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Flameout! Airbus A380s around the world receive a scare as an engine explodes soon after takeoff
T3’s teething troubles Delhi’s swanky and plush Terminal 3 is 100 per cent ready but fliers have been facing major problems
WHAT’S YOUR AGENDA,
MR ZAIDI? AN EXCLUSIVE INTERVIEW WITH DGCA CHIEF NASIM ZAIDI AS HE PREPARES TO TAKE ON A NEW AND CHALLENGING ASSIGNMENT AS SECRETARY, CIVIL AVIATION
Good-bye darkness, hello 2011 The events that shaped aviation history in the last 11 months
Kick-start to cargo A new start-up seizes opportunities in the logistics and cargo sector to begin operation
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EDITOR-IN-CHIEF’S NOTE
The woes at T3
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or many of us, who don’t think twice about walking long distances to get to the gate at Heathrow or Changi what to talk of chaotic John F Kennedy International Airport or Chicago’s O’Hare, the distance at T3 has become a pain in the leg! Literally! Some have even begun to describe the airport as ‘monstrous’ after having spent a lifetime asking for a globalsized airport that could compare with the best in the world. It only leads me to the conclusion that what we are willing to do overseas, we aren’t willing to do at home. More importantly, neither do we have the patience nor the time to allow for things to settle down. We want it ‘here and now’ and damn the consequences. It is also this attitude that has now seen the private airlines go to court to continue with their self-handling at Delhi and other major international airports. For close to three years, Civil Aviation Minister Praful Patel humoured them and kept giving them postponement after postponement. Now, even he has said ‘no’ and having failed to wrangled another extension, the airlines have gone to court. Without going into the merits of their case, here are a few points to ponder.
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Each time the airlines went to the government for an extension, it was with the explicit assurance that they
CRUISING HEIGHTS December 2010
would be ready by the time the extension ended to move into the new ground-handling regime. 9
Through these three years, the airlines did nothing to negotiate and finalise their ground-handling agreements at the major metros. The bigger airlines are the biggest offenders.
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Post-the parcel bomb from Yemen, the government is even more concerned at the large mass of people congregating at the back-end at airports and wants the whole system streamlined.
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What will the government do to a policy that has been cleared by the Union Cabinet after a due process of deliberation?
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What happens to the agreement with the airport developers, who were assured by the agreement to limit the number of ground handlers at each airport?
The present case is also a milestone for those airlines that so far have had their way on everything with respect to policy. It’s a measure of their expertise in tweaking the system. For the first time, they have finally failed and have taken recourse to the legal option. This must surely tell you something about their mindset too. Seasons greetings! May you have a wonderful 2011!
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Off the cuff
Content 2-3 march CH 2008 final new.qxd
A wink can be dangerous The way one views the world is unique. Working on that premise, an Israeli company has developed a new biometric security system that exploits a person’s unique pattern of eye movements to identify them. Most biometric security systems measure physical features that are constant, such as fingerprints or iris patterns. An eye-tracking system has the potential to be harder to fool and easier to use, its creators say. In a Homeland Security Newswire report, Duncan Graham-Rowe writes that the new system tracks the way a person’s eye moves as he watches an icon roam around a computer screen. The way the icon moves can be different every time, but the user’s eye movements include “kinetic features” — slight variations in trajectory — which are unique, making it possible to identify him. According to Daphna PaltiWasserman, CEO of ID-U Biometrics, the company that developed the technology, “The interface is really very simple…the user watches a target moving on a screen and a camera monitors their eye movement responses.” Eye tracking, the report mentions, requires no specialist hardware, other than a camera and a display, so it is cheaper and easier to deploy. Using a standard video camera, the system can identify users with an accuracy of 97 per cent, says PaltiWasserman. Many cell phones and laptops already have this kind of hardware, so ID-U’s system could be deployed widely for both desktop and mobile computing. And possibly in the future also used for airport security. While other biometric systems can be fooled by a very accurate copy of, for example, a fingerprint or retina, the new system uses a biometric pattern that’s very hard to copy. Palti-Wasserman is quoted as saying: “What we’re doing is a challenge-response sequence.” She further says, “The process depends on what is being shown on the screen.”
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contents
THE NEW MAN IN CHARGE
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An exclusive interview with DGCA Chief Nasim Zaidi as he prepares to take on a new and challenging assignment as Secretary, Civil Aviation. Perhaps, the only one to take up the position with deep knowledge about Indian aviation, he lists his priorities.
NEWS DIGEST
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Kalanithi Maran emerges as the largest majority stakeholder by buying off two promoters; Air India continues to face more turbulence on ground than in the air and lots more.
CRUISING HEIGHTS December 2010
SPOTLIGHT
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An engine failure, that forced the emergency landing of Qantas A380 recently, poses cost challenges for Airbus and could affect passenger preferences in the choice of which planes to fly in. A report.
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ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST
CRUISING HEIGHTS Volume V No 8
Editor-in-Chief
K SRINIVASAN Managing Editor
TIRTHANKAR GHOSH
SPECIAL REPORT 40 YEAR-END SPECIAL
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Unfazed by the reverses of 2009, the aviation industry has taken steady steps to growth in 2010. And the Indian scenario is no different. A month-by-month account of the events of 2010.
It may be a wonder to look at, but teething problems at the new swanky T3 of Delhi airport continue. What is the real problem? Plus: A look at some other airports and their troubles.
Group Consulting Editor
R KRISHNAN Consulting Editor
NANDU MANJESHWAR Deputy Editor
P C SINGH Special Correspondent (Mumbai)
ROOHI AHMAD Copy Editor
ASHOK KUMAR Editorial Coordinator
LAKSHMI SINGH Sub-editor-cum-reporters
JASLEEN KAUR PUNIT MISHRA Design
RUCHI SINHA, PRADEEP JHA SHIV, JITENDRA RAWAT Picture Editor
PRADEEP CHANDRA
GLOBETROTTING CARGO
p49
Securing air cargo has become the top priority of airlines all over the world after the recent ‘printer bomb’ scare. A report on the challenges to air security and how Indian airports are gearing up to tackle the security question.
p60
Ever heard about bumpy ride on flight or how crime turns into contest? Just check it out.
Photo Editor
H C TIWARI —————————— Publishing Director
ROHIT GOEL Director (Admin & Corporate Affairs)
RAJIV SINGH Asst. Manager (Subscription)
JAYA SINGH (Mob. 9650433044)
Executive Director
RENU MITTAL For advertising and sales enquiries, please contact: +91-9999919071, 9810030533
BACK PAGE
p74
Neil Armstrong, Arnold Palmer and Warren Buffet are exhorting Americans to take flight. Business aviation is important to the country, its companies and citizens, say the celebs.
SNIPPETS
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Wondering what’s happening with airlines, tourism boards and hotels? We bring you the latest from the aviation and travel world: plans, performance, initiatives, great deals, hotel openings and special packages across the globe.
Cover photos: Nasim Zaidi H.C.Tiwari Cover Design: Ruchi Sinha
CRUISING HEIGHTS December 2010
Editorial & Marketing office:
Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 Tel: +91-11-41033381-82 All information in CRUISING HEIGHTS is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Adver-tisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase-I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase-I, New Delhi-110020.
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PERISCOPE
2010
Irked airlines
We (airlines) had a discussion on the new ground handling policy and proposed amendments on delayed flights by the DGCA and AERA, and we don’t want it.
January
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Kingfisher Airways Chairman VIJAY MALLYA on the government’s move to implement new ground handling policy.
Jet Airways Chairman NARESH GOYAL on the code sharing of two airlines to achieve operational synergies and reduce costs.
The story, The mother of all footfalls (November, 2010) was written in the right perspective as the carpeting at Terminal 3 of the Indira Gandhi International Airport has attracted many travellers with its exquisite design and colours. The pleasant feel of using the carpets has left many passengers satisfied and given them a whole new experience. No doubt, T3 has set new benchmarks for other airport operators to follow. The other airports should take a cue from the carpeting at Terminal 3. It is truly an exemplary achievement by any standard. Priya Saxena, Kanpur All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin (East), New Delhi -13, OR mail to cruisingheights@newsline.in.
M THIAGARAJAN, M D, Paramount Airways on local carriers performing well in the last two quarters of 2009.
February
Alcohol policing The onus of doing this test is with airlines. We will be conducting random tests to see if this is being done or not without any exception. Ultimately we will move towards 100 per cent check for all flights.
DR NASIM ZAIDI, Director General, DGCA, on making alcohol test of pilots mandatory on international flights.
Positive outlook The airline industry is getting better. It’s on its way to recovery.
March
Busy bizjet business (November, 2010) made very interesting points about the business behind business jets. It is interesting that bizjet manufacturers are working hard to roll out top-of-the-class flying machines owing to increasing demands from corporates. As a matter of fact, the business jets market in developing countries is fast catching up, thanks to the booming economy. India is also not too far as Indian corporates are realising the benefits of owning an aircraft as a business tool. The bizjet companies too should provide momentum to the boom and produce quality products to cater to the demands of corporate. Riyaz Shah, Surat
All (local) Airlines are flying in the comfort zone. Last year during this time, jet fuel prices were around $140 per barrel, which was way above today’s $80-85 per barrel. I don’t think it will climb to last year’s peak level.
NARESH GOYAL, Chairman of Jet Airways, hoping that the worst is over for the global aviation industry and it will soon back on track.
That’s optimism I hope the aviation sector will certainly revive in 2011. Civil Aviation Minister PRAFUL PATEL with a strong belief that the airline industry is likely to rebound by 2011.
April
THE STORY on Juhu airport, Jai Ho or Juhu Ho (November, 2010) was interesting to read. The Airport Authority of India’s (AAI) plan to use the inoperative Juhu aerodrome as an alternative for small aircraft to ease congestion is not right in the context that it will cause serious environmental damage to the areas in and around Juhu. Mumbai which is already congested does not need another airport. If the airport gets constructed, it will also hamper the livelihood of people living around the area behind the Juhu aerodrome. So there are more negatives than positives, which are heavily stacked against Juhu airport. Ram Chandran, New Delhi
Illustrations: Rajeev Kumar
We are still talking (with Kingfisher).
Flexing muscles
LETTERS TO EDITOR
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Still in talks
Truly speaking! India is very important to us. It is one of our largest markets and we are committed to expand here. AKBAR AL BAKER, CEO, Qatar Airways on ramping up capacity in the India-Qatar sector.
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Give me a sky, give me a plane We can reach great heights. RASHMI MIRANDA, Commander of Air India’s Mumbai-New York non-stop long haul flight that flew for the first time today with an all-women crew to mark the International Women’s Day.
Air India is not very sure what kind of organisational and management structure it is going to be in the next three to five years’ time.
I appeal to all AI employees to show everyone that when a chance is given in the form of a world-class airport, we will also give back world-class services.
ARVIND JADHAV, CMD, Air India, on the plans of national carrier to use the new integrated Terminal 3 as its hub.
Great vision! India is at the centre of our vision for the future.
KAPIL KAUL, CEO (India and Middle East), Centre for Asia-Pacific Aviation (CAPA), on the unplanned attitude of Air India in recruiting its Chief Operating Officer (COO).
Coming, a system The regulator is developing a system for compensation. DR NASIM ZAIDI, Director General of Civil Aviation on the issue of giving compensation to fliers when the flights are cancelled or delayed.
Yeah…
June
Strong commitment
May
‘Rule’ of uncertainty
and thus worthy of inclusion in this list at the third position, having 664 planes. Its fleet includes more than 250 Cessna planes and a mix of Boeing, Airbus and ATR models. American Airlines’ fleet with 619 planes ranks fourth and Southwest Airlines comes in as the fifth largest airline fleet size. Consistency is a key for the airline, which has nothing but Boeing 737s in its fleet size of 544 planes. With more than 100 Boeing 737s, China Southern is the sixth largest airline fleet with 354 planes. US Airways with 339 planes holds the seventh position. Lufthansa and Sky West found their way in the list of top 10 largest airline fleets at the eighth and ninth positions respectively. Air China bottoms the list with 265 planes.
COLD STATS
Apart from focussing on revenue or passenger numbers, does it matter how many planes an airline has? The figures collected and put out by arabiansupplychain.com for the top 10 largest airline fleet speak volumes about the industry. The numbers have been collected from each airline's website, and from other independent plane-spotter websites. The top ten are: United Continental tops the list with 708 planes. However, according to independent websites, it also has around 300 planes sitting in storage. Delta with 690 planes holds the second position. Its fleet includes more than 140 McDonnell Douglas models and 400 Boeing planes, with Airbus planes making up the rest of the fleet. The airline currently has almost 90 planes in storage. Although FedEx Express is an all-cargo operation, it is still an airline
August
Does size matter?
CHAI WOO FOO, General Manager, India, Singapore Airlines, while talking about seeing a revival in demand on the India route.
Truly speaking We need to create safe, secure, efficient and environment-friendly systems conducive to healthy growth of the civil aviation sector. During the inauguration of T3, Prime Minister DR MANMOHAN SINGH on aligning of policy framework with aviation needs.
It is revenue lost forever.
TONY FERNANDES, CEO of AirAsia, while talking about a full plane with low yield is better than a half-empty plane with high yield.
Long live PPP We are looking for private partners to develop a medium-range civilian transport aircraft. PRITHVIRAJ CHAVAN, Minister, Science and Technology on India’s ambitious plans to design and develop an indigenous mediumrange civilian transport aircraft.
Goa will have two airports — in north and south Goa. There is no change in the existing government policy on construction of airports.
July
In harmony
AMBIKA SONI, Minister for Information and Broadcasting, on the decision of Union Cabinet that the existing airport at Dabolim will continue to function even when the new comes up at Mopa.
CRUISING HEIGHTS December 2010
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Aiming high
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We want to be the premier Indian producer of aircraft. We will explore every opportunity to become a top aircraft manufacturer on the lines of the Brazilian Embraer.
High talks!
The Navi Mumbai airport needs to take off.
In India, the potential for future growth of air travel, both domestically and internationally, is among the highest in the world and Boeing will continue its efforts to be India’s preferred partner and aerospace provider.
Considering the increase in traffic, G V KRISHNA REDDY, Chairman, GVK, believes that if another airport does not come up, it is going to be a problem for the city.
DINESH KESKAR, President, Boeing India, on raising its aircraft sales forecast for India by 15 per cent. India would buy 1,150 planes by 2030 for $130 billion.
Take-off trouble
Meeting demands
It’s not enough
There is tremendous potential for the use of A380 by Indian airlines since traffic here is growing much faster than that in other parts of the world.
Ten destinations in India are not really enough for any airline. There are huge opportunities for all airlines to operate more points in India.
KIRAN RAO, Vice President, in-charge of marketing at Airbus and head of India operations, on the decision of Indian carriers to add 60 A380s over the next 20 years.
MAJID AL MUALLA, Senior Vice-President, West Asia and Indian Ocean, Emirates Airline, on expanding Indian operations and considering India a major hub for the airline.
LOOKING GLASS
8
September
ANAND MAHINDRA, Vice-Chairman and Managing Director, Mahindra & Mahindra, on becoming the first Indian private firm to manufacture smaller civil aircraft for the Indian general aviation market.
CRUISING HEIGHTS December 2010
Let's hope for an even better 2011!
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PERISCOPE
Money talks! Land is like a gold mine and we are unlocking its value now.
GM RAO, Chairman, GMR Group, on the plans to monetise airport land holdings and thereby grow revenues.
Partnering growth It is our endeavour to make customer experience the best it can be, and this partnership is another step towards that objective.
Detect the right nerve
Nearing take-off
Expanding its wings
We are looking at expanding our domestic capacity by 10-15 per cent.
October
STEPHEN PHIPSON, President of Smiths Detection, expecting a five-fold jump in Indian business as with increase in India’s investment on the procurement of safety and security systems.
The Navi Mumbai airport should have been in operation by 2011, but we will try to push it for at least a partial or a first phase opening by 2014-15. Civil Aviation Minister PRAFUL PATEL on the woes to get a new airport for Mumbai.
Ambitious plans The vision of the company is to be the Indian ambassador to the world. We also want to be a leader in the domestic market.
NIKOS KARDASSIS, CEO, Jet Airways, sharing the expansion plans of the airlines during the 18th annual general meeting.
CAPTAIN GUSTAV BALDAUF, Chief Operating Officer, Air India, on the airline’s plans to enhance the focus on domestic operations along with managing the international operations
Rosy picture
Right strategy
The current numbers are because of the strong growth we’re seeing in the market. Air India has got the benefit that everyone has got.
Low fare is the name of the game, as we are operating into price-sensitive destinations with travel duration of an hour and half. We can afford to offer low fares, since our cost of operations is lowest in the industry.
KAPIL KAUL, India Chief Executive Officer, Centre for Asia Pacific Aviation on Air India’s improved report card.
Small is beautiful
KISHORE GUPTA, Director, SpiceJet, on the decision of the airline to offer low fares even on international routes.
Hold it
We are currently evaluating three airports in three smaller cities in the country, which we will be looking at building and operating. Delhi and Mumbai were mega airports and now the growth will come from airports in smaller cities, which we plan to tap. VINAYAK DESHPANDE, President and COO, Hindustan Construction Co Ltd, on the decision to enter the business of building and operating airports.
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November
With the rise in threat perception in India, we expect that our business will increase from $20 million to $100 million in next three to four years.
IndiGo Airline President, ADITYA GHOSH, on IndiGo Airline’s partnership with TATA AIG.
