
New service centre in Kanpur ready to handle 1500 shipments a week
LAST IN/FIRST OUT
Alarm bells for air cargo
TRENDS
With the downturn in air cargo continuing, stakeholders are witnessing a shift to cheaper forms of transport such as ocean, railways and road. That has started to ring alarm bells in the forwarding and airline sectors. Recent reports indicate that logisitics majors such as DHL, UPS and FedEx have started innovating to counter the shift from air to other forms of cheaper transport. In fact, these companies are now offering ocean carriage deals. According to David J.
Bronczek, President and CEO, FedEx Express, the company was now handling traffic out of Asia on ocean. Even international logistics major Panalpina has forecast zero growth in air cargo in the first half of 2012. Perhaps, what is important to note is that even the pharmaceutical industry — prime takers for air cargo — are also shifting to ocean. Obviously, logistics majors have started innovating to facilitate the movement of these time-sensitive goods. DHL, for example, has brought out a tracking device with a battery life of 30 days that sends out emails and SMS on the temperature and location of shipments on high seas. According to DHL, the company saves a lot of money by moving away from air to sea. Within the country, however, the shift from air has been to road transport — despite the challenges of bad roads, local taxes and much more.
Airport project to iron out cool chain flaws Brussels Airport has recently started a 15-month project on GPRS in air freight. The project will be headed by VIL (Vlaams Instituut voor Logistiek Flemish Institute for Logistics), that last year performed a study on what Brussels should or could do to strengthen its position as the pharma hub for Western Europe. Several partners at the airport are participating in this project. Among them are Centipharm, DHL Global Forwarding, CEVA, Aviapartner, WFS, Flightcare and Brussels Airlines. “Our aim is not to monitor where things have gone wrong so this can be used in legal discussions and claims, but to see where we can improve facilities, procedures or supporting equipment to guarantee the cool chain,” said Steven Polmans, Head of Cargo at Brussels Airport. As an airport, Brussels would like to facilitate between all players and the goal is to comfort the industry by making sure that everything is done at the airport to guarantee the cool chain. During the project period, several lanes will be tested. This will give the industry the possibility to test different types of equipment and lanes to see if real-time monitoring with GPRS equipment will be possible on a larger scale. Brussels Airport will use the date and information gathered during the project to determine possible bottlenecks in the chain where the airport is involved. All problems that arise will be tackled.
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“Airfreight continues to be a barometer for world trade, and the needle has now swung back… All trade comes and goes in cycles, and this is a down-cycle. It will be followed by upswings in the future.” ) Lillian Chan
Executive Director of Hong Kong Air Cargo Terminals (HACTL), soon after the release of the half-yearly tonnage figures.
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Air Partner has become the first aircraft charter broker to launch a freight app that finds out the most suitable air carrier for the type of cargo.The multi-lingual interactive app uses the weight and dimensions of a cargo to choose the aircraft most suited to the task, suggesting up to four different models. In addition to this, the application also includes images and cargohold diagrams, which allow a greater understanding of the type of aircraft needed to move a particular item. Available from the Apple store or as an online service, the database also includes information to accommodate outsize freight. Based on the search solutions provided, users are then able to contact an Air Partner specialist, who is able to provide further assistance, including a quote for the consignment’s planned route and final aircraft loadability checks. “This innovation demonstrates that we are leading the way when it comes to developing new products to add to the traditional freight charter broking services that currently exist.There are more than 30 of the most commonly used charter aircraft types within the system to give clients a useful easy-to-use guide,” said Clive Chalmers,Air Partner’s UK freight manager.
CARGO
At last, air cargo seems to be getting the attention it deserves. All across the country, moves are on to set up facilities that would boost air cargo. A Greenfield international cargo airport is on the cards near Delhi while at Ahmedabad, Pune and Indore, for example, plans are being drawn up to enhance facilities for air cargo. A report.
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ven as plans are underway for the formal inauguration of the new terminal at Chennai by Prime Minister Dr Manmohan Singh, there are moves to take the airport away from the government-controlled Airports Authority of India (AAI) and hand it over to private operators. In fact, the move also includes the Kolkata aiport that is undergoing modernisation. Built at a considerable expense by AAI, the terminals at the two airports are comparable to those at privately-held airports at Delhi, Mumbai, Bengaluru and Hyderabad. The AAI would not like to give up any of the airports having lost a considerable portion of its income when Mumbai and Delhi were handed over to private operators. Today,
with only two metro airports — at Chennai and Kolkata — in its charge, AAI would virtually have to close shop if the “political bosses” decide to let it go out of government hands. On his part, AAI Chairman VP Agrawal said that the Authority did not want a Private Public Partnership (PPP) for the operation of the terminal and the airport but “the Planning Commission insists on privatising the Chennai airport”. He said though AAI was not interested in privatising the airport, if and when the need arose, the AAI could hold 51 per cent of the stake to own the airport and let any private party handle the operations. As for cargo operations, the AAI has put in a lot of efforts to upgrade the cargo operations at Chennai; incidentally, it is part of the
initiatives taken by the Ministry of Civil Aviation to boost cargo operations in all the airports operated by AAI. The Authority had other pressing reasons too. With two of its major airports — Delhi and Mumbai — no longer under its belt, AAI was bound to take stock of the changed ground realities and review the policy of cargo operations. A review was also necessitated due to the changing market forces: a number of industrial townships and regions within the country with surplus agricultural produce demanded the availability of air cargo facilities from the nearest airport to not only save transportation time but also cut costs, according to a senior AAI official. At Chennai, for example, the perishable
AIR CARGO RECEIVES A FIRM BOOST
ENHANCING INFRASTRUCTURE: Cargo freighters at the Chennai airport
CRUISING HEIGHTS September 2012
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CARGO
UPPING THE ANTE: Amritsar airport has geared to facilitate transport of perishable cargo from the city.