If surpluses are swallowed up in taxes, airlines will not only be unable to invest in cleaner, emissionsreducing aircraft, they will ultimately go bankrupt and the social and economic benefits they bring will disappear with them. British Airways Chief WILLIE WALSH is furious over huge increase in air passenger tax, which will have a negative impact on the airline.
CRUISING HEIGHTS December 2010
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NEWS DIGEST ir India continues to face more turbulence on ground than in the air. The recent jam it got into in DIAL’s T3 terminal, which it hopes to make as its premier hub more than illustrated the management disconnect the Maharaja is experiencing. This avoidable fracas continued in a different form even in its board room where the independent directors had a totally different take than the CMD and COO on vital staffing as well as a host of other contentious issues, including Air India Express. Let’s look at Air India (NACIIL I + A). Normally, the final P&L accounts of a PSU for any year ending March 31 need to be tabled in the Lok Sabha by the following December of the same year. Air India, since the merger, has been going through a bad patch leading to delays, which seems to have extended to this practice as well. Otherwise, there is no reason why the carrier came out so late with a huge loss figure for 2008-09. Perhaps, we might have missed it but we are yet to find a piece of published paper or Parliament answer that says Air India made a loss of `7,189 crore during the financial year 2008-09. All along the loss figure fed for 2008-09 was `5,642 crore and for the next year 2009-10 an estimated loss of `5,550 crore. Hence, we do not know if — while disclosing next year’s or 2010-11 financials — the loss figure of `5,550 crore for 2009-10 will also go up as steeply as it did for 2008-09. After all, the public should be concerned, as its `800 crore has already been pumped into the airline and another `1,200 crore is waiting to be injected. Following the revised higher loss figure for 2008-09, the AI management “presented a much improved” financials for the next fiscal, i.e. 2009-10, which accounted for 11 months of the current CMD Arvind Jadhav (he joined the airline on May 1, 2009). He informed the Board that the airline’s operating losses decreased by 39 per cent from `5,672 crore to `3,472 crore in 2009-10 and its Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) increased by `2,417 crore. On the other hand, the net loss fell sharply from `7,189 crore (revised as we mentioned) to `5,551 crore in 2009-10. The operating performance in terms of seat load factor rose from 59.5 per cent in 2008-09 to 64.8 per cent in 2009-10, a nine per cent increase over the year. The Available Seat Kilometre (ASKM) which shows that capacity rose from 43,591 million in 2008-09 to 44,722 million in 2009-10, was a three per
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cent rise. The Revenue Passenger Kilometre (RPKM), which is suggestive of demand increased from 25,950 million in 2008-09 to 28,965 million in 2009-10. But the financials remained muted because of the increase in depreciation by `164 crore to `1,390 crore in 2009-10. Interest and financing charges rose by 46 per cent or `769 crore due to induction of more aircraft, increase in working capital borrowings and interest rates. The cost-cutting exercise brought down the expenditure by eight per cent to `19,035 crore from `20,668 crore the year before. However, the
AIR INDIA’S FORTUNES CONTINUE SINKING
total revenues remained almost stagnant. This was a classic case of yields not rising or falling in 2009-10. Air India’s working capital loan outstanding at the end of March 31, 2010 was reported to be `19,000 crore. The reviving fortunes of aviation industry worldwide also had its positive impact on Air India. In the first half of fiscal 2010-11 or April-September 2010, Air India saw its passenger revenues rising by `1,034 crore and the airline statement in this regard merely said the yields were up by 13 per cent. Arvind Jadhav said Air India expected to pare its losses by around 75 per cent in the current financial year ending March 31, 2011. The passenger or seat load factor rose by eight per cent in these six months to touch 67.1 per cent and cargo revenue rose by `140 crore. EBITDA in the first half of this fiscal increased by six per cent compared to the first half of previous year. The operating losses fell by `976 crore as against `2,216 crore in the first half of fiscal 2009-10. According to an Air India statement, the airline has embarked on a cost-cutting exercise, which will see it rationalising routes and increase revenues. It is in this context, Air India is seriously awaiting the second tranche of `1,200 crore from the government. However, each of the ministries and departments concerned has got own take on the issue. The Ministry of Finance, which holds the purse strings, is still awaiting the details from Air India regarding the milestones it was supposed to have achieved for being eligible for the second tranche. When the first instalment of `800 crore was paid to Air India, it had promised to bring down the wage bill by `500 crore. In reality, it was able to cut it by only `100 crore. The Ministry of Home Affairs has its own reservations on the issue considering the fact that its political head P Chidambaram was earlier the Finance Minister and fully aware of the dipping fortunes of Air India. After all, he was the Finance Minister when Air India finalised and signed the aircraft purchase agreement with Boeing and Airbus. The Ministry of Petroleum and Natural Gas feels the `1,200 crore infusion is okay with it provided the carrier clears its outstanding of `1,800 crore owed to public sector oil marketing companies. The Planning Commission has informed that it will give its views only after it gets its new turn-around plan from Air India. Meanwhile, the Board decision of September 2010 to dry lease four A330-200 and 10 A320s seems to have been kept in abeyance if not outright reversed. The same Air India,
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NEWS DIGEST which grounded the already acquired Boeing 777-300 ER or using it sparingly because of its inability to fill them is now seriously thinking of deploying them on the US routes as it carriers nearly 350 passengers in a threeclass configuration as against its Boeing 777200 LR. Air India has been losing heavily on its non-stop routes for many reasons even as its US competitors in American Airlines and Continental make money on the same routes. With the aviation market rising all over the world and many airlines beginning acquisitions, we see Air India unable to fill its existing aircraft on international routes. To make matters worse, the likes of Emirates, Qatar and Etihad from the Gulf and AirAsia from the East have made deep inroads in the Indian market. For instance, while the Gulf carriers connect Indians to various Western destinations, AirAsia is planning to do the same on the Eastern hemisphere. Further, Air India will also face competition from home-grown LCCs shortly like SpiceJet and IndiGo. Air India’s survival, then, will largely depend on how it increases the plane load factor and what kind of yields it manages to get. Mere statements and generalities will certainly not help. Even as these developments take place, the sharp differences between the management and the independent board members have added a new twist to the Air India story. The first of these was visible on the Air India Express front. The recently-appointed COO of Air India Express, Pawan Arora, was asked to deplane mid-flight. We don’t know where he para-dropped but his brief 15 days in Air India Express saw him express serious reservations on the problems confronting the lowcost carrier. He told the media that Air India Express cannot survive by remaining as an attachment of Air India and needs to be virtually independent. For instance, he said, Air India Express can never hope to remain healthy, should it continue to pay 25 per cent of its total revenues to Air India as revenue share. In 2008-09, Air India Express is reported to have earned a revenue of `1,700 crore and hence paid `425 crore to the parent Air India. Pawan Arora, before leaving, had told a daily that Air India Express would never be able to survive if it continued operating as it does today. He had suggested that Air India Express needed a full-time devoted management team and operational staff. It could not be remote controlled. Its aircraft utilisation had to be increased from the present nine to 11 hours to much more. Its domestic footprint, which was about 10 per cent of its capacity, should be increased to 27 per cent. Air India Express has cut down its flights sharply because of severe crew shortage — both cabin crew and pilots. It flies 24 Boeing 737-800, with an average age of less than four years. One reason for the cabin crew shortage was the wrong application of a
14
DGCA approved cabin crew Fund for the Development of Teaching and Learning (FDTL). It is now trying to recruit cabin crew based on virtual walk-in interviews. On date, Air India Express has 361 cabin crew against the required 440. Before leaving, Pawan Arora also stated that Air India Express needed to have its own pilots, HR, finance and engineering managers and staff. Had he got his way, Air India Express would have become a full-fledged airline and even been in competition with Air India. There was also talk at the top management that Air India Express name should be changed to say Express India. (We thought it would have been better had they called it Indian Express as after all
the airline was also full of news !). One of Pawan Arora’s benefactors in Air India and its COO Gustav Baldauf had in one of the Board meetings stated that since the market for Boeing 737-800 was tight, Air India should sell them and buy cheaper A320s to make money and do the same job. But after Pawan Arora was asked to go by Air India Board, Baldauf had threatened to leave, to which some Board members had even stated that if he wanted to he could also go. At the end of the day instead of the aircraft of Air India departing on time, it’s newly found managers who began to depart before time. Managing Air India should not become a mockery as it has become of late.
From: jitenderbhargava@hotmail.com To: arvind.jadhav@airindia.in Subject: Date: Tue, 16 Nov 2010 14:19:47 +0530 Dear Mr Jadhav, As a committed Air Indian, I have been closely following the developments in Air India, particularly the decision to employ certain individuals at huge pay packages unheard of in the government sector. It isn’t clear as to who has been behind the decision to appoint these individuals — the Minister of Civil Aviation, the Ministry of Civil Aviation, the Board of Air India or the management of Air India? Some clarity on this is certainly warranted in public interest. While those behind the decision may have had their justification in deciding to employ these individuals at salaries of `one crore-plus and the Chief Operating Officer at a salary of `three crore per annum, the other stakeholders are, by and large, oblivious of the merit behind this decision. As Air India is a PSU, the public is within its rights to know as to what are these highly paid individuals expected to bring to the table or have delivered thus far from the perspective of bringing about a turnaround in AI’s performance and fortune. I am personally interested to know more about it because in June 2009, you had issued a letter to FDs/EDs/GMs painting an extremely dismal financial picture of the company, threatening the airline’s very survival and at the same time appealing to the senior management personnel to forego a month’s PLI/salary to help mitigate the financial crunch to the extent possible. We were all made to believe that in the kind of financial crisis that we were in even a couple of crores thus saved would ease the financial situation. I was one of the officers to have responded positively to your appeal. However, now that the airline is going about offering huge salaries to certain individuals, whose track record certainly does not merit these kind of salary packages and which are also not in consonance with established pay structure in the government sector (Chairmans of State Bank of India, NTPC, Coal India, SAIL, ONGC, with far more onerous responsibilties, are still drawing pay packages of `25-30 lakh per annum and no more), I would like to once again reiterate my request (and if I can be a little impolite DEMAND ) reimbursement of the salary and PLI given away by me earlier as I simply cannot reconcile to a situation wherein Peters (regular employees) are deprived of their legitimate earnings to pay Pauls (contract employees being hired at exorbitant salaries with no commensurate responsibilty and accountability). I look forward to hearing from you and receiving my cheque. P.S. At the JRD Tata function held in Mumbai earlier this month, I had met several Aircraft Maintenance Engineers who haven’t received their salary arrears for the past five years. The amount involved, I am told, is in the region of `200 crore. Please do something for them as well. Warm regards. Jitender Bhargava
Jitender Bhargav was Executive Director-Corporate Communications, Air India, and he retired in January this year.
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NEWS DIGEST et Airways has, by far, registered the best performance compared to other carriers and its stand-alone operations have been more robust compared to the previous few quarters. Jet reported a profit after tax of `12.4 crore in the second quarter (Q2) July-September of the current financial year (2010-11) as against a loss of `406 crore in the second quarter of the previous fiscal (2009-10). However, its low-cost arm JetLite made a loss of `62 crore which was, however, lower than `126 crore it made in the previous year's second quarter. Overall, the Jet group posted a loss of `50 crore, against `532 crore loss in Q2 of 2009. Jet, as a whole, therefore, made a turnaround of `482 crore. The combined total revenue of `3,523 crore was up by 31.2 per cent based on year-onyear Q2 performance. Passenger growth, on the other hand, was 20.2 per cent higher compared to Q2 of 2009-10. Domestic passenger grew by 17.7 per cent versus same period of last year. The airline’s Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) of `730 crore for Q2 in the current fiscal was far higher than the figure of `228 crore in the same period of last year. Stand-alone Jet Airways revenues rose by 31.9 per cent at `3140 crore and profit after tax at `12.4 crore. During the quarter under review, Jet Airways’ system-wise Available Seat Kilometre (ASKM) was up by 22.6 per cent at 8,479 million and systemwise Revenue Passenger Kilometre (RPKM) rose by 23.3 per cent at 6,562 million. Its system-wide seat factor was also higher at 77.4 per cent. The number of revenue passengers carried by the carrier was up by 23.5 per cent at 3.45 million. While the losses made by JetLite have been mentioned, the low-cost arm registered a seat factor of 74.2 per cent as against 71.8 per cent in the same quarter of the previous year. Due to rising yields, its revenues rose by 25.6 per cent to `382 crore. Though Q2 is traditionally a lean season, and airlines continue to offer competitive fares, Jet Airways showed a marked improvement in the EBITDA margin year-on-year. Jet said this was a result of its managerial efforts to improve network synergies, various cost efficiencies, consistent high levels
J
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JET SCRAMBLES TO MAKE UP LOST GROUND
(Top) Jet Airways Chairman Naresh Goyal and (above) Jet Airways CEO Nikos Kardassis
of seat factor over the last few quarters. Its domestic market operations accounted for 40.5 per cent of the total revenues at `1,271 crore and a seat factor of 71.4 per cent while the international operations registered revenues of `1868 crore or 59.5 per cent of the total revenues. Its international operations registered seat factor of 80 per cent. In the first half or April-September 201011, Jet Airways’ system-wide ASKMs CRUISING HEIGHTS December 2010
of 16,648 million was up by 22.4 per cent, RPKMs up by 27.8 per cent at 13,076 million. The seat factor at 78.5 per cent showed a good improvement and passengers carried rose by 30 per cent at seven million. In monetary terms, its revenues rose 27.8 per cent at `6,147 crore while profit after tax stood at `15.9 crore which was a great improvement compared to the first-half loss of `632 crore in the previous fiscal 2009-10. In the case of JetLite, its first half performance in 2010-11 showed the seat factor rising to 78.5 per cent compared to 72.7 per cent in the first half of 2009-10, while revenues rose by 18.3 per cent at `858 crore as against the previous year first half figures. The first-half losses this fiscal shrunk to `57 crore compared to last year first half loss of `124 crore. Jet Airways and JetLite are now moving fast to reconnect those stations that were disconnected following the economic slowdown. Jet Airways is also frantically looking for more aircraft. It looked for at least seven more Boeing 737800s and since the market was tight and few available ones were picked up by Kalanithi Maran for SpiceJet. Jet Airways promoter Naresh Goyal is seriously toying with the idea of leasing Airbus A320 of which he does not even have one in his allBoeing narrow-body fleet with the exception of two CRJs and few ATRs. It is not that A320s are available freely. Aviation industry watchers stated that at least two airlines in Europe folded up freeing their 40 A320s, which are now available at competitive rates. Another bit of good news for Jet Airways is its application to FIPB for raising $400 million through the QIP route has been approved. This was after Jet explained to the government that it will not result in the foreign holdings in the carrier beyond the permissible limit of 49 per cent. This may also mean that Naresh Goyal may see his holdings shrink to say 60 per cent. A never-saydie Goyal has also mounted pressure on Star Alliance to admit its airline as a member. As it is, he has concluded inter-line agreement with most members which the Indian government saw as an indirect way of settling the issue and hence asked him to stop that lest it adversely impacted the mis-managed stated-owned Air India.
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cent, which, he thought, he would be able to get through the open offer. But considering the kind of shareholding pattern, even if the general public were to unload their shares to Maran, he will still be below 51 per cent or an absolute majority. However, none of Maran’s stakes at 38 per these calculations should cent, it is seen that the bother him or have bothbody corporate continues ered him and his manageto hold 21.60 per cent, ment style is now revealinstitutions 34.28 per cent ing itself in the aggressive adding up to nearly 93 per way he has decided to cent leaving the general expand his carrier’s prespublic with only seven per ence. In the board meeting cent. Obviously, the corof November 15, 2010, porates and institutions besides Kalanithi Maran, can afford to sit tight and Kavery Kalanithi was also wait for the right price inducted as a non-indebefore exiting. Fortunatependent director. His team Kalanithi Maran ly for Maran, those sharewho joined the board holders are not the type included S Sridharan, who will unsettle him and overthrow his J Ravindran, Nicholas Martin Paul and management. One of them includes M K Hari Narayanan. Those who Goldman Sachs, an institution known to resigned on that day from the board with be in the business of making money immediate effect included the original through share purchase and sale. It is not SpiceJet promoter Bulo Kansagra (inciknown to be interested in managing an dentally who did a brief hand holding of airline. As for Maran he has already Kalanithi Maran and also stitched the crossed the critical 26 per cent share- deal with Boeing to holding limit, which gives him the veto acquire 30 Boeing power over any special resolution moved 737-800s valued in the board. The next limit is 51 per
MARAN SPICES UP AVIATION SCENARIO hennai-based Sun Network promoter Kalanithi Maran was formally inducted into the Board of SpiceJet and also appointed Chairman at the airline’s board meeting on November 15, 2010. He had earlier in June 2010 successfully acquired the low-cost carrier SpiceJet by buying off the two promoters — Bulo Kansagra and W L Ross. While Kansagra’s Royal Holdings Services Limited (RHSL) sold its 12.85 per cent stakes, W L Ross sold off his 25 per cent held through the Foreign Currency Convertible Bond (FCCB) route. Thus, between the two Kalanithi Maran bought 37.85 per cent to emerge as the singlelargest majority stakeholder. However, as per Securities and Exchange Board of India (SEBI) norms, he had to make an open offer to the other shareholders which he sought to do just thereafter. But because of certain technical hitches it had to be abandoned and Maran came out with his open offer at a higher price, which closed on November 7, 2010. Since the ruling market price was much higher, there were no takers for Maran’s open offer. If we round off
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Photo courtesy: namaste.net.in
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ON THE EXPANSION MODE: (SpiceJet’s order of 30 Boeing 737-800s is a part of Maran’s aggressive expansion plan for the carrier.
at $2.7 billion and which was announced during the recent visit of US President Barack Obama to India from November 6 to 9, 2010), Kishore Gupta who was the stop gap CEO after the earlier incumbent Sanjay Agarwal resigned and later joined Kingfisher Airlines, Mukharam Jan and Vijay Kumar. On October 26, W L Ross’s personal representative on the board Ranjit Nabha quit. S Natrajhen, who earlier looked after the finances of Sun Network, was appointed the airline’s COO and Neil Mills, who was earlier with flyDubai, was appointed the airline’s CEO. As per SpiceJet, the airline had in all a paid-up capital with a total voting right of 404,886,590 equity shares. After the open offer that led to a marginal increase in Maran’s shareholding position, the new acquirer — Kalanithi Maran — has 156,528,305 shares or 38.66 per cent. Maran’s takeover of SpiceJet nearly coincided with the start of second quarter or Q2 of the current fiscal 2010-11 or July-September 2010. During Q2, SpiceJet saw a 16 per cent increase in passenger numbers, a 14 per cent increase in ASKM and nine per cent cut in non-fuel cost per ASKM. In Q2, SpiceJet made a net profit of `10.11 crore as against a net loss of `101.29 crore in Q2 of fiscal 200910. The airlines income in the second quarter rose by 39 per cent to `628 crore reflective of both a rise in passenger numbers as well as the yield. Income in the previous year Q2 was `449 crore.