cargo facilities have been upgraded. The airport has been handling pharmaceuticals that constitute around 1.5 per cent of the total cargo handled. The present infrastructure includes three chambers of cold storage with different temperature specifications. It also has a further 500 sq. mt storage area in the Perishable Cargo Centre. A new facility with six cold storage chambers measuring an area of 26,000 sqm has also been created. Said Chairman Agrawal, “We are putting ASRS (Automatic Storage System), which will increase the capacity manifold... It will be sufficient to take care of the cargo till 201718.” Though Chennai is now after Mumbai and Delhi in tonnage, it is the fastest growing and is increasingly becoming popular with international carriers with China Airlines and Thai being the last big users. Chennai handled 19,843
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tonnes of cargo in the month of February this year. Of the 8,321 tonnes of import cargo, 3,131 tonnes comprised electronics/electrical items. Exports were to the tune of 11,523 tonnes. Chennai airport staff has voiced its concerns about the airport going to private hands. According to L George, the Regional Secretary (Metro) of the Airports Authority Employees' Union (AAEU), there is no need to hand over the airport to private players. After all, it was granted 'Mini Ratna' (literally a mini gem) status in 2008 when it fulfilled the criteria for the position with continuous profits for last three years. To top it all, it was also chosen as the best performing airport in the south-eastern region for cargo operations for the year 2012 by the South East CEO Conclave (SECC is a group from the shipping and logistics industry and has emerged as the authoritative recognition of
quality service, best practices and innovation in the various segments of the cargo and logistics sector). Whether it remains in government hands or goes to a private operator remains to be seen but what is important is the fact that the move could spell out the beginning of the end of AAI, a pride among governmentowned units and incidentally a totally debtfree company. AAI's airport tariffs are lower than those charged at Delhi and Mumbai. Notwithstanding the financial condition of the country's carriers, stakeholders have not been deterred from continuing — or even initiating — infrastructure projects that will help the air cargo aviation sector flourish. Tier-2 and Tier-3 cities are waking up to the immense potential of air cargo. No longer limited to the metro cities, states in the west of India such as Gujarat and Maharashtra and even Madhya Pradesh in central
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India, are chalking out elaborate plans. The Gujarat government, for example, has revamped its aviation department. At the launch of the Gujarat civil aviation policy in June 2010, the government note pointed out: “Air cargo movement has grown nearly by 19 per cent as compared to 10 per cent and 9 per cent of growth in shipping and railways respectively. In the context of Gujarat, one of the most industrialised states in India, the government wishes to encourage private players to utilise the air-cargo route and include suitable provisions for making a world-class cargo hub in Gujarat.” According to that policy, the federal government tasked the newly-created Gujarat State Aviation Infrastructure Company Limited (GUJSAIL) for the development of aviation and related infrastructure in the state. Hence, the recent invitation for
proposals from entrepreneurs to start cargo and passenger services within the state. Gujarat has one of the fastest growing economies in the country and according to a report that appeared in The Economist in July last year, the state's infrastructure could be compared with that of Guangdong in China. Consider the facts: Gujarat accounts for 16 per cent of India's industrial output and 22 per cent of its exports. While 11 airstrips across the state have been identified, the government has clearly specified the kind of aircraft that would be needed. Even as moves to start aviation services take place, plans that were drawn up to establish an air cargo hub for perishable goods at the Sardar Vallabhbhai Patel International Airport at Ahmedabad are fructifying. The airport's cargo potential is healthy. Ahmedabad airport handles only two per cent of the cargo from India. Of this 83 per cent is handled by the
airport with 44 per cent cargo being domestic and 56 per cent cargo international. Piloted by the Gujarat Agro Industries, another federal government enterprise, the cargo hub is expected to cater to the huge quantities of pharma products, vegetables, fruits and flowers that the state of Gujarat exports. While the airport is within easy reach of Middle Eastern countries, it will cater to the diaspora from Gujarat, spread out all over the world. To begin with, the cargo hub will be able to take away a sizeable share of exports that are now being sent through Mumbai airport. In fact, around 40 per cent of the vegetables sent out through Mumbai are from Gujarat. With the lack of space at Mumbai and the traffic gridlock around the airport that is an almost daily occurrence, perishables often cannot make it to their destinations. The Ahmedabad cargo complex — delayed for around two years because of
land issues — is all set to start operations. With its three temperaturecontrolled cold storages (zero, minus zero and plus 10 degree) besides X-ray machines, the cargo complex is, perhaps, one of the most modern in the country. Incidentally, Emirates picks up around 170 tonnes of cargo a week from Ahmedabad airport meant for the Middle East, the US and Europe and in November, another Middle Eastern airline — Etihad Airways — will start operations to Ahmedabad. However, for the moment, the moves to start perishable cargo handling from Ahmedabad airport have been halted by the AAI. According to the AAI, the Gujarat Agro Industries Corporation (GAIC) breached the contract by bringing in Cargo Service Centre (CSC) and violated the terms under which it had been allotted 3,600 square metres of area at the airport for seven years. Air cargo stakeholders in Ahmedabad are hoping that the points of
BUSINESS AS USUAL: The scene at the cargo warehouse at Pune airport
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ENHANCING CARGO FACILITIES: Haryana CM Bhupinder Singh Hooda has decided to set up an airport for cargo.
contention between the GAIC and the AAI will be settled in a short time. Meanwhile, moves by AAI are on to acquire land near Pune's Lohegaon airport to develop a dedicated air cargo facility. Today, only two international flights — to Frankfurt and Dubai — operate from the airport. Once the cargo terminal is ready, more international flights would start. Plans have also been drawn up for the enhancement of cargo facilities at Indore's Devi Ahilyabai Holkar Airport. Recently, Ajit Singh, Minister for Civil Aviation, expressed the hope that cargo facilities at the airport would transform business around the commercial capital of Madhya Pradesh. Nearer Delhi, the Chief Minister of Haryana Bhupinder Singh Hooda has moved a proposal to build a Greenfield cargo airport for international operations in Rohtak. In fact, the Haryana government has already identified 2,770 acres for the project. The air cargo community has been waiting for quite a while for all the pieces in the puzzle to fall into place but now that some moves have been made, it will not be long before the air cargo industry gets its rightful place in the aviation sector in the country.
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"Saudia Cargo is here for the long run" Keku Gazder, Regional Director, Cargo - Indian Sub-Continent, Saudia Cargo, is upbeat about India. In this conversation with Tirthankar Ghosh, Gazder speaks about Saudia Cargo’s bold and visionary policy to gain marketshare
Q: A:
How do you find business now? It looks like the second downturn is coming. When we look at the figures recently that the World Air Cargo data has provided, we have seen an upward growth trajectory at Saudia. We have experienced growth in the markets and we have seen new opportunities in the markets that we want to explore. We have become a strong player in the Indian sub-continent market. At Saudia Airlines Cargo Co. we are positive and are bullish on the future.
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You have been a very low key player as opposed to the big three from the Middle East: Emirates, Etihad and Qatar. Whatever you told me just now stands in comparison to the big three. We will get back the market share that we deserve. You are aware that we are now privatised. The impact of that is that we are very vigorously and actively pursuing opportunities. We have forged great partnerships with a lot of forwarder partners all over the country and across the region that I represent. This area is the largest market
for Belly Capacity in the SV world. Therefore, we are looking at going into the market with a product or a service we truly believe benefits our partners. We have on an average twelve passenger flights in the region and fly to Dammam, Riyadh and Jeddah. If I look country-wise, we fly from Sri Lanka and Bangladesh. In Pakistan, we have Islamabad, Karachi, Lahore and Peshawar. In India, Mumbai, Delhi, Lucknow, Hyderabad, Bengaluru, Kochi, Calicut and Trivandrum. The freighter destinations are
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three: Mumbai, Trivandrum and Dhaka. If I look at the market that we are operating from: we are a very strong player in the Dhaka market where in addition to passenger flights we operate two weekly freighters to Dhaka. We have added a third weekly freighter into this market. That sort of gives you an idea of how serious we are in the Bangladesh market. Our partners have realised that we are a serious player and we are here for the long run. So is Saudia Cargo in the big three? With 145 passenger
What has been the tonnage like for the region? It is about 7,000 tonnes per month.
But now with the Eurozone crisis, are there any plans to look towards China and South-East Asia? We have got 13 freighters in our fleet which is a mix of MD-11s and Boeing 747 freighters. You have to make best possible choices where you want to go. We are already in the Far East with Hong Kong, Shanghai, Bangkok, Saigon and Guangzhou. So we are already in the key markets in the APAC region. Interestingly, we see a strong request for capacity from APAC to the ISC region via the kingdom.
There are many carriers that have cut down capacities. In such a market, what is the strategy Saudia is following? We are operating on a bold and visionary strategy. We want to be in the long run so we would rather delay our entry into the market. You need to have confidence in the market. The whole idea is of growing together with your partners. Even when the volumes were low, in places like Bangladesh, for example, we never withdrew capacity. We continued to fly to Dhaka, adding more and more freighters. Our strategy is well-defined. A good example of our ingenuity is a product called Bellyflex. Bellyflex is a product where we discount a sizable percentage of the rates in return for a deferred service. The client can choose an air freight option that provides the flexibility of a longer transit time to reach the destination. So, the shipper can still move by air and he is not forced to use the sea. He gets a good saving, which makes
him comfortable giving us the cargo at that rate. This is a win-win situation for partners and shippers.
Are you planning to put in more capacity in India? For sure, we want to grow in India. We see more opportunities to grow. We want to be sure about the opportunities that we have in India. Again, I am reiterating we do not want to step into the market where there is a temporary boom. That is not our strategy. We want to grow and develop the market for a sustainable period of time.
With your partners, do you do services such as door-todoor? We are a professional airline and our primary focus is to move freight airport-to-airport. We are not into warehousing, thirdparty logistics and logistical activities. We do work with third-party trucking companies, which deliver cargo to airports that we do not fly to.
hurdles and extend our vision for the next 20-25 years. It has to be a collective effort by everybody: from shipper to forwarder to the groundhandling agent to the airline to the customs authority. Every link in the chain is important and indispensible to the other. Our industry is more perishable than perishable itself. In the air freight industry, the minute the cargo door closes, every single kilo of capacity, which is not utilised, has already perished. Our decisions rest upon the airport's ability to handle my freighters and we need answers to questions such as aircraft turnaround time, landing rates, easy availability of parking lots, etc. How quickly can our
How is it working in India? Commercially, the biggest challenge is processes and procedures. The long time it takes to process a shipment is not the way to go if we want to grow our air freight business. We have to be more efficient in the handling of cargo and more efficient in the systems we use. Look at the dwell time in certain airports around the world and one wonders why can't we replicate the same? We have world-class facilities in Delhi, Bengaluru, Hyderabad and Mumbai. These are fantastic passenger airports but on the cargo front it's the processes that need to be redefined and make business industry friendly. India's GDP figures are touching 7.5 to 8.0 per cent and to exploit this growth, future planning is a must. We have to address the
KEKU GAZDER,
Regional Director-Cargo, Indian subcontinent, Saudia Cargo
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We have got 13 freighters in our fleet which is a mix of MD-1 11s and Boeing 747 freighters. You have to make best possible choices where you want to go.