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During the first half April-September 2010-11, SpiceJet’s net profits rose to `65.33 crore as against a loss of `74.95 crore in the same period of previous fiscal. SpiceJet CEO Neil Mills said, at the end of Q2 2010-11, the airline had a positive networth and over `600 crore in cash.
Bulo Kansagra
Sanjay Agarwal
W L Ross
Neil Mills
There was every reason for the management to be optimistic about the future, he said. Even Maran said the same, soon after taking-over as Chairman. The aggressive expansion plan envisCRUISING HEIGHTS December 2010
aged by Maran was first evident when he placed an order for 30 Boeing 737-800s. This was followed up soon in late October 2010 when his airline placed another order for 30 Bombardier Q 400 turboprop planes worth $900 million. As Mills said, SpiceJet’s fleet would more than double from 25 of Boeing 737-800s and 900 ERs at present to 50 by 2013. The Q 400s will be a competition to ATRs operated by Kingfisher Airlines and Jet Airways to connect the Tier-2 and Tier-3 cities or the regional stations. According to SpieceJet’s calculations, there are about 23 airports-cities, which are fit for the Q 400s and also sufficient passenger demand for onward journey to metros and major metros. The Q 400s will, therefore, be ideal for Maran’s grand huband-spoke plan. To start with, it will begin to connect those cities in the south, which Paramount Airways used to connect. These turboprops will be delivered from the second quarter of 2011 or in less than six months. The propeller-powered Q 400 can carry 70 passengers and fly 1,567 miles or 2,522 kilometres according to the Canadian aircraft-maker Bombardier, which also manufactures Q 400s. As for the Boeing 737-800s order placed by SpiceJet, the planes are expected to be delivered from 2014 as there is a massive waiting list for this type of aircraft. The B737-800s SpiceJet hopes to get, according to Boeing, will have a brand new interior. It will have special features that would reduce fuel consumption and carbon emissions by two per cent making the airplane a full seven per cent more efficient that the 737 NGs delivered so far. Performance improvements to the airframe and engine are beginning certification test soon and will be fully in service by early 2012. In the meanwhile, SpiceJet has managed to get on lease seven of Boeing 737800s and the plan is to have a 75-plane fleet by 2015. There could be a neck and neck race between Spice and IndiGo. It may be recalled that only in August 2010, SpiceJet launched its international forays by flying to Kathmandu from Delhi and to Colombo from Chennai. It has now applied for rights to fly to Colombo from Mumbai and Bengaluru as well. Besides, SpiceJet is also working out plans to fly to Singapore and Malaysia from Chennai besides Male. For the time being, the airline has no plans to acquire wide-body aircraft and wishes to connect only those foreign destinations that can be reached by its Boeing 737-800 and 900 fleet.
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NEWS DIGEST he newly-appointed CEO of Kingfisher Airlines (KFA), Sanjay Agarwal, who left SpiceJet soon after Kalanithi Maran took it over, is in for more challenging times as the Vijay Mallya-owned KFA continues to be in a serious financial crisis and is quite a distance from recovery. But the Q2 fiscal 2010-11 results announced should give him some reason to cheer. For Q2 ending September 30, 2010, KFA cut back losses by 45 per cent to `231 crore while income from operations rose 24 per cent to `1,383 crore. In July-September 2009, it made a loss of `418 crore. Its average revenue per passenger or ARPP increased by 17 per cent to `4,620 crore while overall seat load factor rose to 79 per cent (domestic 82 per cent) from 71 per cent a year ago. This helped the partially full-service carrier and largely low-fare carrier (Kingfisher and Kingfisher Red a revised version of Air Deccan taken over by Mallya nearly three years ago) in terms of capacity deployed domestically to raise its head above the air pocket. The tighter management of the carrier was evident from the position where the airline registered 24 per cent rise in operating revenues in spite of the 11 per cent fall in the number of departures. The unplanned grounding of its aircraft caused an estimated loss of `73 crore during the quarter under review. The rising load factors helped the carrier in cutting the adjusted net losses by 18 per cent over the previous year. It is also true that the sharp rise in the load factor was partly due to route rationalisation and partly due to shrunken fleet in the face of rising demand. The Q2 was also significant in that it saw the
TRAFFIC DATA
T
GOOD TIMES ARE AROUND THE CORNER airline getting a favourable nod from the Reserve Bank of India for its debt recast by commercial banks that had lent huge amounts of money to the beleaguered airline. Kingfisher Airlines expects the situation to improve with buoyant domestic demand and its 13 grounded planes taking off in batches. The 13 aircraft belonging to KFA fleet got grounded because of serious engine trouble. The airline uses IAEmade V2500 V series engines. After legal wrangling and negotiations the enginemaker IAE has begun resolving the issue and has already got six planes airworthy. At one time, Kingfisher was operating 89 aircraft — that came down to 66. While some of the leased aircraft have been returned, the grounded ones had to be repaired before flying them again and this has begun to happen now. This is the rea-
Capacity and demand continues nalysis of capacity (ASKM) and demand (RPKM) data on yearon-year basis indicates that the trend of increase in both capacity and demand continued in October 2010. Domestic passengers carried by Indian-scheduled airlines in the month of October 2010 were 46.17 lakh; significantly up from 39.11 lakh in September 2010. The break-up for October, 2010 — Air India (Domestic): 8.16 lakh, Jet Airways:
A
MARKET SHARE Airline-wise details of market share of scheduled domestic airlines for the month of October 2010 were: Go Air 6.6%
REASONS OF CANCELLATIONS
Technical 42.2% Operationa l 0.9%
Indi Go 6.8% NACIL(I) 17.7% Jet Airways 18.8%
Jet Lite 7.4% Kingfisher 19.0% Spicejet 13.6%
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son for KFA to start new connections to new destinations in India. As it is a standalone carrier, it has enjoyed the highest load factor exceeding 80 in September as well as October 2010. Sanjay Agarwal was in the US discussing with the IAE or engine-maker to get the planes back on schedule soon and all eyes are on him since he brought SpiceJet to the profit zone. Will he be able to do the same for Kingfisher is the issue everyone in the aviation circle is debating. But he may not find the going easy because SpiceJet and Kingfisher operate under different models and even within KFA, it has a fullservice arm and another an LCC. As mentioned, the second quarter also saw the RBI extending its nod to KFA’s debt recast plan. The carrier is awaiting each of the funding banks to pass an enabling resolution to do the debt recast. If all goes well, SBI Caps which represents the consortium of 15 banks that lent to the airline may announce the debt recast plan for Kingfisher by December 2010. The total debt of Kingfisher Airlines is now at `8,200 crore up from `7,926 crore in March 31, 2010. Its networth slipped further to a negative of `4,289 crore from `3,870 crore back in March. Vijay Mallya has pledged his own stake of up to 69 per cent. In September 2010, the airline saw its interest cost shooting up by 25 per cent. Taking the two quarters together, during the first half of fiscal 2010-11, the airline incurred an EBITDA profit of `181 crore as against a loss of `353 crore in the first half of fiscal 2009-10. It is in this context, Kingfisher Airlines has drawn up
Commercial 27.5%
Weather 12.7%
Consec/Misc 14.8%
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POSITIVE OUTLOOK: (The debt recast and the restoration of planes will perk up Kingfisher Airlines
a three-month plan for a turnaround from loss junction to profit junction in terms of operational parameters. These include the debt recast, getting grounded planes airworthy, slowing down of loss-making overseas routes and other cost-cutting exercises. The airline is regaining confidence and that is slowly becoming evident from its decision to reactivate the new delivery stream from Airbus from 2012. Vijay Mallya had earlier stated that he had deferred delivery of new aircraft due to the economic slowdown and general over-capacity in India. These orders are being reactivated. The financials of KFA, as per our sources, and as at the beginning of November 1, 2010, was as follows: (1)
Total bank debts are around `7,500 crore with aircraft acquisition related debts at `1,000 crore. The balance `6,500 crore is short-term and working capital loans. Non-bank debts could be in the range of `1,000 crore-plus. These could be higher with rise in interest rate; (2) KFA requires as stated earlier $400 million for its immediate requirements and this is also necessary to get its 13 grounded A320s off the ground; (3) RBI’s consent to KFA’s debt recast will give the airline a two-year moratorium and convert the loan tenor from seven years to nine years and a possible cut in interest rate from 12.5 per cent to 11 per cent; (4) UB holdings will convert its `732 crore debt to KFA to preferential shares and the airline will also raise
$200 million through ADR or GDR offering besides raising `500 crore via a rights issue in the domestic market. Banks have also agreed to a `900 crore credit line to the airline; (5) Point No. 4 will help Kingfisher raise up to `2,300 crore in the next few months. But most of the funds will be spent immediately like clearing vendors’ outstanding and getting the 13 aircraft off the ground. Therefore, no capital will be left for expansion and boosting liquidity. Meanwhile, KFA’s bank debt levels will edge closer to `10,000 crore after the twoyear moratorium is over. So, how the debt levels will be reduced remains to be seen; (6) KFA’s business is in much better shape compared to two years ago. KFA capacity has been cut significantly (20 per cent largely owing to return of leased aircraft and lately also due to grounding of some aircraft following engine problems), nonfuel costs have been reduced by `550 crore, aircraft utilisation is up by 10 per cent and some revenue enhancement measures have been initiated. Even after reduced inventory, the passenger count is higher. The airline, however, requires even more stringent cost cutting both distribution and maintenance related; (7) Going in for American Depositary Receipt (ADR) or Global Depositary Receipt (GDR) will involve the risk of the promoter stake shrinking by between 25 per cent and 30 per cent should the issue be a size of over $200 million. These numbers could well change depending on the way KFA moves -North or South. It is unlikely to go South as evident from the Bombay Stock Exchange (BSE) movement.
ON-TIME PERFORMANCE (FOREIGN AIRLINES) DEPARTURE On- Time 75.8% Excessive (>44 min) 5.1% Very Late (30-44 min) 5.1%
IT Related 2.3%
ARRIVAL
Others 57.1% Staff Misbehavior 10.3%
Excessive (>44 min) 8.2% Very Late (30-44 min) 4.5% Late (15-29 min) 8.9%
REASONS OF PASSENGER COMPLAINTS
Late (15-29 min) 11.9%
On- Time 78.4%
There are 70 foreign carriers operating to/from India. At the time of compilation of this report, OTP data of 59 carriers was received. The overall On-Time Performance (OTP) of these 59 carriers for October 2010 was 78.4 per cent in departures and 75.8 per cent in arrivals.
8.70 lakh, JetLite: 3.43 lakh, Kingfisher: 8.77 lakh, SpiceJet: 6.30 lakh, GoAir: 3.06 lakh and IndiGo: 7.75 lakh. The percentage share of the carriers in October — Air India (Domestic): 17.7 per cent, Jet Airways: 18.8 per cent, JetLite: 7.4 per cent, Kingfisher: 19 per cent, SpiceJet: 13.6 per cent, GoAir: 6.6 per cent and IndiGo: 16.8 per cent. The seat factor of the domestic airlines in the month of October 2010 was — Air India (Domestic): 70.8 per cent, Jet Airways: 73.6 per cent, JetLite: 80.7 per cent, Kingfisher: 87.1 per cent, SpiceJet: 84.4 per cent, GoAir: 77.4 per cent and IndiGo: 86.1 per cent.
Lost Baggage 18.7% Refund 11.6%
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NEWS DIGEST he International Air Transport Association (IATA) recently announced the international traffic results for October showing a 10.1 per cent year-on-year increase in passenger demand and a 14.4 per cent year-on-year increase in international freight. “As we approach the end of 2010, growth is returning to a more normal pattern. Passenger demand is five per cent above precrisis levels of early 2008, while freight is one per cent above. Where we go from here is dependent on developments in the global economy. The US is spending more to boost its economy. Asia outside of Japan is barrelling forward with high-speed growth. And Europe is tightening its belt as its currency crisis continues. The picture going forward is anything but clear, but for the time being, the recovery seems to be strengthening,” said Giovanni Bisignani, IATA’s Director General and CEO. Freight appears to be at a turning point. Since May, freight volumes have declined by five per cent. October saw an end to the decline in freight with a slight uptick. “But a single month does not make a trend. And it remains to be seen if this is the stabilisation in freight volumes or the start of an upward trend,” said Bisignani. Improvements in demand are being met
BEYOND THE TURNING POINT
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by a cautious approach to capacity expansion. Over the first 10 months of the year, passenger demand grew by 8.5 per cent, with a capacity expansion of four per cent. A cargo capacity expansion of 9.2 per cent was well below the demand increase of 24 per cent. Forward schedules indicate a continuation of this trend, with a 7.5 per cent passenger capacity increase planned for the half-year scheduling period beginning at the end of October.
¾
¾
¾
International Pax Demand ¾
¾
The 10.1-per cent growth in passenger demand in October is slightly below the 10.7-per cent recorded in September, but both months are an improvement over August. North American airlines posted a 12.4
¾
per cent demand increase over October 2009. October represented the fastest growth rate for the year. With a capacity increase of 11.9 per cent, the load factor for North American airlines was pushed to 82.5 per cent, the highest among all regions. Compared to pre-recession levels of early 2008, the region’s airlines are carrying two per cent more traffic. European carriers showed a 9.6-per cent increase over October 2009. This is significantly better than the 8.6-per cent growth reported for September. European airline traffic grew by 1.5 per cent from September to October and is now four per cent higher than that of the pre-recession levels of early 2008. Asia-Pacific carriers posted a 7.3 per cent demand increase, ahead of a 5.3 per cent increase in capacity. Volumes remain one per cent below pre-crisis levels of early 2008. African airlines recorded a strong growth (13.3 per cent) as compared to October 2009. With a capacity increase of 8.9 per cent, load factors improved to 71.8 per cent. Latin American airlines posted a comparatively weaker performance with a 4.9-per cent increase in demand and a 0.7-per cent drop in capacity. The
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region’s results remain skewed because of the bankruptcy of Mexicana. Middle East carriers recorded the strongest growth for the month with an 18 per cent increase in demand. This is despite the earlier Ramadan dates, which negatively skewed the numbers with a one per cent fall in October traffic as compared to September. The region also had the largest capacity expansion at 13.7 per cent as compared to October 2009.
International Cargo Demand ¾
¾
The 14.4-per cent year-on-year increase in freight traffic for October was marginally weaker than the 15.5 per cent recorded in September. Nonetheless, international freight volumes actually improved slightly from its September level on a seasonally adjusted basis. Asia-Pacific airlines reported a 14.9-per cent year-on-year increase in international freight demand, down from the 16.2-per cent recorded in September. October’s growth translates to an impressive 22-per cent annualised growth rate for the region’s carriers, reflecting the strong economic recovery particularly in China and India. With a 44-per cent share of total freight traffic,
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the growth experienced by Asia-Pacific airlines played a large role in the uptick seen in overall industry freight volumes during October. ¾ European airlines recorded a 12.1-per cent year-on-year demand increase in October. North American carriers saw a slightly larger improvement of 12.2 per cent. For both regions, October freight volumes represented a six per cent improvement on freight volumes carried in December 2009. Relative weakness in the Euro and dollar is helping export activity and boosting freight traffic. Even so, traffic remains 12 per cent below pre-recession levels of early 2008 for European airlines and just two per cent higher in North America. “We are ending 2010 in much better shape than we were just 12 months ago. Airlines have turned losses into profit — albeit tiny. Despite the economic uncertainties people continue to fly. Airlines appear to be managing capacity in the upturn with a good deal of prudence. And cost control continues to be a main theme for airlines everywhere,” said Bisignani. “A good example of airlines delivering change is the conversion to bar coded boarding passes (BCBP). In 37 days, we will achieve 100 per cent capability for BCBP.