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aircraft and 13 freighters: Definitely yes.
client partner clear their cargo at the airport also means a lot to our decision about which airport we should go to. It can be understood against the background that in the air freight business, the word
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air freight means significant urgency. Why would somebody want to pay us six times more as compared to sea freight if it is not urgent?
Among the Indian airports, where do you get more business from? If you want one name, it's Mumbai. That is more to do with the present capacity available. However, we have to look at the context of capacity versus the market. Basically, we are flying five types of aircraft in this region. We have passenger aircraft such as 777s, 330s, 320s and 747 freighters and MD 11 freighters. We want to be sure about the commitment we give to our partners. Since we are spread out to eight airports in India, we concentrate more on each airport and the nearby areas to feed the flights. The south is growing and it is our focus area because of heavy density of airports. For example, based in Chennai if I take a 90-minute flight, I will cover seven-eight export production and international airport-based cities down south. And if you take a 90-minute flight from Delhi, how many international airports will you touch? South is where the FDI and foreign investors are flocking and the key verticals are investing today. Take auto, electronics, hardware, IT, telecom — all these are going to south. In addition, it comprises cities such as Hyderabad, Bengaluru, Kochi, Calicut, Trivandrum and Chennai, which give me various options. I can truck my cargo around based on capacity available from Chennai to Bengaluru, Chennai to Cochin, etc. But can I truck business from Mumbai to Delhi to connect a flight and make it commercially viable?
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ven as international express majors continue to make inroads in the Indian domestic market, a home-grown logisitics set-up is getting ready to change the concept of door-to-door delivery when it launches RED Express RED (acronym for Real Time Express Distribution). Promoted by one of the country's experienced cargo groups that has been serving various segments of the aviation cargo industry with distinction for well over 26 years, RED Express hopes to start operations by the end of the current calendar year. RED's sister concerns span the airline cargo industry: from GSA representation to providing cargo airlines and cargo warehouse terminal operators customized cargo applications and ITES services. The new venture has already received financial investments from a Singapore-based freight organization with business operations in Malaysia, Philippines and other parts of the Asia Pacific region. RED is now actively discussing with international express operators for tie-ups in the Asia Pacific region as well as all around the world. RED Express will be the country's first dynamic doorto-door express parcel service provider. It will offer extended pickup and delivery services that are dependable and time guaranteed, providing value to business entities, big or small, domestic or global. Services will include express same day service and also collection of the value of the consignment, which can be a key added value to the growing e-retailing business in India. RED will concentrate on small packages and general distribution services, on a time-definite basis. Significant investments have been planned in technology,
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FORMIDABLE TEAM: The RED Express team at the launch of the operations that will begin at the end of the year.
India’s going RED! Venturing into a territory that poses stiff challenges, RED Express is all set to roll out its dynamic parcel service across the nation. infrastructure, training of personnel and regulatory development. The value proposition lies in process innovation, technology, multiple frequencies, pricing, track 'n' trace and customer business/account information. Unique business solutions for customers with high degree of information transparency for schedules will set new standards in the industry. The company is aiming for a perfect integration of people, processes and technology. These efforts will be supported by a userfriendly website, a first-ofits-kind online booking engine, a proactive approach, an interactive customer dashboard, real time information, promptness of response
through its 24 x 7 Customer Service Interaction Center (CSIC), etc. The geographical reach on a pan-India basis will be through a robust network that will be based on the 'Hub and Spoke model'. The first phase will see 10 operation hubs or Master Distribution Centers (MDCs) and 48 Sub Distribution Centers (SDCs) in more than 23 major cities in the country. This will be strengthened by a vast franchisee network in Tier-2 and 3 cities. The distribution network will be backed by a fleet of RED Liners, operating on the principle of scheduled departures and arrivals with multiple frequency managed by a well trained and focused crew. With its tagline, “Delivered as Promised”,
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RED will be banking on its pragmatic standard operating procedures and its indigenously developed webbased IT platform. In addition, the Unit Load Devices (ULD) will have unique colour coding and security features that would ensure reduction in instances of lost packages and irregularities, while improving the safety and security of the consignments during transit. As Shivi Suri, RED's Project Head - Express and Saurabh Pathak, Operation Head-Express pointed out, Real Time Express Distribution will offer speed, flexibility, reliability, information transparency and value services “to help satisfy the ever changing demands of the customers anytime and anywhere”.
CARGO JOTTINGS IBS holds conference on air cargo
Jettainer and airberlin sign deal
Representatives of leading freighter airlines of the world assembled in Singapore recently to share insights and discuss key issues shaping the global air cargo industry. The conference, titled ‘CONVENTUS’, was organised by IBS Software Services. Over 40 senior executives, including global head of logistics from Qantas, Lufthansa, South African Airways, British Airways, All Nippon Airways, Nippon Cargo Airlines, Hawaiian Airlines, Indigo, IACT, Malaysia Airlines, Turkish Airways and Bangkok Airways participated in the three-day event. Set against a background of plunging profits for the aviation business worldwide, industry stalwarts discussed some of the critical challenges facing the sector and how advancements in technology could be leveraged to tide over the crisis. The importance of re-defining the relationship between the aviation industry and the IT industry to prevent yield erosion and improve asset utilisation was discussed at length. The other topics of discussion included ‘future proofing air cargo movement’, ‘digitisation air cargo supply chain’, ‘cargo 2000’, ‘implementing e-freight’ and ‘growth through value’. Top officials of the airline industry body, IATA, also participated in the discussion.
Jettainer was appointed to manage and maintain the entire ULD fleet of airberlin. Jettainer has also decided to introduce a number of ecologically friendly lightweight containers at airberlin in order to help decreasing the emission. 750 ULDs will gradually be replaced by modern lightweight containers and they will come into operation on long-haul flights of airberlin’s A330-300 and A330200 aircraft. By using this new technology, airberlin will be able to reduce the gross weight of such an aircraft by up to 200 kilogrammes per flight. “Wherever weight can be reasonably reduced, we use less fuel and lessen the burden on the environment,” said Helmut Himmelreich, Chief Operating Officer for airberlin. “The lightweight containers are a new component in our “eco-efficient flying” measures, which we will expand this year to achieve our goal of a specific fuel consumption of 3.4 litres per 100 passenger kilometres.” The weight reduction enables airberlin to
CAPELLA drives logistics management CAPELLA, an enterprise wide webbased CFS/ICD management system, is now on cloud and developed on Microsoft Windows Azure platform. CAPELLA is currently being used by many global CFSs and ICDs successfully for streamlining their container operations. Continental Warehousing Corporation Limited is the first CAPELLA client to go live on Azure Platform. Kale’s CFS Management System — CAPELLA caters to specific needs of CFS and ICD operators. It has been developed on the foundation of Kale’s extensive domain knowledge and technological expertise in the logistics space. It is an enterprisewide, robust, web-based system that automates the disorganised CFS/ICD processes to give the operator instant access to information and provides the management with complete visibility of their business at all times. CAPELLA can be deployed both as licensed software and as a SaaS-based application. A Microsoft Windows Azure platform base provides CAPELLA clients the operational efficiency, development flexibility, scalability, data security amongst many other business benefits.
FFFAI gets push from CBEC Shantanu Bhadkamkar, Chairman, ‘Federation of Freight
Forwarders’ Associations in India’ welcomed the initiative taken by SK Goel, Chairman, CBEC, for inviting the stakeholders for a joint conference with the Secretary General of WCO. FLORAL TRIBUTES: Shantanu Bhadkamkar, He informed that Chairman FFFAI, welcoming Kunio Mikuriya by the federation was presenting a floral bouquet. keen to strengthen its partnership with customs and enhance professionalism of custom brokers in the fast-evolving environment in which customs and business operate. Amongst the issues that were put forth by Shantanu Bhadkamkar, Chairman of ‘Federation of Freight Forwarders’ Associations in India’, were expression of commitment of FFFAI and its members for good business practices including: being lawcompliant and tax-efficient, participation in initiatives related to secure and safe supply chain and facilitation of fast movement of cargo through borders. He also expressed that customs was amongst the most accessible government department and regular interaction had facilitated quick problem resolutions.
Celebi guides Olympics 2012 fervour With Olympics 2012 fervour at its peak, GameOn India and Celebi Delhi Cargo Terminal Management India Pvt. Ltd, recently organised an inaugural seminar, “For the Love of
DHL expands in North India
ONE MORE IN THE KITTY: Irshad Mirza, Chairman, Mirza International Limited along with Malcolm Monteiro, CEO, South Asia, DHL Express and R S Subramanian, Country Manager, DHL Express India inaugurates the new service centre.
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DHL is further expanding in the markets of North India and officially inaugurated a new service centre facility in Kanpur. The new facility that is spread over 2,000 sq ft with a capacity to handle a volume of close to 1500 shipments a week, was inaugurated by Irshad Mirza, Chairman, Mirza International Limited and Malcolm Monteiro, CEO, South Asia, DHL Express.
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lower the fuel consumption of each aircraft by more than 30,000 litres per year. This goes along with a reduction of the annual carbon-dioxide emission by up to 1,100 tonnes per aircraft. “Being responsible for the global JOINING HANDS: Jettainer cargo management and being loaded into airberlin plane maintenance of airberlin´s ULD fleet makes us very proud — last but not least due to the fact that airberlin’s partner Etihad Airways has appointed Jettainer to supply, manage and maintain its ULD fleet last year already,” said Alexander Pluemacher, Managing Director of Jettainer.
Sport”. The event aimed at bringing together people from various walks of life for uniting them by their shared love for sports. Celebi and GameOn India took this initiative with intent to provide a common platform to the working-class professionals and expatriates for playing a sport of their choice with like-minded professionals. The event witnessed the presence of eminent speakers such as Joy Bhattacharya, CEO, Kolkata Knight Riders; Reena Kaushal Dharmshaktu, first Indian woman to ski to the South Pole; Ashok Rathod, Founder, Organisation for Social Change; Zafar Iqbal, former hockey captain; Rahul Verghese, Founder, Running and Living Infotainment Pvt. Ltd and Shiva Keshavan, first Indian representative to compete in luge at the Winter Olympic Games. These stalwarts descended upon a common platform for sharing their experiences and inculcating the importance of sports and being fit amongst the busy working-class professionals.
Peter Dew, CEVA’s Chief Information Officer said, “This new app is a clear example of how we are using technology and innovation to improve the overall service our customers receive. Visibility is an integral part of any supply chain and this app, in combination with our online CEVA Trak tool, makes it quick and convenient to see exactly where a customer’s goods are at any given point in the supply chain.”
Etihad Cargo leads record tonnage Etihad Cargo posted record monthly figures for July with network volumes approaching 33,000 tonnes, an increase of 18 per cent on the same month last year. The figures surpass a previous month record of 31,700 tonnes, which Etihad Cargo carried in March 2012. Total revenues for the month were up 4 per cent on June and up 8 per cent on the corresponding period the previous year. Last month, Etihad Cargo reported strong H1 2012 results, with tonnage up 21 per cent to 175,000 tonnes. Etihad Airways’ Chief Planning and Kevin Knight Strategy Officer, Kevin Knight said, “We’ve seen a good recovery in business from Europe after the second quarter. Also, the capability of our fleet with the addition of the 747-400 freighter has enhanced our overall schedule flexibility, and helped support significant project work in what was also a record month for our charter team. Business across and through the Middle East has remained strong into the holy month of Ramadan. New routes including our recently-launched six-times-a-week passenger service to Lagos and our new freighter service to Dammam have broadened the reach for our customers. Looking ahead, we expect to maintain strong freight performance over the third and fourth quarters of 2012.”
TNT shows improved Q2 results
CEVA Logistics launched its first mobile app, CEVA Mobile, which enables customers to track the exact location of every shipment using their iPhone or iPad. Every year, CEVA ships hundreds of millions tonnes of cargo for over 15,000 customers worldwide. The app is CEVA’s latest move in using technology to provide customer value and is a simple and flexible way to search and retrieve the status of airfreight, oceanfreight and customs brokerage shipments worldwide. CEVA Mobile provides easy, on-the-go access to shipment tracking using only the customers’ shipment reference or house number.
TNT Express once again bounced back to record improved results in its second quarter despite increasingly difficult economic conditions. The Netherlands-based integrator saw its overall revenues up 1.7 per cent to €1.8-billion for the three months to the end of June 2012, with operating income up 67 per cent to €7-million. TNT Express said it had been quite surprised by the stable volumes in Europe, Middle East and Asia, considering the challenging economic conditions. Commenting on the results, CEO Marie-Christine Lombard said her company was able to maintain profitability in an increasingly challenging economic environment. She said, “In Europe, good volume growth underscores the strength of our diversified product portfolio. Cost savings and revenueenhancement initiatives also supported profits. Performance in Asia Pacific and Americas continued to improve as a result of business development and restructuring measures.”
On the occasion, Malcolm Monteiro commented, “India is a key focus market for DHL Express and figures among the top five markets globally. For our business in India, we are committed on enhancing our services and offering by investing in infrastructure which means ground facilities, fleet and air capacity.” He added: “With the new service centre facility in Kanpur, we are now closer to the market, ensuring that customers in and around Kanpur continue to receive the
highest level of service from DHL.”DHL Express has been servicing a wide variety of customers in and around Kanpur in leather and leather products, apparel and textiles, banking, farm and industrial equipments sectors. The new service centre facility will serve as a DHL’s local pickup, delivery and sorting operations and is fully operational. The new facility will also cater to customers requirements of same day delivery from Unnao, Banthar, Panki, Jajmau and Chaubepur.
CEVA unveils mobile app for shipments
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GLOBETROTTING
Prickly meal z
Flight fiasco z It was the strangest flight that Bourne Legacy actor Jeremy Renner could have ever imagined. But it did happen to him. He accidentally took a Viagra pill instead of a sleeping aid making his journey very uncomfortable. The actor later revealed this strange incident to chat show host Jimmy Kimmell, “I had to get off the plane to go to work so I had to sleep on the plane. Somebody gave me some pills ... so great. I took a little sleeping pill... and nothing was happening but something else was happening, and I saw pretty quickly that 'A' was a little 'V' on
the pill. Not only did I not sleep on the entire flight, I was camping… There was no walking. If I had to go to the restroom, it was so embarrassing,” he recalled.
Believe it or not, a needle was found in a catered sandwich on an Air Canada flight. Following the incident, Air Canada spokesperson Peter Fitzpatrick wrote in an email, “Safety is always our main concern so we are taking this matter very critically. We immediately contacted the caterers that provision our flights, and a full inquiry is under way.” Earlier, a similar incident happened when needles were found in sandwiches on four transatlantic Delta flights from Amsterdam to US destinations. In those situations, needles were discovered in
Beware, drunk female pilot on board ! z A female pilot was booted out from Sydney Airport after members of the cabin crew suspected she was drunk.The decision was made after flight attendants informed the Flight Operations Manager they suspected the pilot had been drinking. The woman reportedly recorded a positive reading for alcohol and ultimately withheld from operational duties on full pay. Ultimately, the jet returned to the terminal and a substitute pilot was found to take control of the flight. Later on, Qantas launched a full investigation into the incident. “A Qantas captain was suspended from service for administrative reasons. The matter is being investigated and it would be inappropriate to comment further,” Qantas Airways' spokesman said.
Indecent dressing z In a rather unusual incident, a man was kicked off a flight for his indecent clothing. The man who was wearing baggy pants was asked to pull up his pants but he refused. “It was to the point where his entire bottom was hanging out. And that's not appropriate. We have a lot of customers on the plane, a lot of children on the plane. Our flight attendant asked him if he would kindly pull (his pants) up so that they were at a more appropriate level,” Spirit Airlines spokeswoman Misty Pinson told CBS Chicago. As a result, the man became “verbally abusive” and ultimately police was called and the man and his companion were escorted off the plane. “A safe and pleasant environment for all customers on board is our top priority,” Pinson added. “When our crew members ask passengers to comply with a request, it is taken keeping in mind with the best interest of all of our customers.”