The courage to change brings great benefits: $1.5 billion in cost savings for the industry and greater convenience for our passengers,” said Bisignani. “Not all in the supply chain have the same courage to change. We have been waiting for decades for the efficiency of a Single European Sky. Average air traffic management costs per flight in Europe are EUR 771, compared to EUR 440 in the US. This is a EUR five billion competitive disadvantage for Europe that affects everybody that flies or ships goods by air. Reluctance to change continues to put the programme at risk. It is extremely disappointing to see some European state governments refusing to implement the 4.5-per cent cost reduction target for 2012-14 agreed by the independent Performance Review Board,” said Bisignani. “This is no hardship. With inflation expected to be 1.6-2 per cent and with traffic growth of 3.2 per cent, this is achievable simply by containing costs. If Europe’s air traffic management community cannot see the need for change, I hope that Europe’s Transport Ministers will. I urge them to support the European Commission in building a more competitive Europe, driven by serious performance targets and with a modern cost-efficient approach to air traffic management that is the Single European Sky,” said Bisignani.
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SPOTLIGHT
A Rolls-Royce of a
problem!
Engine failures are part and parcel of commercial aviation but when a Qantas A380 suffered an engine flameout recently — and narrowly avoided a major accident — it sent alarm bells ringing. While RollsRoyce, the maker of the Trent engines is looking into the problem that caused the blowout, deliveries of the super jumbo by Airbus will certainly be affected. Worse, the mishap could affect passenger preferences in the choice of which planes to fly in. A report.
THE AIRCRAFT Airbus A380 Type: A380-842 Registration: VH-OQA Serial number: MSN014 Engines: Rolls-Royce Trent 900 (972-84 variant) First flown: January 25, 2008 Entered Qantas revenue service on: October 20, 2008 Qantas has operated the Trent 900 for two years. Available exclusively for the Airbus A380, the engines share some features with the rest of the Trent lineup and are used by three airlines: Lufthansa, Qantas and Singapore Airlines. It is also worth noting that Qantas operates a high power variant of the Trent 900, which has a higher thrust rating than the ones operated by the other two operators. Other airlines like Air France and Emirates (that have ordered the largest number of 380s) have their engines from the Engine Alliance (General Electric and Pratt & Whitney) and, therefore, are not beset by these issues.
t happened on November 4 when a routine Qantas flight (A380 Nancy-Bird Walton) left Singapore on the final leg of its London to Sydney odyssey as QF32. Minutes into the flight (six, actually) — there was a loud bang and the number 2 engine (left wing) had blown out causing debris, including the cowling, to fall on the nearby Indonesian island of Batam. The aircraft returned to Singapore and following landing, it was found that the engine debris had harmed a wiring system, making it impossible to shut down number 1 engine, requiring it to be shut down by foaming. Much worse, the aircraft’s left wing had suffered damage from the engine blowout — this sort of error, causing parts of engine to blow out, is what is called an ‘uncontained engine failure’. But the concerns have actually been enlarged by the fact that apart from the A380, a Qantas 747 had an engine issue just one day later, which was preceded in August by two other failures concerning Rolls-Royce engines. At the end of that month another Boeing 747, also operated by Qantas, suffered a fault and had to fly back to San Francisco airport. This came shortly after one of the company’s new Trent 1000 engines blew up on a test bed at its Derby headquarters. Engine failures can happen, but what has set alarm bells ringing are that three of the four events were linked to “uncontained failures”. Dangerously, as it happened on the A380, inner pieces of the engine have come apart with sufficient force to puncture the outer casing, opening up the possibility of pieces of metal flying into the aircraft’s fuselage at high speed. Passengers on the A380 were awfully lucky, the wing was damaged by the blowout, but just about failed to open the fuel tank. Of all the tests that aircraft engines have to pass, among the toughest are those that are meant to ensure that if a problem (with inner parts) does occur, it is kept contained (inside the casing).
I
LOOKING TERRIBLE: After the incident of Qantas A380, which suffered an engine flameout, Rolls-Royce — the manufacturer of the Trent 900 engine — is in problem.
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Photo courtesy: usnewstrend.com
Will the fallout affect Airbus? “I expect that this event (will) have an impact on supplies, especially in 2011,” because of the inspections and replacements recommended on Rolls-Royce, said Airbus President Thomas Enders. It is still not clear on the numbers that would be affected by delays in delivery. But it is unfortunate from the manufacturer’s perspective considering the fact that Airbus hoped to deliver up to 22 units of the super jumbo this year, against only ten in 2009. “We haven’t had any orders called off; there isn’t any kind of discussion about cancellations going on,” Enders told journalists in Berlin. “There is no reason to doubt the safety of the aircraft.” Nevertheless, Enders described the problems as a “serious incident,” adding that Airbus wanted to help airlines “as far as possible with engines that we have at our disposal”. Rolls-Royce has said it will inspect the Trent 900 engines on all A380 aircraft that have them installed and will replace the part. “I expect that this event, the inspection regime, plus the modification and the replacement that Rolls has just been announcing, will impact deliveries, especially in 2011,” Tom Enders told reporters. “Our priority is to help our customers to keep the aircraft in service flying.” He added: “I would expect we could deliver up to 22 (A380) aircraft before yearend.” Airbus has said previously that it expects to deliver at least 20 A380s this year. Officials at Airbus told reporters that four of the double-decker aircraft were waiting to be delivered to reach the company’s official target of handing over 20 planes in 2010, double last year’s output. Three of those aircraft already have Rolls-Royce Trent 900 engines fitted under their wings, identical to the one that disintegrated mid-air on Qantas flight QF32. Another two aircraft are nearly ready for delivery and might have been squeezed onto the roster for 2010, as production hits its stride following birth pangs in recent years. Although he concedes Rolls-Royce is under a lot of pressure to push its manufacturing supply chain to the limit to deliver on an extremely full order book, “all the signs up to now are that the company is able to handle (the pressure), without its supply chain coming under too many strains”. He adds that the company’s track record on engine safety is “at least as good” as its two big rivals in this business, with the other key player being Pratt & Whitney, also from the US. Even so, the test failure of the Trent 1000 in August, followed by the in-flight failure of the Trent 900 on the Qantas aircraft, has focussed attention on Airbus’s new A350 aircraft. Rolls-Royce is the sole engine sup-
BLOWN OUT: Qantas Airbus A380 flight experienced an engine trouble, when one of its engines exploded with a bang.
plier for that aircraft and is offering another member of the Trent family, the Trent XWB. Rolls-Royce is one of two aircraft enginemakers that dominate the market for widebody jets; the other is GE of the US. Airlines are normally offered a choice of engines on wide-body or twin-aisle aircraft but Airbus has opted for one supplier on the A350. That puts added pressure on both Airbus and Rolls-Royce, as they develop the new composite, lightweight A350, which has garnered nearly twice as many orders as the A380 and is due to enter service in 2013. In a statement, Rolls-Royce’s Chief Executive John Rose said: “We regret the disruption we have caused.’’ However, the statement provided no detail about why or when changes were made to engines for the A380s at production plants in Europe. Sir John said the failure was confined to a “specific component in the turbine engine area of the engine (that)… caused an oil fire’’, which led to a turbine disc being blown out. In a speech a year ago, Sir John pointed out that making an aircraft engine, parts of which have to withstand temperatures of 2,000°C while propelling air at 1,500 km/hr, demands a “wide range of skills, a complexity of relationships (with suppliers) and a constant focus on quality and reliability”. But Airbus said it would give priority to the job of ensuring any retrofitting of new parts required by Rolls and European safety regulators went ahead as quickly as possible.
AIR FRANCE
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CRUISING HEIGHTS December 2010
It raised question marks over deliveries especially for 2011. “In such a situation, of course, the customer has priority, and the priority is to keep the 39 aircraft flying or back in the air as quickly as possible and I would not rule out some impact on the delivery schedule,” Enders told reporters. “I do not know how severe that would be,” he said, referring to deliveries in 2011. The finance chief of parent EADS, Hans Peter Ring, suggested this year’s remaining deliveries could also be affected. “It is a very recent development and is being managed on a daily and even hourly basis,” Ring said. Airbus’ Chief Operating Officer John Leahy down under for the Qantas 90 years’ celebrations said that Airbus planned to take newer versions of the Trent engine off its A380 production line and ship them to Qantas so that the airline could change the engines on some of its super jumbos. He also said that three A380s that will be delivered to Qantas before Christmas will be fitted with engines that have the design upgrade. He said the engine-maker planned to address the problem in two ways: replacement parts would be supplied to fix the oil leaks and software would be fitted within the engine’s digital management system. “In the future, the computer will have software that can identify a problem at the outset and will shut down an engine before a turbine disc can go out of control and come apart,’’ Leahy told the media. The potential financial damage to Qantas goes beyond the immediate costs associated with the incident and its aftermath. The airline spent hundreds of millions of dollars on fitting out its A380s to offer the highest standards — way ahead of those offered aboard the substitute Boeing 747 aircraft. In addition, there is always a risk in transferring passengers to rivals if they find the alternative carriers to their liking. “We’re not going to rush anybody, we’re not going to be putting a deadline on it. We’re going to make sure it’s absolutely right before we have this aircraft start flying again,” CEO Alan Joyce said during the celebration of the 90th anniversary of his airline, which began as a small-scale flier transporting pastoralists and miners across the northern Outback.
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FOCUS ow-cost airline easyJet marked better-than-expected profit figures by announcing plans to pay a dividend to shareholders for the first time — a long-time demand of founder Sir Stelios Haji-Ioannou, whose family controls about 38 per cent of the shares and has long called for the easyJet board to start payments to shareholders. The first dividend will be paid in January 2012. easyJet also announced it will buy another 24 planes, expanding its fleet to 220 by September 2013, increasing seats by 7 per cent a year. This is a much more circumspect order as compared to the nearly 60 that were expected to be ordered. Many believe that the LCC’s backing-down has much to do with Stelios’ activism who quit the easyJet board “in order to focus on a campaign as a shareholder activist against the increase of the size of the aircraft fleet of the company beyond the current level of about 190”. “These new aircraft are the expensive legacy of an order signed by outgoing CEO Andy Harrison and Airbus in November 2006 when entirely different economic
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easyJet was launched in 1995, with £30m of Sir Stelios’s father’s cash, and floated on the stock market five years later. Today it’s the largest UK-based airline and Europe’s second biggest, after Ryanair
circumstances prevailed,” Stelios claimed. Dozens of airlines around the world have cancelled or delayed orders since the start of the global economic crisis to try and protect their margins, as demand for air travel wanes. He added: “I have been arguing for some time that a much higher priority should be given to restoring profit margins from the current 1-3 per cent to the more than 10 per cent level of ten years ago and delivering value to all shareholders.” easyJet was launched in 1995, with £30m of his father’s cash, and floated on the stock market five years later. Today it’s the largest UK-based airline and Europe’s second biggest, after Ryanair. Ioannou said: “…the board has refused to take into account my recommendations, using the pretext that the rest of the shareholders want something different, and instead remains resolved to go on squandering shareholders’ funds on more expensive aircraft that will probably destroy shareholder value”. Stelios was easyJet’s non-executive chairman until 2002, left the board, then rejoined as a director in 2005, until quitting again in May this year to pursue those strategic differences. He remains by far its
Ioannou wins the
dividend battle
Europe’s most successful low-cost carrier easyJet recently announced that it would pay out its first dividend in 2012 — like its rival Ryanair. While the going has been good thus far, the future will see a major confrontation between the present easyJet management — keen to acquire more aircraft — and founder Sir Stelios Haji-Ioannou, who quit the board to become a shareholder activist against the increase of the size of the aircraft fleet. A report.
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“Priority should be given to restoring profit margins from more than 10 per cent level of ten years ago and delivering value to all shareholders.” — Stelios Haji-IIoannou
biggest shareholder. Since 1999, he has set up 16 other ‘easy’ ventures, which are separate from easyJet. They are owned by easyGroup, the private investment vehicle for his Stelios Trust. easyGroup owns the ‘easy’ brand, which licenses it to various ‘easy’ operations, including easyJet. This private side embraces easyBus, easyCruise, easyOffice, easyCar, easyPizza, easyHotel, easyInternetcafe — all with the same distinctive orange logo as easyJet. Now in a brand new move, the airline has launched a flexible fare targeted at business travellers, allowing passengers to change their flight up to two hours before departure time. easyJet has changed its business model with the introduction of flexible fares, which are aimed at business passengers specifically. Budget airlines like this one have benefitted from business travellers choosing to fly with them rather than major airlines. This happened during the recession, as companies were cutting back on travel costs. It’s their hope now to accelerate the trend with the new fare. About 18 per cent of easyJet customers are business travellers now. The flexible fare is still anticipated to be a lot less in price compared to those offered by major carriers, even though it will still be higher
“If we’re still generating this amount of cash and we haven’t found any acquisition, then we would certainly consider a second dividend by about the end of 2013. ” — Michael O’Leary
priced than the carrier’s own standard fares. Carolyn McCall, the chief executive of easyJet, said that it’s easy to see why business travellers are choosing them over major airlines, as they have the best European network, with flights to main airports at cheaper prices. The flexible fare has been created to meet the needs of business travellers, she added, which makes the carrier an even more attractive choice. The easyJet dividend follows close on the heels of Ryanair chief executive Michael O’Leary, who finalised a £341m one-off dividend. The dividend is the first since Ryanair was floated in 1997 and comes after talks over the delivery of 200 new aircraft with Boeing broke down. Ryanair shelved the acquisition putting the brakes on its famed focus on rapid expansion. A portion of the cash pile is now going out in the form of a dividend. Because of the sharp reduction in capital expenditure this will lead to Ryanair plans to return another £341m to shareholders by 2013. Although O’Leary was at pains to stress to investors and analysts that the payments were a one-off, the £341m dividend represents a nominal yield of 10 per cent and is a hefty payout. However, for investors, a potential slowdown in growth
CRUISING HEIGHTS December 2010
“It’s easy to see why business travellers are choosing them over major airlines, as they have the best European network, with flights to main airports at cheaper prices.” — Carolyn McCall
means Ryanair is likely to be a rather different proposition for the next few years. He has held out the prospect of paying a second dividend in 2013, unless Ryanair found a better use for its growing pile of cash which, he said, might not happen. This prompted some analysts to suggest he was finally reining back the airline’s aggressive growth strategy that has seen it grow into a airline carrying twice as many passengers as older rivals such as British Airways. He said: “All other things being equal, if we’re still generating this amount of cash and we haven’t found any acquisition or aircraft acquisition for it, then we would certainly consider a second dividend by about the end of 2013. But if I was a shareholder I wouldn’t be banking on that yet.” He said he saw no airline on the market worth buying, but there was still the option of purchasing not just the 200 Boeing jets, worth about $15bn (£9.8bn) at advertised prices, but up to 300 from either Boeing or its rival, Airbus. Ryanair had told both manufacturers in early summer that it could buy “200 to 300” aircraft if suitable prices and terms were offered, he said, though there were no negotiations at present.
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TAKE-OFF yanair launched its 2011 Ryanair Cabin Crew Charity Calendar, which, it hopes will raise up to `60 lakh for German charity “Tafel”, which provides food to people in need all over Germany, many of them children and teenagers suffering from poverty and malnutrition. The proceeds of Ryanair’s 2011 cabin crew calendar will bring the total raised by Ryanair’s sexy cabin crew to over `2.4 crore since the first calendar in 2008. The 2011 edition, which was shot in Fuerteventura (Canary Islands) in September, will raise `60 lakh through the sale of 10,000 calendars onboard Ryanair flights. As per tradition, the Ryanair’s crew chose the German charity “Tafel”, after
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over 400 charities across Europe applied for the charity calendar partnership. This is the first year a German charity will receive the donation and follows strong sales of the 2010 cabin crew calendar in Germany, where over 30 per cent of the 2010 cabin crew calendars were sold. The calendar also has a page poking fun at rivals BA, with a picture of an older woman holding a placard, reading: “We’re off our trolleys.” Ryanair’s CEO Michael O’Leary said: “Ryanair’s cabin crew stunners are delighted once again to strip off for charity and this year they’re doing it for the ‘Tafel’ charity in Germany. We hope that the 2011 charity calendar will help ‘Tafel’ deliver even more food to people in need throughout Germany.”
Last year’s calendar saw money donated to the UK charity KIDS. The publication of the 2009 calendar led to Labour MP Mary Honeyball accusing Ryanair of “sexualising” the airline industry, describing the stunt as “a desperate bid for profits”. O’Leary responded by describing Ms Honeyball as “anti-fun”, before sending her his own copy of the calendar. Meanwhile the Kingfisher calendar, for which a nationwide selection was done to select the finalists, is also under shoot in Maldives. Now, why doesn’t Vijay Mallya consider getting his inflight crew to volunteer for the shoot and sell the calendar for charity. Good idea, eh? Or, will there be an uproar in Parliament?
Stripping FOR
CHARITY
CHARITY IN THE AIR: Ryanair’s cabin crew who are featured in the airline’s charity calendar 2011, and (top) the dig at rival British Airways.