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Strange demand z
since separate sandwiches, injuring one female passenger. Meanwhile, Christina Ulosevich, a spokeswoman for the food services company, Gate Gourmet Canada, was quoted as saying, “While we are not Air Canada’s catering provider out of Victoria.”
Strange things happen on flights. A passenger on a flight got so outraged that he created a ruckus on a petty issue: the woman sitting beside him wouldn't turn off her reading light. This enraged the male passenger so much that he starting screaming and cursing. While all the passengers were sleeping, the male passenger started shouting expletives to the lady who was using her reading light. He told the lady to turn-off the reading light which she refused to do. Ultimately, when the plane landed, the gentleman was taken down and five sher-
Gimmick goes bad z It was a promotional campaign that went haywire. Southwest Airlines' endeavour to show gratitude to Facebook friends (promotion celebrating three million Facebook fans) with a half-price ticket sale boomeranged, with customers unintentionally charged multiple times for a single flight. “It was just a technology glitch in our system that caused that,” said Southwest spokeswoman Ashley Dillon adding the firm was apologetic for the hassle to customers.
iff’s deputies questioned him before allowing him and his family to continue on their journey home.
thing. They smiled at me when I went through.” The Sun quoted him as saying, “I went to the toilet and sat there but I couldn’t get out. Then ‘whoosh’, we were going up in the sky.” Liam completed the flight journey of 1,500 miles before returning to Britain unharmed. He was escorted by staff and later on reunited with his worried family. His mother was quoted as saying, “I can't get my head around it. How did he get that far without anyone asking him one question? I just keep thinking how easy it would be for a terrorist, it's unbelievable? All I read about is how airport security is the highest it has ever been. I'm disgusted and I want answers.”
?? ? ? ?
The demolition man z
The campaign named “luv2like” ended on the wrong note. The campaign was supposed to give customers who booked flights a 50 per cent discount on certain fares. But it all went haywire when flyers' credit and debit cards were repeatedly charged, in some cases 20 or more times for a single flight.
Flight safari z
Next time you turn up to board a plane make sure that you don't get struck because of a strange reason like what happened recently at Brisbane airport where a man with a metal hip unknowingly created a security nightmare at the airport, causing minor postponements while forcing hundreds of passengers to be examined twice. A Qantas spokeswoman said all passengers had to go through security again. “It has caused minor delays, but we've almost rescanned everyone now,” she said. “We located him shortly after but as a result of this we had to take security safeguards and we did clear the passengers,” she added.
In an amazing incident, an 11-year-old school boy flew without a passport, a ticket or a boarding pass. It all happened when Liam Corcoran sneaked away from his mother at a shopping complex before successfully catching a flight to Rome while duping airport staff. Liam told The Telegraph, “Getting on the plane was easier than doing my homework. I didn't have anything on me and no one asked me for any-
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DOMESTIC AIRLINES Delhi Duty Free gets 3 awards DELHI DUTY Free Services Pvt. Ltd (DDFS) recently won three awards — Retail Business Partner of the Year, Super Star Commercial Partner of the Year and Retail Outlet of the Year International — at the recently-held GMR-IGI Airport Awards 2012. The entire award evaluation process was carried out and validated by leading audit firm KPMG. Receiving the awards on behalf of Delhi Duty Free, Steve O Connor, CEO, Delhi Duty Free, said, “We are extremely honoured and proud to have won three awards in the very first GMR-IGI Awards 2012. I am glad that the commitment level and service standards shown by our teams have been recognised. I am very proud of the team we have and we are confident that this is only the first step of many awards DDFS will compete for.”
SHOWING COMMITMENT: DDFS officials receving the awards during the GMR-IGI Airport Awards 2012
IndiGo introduces two new flights INDIGO RECENTLY introduced two new flights in its network. The carrier started its new daily and direct flight between Hyderabad and Dubai. Additionally, IndiGo is now operating its
INCREASING NETWORK: Inside an IndiGo aircraft
second daily and direct flight between Delhi and Dubai. These flights will give more choice to business and leisure travellers who are constantly on the lookout for new and affordable flying options. Speaking on the occasion, Aditya Ghosh, President, IndiGo, said that the carrier was determined to provide the best travel experience to “all those who wish to fly to these destination. We are looking at providing affordable fares on these new routes for 6E travellers. It is our constant endeavor to provide more
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flexibility of choice for our customers as IndiGo continues to offer them on-time, hassle-free and always affordable flying experience.”
Deccan Shuttles starts services DECCAN SHUTTLES, a specialised wing under Deccan Charters Ltd., announced the commencement of daily charter flights in Gujarat connecting key economic centres such as Ahmedabad, Surat, Jamnagar, Bhavnagar and Kandla.
IMPROVING CONNECTIVITY: A Deccan Shuttles chartered plane
The flight service aims at providing improved connectivity to these important industrial hubs in Gujarat, for the valueconscious business community. It endeavours to fuel their business by cutting their travel time, thereby enabling increased efficiency. Secure, committed and prompt, it is a one of its kind service that Deccan Charters brings to the state of Gujarat. Deccan Shuttles will provide this service using a 9seater Cessna Grand Caravan Aircraft, one of the most robust aircraft used worldwide for passenger services. The service commenced on August 20 and will initially be operational on Ahmedabad-Surat-Bhavnagar route. The Ahmedabad-Kandla route was made operational from August 27, 2012, and Ahmedabad-Jamnagar route will be added subsequently. “Over the years, Deccan has made breakthrough innovations that have redefined paradigms of the aviation industry in India. These innovations have been fuelled by the vision of delivering value to the customers through safe and reliable services, while fostering an all-inclusive growth of the country. This service aims at linking the key industrial hubs in Gujarat with each other, thereby fostering business growth in the region. It will be of special significance to the business community as it will provide a much-needed boost to their business requirements through efficient and time-saving services,” said Capt. GR Gopinath, Chairman of Deccan Charters Ltd. Col. (Retd) Jayanth Poovaiah, Director and CEO, Deccan Charters Ltd, said, “Deccan is dedicated to explore and identify the need for air connectivity in different pockets of India. Through these services we aim to bridge the gap in connectivity for inaccessible tourist, industrial and other important clusters. This newly-launched service creates this much-needed connectivity in the economically-advanced state of Gujarat. With this service we also introduce the Cessna Grand Caravan aircraft, which are synonymous with reliability and efficiency; enabling timely service... values that the Deccan family cherishes.”
Jet, HDFC tie up for credit cards JETPRIVILEGE and HDFC Bank have partnered to launch ‘JetPrivilege-HDFC Bank Credit Card’, an exclusive range of credit cards offering unique benefits and rewards in the form of JPMiles. The co-brand credit cards will promote increase in card usage, making air travel more affordable and rewarding for cardholders. The JetPrivilege-HDFC Bank credit card with its World,
CRUISING HEIGHTS September 2012
Platinum and Titanium variants will be offered on the MasterCard network platform allowing customers access to benefits across the world. JetPrivilege-HDFC Bank World Credit Card, being the premium variant, will entitle the cardholders to 6 JPMiles for every `150 spent and another 10,000 JPMiles within the first 90 days. The cardholders will also be able to aggregate all their spends into one account with single reward currency — JPMiles — and pool their earnings
work towards strengthening customer relationships and is a win-win for JetPrivilege, HDFC Bank, and our mutual guests.”
STRATEGIC TIE-UP: The HDFC and Jet teams at the launch of JetPrivilegeHDFC Bank Credit Card
PROVIDING ENCOURAGEMENT: SpiceJet will be providing free air tickets for life to Indian medal winners of the Olympics
through various programme partners to thus fast track their ability to ‘Fly Free Faster’. Nikos Kardassis, Chief Executive Officer of Jet Airways, said, “Our objective is to deepen the relationship with our guests. This tie-up with HDFC Bank is another unique travel option aimed at making air travel more economical, and costeffective for family travel. This co-branded programme bears testimony to our customer-centric approach and will mutually
“The nation is proud of their unprecedented performance. It is a matter of great honour for us to be associated with the sportspersons who brought credit for India at London Olympics. The victory of Sushil Kumar, Yogeshwar Dutt, Vijay Kumar, MC Mary Kom, Saina Nehwal and Gagan Narang at an event where sportspersons from across the globe participated proves their hard work and commitment to their respective fields.”
SpiceJet honour for Olympics winners SPICEJET recently announced that it would provide free air tickets for life to Indian medal winners of the London Olympics. Making the announcement, SpiceJet CEO Neil Mills said,
GoAir, Lufthansa Technik sign contract GOAIR and Lufthansa Technik signed a 10-year component paramount in a highly-competitive and cost-driven market support contract. The contract covers like India,” said Giorgio De Roni, Chief most of the spare parts required for the Executive Officer of GoAir. regular maintenance of A320 classic Flights to southern and northern aircraft and will also cover the new India: GoAir introduced a new flight A320neo fleet of GoAir, which is from Bengaluru to Goa from August 21, expected to enter into service from 2016 2012, and has also introduced a new onwards. The component support will be flight from Lucknow to Delhi and handled via the Lufthansa Technik Mumbai. Group network. The Bengaluru flight schedule has The spare parts shall be supplied to been devised to offer perfect the airline’s bases at Mumbai and Delhi. opportunities for round trip travels on The contract also provides GoAir access the same day, with a morning departure to Lufthansa Technik’s technical from Bengaluru and an early evening operations WebSuite, whereby both GoAir CEO Giorgio De Roni return from Goa and is part of GoAir’s parties shall observe just-in-time inventory management. strategy to strengthen its position in South India where it This will enable further efficiency gains for both parties. presently operates from Bengaluru, Chennai, Cochin and The maintenance and repairs of the components will be Goa. With this new service, GoAir’s total flights to done at Lufthansa Technik facilities. GoAir shall be Bengaluru add up to 84 per week, linking Mumbai, Delhi, supported by a dedicated customer support team in addition Pune and Goa. to Lufthansa Technik’s general 24/7 AOG Desk. Speaking on the occasion, Giorgio De Roni, CEO, “At GoAir, it is our constant endeavour to achieve GoAir, said that the new flights between Bengaluru and safety for our passengers and achieve operational Goa and Lucknow and Delhi would “strengthen our efficiencies at all levels. I am glad to share that GoAir has position in Bengaluru and Lucknow and represent a further finalised a very important contract with Lufthansa Technik. step in our long-term strategy to increase our presence in It clearly demonstrates that GoAir is able to achieve the South and North India. Within this financial year, GoAir required safety of passengers through world-class will receive an additional brand new aircraft and more component support at attractive prices, which are flights are planned to/from Bengaluru.” CRUISING HEIGHTS September 2012
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SNIPPETS
INTERNATIONAL AIRLINES Virgin touches JFK with Delhi
stretching their legs and indulging in some duty-free shopping. VIRGIN ATLANTIC recently announced the launch of its new We're looking forward to making this new service to JFK a service, connecting flights from Delhi to New York's John F success.” Kennedy airport via London Heathrow. The airline's soaring All set to connect Mumbai to London and USA: Virgin success on the Delhi-Newark route was a key factor in Atlantic is starting flights to London from Mumbai, from launching this new London-New York service (Virgin's 6th October 29, 2012. The daily flight will serve the UK and open daily out of London). up fabulous connections from London The new service to JFK will Heathrow Airport to New York, Boston, commence from October 28 and Washington and Miami among other will complement the airline's USA destinations. existing same day connection from A brand new A330 aircraft offering the Delhi to Newark via London best in the airline's new product and Heathrow. The new service is service will be deployed on the route being launched to build upon the which is also home to the innovative airline's strong performance to Upper Class Dream suite. The redefined Newark from Delhi and to business class cabin features new super capitalise on the growing passenger lounge seats, the longest bar and numbers to New York and the business class bed in the sky, and STRONGER CONNECTIONS : A Virgin Atlantic aircraft USA. revolutionary touch screen JAM Stephen King, General Manager, entertainment system fitted in every India, Virgin Atlantic Airways said, “India is definitely one of cabin. Sir Richard Branson, President, Virgin Atlantic Airways our key markets and along with launching Mumbai later this said, “Virgin Atlantic is proud to be flying to Mumbai again, year we are really looking forward to connecting more linking this wonderful city to our key destinations of London, passengers to JFK and Newark out of Delhi. The schedule has New York, Boston, Washington and Miami. India's been designed to enable passengers from India's capital to phenomenal growth continues to drive travel to UK and USA connect quickly to New York. Our increasing share to Newark and we know our passengers are going to love the connections shows that passengers prefer breaking the journey in half, the new flight offers.”
Turkish Airlines bags Skytrax award
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AIR TRAVELLERS once again voted Turkish Airlines as the Best Airline in Europe, the second year running at the 2012 Skytrax World Airline Awards. Turkish Airlines was also named as the winner of the categories, “Best Airline in Southern Europe” and “Best Premium Economy Class Airline Seat” for its comfort class seats by Skytrax. The survey, conducted by global aviation research organisation SKYTRAX, polled over 18 million business and leisure air travellers from 100 countries, with the winners of these passenger’s choice awards announced at the recently-held Farnborough Airshow, UK, and the awards were handed over to Turkish Airlines’ General Manager Temel Kotil by the CEO of Skytrax, Edward Plaisted. “Turkish Airlines continues to consolidate its position as one of the world’s leading airlines and the awards they have received today for Best Airline in Europe and the Best Airline in Southern Europe demonstrate their continued popularity amongst passengers. Turkish Airlines Premium Economy cabin product has proved increasingly popular and the award Turkish Airlines collected for the Best Premium Economy Class Airline Seat is a clear reflection of the success of this high-quality product,” said Plaisted.
Blessed with a plethora of spectacular scenery, Lombok satisfies diverse holiday preferences. Outdoor lovers may embark on adventurous trips to explore the mighty Mount Rinjani or Tropical Forest and Animal Reserve. Honeymooners will definitely find the untouched sandy beaches at Senggigi and the surrounding Gili Island as romantic retreats. For those who seek escapism, Lombok is a perfect spot for snorkeling and diving, with a dreamlike and picture-perfect underwater world.” Announces great year-end deals: AirAsia X is offering special year-end holiday fares to its destinations across Australia, China, Taiwan, Nepal, Japan and Korea. The airlines will be taking passengers from Kuala Lumpur to Japan (Osaka, Tokyo) starting from as low as $96, China (Beijing, Hangzhou, Chengdu) from as low as $112, Australia (Perth, Melbourne, Gold Coast, Sydney) from as low as $118, Taiwan (Taipei) from as low as $125, Nepal (Kathmandu) from as low as $128 and Korea (Seoul) from as low as $141. Increases frequency to Nepal: AirAsia X will be increasing its flight frequency to Kathmandu from Kuala Lumpur, from its current two flights weekly to three flights weekly effective September 15, 2012. The move comes in response to encouraging demand from our guests in South East Asia and beyond. AirAsia X in conjunction with the added frequency is offering extremely competitive promotional fares from Kuala Lumpur to Kathmandu, Nepal for travel between September 4, 2012 and May 22, 2013.
AirAsia launches flights to Lombok
Cathay announces 2012 interim results
INCREASING ITS connectivity with its 15th Indonesian destination from Kuala Lumpur, AirAsia has recently launched thrice weekly direct flights to Lombok. Jasmine Lee, AirAsia Berhad Commercial Director, said, “Lombok is a hidden gem.