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Rich
IS A DARLING!
ichard Champion de Crespigny, who has 35 years' flying experience, has been universally praised by passengers for the way he handled the critical incident and the manner in which he addressed the 466 people on
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Scramjet delight he US space agency NASA has plans to build a hypersonic jet that would enable passengers to fly from London to New York in just 45 minutes! The craft would travel at an incredible five times the speed of sound, reaching Mach 5, which when you compare it to the iconic jet Concorde that completed
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its first supersonic flight in 1969 flying at twice the speed of sound, Mach 2, these are phenomenal speeds! The aircraft will fly at the limits of the earth’s atmosphere and slash flight times all around the world to a few hours at the outside, travelling at around five times the speed of sound much like a supercharged CRUISING HEIGHTS December 2010
loves the aircraft so much he’s writing a book about it.’’ Aviation runs in the family: Captain de Crespigny’s father Peter is a private small-craft pilot and two of his great-uncles were in the Air Force. Captain de Crespigny joined the RAAF straight out of school and Richard’s son, Alexander, 21, an engineering student, is also training for his pilot’s licence.
Photo courtesy: sydney morning herald
CALM AND COMPOSED: Despite a catastrophe facing the A380 mid-air, Richard remained calm and composed while handling the 466 passengers.
board after the A 380 Qantas mid-air explosion (see Pages 24-25 of this issue of CRUISING HEIGHTS). The 53-yearold pilot has been flying for 35 years — all with Qantas apart from an initial stint with the Royal Australian Air Force. When the engine blew, de Crespigny said over the plane’s intercom: “I do apologise. I’m sure you are aware we have a technical issue with our No. 2 engine ... I’m sure you are aware we are not proceeding to Sydney at this stage. The aircraft is flying safely at this stage. Thank you for your patience.” But it was his wife, Champion de Crespigny who had the final word: “I was not at all surprised to hear how calm he was when talking to the passengers. I’m sure he would have been thinking, ‘What words would I like to hear from the Captain if I was a passenger? He’s such a smart guy. If I was in a dire situation on a plane I would want to know Rich was up front’.’’ But is her Rich a hero? Not really, says the missus: “He just loves to fly. Every day he goes to work he’s got a smile on his face. It’s not because he’s leaving me, it’s because he loves his job. Rich was promoted to captain to fly the A380 when they arrived. He
Concorde. The project involves designing a re-useable aircraft that can travel to Mars, but the spin-off for terrestrial technology could be considerable. Under the umbrella of NASA’s aeronautics 2010 proposal, the agency is to allocate $5 million each year over three years to make the design of the new craft a reality. The plane will need to carry passengers through the thin air and land safely as well as being re-useable. NASA is aware of the challenges it faces in developing the new technology, but has already come up with an experimental aircraft, which flies at seven times the speed of sound. Hypersonic aircraft are the next generation after Concorde and still a fairly new concept, with the experimental prototype only hitting Mach 7 for three minutes or so last June. Another more recent test saw it launched from a B-52 bomber. It reached Mach 6 under its own power and flew for over three minutes.
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A United
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SYMBOLIC: The Boeing 757 aircraft in new livery — from nose to tail — with logo from The Oprah Winfrey Show farewell season.
nited Airlines has unveiled “The Oprah Winfrey Show” farewell season plane to honour the iconic talk show host’s 25th and last season on CBS before embarking on running her own cable channel. The Boeing 757 aircraft is newly painted with imagery from the TV show.
Photo courtesy: http://larryfire.wordpress.com
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irgin boss and Knight of the Realm Sir Richard Branson will soon be swishing across the aisle of an AirAsiaX flight with his legs shaved, in high heels and a fetching red stewardess uniform serving guests and delighting AirAsiaX boss Tony Fernandes. That’s part of the deal after Branson lost a bet to Tony over whose Formula 1 team performed better this season. Branson backs Virgin Racing, while Fernandes is the team principle of Lotus Racing. Both teams are 2010 F1 Championship fanatics and travel the globe to catch their teams rush the pit. At the start of the season, Branson and Fernandes wagered that the loser of the bet would have to dress and serve as a flight attendant on the winner’s airline. “He has an airline, we have an airline, and if we beat him, he can come and work on one of our airlines as a Virgin stewardess,” Branson had told a delighted media in December last year when the bet was placed. “I suspect if he beats us he might ask me to reciprocate. Maybe I’ll have to check out how fetching his stewardess outfits are!” While both team ended the season with zero points, Lotus had better finishing positions overall and placed ahead of Virgin Racing in rankings. “We have had this great bet running all season and now it’s time for Richard to start preparing himself for some hard work and the likely pain of a pair of high heels!” said Fernandes. Branson seems delighted with his AirAsia outfit. During celebrations on track on the conclusion of final F1 race, held in Abu Dhabi, Fernandes gave Branson an AirAsia uniform and pinned a stewardess’ badge on the Virgin Racing boss. “One of the first people to come and congratulate us on the pitwall was Richard,” said Fernandes. Judging from Branson’s ecstatic expression, pictured left, you’d think he was actually excited to have an excuse to don a female uniform. We think it would be delightful if Branson did a safety demonstration dance routine while he’s at it. “We want him to shave his legs. We are going to try and get him to shave his legs and wear some make-
The interior also has been redecorated and passengers will be greeted by a special onboard video welcome from Winfrey. At a send-off event at Chicago O’Hare International Airport, passengers heard a special message from Winfrey before boarding the flight. During the inaugural flight from Chicago’s O’Hare International Airport to Los Angeles, one passenger was given enough United Mileage Plus miles for a trip around the world. All the other passengers received a specially mono- grammed “Oprah 25” fleece blanket each. In conjunction with the unveiling of plane, United is launching the “Million Mile Giveaway” — a sweepstakes that will award one million United Mileage Plus miles to one winner each month through May 2011. “As Chicago’s hometown airline, United is proud to celebrate The Oprah Winfrey Show’s farewell season. This unique plane represents the global reach of two great Chicago icons.” The airline, which recently merged with Continental, is based in Chicago, which is also the city Winfrey calls home and films her daily show.
CRUISING HEIGHTS December 2010
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POOR CHAMP!: (Top) AirAsia’s Tony Fernandes and Virgin’s Richard Branson being measured for stewardess’ uniforms, and (below) a cartoon of Branson as a stewardess on an AirAsia X flight.
CRUISING HEIGHTS December 2010
up,” The Star (from Kula Lumpur) quoted Fernandes as saying. The paper added that if Richard is sporting, so is Tony. He is prepared to make a concession to his British friend, as he seeks his pound of flesh. “But we will leave his moustache alone, as it is his trademark,” said Fernandes, who is the Lotus Racing team principal apart from being AirAsia Group’s Chief Executive. Incidentally, if Branson is Sir Richard, Fernandes has the Malaysian equivalent, Datuk Seri. The Malaysian media and the online world have been abuzz about the bet, with blogs, twitter and news portals worldwide picking up on the result of the wager. The excitement is fuelled further by the fact that Fernandes said Branson would be expected to wear high heels during the flight and perform tasks like any other crew member, including cleaning the toilets, the newspaper said. Branson will serve on a Kuala Lumpur-London AirAsia X flight. The tickets will be sold in an online charity auction. Details on the date of the flight and how to enter the charity bid will be released soon. Fernandes said, “It’s quite fitting, don’t you think? Our guests will be delighted to be served by a Knight of the Realm. But knowing Richard, the real challenge will be to prevent him from asking our guests ‘coffee, tea or me’?” Fernandes added that Branson would serve duty on board an AirAsia X flight. Fernandes, who once worked for Branson as a financial controller at Virgin Records, had recently joked that his only target in the new F1 season is to beat Branson, otherwise he would quit the business and kill himself. Branson responded, “He has an airline, we have an airline, and if we beat him he can come and work on one of our airlines as a Virgin stewardess. It will save him having to kill himself, but we’ll make sure the stewardess outfit is perfect,” joked Branson. “I suspect if he beats us he might ask me to reciprocate. Maybe I’ll have to check out how fetching his stewardess outfits are,” he added. Fernandes has accepted the challenge and has picked out a lovely crew uniform for Branson.
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ay.com
ad : cartoon Courtesy
No patdown, NO CRY
atdowns are a touchy subject — at least for the Americans. To the unitiated patdown is the Americanese for body search and is presently being carried out at airports in the USA with “ferocity”. In fact, the airport security drill is so hated that it is snowballing into a major privacy row and Americans have started protesting against the introduction of the TSA full “Montys”.
P
DESPITE PROTEST, CELEB SUPPORT: Amidst all the campaigning against the patdown procedures, (left) American actress Julie Benz and (above) Grammy-winning musician Steve Vaus believe the scanners can act as security measures. (Top) A cartoon depicting the effects of the scanning system.
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Demonstrators recently gathered against these body touches in the US capital. At least a section of the Americans feel that they’ll take the bus, train or find a ride before they book an airplane flight. Passengers are refusing to fly rather than have his or her “junk” felt. “If you touch my junk, I will have your arrested,” John Tyner told security personnel at San Diego airport and sent a recorded tape of this experience on YouTube. Tyner even blew up threatening to have the screener arrested for patting down his groin area. He later said he used the word “junk” to keep the atmosphere lighthearted. The online video footage spread like a viral across America, fuelled by breathless TV coverage, which turned into a minor celebrity, being called everything from a hero to a nut to a Gandhi-like figure for his civil-disobedience. Amidst all this chaos, US star Julie Benz believes that while it’s not the best situation to go through a X-ray scan that can peer through your clothes or to be subject to a thorough pat-down inspection, the new screening procedures are necessary security precautions. “I’d rather be felt up then have somebody get on a plane with a bomb,” the sportive star was quoted as saying. “I think right now, unfortunately we live in a time where security on flights is very important. They’re working it out. Is this the right choice? Who knows, but it is a choice, and I’d rather be safe than sorry,” she said. “If you want to feel me up, feel me up. I would hate to be on a plane where they didn’t catch the guy when he was going through security,” commented Benz. Even the Grammy-winning musician Steve Vaus has penned a song, “Help me make it through the Night” as a source of inspiration to support the airline security for the controversial body scans conducted by them. Help me make it through the night Take the ribbon from your hair Shake it loose and let it fall Leave your shoes right over there Now, get up against the wall I’ll run my hands inside your thighs Up your legs and out of sight But you can trust the TSA To help you make it to your flight… Trust the Americans to come up with something like this. As for us Indians, we go through patdowns and patups everyday — even for a movie show.
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Advanced technologies create an oasis of spacious style and comfort. www.newairplane.com/style
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T3
SPECIAL REPORT
irons out the
Glitzy and swanky, Delhi's T3 has of late, been the scene of chaos and confusion. Is it due to teething problems or is there more to it? Tirthankar Ghosh finds out.
glitches hen Prime Minister Dr Manmohan Singh inaugurated Delhi airport’s glitzy and swanky Terminal 3 on July 3, 2010, the world sat up and took note. Indeed, the terminal was truly international: eighth largest in the world, it has 78 aero-bridges, 63 elevators, 35 escalators, 92 automatic walkways, 168 check-in counters and 95 immigration desks. Capable of handling 12,800 bags per hour with 6.4 km of conveyor belts, Terminal 3 created in just 37 months was the world’s most modern terminal. The Prime Minister had commented at that time that the “terminal establishes new global benchmarks for India. It also shows our resolve to bridge infrastructure gap in the country”. An equally impressed Sonia Gandhi, who was also at the inauguration, said that T3 “is a most impressive structure … it is evident global standards of excellence have been achieved here.” As CRUISING HEIGHTS goes to press, T3 and airport operator DIAL (Delhi International Airport Limited) seemed to be at the receiving end. Passengers were irked by the late delivery of baggage and delays in flights. But the fault was not T3’s. As DIAL’s CEO P S Nair put it rather succinctly: “T3 is 100 per cent ready.” So, what
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Troubles started on November 11, 2010, when Air India shifted its domestic operations: passengers began facing problems CRUISING HEIGHTS December 2010
HARRIED PASSENGERS: Amidst chaos and confusion, passengers are a victim of the unpreparedness of the T3.
really are the reasons for passengers’ ire? Before finding out the causes, one needs to look at a bit of history. To begin with, operations from the terminal did not start the very next day. In fact, DIAL staggered T3’s operation date by a fortnight after the inauguration to enable stakeholders to deal with any last-minute glitches, like synchronisation of security procedures, baggage handling and other airport operations. Everything seemed to be going great for the terminal. And, when Air India announced on July 15, 2010, that it planned to use the new terminal as its hub, it was felt that Delhi’s connection to the world would be strengthened. Air India’s CMD Arvind Jadhav went on to point out that Air India operating from the new terminal would provide seamless travel for its passengers on all sectors and would increase business by more than 20 per cent in the long run. Three new direct international routes that would start from October were announced by the Air India’s Chairman. July 28, 2010, was the day T3 was waiting for: the terminal opened for
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Troubled Terminals
Denver International Airport Scheduled to open in 1993, the baggage handling system delayed the opening of the airport by 16 months and $2bn in cost overruns. After multiple delays, the system was stripped down and had to be finally abandoned in 2005.
international passengers. With a handling capacity of 27 million passengers a year, to begin with T3 was all set to handle 90 flights a day, which would eventually be ramped up to 220. Domestic operations by Air India, Kingfisher Airlines, Jet Airways and their low-cost subsidiaries had plans to shift operations to the new terminal later. By September, the teething troubles seemed to be over. The terminal scored a big hit when it screened the one millionth baggage at its gigantic in-line baggage handling system since it was commissioned. And, barely two days later, athletes and delegates arriving in Delhi for the Commonwealth Games were floored by Indian hospitality right after alighting from their planes. They breezed in and out of the airport as if on song. Before T3 could begin domestic operations from November 14, the terminal was reviewed for its preparedness by the Secretary, Civil Aviation, M Madhavan Nambiar on October 25, 2010. He held a meeting with representatives of the Delhi International Airport Limited (DIAL), airlines concerned, Delhi Metro Rail Corporation (DMRC), Delhi Development Authority (DDA), Delhi Police, Directorate
General of Civil Aviation (DGCA) and officials of the Ministry of Civil Aviation. The press release issued by the government’s Press Information Bureau does not indicate any shortcomings of DIAL on the airside as far as preparedness to receive flights were concerned. Instead, the release mentioned issues on the cityside that had resulted in the postponement of domestic operations from T3. Among the issues that were discussed were the connectivity problems with the airport. While the Metro connectivity to the airport was expected to be in place by mid-November, 2010, the integration of the Dwarka Underpass would be completed by the end of October, 2010. The underpass had to have trial operations and simulations to ensure smooth traffic flow and that was expected by the middle of November 2010. With an eye on the increase in traffic during Diwali and to ensure maximum convenience to passengers, it was decided at the review meeting to shift domestic operations of three airlines — Air India, Jet Airways and Kingfisher Airlines — on November 14, 2010. Before that, however, a number of simulation exercises would be carried out in the interim period. However, when consulted by the Press it was assured
Kuala Lumpur International Airport Known as the best airport in the world today, KLIA had teething problems: software glitches forced passenger delays; cargo operations were bogged down — with seafood, vegetables, and other perishable goods left sitting uncleared for days — badly
Hong Kong International Airport JULY 1988: At the airport's opening, 22 core problems appeared: haywire. Cargo mishandling resulted in a loss of HK $4.6 billion. Five months after its opening, it suffered severe organisational, mechanical, and technical problems that almost crippled the airport.
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Troubled Terminals
Athens Eleftherios Venizelos Airport Within two hours of the airport opening, the baggage handling system failed causing baggage delays. On opening day, the check-in systems malfunctioned: check-in computers were generating boarding gate info for the old airport confusing airline staff as well as passengers.
Suvarnabhumi Airport Difficulties were recorded during the first days of the airport's operation: sluggish luggage claims were rampant, many flights were delayed, failures with the check-in system and cargo computer system and even the departure boards displayed wrong information.
Heathrow Terminal 5 Hour-long queues in baggage arrivals due to problems with the luggage processing system and 34 flights were cancelled from the new terminal on the first day. 300 flights got cancelled and some 15,000 bags missed out by passengers in first four days.
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DESPITE CONTROVERSIES, BIG HIT: During CWG, passengers breezed in and out of airport as if on a song.
that in a span of 10-15 days, everything will be sorted out. Troubles started on November 11, 2010, when Air India shifted its domestic operations: passengers began facing problems. Unused to walking long distances, many could not claim their baggage because they reached the baggage belt late. Result: baggage was kept in the reclaim area by Air India. Additionally, flights out of the airport were delayed — a result of “consequential delays due to late arrival of aircraft”, according to an Air India spokesperson. As for Jet and Kingfisher, both completed a successful, smooth and uneventful migration of the domestic operations to Terminal 3. Kingfisher, for example, pointed out: “By and large, the transition of operations for our domestic flights to T3 went off smoothly, thanks to the wellcoordinated advance planning by all stakeholders involved”. The delays can be attributed to a variety of factors. To begin with, there were the merger pangs: Air India and Indian (Airlines) were working in coordination for the first time under one roof. Indeed, Air India’s Chief Operating Officer (COO) Gustav Baldauf conceded to the Air India board that there had been lack of “proper long-term planning” for the migration to T3. The switch to T3 was a key pillar of Air India’s operational turnaround plan. In addition, the hub and spoke model that Air India had worked on had not calculated connection timings between international and domestic flights. According to experts, connection timings even in an integrated terminal — one that operates both domestic and international flights — are crucial and are to be achievable. To top it all, Air India has been suffering from acute manpower shortage, especially in the AI-SATS ground handling section. Add to that, the unpreparedness for ground handlers and what the passengers faced was sheer chaos. According to DIAL CEO Nair, most CRUISING HEIGHTS December 2010
airports in the world have faced teething problems. Way back in 1988, for example, Hong Kong International Airport faced 22 core problems and the government had to reopen the cargo terminal at the old Kai Tak Airport to handle freight traffic due to a breakdown at the new cargo terminal. It took almost six months for the airport to operate normally. Other airports like Denver had to have its baggage system totally replaced. However, when consulted by the Press, it was assured that in a span of 10-15 days, everything will be sorted out. Experts point out that a new terminal has to go through a three-phase stabilisation period. Phase-1, known as the critical phase, may extend up to 10-12 days. During this period, incidents like delays in baggage, mal-functioning of IT systems and traffic management issues, etc., may often go out of hand. During this time, the airport management in co-ordination with airlines and other regulatory agencies try to put things in place primarily through fire-fighting efforts. In fact, a lot of hand-holding is done: an action that was being carried out by DIAL with Air India, as we go to press. Phase-2 is the stabilisation phase and can stretch up to 10 weeks. During this phase, each system and sub-system is geared to work towards stabilisation. In the last and final phase, the airport gears up to provide the promised standards of service to the passengers and that takes around 10-12 weeks. At the end of the phase, the airport reaches the level of service it has promised. The teething problems will take some time to end but till then, as CEO Nair pointed out, while DIAL will continually upgrade and enhance the facilities — for example, the number of golf carts has been raised from the 16 to 28 after there were demands that senior citizens, mothers with kids and those with physical infirmities were finding it difficult to walk long distances within the terminal — the travelling public will have to get used to the new terminal. After all, when we Indians go to Changi or JFK, we walk long distances. So why not in Delhi?