CITING PERSISTENTLY high price of jet fuel, passenger yields coming under pressure and weak air cargo demand — factors common to the aviation industry as a whole — the Cathay Pacific Group reported an attributable loss of $120.5
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million for the first six months of 2012. Profits from associated companies, including Air China, also showed a marked decline. In response to these challenges, the Cathay Pacific Group introduced measures designed to protect its business, including schedule changes and capacity reductions, the withdrawal from service of older, less fuelefficient aircraft, a recruitment freeze and the introduction of voluntary unpaid leave for cabin crew. However, the group has kept its network intact and not allowed cost reductions to compromise the brand or service quality. It also continued with major investments — new aircraft, new products and its own HK$5.9 billion cargo terminal at Hong Kong International Airport — that will benefit the business in the long term. Speaking on the latest announcement, Tom Wright, General Manager, South Asia, Africa and Middle East, said, “India continues to remain an important market for us as we see a huge potential here and our flights have had good load factors. We are expanding our services in India with increase in flights from Chennai from four weekly flights to daily. We will also launch Dragonair services in Kolkata offering the only direct flight services to Hong Kong this November. The Cathay Pacific cargo business is also doing well and we have recently started our cargo services in Hyderabad. We are optimistic about our growth in India.”
of its investment. The purchase was made following the development of a highly successful multi-tiered partnership between the two airlines that includes code-sharing on flights, joint marketing initiatives and reciprocal earn-and-burn on their respective frequent flier programmes. Etihad Airways and Virgin Australia together currently operate 24 flights per week between Australia and Abu Dhabi offering Australian travellers and visitors to Australia greater choice and access to a combined network of more than 285 global destinations.
Lufthansa’s Boeing 747-8 gets royal salute LUFTHANSA’S BOEING 747-8 Intercontinental recently touched down for the first time in the country, marking a new milestone in Indian aviation. It was received with a grand water canon at Terminal 3 of New Delhi’s Indira Gandhi International Airport. Lufthansa is the global launch customer for the latest avatar of the legendary family of Jumbo Jets and Delhi is the second destination worldwide to receive the B747-8. Passengers on the inaugural flight from Frankfurt witnessed how state-of-the-art aircraft technologies maximise in-flight comfort, by reducing cabin noise by 30 per cent for
BA doubles Dublin-London frequency THIS WINTER, British Airways will double the number of flights it operates between Dublin and London Heathrow. Following the acquisition of British Midland International by International Airlines Group (IAG), British Airways now operates this important air link after taking over the route at the end of June. The new schedule, effective from October 28, will lead to the number of daily services increasing from four to eight return flights, enabling the airlines to offer thousands more seats a week between both cities. The route will be operated by a 150-seater A319 aircraft offering the choice of both Club Europe and Club Traveller cabins and passengers can enjoy a full onboard experience with complimentary food and drinks.
Etihad to buy more of Virgin Australia ETIHAD AIRWAYS has welcomed the decision by the Australian Government to allow the airline to increase its equity stake in Virgin Australia Holdings to a maximum of 10 per cent. Etihad Airways currently has a 4.99 per cent stake in Virgin Australia, acquired earlier this year, and had applied to the Foreign Investment Review Board (FIRB) to raise the level
STYLE REDEFINED: The sophisticated new Business Class in Lufthansa’s Boeing 747-8
example. They also experienced Lufthansa’s latest in-flight products, such as a sophisticated new Business Class seat featuring a 6.5-foot-long full-flat bed with vastly improved sleeping comfort and much greater privacy. Travellers on the main deck of the nose section, were treated in “the quietest First Class in the world”. Economy Class passengers too enjoyed the new seats with large increase in individual space with 5-7 cms more legroom and 52 centimetres wide seats.
APPOINTMENTS Emirates strengthens commercial team
New GM for Air France-KLM
Strengthening its commercial operations team, Emirates airline announced management changes to its commercial operations department, helping the airline meet its demanding growth trajectory. The airline has promoted Essa Sulaiman Ahmad, Essa Sulaiman as Vice President, India and Nepal and Orhan Abbas as Senior Vice President, Commercial Operations - The Americas. In addition to this Ahmed Khoory, has been appointed as the Senior Vice President, Commercial Operations, West Asia and Indian Ocean.
Air France-KLM appointed Yeshwant Pawar as its new General Manager-South Asia. Taking charge of the Air FranceKLM office on September 1, 2012, Yeshwant will be responsible for accelerating Air France-KLM growth in Yeshwant Pawar South Asia, strengthening teams and enhancing relationships with partners and alliances in the region. Prior to taking up this new designation, he was the General Manager, Eastern Africa for Air France KLM.
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SNIPPETS
TRAVEL & TOURISM Exclusive shop at Delhi airport DELHI BAZAAR, an exclusive Indian store concept by Craft House of The Metropolitan Hotel and Spa, opened at the Terminal 3 of Indira Gandhi International Airport. Speaking on the occasion, Monisha Gupta, Director, Craft House said, “Delhi Bazaar will be a holistic shopping experience for the travellers flying out of the city. We aim to promote India as a concept and will offer products ranging from handicrafts, tea, spices, décor accessories to coffee table books, aroma, spa and spiritual products, ethnic wear etc. A smaller version of Delhi Bazaar will also open at the Domestic Departure of T3 as well.” A shopper’s delight, it features the famous Indian hand-woven pashmina in an array of weaves, colours and prints, designer jewellery in precious gems, a variety in silk accessories, bags and crafts.
EXCLUSIVE INDIAN STORE: A view of the Craft Bazaar at New Delhi Airport’s Terminal 3
India ushers first sea-facing hotel THE FIRST sea-facing hotel of Chennai region that would provide a magnificent view of the Bay of Bengal - The Leela
and heritage of South India. This Palace property will raise the bar of luxury hospitality in the region and provide a world-class destination for discerning travellers as well as city residents.”
Largest IBIS hotel opens
ONE MORE FEATHER IN THE CAP: Capt C P Krishnan Nair, Chairman, The Leela Palaces Hotels and Resorts, lighting the lamp during the pooja at the inaugural of the Leela Palace, Chennai
Palace Chennai - is slated to be launched by The Leela Palaces, Hotels and Resorts. The 11-floor, 326-room property, spanning six verdant acres, is in close proximity to the capital's business district, and is strategically located on the prime real-estate site of the Adyar Seaface. Designed by the internationally acclaimed architects Smallwood, Reynolds, Stewart, Stewart & Associates, Inc, USA, it seamlessly combines the architectural opulence of the Chettinad dynasty with the largest guest rooms in the city. Stateof-the-art facilities, finest dining concepts and a dazzling collection of renowned contemporary art and artisan craft makes the hotel one of the most luxurious landmarks in South India. The Palace offers lavishly-appointed suites, exclusive services for corporate high-flyers, palatial spaces for meetings, conferences, and private celebrations, fine dining from around the globe, an award-wining spa, an ultra-modern fitness retreat and a spectacular 25-metre swimming pool. Rajiv Kaul, President of The Leela Palaces, Hotels, and Resorts said, “The Leela Palace Chennai symbolises the spirit of Chennai which has rapidly evolved into a global business and technology hub, while deeply rooted in traditional culture, music
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IN ORDER to tap business travellers of the fastest-growing corporate hub after Mumbai, IBIS - Accor Group’s economy hotel brand announced the formal launch of the largest hotel in Turbhe, Navi Mumbai. With 196 rooms, IBIS is expanding its footprint to attract an ever-increasing corporate fraternity. IBIS Navi Mumbai is set up at a capital investment of between `100 crore and 150 crore, located on the Thane-Belapur Road at a major junction just 10 minutes from business areas of Vashi, Mahape and Belapur. It aims to break even within next 2 years with 70 per cent occupancy during peak season that is March-June and September-December. Key features of an IBIS experience include anytime check-in by guests, a three-shift buffet breakfast starting from 4 am to 7 am, 7 am to 10 am and 10 am to 12 pm. A unique concept introduced for the first time is 15-minute non-satisfaction guarantee wherein if a guest faces a service issue and it is not addressed within the stipulated 15 minutes, the stay is complementary for the guest. Speaking on the occasion, Maverik Mukerji, General Manager, IBIS (Navi Mumbai), stated, “At IBIS, we believe in delivering an experience of a luxury hotel services at an affordable price. Owing to the robust commercial activity in Navi Mumbai there is considerable demand as business travellers have become cost and quality conscious.”
Jharkhand gets boost for tourist circuit SUBODH KANT SAHAY, Minister for Tourism, Government of India, announced that the Government of India had granted `50 crore for the development of a tourist circuit covering important spots in East Singhbhum, Saraikela-Kharsawan and Ranchi districts of Jharkhand during a recently-held conference on ‘Jharkhand: A rediscovered tourist paradise’, in Ranchi. “Initially, the ministry decided to give around `39 crore, but keeping in mind the tourism potential of the state, we decided to increase the allocation to around `50 crore,” said Sahay. “Jharkhand has everything to make it a popular tourist destination, but the state government has never tried to develop it. The state has also failed to realise that tourism helps in generating employment,” he added.