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On with the happy days!
As the country’s aviation sector experiences a second boom, it would be worthwhile for the government and those handling civil aviation to ensure that the country does not go back to the days of the licence raj, comments R Krishnan. R Krishnan
The Tata case was indeed pathetic. When Tata’s sought clearance during the Narasimha Rao-led regime, a leading private carrier made it impossible for the Tatas to get an entry
appy days are here again!” That was a slogan for a soft drink ad not so long ago. I think the sentiment fits quite well with the rising fortunes of Indian domestic carriers once again. Post-2003-04, Indian domestic air traffic rose more than threefold from 15 million to nearly 50 million in 2010. Much of it came during the heady days of 2005, 2006, 2007 and early 2008 when the annual traffic growth at times touched 38 per cent. All this became a distant dream when the global economic slowdown hit the world aviation industry including our own domestic aviation sector. The boost helped catapult India to the ninth position in international aviation ranking and given the current growth rate, India's rank may move up to the fifth position. Boeing India chief Dr Dinesh Keskar said recently at the FICCI seminar, India: The emerging aviation hub, that India could emerge as the most exciting aviation market in the world. Already global aviation's centre of gravity has shifted to the Asia Pacific. Now it has begun its tilt towards China and South Asia (read India). It will not be just aircraft numbers but the basis for them — MROs, training schools, other related service areas, etc. — that will witness an uptrend. Dr Keskar observed that the growth being experienced in India this time was strengthening airlines’ financials as it reflected in higher yields and profitability. What he did not say was that during the boom in the previous phase from 2005 to early 2008, the domestic carriers, in the garb of widening and deepening the market, failed to focus on the yields. Today, the focus is very much on it. FICCI Secretary General Dr Amit Mitra said something very significant. He said the elasticity of the airline business in India was high: in fact much higher than the Indian Railways. So given the higher economic or GDP growth rates year on year, the Indian aviation scene will surely witness a big boom once again — something on the lines of the “Happy days are here again!” Dr Mitra also pointed out that the day was not far off when the total Indian domestic traffic could reach as high as 100 million. Civil Aviation Minister Praful Patel too, must be a really happy man, as he is witnessing a second boom in his second ministerial innings as part of the Congress-led United Progressive
“H
Alliance (UPA)-II. Instead of the advertisement tagline, he chose to describe it as: “We are back to the heady days of growth again witnessed in 2005-2008.” He was happy that India had recovered in a reasonably short time and with the current growth rates of nearly 20 per cent, the issue in the near future will be how to manage this growth safely, securely and economically. Even if stretched to the maximum, India could still experience a consistent 10 per cent growth over the next decade. It is precisely to manage such growth institutions like the Aviation Economic Regulatory Authority (AERA), the Directorate General of Civil Aviation (DGCA) and, perhaps, its re-shaping into the Civil Aviation Authority of India (CAA) will become important. It was at this juncture that Minister Patel took on the airlines that — sensing the travel
NO BRIBES, NO AIRLINE LICENCE: The Tatas had plans to start an airline with (above) Singapore Airlines and (inset) Tata chief Ratan Tata
boom ahead during the heady winter holidays of Christmas, New Year, etc. — have jacked up their fares four to fivefold. Against the earlier boom, which ended with capacity mis-match, i.e. more aircraft and fewer passengers, the present boom has been witnessing lower capacity and higher passenger demand. Patel thundered that the airlines had freedom but this could not be at the cost of consumer interest. Obviously, Praful Patel is right in saying so and we have reason to believe what he said. But what do we say of the past when different yardsticks were used for nearly similar issues like entry into the aviation business. For instance, Ratan Tata remarked that he was informed by a fellow industrialist about 12 years ago when Tata was struggling to get his domestic airline, Tata Airline, off the ground that if he paid Rs 15 crore to the political personality, he would get the required approval. Tata Airline was grounded before take-off and the Tatas
CRUISING HEIGHTS December 2010
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Prime Ministers all: (top) P V Narasimha Rao, (centre) I K Gujral, and (bottom) H D Deve Gowda
The earlier monopoly of Jet Airways and Air Sahara has now transformed into a small group of Jet, Kingfisher, IndiGo, SpiceJet and GoAir 44
withdrew their application to start a domestic airline. I still remember when a senior Secretary to the Government of India told me that the then Prime Minister of Singapore, Lee Kuan Yew, told the Indian Prime Minister that three governments had changed but the airline could not get an approval. Perhaps, it was some kind of record. So, when Tata made his remarks, Praful Patel was kind enough to say that he would always welcome the Tatas should they desire to enter the airline business. The earlier monopoly of Jet Airways and Air Sahara has now transformed into a small group of Jet, Kingfisher, IndiGo, SpiceJet and GoAir. Paramount Airways that came in with southern connections, lost out and is again in the revival mode. To a Parliament question, Patel had said that nearly 13 applications for starting domestic scheduled carriers were awaiting clearance, of which many have already withdrawn and dematerialised. The Tata case was indeed pathetic. When they sought clearance during the Narasimha Rao-led Congress regime, a leading private carrier made it impossible for the Tatas to get an entry. Then came the regime of United Front first led by Deve Gowda followed by I K Gujral. It was C M Ibrahim, a Deve Gowda confidant, who held the Civil Aviation portfolio. As it was nearing clearance following the advice of the then Industry Minister, the late Murasoli Maran, the Deve Gowda government suddenly discovered that foreign equity by a foreign airline in an Indian domestic carrier should not be allowed. At that time Singapore Airlines (SIA) had planned to hold 40 per cent equity in Tata Airline. Mulayam Singh Yadav, who was then Defence Minister, even issued through the media a statement that said that allowing TataSIA to start a domestic carrier in India would pose a serious security threat to India and to the Indian Air Force. What he did not want to say was that his then friend Amar Singh's friend Naresh Goyal-owned Jet Airways had foreign equity from foreign carriers in Kuwait and the Gulf besides an airport even as he had registered his promoter company Tailwinds in the tax haven of Isle of Man and continues to keep it there even today without ever posing any security threat except to those potential airline companies, like the 13 may have to wait permanently outside Rajiv Gandhi Bhawan housing the Ministry of Civil Aviation. So, what the humble farmer Deve Gowda and his Aviation Minister did was to pass a Cabinet resolution to say that no foreign equity by any foreign airline would be allowed directly or indirectly into a domestic Indian carrier. This rule holds true till date. We do not know who successive governments wanted to protect. Earlier, we saw governments that ran the extra mile to finish the state-owned organisations like Doordarshan (DD), Air India, Bharat Sanchar Nigam Limited (BSNL), Mahanagar Telephone Nigam Ltd CRUISING HEIGHTS December 2010
(MTNL), etc. (I am not saying it was a bad thing. All I am saying is that there is no consistency in what the ministers have been doing.). Protection has been extended to a few more private airlines. So, all new applicant airlines cases are either permanently kept in the so-called “under consideration” bin or simply not responded to. The usual plea was and is that the available infrastructure is not adequate to meet the demand of new airlines. What is inexplicable is the same ministry continuing to extend approvals to the existing carriers to acquire more and more aircraft — even up to 100 or 150 at one time. It even cleared the application of two regional carriers that have failed to take off. And those that had taken off like MDLR and Indus Air have since gone under. What we are witnessing is a going-back to the old days of the licensing raj when existing individuals or those well-connected could manage a licence to ensure that new ones don't come in. This trait of pre-emption has been the bane of Indian economic history. No new car manufacturer, for example, entered or could enter India except for Hindustan Motors and Premier Automobiles for a long time. Later, Maruti-Suzuki entered the scene in 1984. Such a policy was applied to Information & Broadcasting when the government allowed private news channels to do business. The same thing happened in telecom. But when it came to the airline business, the bogey of safety and inadequate infrastructure was raised to prevent entry of new entrants that could really make a difference. Yes, safety is true and very important. But why is it always believed that new entrants will fail on safety vis-a-vis those already in business. In the same vein, the present party or parties ruling at the Centre need not have opposed the fixing of Air India by Atal Behari Vajpayee during his rule. Today, the same parties are neither able to fix Air India nor able to do away with it. The monopoly of one airline has grown to a select few. If the airline business and domestic traffic are going to expand in a big way, as expressed by Praful Patel, Amit Mitra and Dinesh Keskar, then as the policy leader Patel needs to re-invent himself. A mere belated invitation to the Tatas, as a knee-jerk reaction, is not enough. Why Tatas? Maybe other players will want to come. If the government can debate so furiously the entry of Walmart and Carrefour to enter India's multibrand retail business, then it would be perfectly in order to allow — as starters — FDI by foreign carriers in Indian domestic carriers that are facing a severe cash crunch. What is the point in denying entry by foreign carriers when India's premier carrier Jet Airways continues to believe, locate and function from its principal promoter's office in a tax haven rather than in India! Why should a few other major owners of domestic carriers wish to remain NRIs? (Veteran journalist and long-time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.)
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“WE NEED A
FRAMEWORK FOR THE NEXT DECADE”
HE IS ONE OF INDIA'S MOST SEASONED 'CIVIL AVIATION' CIVIL SERVANTS. HAVING SPENT OVER 10 YEARS IN THIS SECTOR — AS JOINT SECRETARY, INDIA'S REP AT ICAO AND THEN DG AT DGCA (DIRECTORATE GENERAL OF CIVIL AVIATION) — DR NASIM ZAIDI IS JUST THE RIGHT MAN TO BE SECRETARY, CIVIL AVIATION. IN HIS FIRST MAJOR INTERVIEW WITH K SRINIVASAN AND R KRISHNAN, HE TALKS ABOUT HIS TWO YEARS AT THE DGCA AND THE HUGE TASK AHEAD. 45
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Q: A:
Your thoughts on the 24 months at the DGCA? These 24 months have been most challenging. In fact, I would say the most challenging assignment of my career. I began with the looming threat of the Federal Aviation Authority (FAA) and the ongoing degradation of the ICAO (International Civil Aviation Organisation) — USOAP (Universal Safety Oversight Audit Programme) Audit. I began with the USOAP Audit where we had lots of deficiencies in the system and just two weeks later, I got the FAA — international aviation safety assessment — that was the second-biggest challenge. All the other challenges and the entire set of work that flew from there was because of these two challenges. Therefore, we decided that we could set these two things right and our entire regulatory structure will be in order. As I complete my two years, I leave with a great sense of satisfaction of not only having addressed the ICAO Audit of having brought India at par and above international standards and secondly, brought forth significant changes and retained India in Category One with respect to the FAA. It brought recognition from the largest aviation structure in the world — the FAA. They said that India could be a role model for Asia as far as the regulatory regime is concerned. They also came on record to say that in the shortest time, significant changes have been made, which is noteworthy and added that it is rare that a country that was almost derated and put on alert could come back to Category One. There are over two dozen countries that have been downgraded to Category Two. So, I leave with a great sense of satisfaction and there is a whole series of action and changes I have been able to bring about in the DGCA. Would it be right to say that your two years were used largely to clean up the DGCA? I can say with confidence that I brought about a lot of changes, but I must add that a lot of changes are still required to be done. I began with the biggest handicap of staff shortage. At the beginning of 2009, we had only 145 technical staff. I am leaving with roughly 360 staffers, which is more than double. What also satisfies me is that all recruitment rules have been revised; Union Public Service Commission (UPSC) has started coming out with advertisements for recruitment. It is also satisfying that I could bring the entire DGCA to work as one integrated organisation. When I took over, most of the
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“
I leave with a great sense of satisfaction of not only having addressed the ICAO Audit of having brought India at par and above international standards and, secondly, brought forth significant changes and retained India in Category One with respect to the FAA.
”
directorates were working as silos without having a larger picture of what they were working for. I was able to bring them all into one and share the common goal and objective as DGCA. I am happy that everybody now speaks with one voice. All the decisions of this organisation are collective decisions. Everybody sits down each week and decisions are shared. I have also tried to make the DGCA as transparent as possible. My website is a very dynamic website, we started open houses, I am available on my email, I attend to all individual complaints. So, transparency in all activities was another major area of improvement. The fourth plank was an intensive consultation process with industry. No regulation of the DGCA was issued without prior consultation, whether 30 days or 21 days. We have also reached the next stage of governance, through electronic mode for the Authority. The project is in the final stages of approval that will see the entire DGCA automated. The proposal is with the Planning Commission and I hope it will be finalised soon. There has also been progress on the infrastructure front. The DGCA is an ‘international’ kind of organisation and we have a new building coming up. We have CRUISING HEIGHTS December 2010
CONVOLUTED PROCEDURES: Passengers are subjected to additional security checks.
set up a joint academy with the AAINIAMAR (the Airport Authority of India [AAI] training institute is called the National Institute of Aviation Management and Research [NIAMAR]) for which funds have been sanctioned, the building design is ready and it will come up in Vasant Vihar. Another major area of focus was the infrastructure of the regional offices and to have them staffed fully. So these are fivesix areas that I can quickly recount where changes were made. …also the decision to move towards an Authority… This was a continuing process in order to bring about transformation. In fact, we are moving very fast into the transformation of the DGCA into the Civil Aviation Authority (CAA). Now, of course, there is talk of having the expanded form of the CAA, including several areas of regulation. DGCA is a regulatory body and if it becomes a CAA, what are the additional functions will it have? Or, will it be CAA’s functions versus the regulatory
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stage because the committee is examining the report and these functions are being debated. After the principle clearance of the government, it will take a minimum of 18 months to go through the legislative and transformation process, etc. The effort will be to push this process forward.
functions? Who will handle what? ICAO has completed the study. It recommended that there should be a Civil Aviation Authority. Now the study has gone to the government that has appointed a committee. They are looking into what additional functions this Authority should have. Safety regulation is one, air space regulation is the second, consumerprotection is the third, environment-related issues are the fourth. There is also discussion on the economic regulation. These five-six areas are being thought of being brought under this enlarged Civil Aviation Authority so that we have a unified regulatory regime. But will economic regulation not conflict with AERA (Airport Economic Regulatory Authority)? Economic regulation relates to areas like fares, excessive fares, predatory fares, transparency in fares and those kinds of things. Nothing to do with things that AERA handles? Of course, some have been advancing the view that let there be a unified Authority like the one in the UK. But I cannot make any comment on that at this
“
The DGCA is an ‘international’ kind of organisation and we have a new building coming up. We have set up a joint academy with the AAI-NIAMAR for which funds have been sanctioned. Another major area of focus was the infrastructure of the regional offices and to have them staffed fully.
”
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Coming to foreign pilots, you want them to go, but there is going to be a severe shortage considering that aviation is now out of the slump and airlines are expanding? Ideally, there cannot be a situation where there will be no foreign pilot. This is a global industry and there will always be some areas with surplus and some areas with shortage. Most important, there will be a global movement. Moreover, realistically speaking, we do not have experienced commanders. If the aircraft arrive, operations have to happen. We have already issued the foreign pilots regulation and based on that regulation we will go forward. Basically, there were two concerns — foreign pilots (commanders) should have adequate level of experience. Now, they will have comparable (as elsewhere) level of experience. The second issue was their medical. Chennai High Court also came out with directions that they should have equivalent standards as Indian (pilots). So, we have incorporated that as well in the regulation. Foreign pilots do not wish to come for six months or one year. Nobody wants to be dislocated for such a short period. Airlines are asking for two to three years for these pilots. I think we will have to take a realistic view on this, but that does not free the airlines from their obligation of graduating our co-pilots into commanders and that is a process that is going on. But, broadly speaking, the process of foreign pilots coming will have to continue. What are the major issues confronting you as Secretary, Civil Aviation? Let me put it this way, there are key issues. We are all aware where we were in the last decade and where we will be in the next decade. So, the experiences of this decade will have to be utilised, analysed and built upon for the next decade. That is the major plank. We need to have a framework for the next 10 years that includes issues like market access, airport issues, groundhandling, capital inflow, human resources, viability of airlines and sustainability — these are going to be the key areas. I think effective and seamless coordination is also a key issue. One area that has been engaging my attention is the transaction cost and time for the industry to work. Let me give you a simple example. A
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COVER STORY person wants to ply a bus at the airport, he has to take six or seven permissions — airport operator, Customs, BCAS, licences for the driver — there are so many transactions and there is no certainty that this will last. The industry is spending a lot of time on this and it needs to be looked into. Another major area of regulation will be the restructuring of the DGCA itself. There are issues relating to the air navigation services, whether you need a corporatisation or a subsidiary. You are now going to licence the Air Traffic Controllers (ATCOs). Once they get their licence, it will be at par with what the FAA or others have done and once that happens you will see a migration of the ATCOs. How do you hope to handle that? It is a big challenge. There is an additional pressure on our workforce from the neighbouring countries. In the next 10 years, our requirement will go up from 1,50,000 personnel to 4,50,000 personnel. This is only those related to airports, cargo, handling staff, etc. As far as airlines are concerned, it will be trebled from 30,000 to 90,000 personnel. We do not have high standardised flying and maintenance academies. We do not have adequate infrastructure to train this manpower. Why don’t you allow foreign universities to come and set up shop in India to help overcome this shortfall? CAPA (Centre for Asia Pacific Aviation) is coming up around Mumbai and there is talk of setting up one around Hyderabad. I think Concordia University of Canada is very actively pursuing it. Education, training, workforce, AME, pilots, those are the key areas. You have driven the PPP model by crafting the operation, management and development agreement (OMDA) as a Joint Secretary. Now as you return as Secretary, what do you see are the lessons to be learnt? One important area is the concession agreement itself. Whether it requires any improvement — viability of the airport, viability of another airport, seamless coordination of agencies relating to airport — are areas we will have to look at. In the next 10 years, we need $30 billion of investment in the airport sector. We have just finished with $9 billion of expenditure. What sort of concession agreement, if required, what sort of viability are we looking at are issues that are of immediate attention.
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DGCA - NODAL AUTHORITY: The airports have to fulfil certain pre-defined regularities set by DGCA.
Is it the best international practice? The regulation of airports worldwide is with the government. I think we are the only one or one of the few who has an independent authority. Of course, there is a great responsibility on the regulator also to ensure that the larger purpose for which the airport is set up is also achieved. So what AERA is doing is what FAA or BAA (British Airports Authority) does apart from other things. In that sense traditionally, DGCA should have been doing this job? In the UK, the counterpart of the DGCA does it. That is where I was talking on a discussion on a unified agency. There are so many areas where one needs to prepare a blueprint for the next 10 years.
“
We are all aware where we were in the last decade and where we will be in the next decade. So, the experiences of this decade will have to be utilised, analysed and built upon for the next decade… I think effective and seamless coordination is also a key issue.
”
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Your views on Air India and some of the other issues? I need to spend a few days before I can comment on these issues. So far, I had been looking at these issues from a regulator’s point of view. We have been emphasising that all the regulations must be complied with as a separate AOP (Air Operator’s Permit) holder and they have done so. Let me reserve my comment. The DGCA is the nodal Authority for all bilaterals. Now that you are in the Civil Aviation Ministry, will you take a holistic look at the whole issue? Take AirAsia, for example. In eight months, it has got 114 frequencies. Very soon it may beat Emirates also, which has the largest frequencies. So, the two of them from East and West will have an excellent umbrella organisation over India. As DGCA, we were issuing operations authorisation for which there are certain laid-down regulations, which a foreign airline has to fulfil. Let me reserve my judgment on the economic part till I study the issue in its totality.
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CRUISING HEIGHTS AIR CARGO & LOGISTICS
December 2010
AIR CARGO SECURITY
THE SEARCH FOR A
SILVER BULLET Aviation security around the world is sitting up after the chance discovery of the innocuous packages containing explosives that were sent out as bellyhold cargo
Do we need allcargo airports?
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An aircargo entrepreneur lists the challenges D J Ghosh
Yes, aircargo can be blogged about p58 Industry veteran shows the way — with a finesse Oliver Evans
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LAST IN/FIRST OUT
M
Single cargo advisory group formed
ichael Steen, Vice Chairman of The International Air Cargo Association (TIACA), on behalf of the Chairman, Des Vertannes, Global Head of Cargo of the International Air Transport Association (IATA), JeanClaude Delen, President of FIATA, the International Federation of Freight Forwarders Associations, and Peter J Gatti, Executive Vice President of US-based shipper organisation, The National Industrial Transportation League (NITL), speaking on behalf of the Global Shippers’ Forum (GSF) have signed a letter of intent committing to work towards the formation of an industry
“Collectively we represent the powerful grouping of all parties involved in the air cargo supply chain. We want to have the strongest possible voice to highlight to policymakers the vital role air cargo plays in world trade, in employment and in the growth of developing markets.” ) Michael Steen Vice Chairman, TIACA
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IATA's Des Vertannes, TIACA's Michael Steen and FIATA's Jean-Claude Delen during the Air Cargo Forum in Amsterdam.
advisory group facilitated by TIACA to ensure the air cargo industry has a strong, unified voice in its dealing with worldwide regulatory authorities and other bodies whose decisions have direct impact on air cargo. The agreement commits
TIACA, GSF, FIATA and IATA to work together to look at their current positions on issues such as security, customs reform, e-commerce and the environment, and to try to find common ground to best protect and promote
“Without air cargo, the global economy cannot function. The industry is working to improve efficiency with programmes like IATA e-freight. But governments have not received clear signals on what is needed for efficient global air cargo operations. A unified industry voice with the Global Shippers Forum is a step in the right direction.”
“FIATA is recognised as representing the freight forwarding industry. We are constantly looking at how to bring greater value to FIATA’s membership. It is time for associations like FIATA, TIACA and IATA to look at how we can collectively approach the issue of regulatory and industry.”
) Giovanni Bisignani
) Jean-Claude Delen
IATA
President, FIATA
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the interests of the air cargo industry, the organisations and its customers. The review will also look at the associations’ respective resources committed to industry affairs and consider how to make the most-effective use of the existing and growing relationships TIACA, GSF, FIATA and IATA have with relevant government departments and other regulatory bodies. The associations will also discuss the involvement of other global industry groups in the air cargo supply chain and seek the support of bodies such as the World Customs Organisation (WCO).
“The importance and impact that this group can have should not be underestimated. Suppliers and their customers working together can be a powerful force in identifying supply chain needs. This new working group presents an extraordinary opportunity to be heard by national policymakers.” ) Peter J Gatti Executive Vice President, NITL
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CARGO
Time to look for the HUNDRED PER CENT SECURITY?: The Yemen episode has proved that cargo security has loopholes.
Silver Bullet
The Yemen-manufactured ‘printer bombs’ have forced air cargo security experts to look at the present screening systems. TIRTHANKAR GHOSH takes a look at the cargo screening situation around the world, post-the ‘printer bomb’ scare.
J
ust when the good news that aircargo was looking up came a shocker that has sent every cargo stakeholder looking at ways to provide 100 per cent security. That devices as innocuous as Hewlett Packard printer ink cartridges stuffed with a white powder-like pentaerythritol tetranitrate (PETN) and connected to circuit boards could be easily slipped into the bellyhold of commercial airliners without arousing any suspicion prompted every stakeholder in the air cargo community to look at cargo security. It
was sheer luck that the Chicago-bound cartridges were pulled out from the cargo planes in England and the United Arab Emirates before they exploded. The fallout of the printer bomb discovery has been felt the world over. While cargo from Yemen — where the bombs originated — has been hit the hardest, India too has felt the shockwaves. British authorities, for example, have instituted measures to check cargo from India and Pakistan. Britain’s Transport Secretary Philip Hammond was quoted as saying, “Cargo originating from some cities in India, Qatar, Pakistan,
Iran, Bangladesh, Thailand, the Maldives, Sudan and Libya will have to be rescreened after arriving in Britain before being loaded onto onward flights.” This was a move that was started for the first time. To add to the problems, Secretary Hammond even went on to tell industry representatives in his country that the authorities had plans to install a system that would grade countries according to the perceived risk. Simply put, those countries which followed a screening system like Britain’s would be able to get cargo in quicker than the others.
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The discovery, incidentally, emphasised what many experts have been saying time and again: air freight is the soft underbelly of the aviation industry. Soft target or not, new security rules are coming up and the most affected are freight forwarders, airlines and cargo stakeholders. And the timing seemed to be wrong for an industry that was emerging from the shadows of the recession. The stringent air cargo security rules have irked many. Last year, for example, forwarding firms in the US and Europe made
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CARGO it clear to policymakers that 100 per cent scanning of sea containers could not be done. That sent the decision to scan each pallet/container into a tailspin. One of the planes targeted by the printer bomber belonged to FedEx. Soon after the episode — and after the heightened security regime was ushered in by Britain — CRUISING HEIGHTS tried to find out if any major security changes in the India operations of FedEx had taken place. In an email interview, Taarek Hinedi, Managing Director, Operations of FedEx Express, pointed out: “FedEx security procedures are confidential and we do not disclose them publicly. We remain committed to security and take all appropriate measures to ensure the integrity of our security system.” He also said: “It’s important to note that the FedEx security system comprises interconnecting layers of processes and procedures, all of which are effective.” Even so, a move is on to ensure that security regulators around the world to work together to ensure that air freight is safe. On his part, Giovanni Bisignani, Director General of the International Air Transport Association (IATA) — comprising about 230 passenger and cargo airlines — said in a written statement: “We are much more secure than in 2001 (the year when the September 11 attacks took place), but there is room for improvement.” He also emphasised the fact that since IATA is responsible for carrying about 35 per cent of the total value of goods traded internationally, “transporting these goods safely, securely and efficiently is critical”. Pointing out that the present processes of looking at “belts, shoes and shampoos” were not enough, Bisignani
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(Above) A SINGAPORE AIRLINES CARGO PLANE: Cargo security tops IATA's list; and (left) TSA's dog squad in action.
said that the time had come when “we must shift the screening focus from looking for bad objects to finding
terrorists. To do this effectively, we need intelligence and technology at the checkpoint. The
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enormous amount of data that we collect on passengers can help governments to identify risks”. It must be pointed out that a number of freight forwarders and express majors have been cooperating and coordinating with governments to ensure safe carriage of cargo. The IATA chief, however, added that no government should bring about changes in security procedures that could have long-term consequences for the industry. Bisignani was not alone. Veterans of the air cargo sector said that knee-jerk reactions to the printer bomb episode would jeopardize international trade. In fact, if shipments were banned from belly-holds, global commerce would come to a halt, said Emirates SkyCargo’s Ram
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Courtesy: www.english.aljazeera.net
DEADLY: The printer bomb from Yemen.
Menen at a panel discussion at the recent TIACA meet in Amsterdam. He was quoted as saying: “Sanity will prevail and a ban of cargo carriage on passenger aircraft will not happen.” His advice: set universal standards to secure air freight. In fact, IATA’s ‘secured freight’ project — instituting checks and controls of every piece of cargo right from the shipper to the final consignee — was a move in the right direction and if it was globally accepted, it would be a huge step forward. Though many governments have agreed to hammer out global standards along with the International Civil Aviation Organisation for collecting information about cargo, the process is not followed. The IATA chief, for example, has often pointed out that there is no government-certified technology to screen standard-size pallets and large items. Along with
“We are much more secure than in 2001 (when 9/11 happened), but there is room for improvement.” —Giovanni Bisignani Bisignani, US’s Transportation Security Administration believes that one of the biggest challenges it has been facing is attaining visibility of other country’s security programmes. It is believed that for countries with a non-standard data requirement, it will take about $1 million to build
new systems. According to IATA, adding just one nonstandard element to data collection is a $50,000 system cost. Bisignani specially mentioned India when he said that new data requirements “consume money and resources, but none improve security or border control”. The challenge, he said, was “to work with governments to implement harmonised standards”. On its part, our airports have been on 100 per cent screening mode for a long time. The use of sniffer dogs that was discontinued sometime ago, according to reports, would be restarted. But as always, infrastructure — or rather the lack of it — has been the main obstacle — even for such a sensitive subject as security. The major airports are short of X-ray machines for cargo screening. The Delhi airport, for example, has 20 X-ray machines. Result: shipments tend to pile up and causes delays. As a consequence, many tend to move towards a less time-consuming screening technique that cuts out the use of X-ray machines. How effective that is only time will tell but experts believe that the move is risky. It is reliably learnt that the civil aviation department is looking closely at RASCargO, a technique that is sold by a subsidiary of
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ICTS Europe and is used for cargo screening in Great Britain and France. The technique, according to experts, is the best way to clear outsize cargo, thereby over-riding the problem caused by items that cannot be X-rayed or hand — searched. The process entails taking an air sample from the item to be screened. This is done by drawing air from cargo trucks or pallets to specially designed filters. Each of the filters is sniffed by trained dogs for even the minutest traces of explosives, drugs and other material. The samples are then analysed and if any indications exist, the pallet is stopped. For a country like India, where each tonne of cargo costs around `6000 to X-ray, the RASCargO technique would be certainly cheaper. While it is almost impossible to check every item of freight moving because the volumes are high, there has been talk that like the express industry’s track and trace system, the whole freight industry could start using it to find out what it is receiving in the consignments. To that Hinedi mentioned that it would not be fair to “speculate on what should or shouldn’t be done”. FedEx’s security system, he said, “is effective and we continue to make security a priority”.
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CARGO
Start-up banks on
rising India
High growth volumes have not only spurred the cargo industry to spread wings but have also prompted entrepreneurs to launch their own logistics outfits. Among the handful who have taken the brave step forward is Sesh Kulkarni. TIRTHANKAR GHOSH met the entrepreneur.
T
he resurgence in the air cargo market is seeing a lot of movement. While new services are starting and acquisitions are taking place. To top it all, new big ticket start-ups are also happening. One such is the move by Bengaluru-based Sesh Kulkarni. The former President of UT Worldwide, and a prominent member of the Bengaluru Air Cargo Club (BACC), Kulkarni has launched UFM. Primarily a freight forwarding outfit, UFM has major plans to move into the big leagues. To begin with, the initiative, barely a few months old, has clearly defined values and beliefs. Talking to C RUISING H EIGHTS , Kulkarni pointed out that UFM believes in customer satisfaction and that will come from the manifestation of UFM’s core delivery strength: “The experience of it all.”
This belief in adhering to customer experiences beyond just mere verbal assurance would be translated into a visible edge for UFM’s customers. With this in mind, Kulkarni would like to build people skills, processes and systems around client need and requirement. When questioned about the timing of the launch of UFM — considering the fact that there are many who have been struggling to keep their heads out of water — Kulkarni exuded confidence that the timing
of UFM stepping into the Indian market was perfect. “The investors in UFM, our leadership teams in the company and I are completely convinced that this is the right time to have launched UFM. In fact, we think this is the time to be Indian.” He pointed out that in 1991-92, India had the first wave of industrialisation, which lasted for 15 years till the global meltdown slowed it a bit. The first wave put India on the map. Now India is on the verge of second wave, and this time, the world is set up in
ALL SET FOR THE WORLD: UFM has ventured into all forms of transport to service customers around the world.
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India. “We are very excited with the timing,” he said. He had his reasons: “We do think that the centre of trade and commerce is shifting to India and China. India will have a big say and Indian companies will have bigger role to play in the years to come.” Confident that the next big wave of globalisation in various spaces will be driven by India and fellow-Indians, Kulkarni and his team are excited about the possibilities and, at this stage, he cautioned that it would be premature to talk too much at this point, “but we do aspire to be present globally and with the right resources, infrastructure and business, that will be very much a possibility. As examples, he said, pharma, automotive and IT companies have already set the tone and shown the way. All UFM needed to do was follow. The plans then, for the next couple of years, have been chalked out in detail. Kulkarni stressed upon the word “aggressive”. He also mentioned: “We would like to be a pan-India operation in the next few months. We currently operate in Bengaluru and Delhi and our offices in Chennai, Hyderabad and Mumbai will be functional in 60-90 days.” But UFM’s sights are
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not only on India. It seeks to be an Indian global organisation. Said Kulkarni, “We do foresee that the logistics space is going to be a major space and the next wave of growth and visibility for this country is going to be in this space. Everybody starting from people in the remotest part of the world to most throbbing business centres like London, New York and Los Angeles want to be part of this action: India.” With such focus and attention, he said, it was imperative that in the coming years logistics would get its due space and recognition — both with industries and with the government. Looking at the Indian urbanisation index, that is pegged at 15 per cent growth per annum, “for the next 10 years we see a major role for logistics and logistics companies”, he said. Unfazed about the lack of infrastructure that is a common complaint from most aviation and cargo stakeholders, UFM and its management are convinced that “we are at the right place, at the right time with right infrastructure. Our ERP is very dynamic and completely webenabled and we are hosted on a cloud environment which allows us to keep our costs in check, unlike many
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Sesh Kulkarni
“We do foresee that the logistics space is going to be a major space and the next wave of growth and visibility for this country is going to be in this space.”
who still work on a serverbased environment. We have just finalised a very robust training module which allows us to train young graduates passing out of the college in this space and also bring to table the latest knowhow and best practices for our teams”. In terms of people, we are a 40-people organisation today and in just about 60 days we should be close to 100+ soon. With regard to revenues, our plan is to be a ‘100-crore company by the third year”. IT was one thing but shipments need to move and for that the country’s infrastructure was still way behind Europe or the US. Kulkarni pooh-poohed the poor infrastructure. He pointed out:
“Infrastructure in India is only getting better and we are excited about it. It is not important for us to be aligned with what Europe and America are. What is important is the consciousness to improve and get better.” He was convinced that things were moving in the right direction. Having served in various associations like the Confederation of Indian Industry (CII), the American Chamber of Commerce in India (AMCHAM — India) and a few others, “I see a very positive inclination to develop on part of many in the political arena. Hence, our infrastructure has to go only one way i.e., North and that is good enough!” Kulkarni knows what he is talking about. He has diagnosed what the major
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struggles for organisations like UFM are that in turn make them into failures: ¾ They are not in sync with global development, beliefs and practices; ¾ They are not clientcentric; ¾ Their IT infrastructure is not enabled to leverage the changing landscape keeping in tune to the demand for information and visibility; and, ¾ They are asset heavy. Simply put, organisations that are not aligned positively to tackle the struggles will fail. As for UFM, it has a lot of confidence on its employees. Kulkarni said: “Our Employee Stock Ownership Plan (ESOP) module is very robust and in many ways it is the first of its kind in the logistics space… We firmly believe that it is important to create wealth not just for promoters, but for the teams too, that work on building the business and company.” He went on to point out: “Over the last 20 years in the business, we have learnt two things: What to do and what not to do.” Sesh Kulkarni has brought these lessons to the table at UFM and is confident that “we will have a story to tell”.