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M
adhya Pradesh is the heart of India. The state's natural beauty, combined with innumerable monuments, exquisitelycarved temples, stupas, forts and palaces, make it a must visit. In addition, there are amazing national parks. Furthe-rmore, the MP State Tourism Development Corporation offers a wide choice of accommodation. So come to MP and enjoy hospitality never-experienced before. Khajuraho — Eternal Images of Love The temples of Khajuraho are a testimony to the unique craftsmanship of the times and the vision of the Chandela Rajputs, who had them built between 950 and1050AD. Of the 85 original temples, 22 have survived till today. Lost among the forests for centuries, these temples were discovered by a British engineer, TS Burt in 1838. These groups of temples are designated by UNESCO as a world heritage site and are divided into three geographical groups. The Western Group — Located on the main Bamitha-Rajnagar Road, these temples are the most visited. Among them are the Kandariya Mahadev that soars 31 m high and has the most elegantly ornamented basement with intricately carved processional friezes; Chaunsath Yogini, the only granite temple and the earliest surviving shrine of the group,
dedicated to Kali. Of its 64 peripheral shrines, only 35 survive today; Chitragupta Temple — Facing eastwards, the temple is dedicated to the Sun God. The imposing diety image in the inner sanctum is driving a horse-drawn chariot. The depictions reflect the lavish lifestyle of the Chandela courts; Vishwanath Temple — The architectural style of this Shiva temple indicates that it was built just before the Kandariya. Particularly noteworthy are its two sura sundaris. It is a panchayatan temple but now only two subsidiary shrines survive; Lakshmana Temple is a Vaishnav temple and has the five principal elements of the Ardh Mandapa, Mandapa, Maha Mandapa, Vestibule and Sanctum. The lintel over the entrance of the temple shows the trinity; Jagadambi Temple dedicated to Goddess Kali is of four part design in plan. The sanctum has a four armed Vishnu; Matangeswara Temple — Still a place of worship, the Shiva temple has an eight-foothigh lingam. This temple is the venue of a large fair on the day of Mahashivratri. Eastern Group — Here, close to the village of Khajuraho, Brahminical and Jain temples exist side by side. The Hindu temples are situated near Ninora Tal or Khajuraho Sagar. Brahma Temple — Wrongly called a Brahma temple as the four-faced linga placed in the sanctum was mis-
taken for the four-faced idol of Brahma. Though the linga would indicate that this is a Shiva temple, the prominent figure carved on the lintel of the sanctum doorway indicates that it was a Vishnu temple; The Vamana temple is dedicated to the Vamana incarnation of Vishnu. Its walls are richly-carved; Javari — It stands on a high plinth and has a delicate soaring shikhara. The three bands of sculpture on its outer walls are rich in carvings and decoration. Jain shrines are situated further south accessible by a metalled road. Ghantai Temple — Ghantai is the local name for these ruins because of the carvings of bells on its slim pillars. All that stands now is the remains of the entrance porch and its maha mandap or assembly hall; Parsvanath Temple — About 400 m southeast of Ghantai temple this stands in a walled enclosure with the other Adinath temple. Made of honey-coloured sand stone, it enshrines a black marble image of the first Tirthankar; Adinath Temple is smaller than Parsvanath and in many ways resembles the Yamana. Only the sanctum and vestibule have survived. The sculpture on the three bands include charming sura sundaris whereas the principal three niches of the outer facade have images of yakshis. Southern Group: It comprises just two conserved temples, Duladeo Temple and Chaturbhuj Temple,
CRUISING HEIGHTS September 2012
that are among the last temples to be built. Sound and Light Show: This fascinating Son-etLumiere spectacle evokes the life and times of the great Chandela Kings and traces the story of the unique temples from the 10th century to the present day. Mounted in the complex of the Western Group of temples, the 50-minute show runs in Hindi and English every evening. State Museum of Tribal and Folk Arts: A fine collection of masterpieces of tribal and folk arts and artifacts from all over MP is on display at the Chandela Cultural Complex. The Museum opens everyday from 10 pm to 5 pm, except Mondays and gazetted holidays.
HOW TO REACH BY AIR: Regular services link Khajuraho with Delhi and Varanasi BY RAIL: Khajuraho has its own railway station linking it to Delhi, Jhansi (l72 km), Harpalpur (94 km) and Mahoba (64 km), Satna (117 km) on the Mumbai-Allahabad line of the Central Railway, is a convenient rail link for those coming from Mumbai, Kolkata and Varanasi. BY ROAD: Khajuraho is connected by regular buses with Satna, Harpalpur, Jhansi and Mahoba. Best Season: July to March YOUR HOST: Madhya Pradesh Tourism's Hotel Jhankar, Hotel Payal and Tourist Village.
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FOCUS FEATURE
Khajuraho: Symphony in stone
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WORTH Y The Wo ACHIEVER: F men Ac utehall by Air In hievers in Av y receiving ia dia on Decem tion Award Executv from Chitra S ber 16, 2011, e Direc arkar, th tor, Air India, A e then mericas
HIGH FLIERS: Rabia Futehally with the then Prime Minister Rajiv Gandhi and other eminent fliers
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IN CONTROL: Rabia Futehally, pilot in command, attired in a saree
S: NTURER e RING VE THE DA utehally (extrem Rabia F with Chanda S long PA right), a hairperson, IW , C ff i, tt a b a hini Shro ) o Budh M ), e ft (centr xtreme le (e A P IW Trustee,
“FLYING IN A SAREE WAS VERY NATURAL”
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f Rabia Futehally could fly in 2012, she would have made a fashion statement. Her’s would have been a memorable photograph:a striking lady, draped in a gorgeous silk saree stepping into a cockpit. For as long as her friends from the pilot community — and she has many, but, mind you, all are wonderful ladies like her — can remember, Futehally has flown around the country in her ‘trademark’ sari and thereby created a record of sorts: the only Indian woman pilot to fly in a sari. “Flying while dressed in a saree was very natural. We always wore a saree — be it work, mountain climbing, trekking or flying,” says the lady who was honoured as a 2012 inductee into the International Forest of Friendship (IFF), in Atchison, Kansas during ceremonies in June. With this and many other achievements to her credit, the lady still feels that there is no need for congratulations as she was merely pursuing her passion. “Flying commercial was not my ambition. I flew just for the ecstacy of flying.” She currently serves on the Board of Trustees of the Indian Women Pilots’ Association (IWPA), is the Secretary of the India Section of the 99s, and also a member of the Managing Committee of the Bombay Flying Club (BFC). In 1962, when her first daughter was nine months old, her father, husband, and three brothers went off and enrolled at the BFC. They were so struck by the magic of flying that no other subject was spoken of in the house. When she asked them in exasperation if she could also fly, her father, who had by that time pro-
cured his Private Pilot Licence (PPL), told her to get into the car, drove to the Flying Club — and her flying lesson started within minutes! She was instantly addicted, from the very first unbelievable experience the eventual ultimate feeling of oneness with the aicraft that soon became an extension of the self. Her progress with exams and licenses was quick. She got India’s PPL No. 13; being perhaps the first Indian woman to do so. “Even my instructors treated me just like another pilot and there was no discrimination as a woman,” says the pilot. Flying was fun; it could also be used for work, as she and her husband, together flew all over India for work. On a lucky day at the BFC, she met Isabelle McRae, 99 Member of the El Cajon Valley Chapter in California, touring India. Isabelle was instrumental in getting her and Chanda Budhabhatti, also flying at the BFC, to become guest members of her chapter in the USA. This inspired Chanda, with her help, to collect all the girls flying in India in 1965; the group ultimately became The Indian Women Pilots’ Association in 1969, which today has 150 Members. In 1976, when The Charter of India Section of the 99s was granted to a group of women pilots in Bombay by the President of the 99s Lois Feigenbaum, Futehally became the first Vice Governor. She has been a 99 ever since 1965. Her efforts have resulted almost directly in the induction of women pilots in India’s Airlines, and into the armed forces of India in 1986, including the Air Force, the Navy and The Coast Guard. n
I flew simply for the ecstacy of flying, not commercial reasons
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—Nidhi Sharma