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COLUMN/CARGO
The case for all-cargo airports Quite some time ago, the Civil Aviation Ministry framed a policy for development of cargo-only airports at several key locations in the country. Before we take lessons from Europe, it would be worthwhile to consider the challenges, writes D J Ghosh.
T The dilemma for cargo airports is that to attract a commercial carrier, they need a strong forwarder community. Conversely, to bring in the forwarder community, you need commercial air service; the classic chicken and egg scenario.
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he Random House dictionary defines ‘dedicated’ as “devoted wholly and earnestly to one single purpose”. In the case of ‘dedicated all-cargo airports’ this dedication refers to the airports’ single-minded devotion to one purpose alone; the movement of cargo by air, and the solicitation and retention of all the key players who facilitate this singular purpose. Why do we need ‘dedicated’ cargo airports, which cater exclusively to freighter aircraft? Why can’t air cargo businesses continue to flow through mainline passenger airports? To answer this question, one needs to understand that air cargo is no longer a stepchild of the passenger business. As recently as 2008, global air cargo revenue topped $80 billion, and while a significant portion of this business is still carried in the bellies of passenger aircraft, dedicated freighter aircraft and freighter operators are here to stay and are rapidly increasing their share and providing the trade with more specialised ‘main deck’ offerings. ‘Dedicated cargo’ airlines operate on a very different business model from that of their passenger counterparts. Outside of the higher-priced ‘integrated’ cargo airlines like FedEx, UPS and DHL, most freighter operators transport general cargo with very little pricing power. In this business, it is the freight forwarder or cargo consolidator who dictates the terms, playing one airline against the other as the price for offering them consolidated shipments in bulk. Saddled with huge aircraft investments, general cargo airlines look for every opportunity to shave costs. In most cases, they generate revenue on only one leg of their trips, coming back empty on the return leg. Thus, when non-hub airports, located far from metropolitan cities, dangle incentives such as lower landing fees and ground handling charges, often half that of their mainline counterparts, the temptation to cut expenses is often too difficult to resist. Unlike passengers who need to travel through major passenger hubs, cargo can quite easily bypass these hubs and land at remote loca-
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tions. It is this phenomenon that has allowed defunct and far-flung military bases in Western Europe and North America to re-invent themselves as cargo airports, thus giving them a new lease of life, and in the process providing muchneeded income and employment to their rural communities. Cargo aircraft also generally arrive at night. With very few people living in the vicinity of these rural airports, they can be operated 24 hours a day, seven days a week, with no ban on night traffic and virtually none of the noise restrictions, which have driven cargo flights away from airports like Brussels, and which imminently threaten airports like Frankfurt. The fact that they are in the middle of nowhere allows them to grow exponentially and inexpensively, with very little legal interference and tremendous local support. So what do you need to be a ‘cargo friendly’ airport? For the purpose of this article, we polled four European airports: Frankfurt Hahn in Germany, Paris Vatry and Chateauroux in France, and Ostend airport in Belgium. There is a common thread that binds all of these airports. They all boast of runways exceeding 3,000 metres, are all capable of handling the largest freighter types, all have leading edge flight navigation systems, outstanding infrastructure, excellent road connections, dedicated cargo and ground handling capabilities, and most important, significantly lower landing, cargo handling and warehousing costs at their more rural locations. Since most of them cater to the perishable trade, including flowers, fruits and vegetables, they have invested heavily in special cold storage facilities. With strong political support from their local governments and plenty of room to grow, they look forward to a bright future. However, despite all of this, the numbers for all-cargo airports have not added up. None of them are in the big league in cargo like their passenger counterparts in Hong Kong, New York or Seoul, where cargo throughput can easily exceed one million tonnes each year. Dedicated cargo airports would be lucky to exceed a throughput of 100,000 tonnes a year,
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with most operating in the 40-100,000 tonnes per annum range. Their business model is still shaky, and the entry or departure of even one cargo carrier can make or break them. Paris Vatry Airport, which clocked 41,203 tonnes of cargo in 2008, saw this figure drop to 23,000 tonnes in 2009 with the departure of a major African-based airline. While cargo airports have had notched up some successes with the perishables trade, most other general cargoes have stayed away. Many survive by leasing out warehousing space or positioning themselves as logistics hubs, which have not really generated any significant air cargo traffic. Others are actually soliciting passenger traffic to stay afloat and have opened their doors to ‘low-cost’ passenger services. There is still no overarching template for a traditional cargo airline to abandon a hub airport in favour of a more rural cargo airport, notwithstanding lower landing and ground handling fees and plenty of cheap real estate to grow a business. Conventional carriers, transporting general cargo, still need to be in airports where they can benefit from other carriers, using the network to move cargo, as well as a pool of surface transportation providers with national connections. The dilemma for cargo airports is that to attract a commercial carrier, they need a strong forwarder community. Conversely, to bring in the forwarder community, you need commercial air service; the classic chicken and egg scenario. Forwarders, who grew big at hub airports when all cargo moved in passenger bellies, have already committed major investments in manpower, warehousing space and equipment at these gateway airports and are very reluctant to move, even though more and more cargo now moves on dedicated freighters. Since over 80 per cent of all world air cargo is controlled by the 20 top freight forwarders, they are the ones that hold the power to unleash the new dynamics for this business. Unless they are incentivised to move to cargo airports, this game will never change. This challenge has many cargo airport executives scratching their heads for a way to get the first big forwarder to move. One notable success story is Huntsville, a U S airport located in Huntsville, Alabama, which boasts of regular B747 freighter flights operated by Atlas Air on behalf of global forwarder Panalpina, as part of their owner controlled network. However, even though Panalpina has persevered with this operation at Huntsville, the airport does not seem to have been successful in attracting any other major forwarders or cargo operators. So what will it take to put dedicated cargo airports on the global map of the air cargo world? We believe that the answer is ‘niche marketing’. Since large forwarders are reluctant to move, cargo airports need to set their sights a little lower and target smaller forwarders who deal in specialised products that need to move on
Paris Vatry airport is one of the top all-cargo hubs of Europe.
special ‘purpose-built’ freighter aircraft. They need to customise all their offerings, including ground handling, temperaturecontrolled warehousing and airport access, to cater to these specialised trades. Rather than adopting a general approach to cargo, they need to concentrate on specific products and industries and develop ‘core competencies’ in each of them. They then need to promote branding and product differentiation to achieve market domination in these sectors. One such category is pharmaceuticals and life sciences, which requires major investments in both training and infrastructure to ensure 100 per cent integrity of the final product. Cargo airports will thus have to concentrate on quality rather than quantity till such time as they gain the critical mass to attract the attention of the large forwarders. The persistence and stamina that it will take to prove the business case for such airports will separate the men from the boys. During this time, they must educate themselves and become proficient in the dynamics and unique characteristics of each and every type of cargo by attending trade and industry forums dedicated to them. Specialisation and product differentiation must become their new mantra. The world must learn that every type of cargo deserves special treatment. While all of this happens, more stringent bans on night flying and tighter security regulations for cargo products will drive more cargo flights from passenger hubs to dedicated cargo airports. Indeed, as Joerg Schumacher, Managing Director of Frankfurt Hahn Airport (a cargo airport 75 miles from Frankfurt) observes: “With the discussion on the ban of night flights at Frankfurt Main in full swing, international interest in our flight capacities is growing.” Indeed, history is replete with examples of opportunity being created out of adversity. While cargo airports work at perfecting their own game plans, excessive regulation at passenger airports might become a new tipping point for revival in the fortunes of dedicated cargo airports. (The author is President, American Friendship World Air Cargo Corporation. This article first appeared in International Airport Review.)
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Cargo airports will have to concentrate on quality rather than quantity till such time as they gain the critical mass to attract the attention of large forwarders. The persistence and stamina that it will take to prove the business case for such airports will separate the men from the boys.
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CARGO JOTTINGS Carriers face EU music
The fines were actually expected a year THE European Commission in Brussels has ago at which time the airlines had claimed an fined eleven cargo airlines €799,445,000 inability to pay the fines due to the heavy million for building a global cartel. Carriers losses incurred during the global economic affected are Air Canada, Air France-KLM, crisis. British Airways, Cathay Pacific, Cargolux, Air France-KLM topped the list, having Japan Airlines, LAN Airlines, Martinair, been fined €310 million, followed by British Scandinavian Airlines, Singapore Airlines and Airways (€104 m), Cargolux (€79.9 m), Qantas. Singapore Airlines (€74.8 m), and SAS Brussels claims the collective manipulation (€70.2 m). Joaquín Almunia of kerosene and security surcharges by the Lufthansa and Swiss received full mentioned carriers between 1999 and 2006 was done immunity under the Commission Leniency Program as “without conceding any discounts”. “It is deplorable that they were the first to provide “valuable information” so many major airlines coordinated their pricing to the regarding the cartel. Incidentally, the EU Commission's detriment of European businesses and European fines fall short of penalties imposed by the US on 18 consumers,” stated Spanish-born EU Commissioner cargo carriers for price fixing amounting to €1.15 billion Joaquín Almunia. ($1.6 billion).
Lufthansa Cargo launches new website NINE months after the first-ever air cargo flight took place in the USA on November 7, 1910, airfreight was born in Germany. On August 19, 1911, a shipment of newspapers was flown from Berlin-Johannisthal to Frankfurt on the Oder. The airfreight industry has evolved in recent years to become the engine of the world economy. The international division of labour and the global networking of business and commerce would be inconceivable without airfreight, observed Lufthansa Cargo CEO and Chairman Carsten Spohr. But airfreight not only networks business and industrial centres, he said. “Above all, airfreight also connects people. The 1948/49 Berlin airlift or the relief flights to Haiti and Pakistan recently are eminent examples of the existential importance of air cargo.” In an effort to highlight the changes in airfreight through these 100 years, Lufthansa Cargo has gone in for a total makeover — at least its website has. The home page (www.lufthansa-cargo.com) is reappearing in a bright new look after an Internet relaunch on October 29. Totally re-styled, the website portrays the company as emotional, innovative and customer-focussed in its new online presence. With its newly re-designed international website, the cargo carrier offers web visitors an entirely fresh approach to the company and its services. Website-users, after just a few navigation steps, obtain an overview of the diversity of Lufthansa Cargo and the fascinating world of the airfreight industry. “We want users to experience the company hands-on and communicate externally the emotionality of our business activities,” emphasised Nils Haupt, Lufthansa Cargo’s Director of Communications.
Korean Air's strategic move In a strategic move to augment its ambitious growth plans, Korean Air joined hands with Acumen Overseas Pvt Ltd to provide full range of GSA services for both cargo and passenger divisions of Korean Air for the whole of India. “Korean Air operates passenger flights to Seoul from Mumbai, along with
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freighter operations from Delhi, Chennai and Mumbai. We have elaborate plans which will unfold in the near future" said Jin Kwang Kim, General Manager-India of Korean Airlines. Korean Air has placed orders for 45 passenger aircraft that includes 10 of Airbus's super-jumbo A380 and 10 Boeing 787 Dreamliners. The carrier's fleet comprises 105 modern passenger and 27 cargo planes. As one of the world's largest commercial airline cargo operator, the carrier has 12 cargo aircraft on order. “We are honored to be associated with Korean Air which is committed to the Indian market and has a great presence worldwide,” said Pukhraj S Chug, Managing Director of Acumen after signing the agreement.
Uday Dholakia is cargo ambassador for Asian markets UDAY Dholakia has recently been appointed Birmingham Airport’s brand ambassador for Asian markets. Dholakia is a senior partner with a Midlands-based consulting firm with over two decades of experience of brand development and international marketing, in addition to direct experience of route and cargo development and launching of new routes. Paul Kehoe, CEO of Birmingham Airport, said, “We want to Uday Dholakia embrace the fact that we can connect people to over 400 different destinations worldwide and want people to feel proud and excited about the opportunities that lie ahead... Uday’s extensive knowledge of the Asian markets and route and cargo networks in the Middle East and the Indian subcontinent will be integral to tempt people away from the Heathrow problem.” Dholakia pointed out that there are around eight million people living within an hour’s drive of the airport but less than 40 per cent of this demand uses Birmingham. “We are determined to increase the links with the Indian subcontinent, as a truly global airport,” said Uday Dholakia.
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Emirates is No. 1 cargo carrier
P S Bedi ties up with Israel's Maman
EMIRATES SkyCargo has been named ‘Air Cargo Carrier of the Year’ at the 2010 IFW Awards. The cargo division of Emirates Airline beat off competition from five other carriers including British Airways, Lufthansa and American Airlines to win the award, which is voted by the readers of the online cargo journal International Freighting Weekly. This is the fifth time the cargo carrier has won the award, having previously received the honour in 2008, 2006, 2005 and 2004. “To win this prestigious award for a fifth time is a great honour and a powerful endorsement of our service,” said Ram Menen, Emirates’ Divisional Senior Vice President, Cargo. The award comes as Emirates SkyCargo continues to increase its network of destinations across the globe and has recently commenced freighter services to Almaty, Bagram (Afghanistan) and São Paulo. The carrier’s network now stands at 108 cities in 65 countries, comprising 25 dedicated freighter destinations and 98 points served by aircraft with belly-hold cargo capacity.
THE 35-year-old Delhi-based logistics expert, P S Bedi Group, has forged an alliance with Maman Group of Israel and as a first step forayed into records management and archiving of documents, in collaboration with Maman Group’s subsidiary, Archive 2000 Ltd. The venture, PSBedi Archive 2000, will bring to India the expertise of Archive 2000 for assisting banks, insurance companies, hospitals, corporates, government bodies, etc. to preserve critical and sensitive documents for long periods while maintaining reliability and confidentiality. R S Bedi, CEO of P S Bedi Group, pointed out that the archiving of documents was the first pilot project of the joint
Domestic air cargo operators to meet THE Domestic Air Cargo Agents Association of India (DACAAI) will be holding its second national convention at Delhi from February 14 to 16, 2011. Barely a couple of years old, DACAAI has been urging the government to take steps that would make the domestic cargo industry stronger. In its first convention at Mumbai early this year, President Arvind Nayak had pointed out that DACAAI would be a forum for interaction of all stakeholders of air cargo industry, contributing to the overall growth of the economy. The domestic air cargo industry is highly unorganised even though it accounts for about 40 per cent of all air cargo in the country and has been growing at a rate of 20 per cent every year. While the first convention saw participation by more than 40 members from the major airports in India, the second meet is likely to be addressed by industry stakeholders both from the government and the private sectors.
P S Bedi Group CEO R S Bedi (third from left) with Israel’s Ambassador to India Mark Sofer and Opher Linchevski, CEO of Maman Group, photographed during the launch of the joint venture recently.
venture with Maman Group. Major investments have been planned in the Indian logistics industry through a nationwide network of warehouses and distribution centres. “In the next phase we intend to get into cargo terminal handling, third party logistics and cold chain logistics, which has a huge scope in India due to severe shortage of cold chain facilities. The current project of records management and archiving is only the first pilot project and kick-off of the JV.” Opher Linchevski, CEO of Maman Group, stated that his company had entered into a joint venture since efficient logistics was the core to the success of well-maintained record management centres.
Air cargo blogger extraordinary
marvellous figures of the Wright brothers and WHOEVER said that those working in the air the courageous young pilot, who cargo industry had little or no idea of commandeered this strange new flying literature or an appreciation of the finer things machine through the morning skies… there in life would be surprised when they read stands a man who played a part in the advent Blogistics — the blog by the Swiss WorldCargo of aviation that can hardly be overestimated.” chief Oliver Evans. It is at once lively, He mentions Max Morehouse, “the merchant entertaining and, of course, written in a style who by a stroke of genius devised the plan to that would make authors sit up and take note. use the legendary Model B as a means to Writing on November 11, 2010, Evans transport and promote his valuable recounts the birth of air cargo when on merchandise”. Oliver Evans November 7, 1910, “money changed hands for the Evans' story has a message: today, as in all other transportation of goods by airplane for the first time ever. times, there are people who constantly teach us to live in 200 pounds of silk were entrusted to one of those daring the future, to see the amazing possibilities of new new flying machines only recently invented by Orville and technologies, to envision things that are just not there yet. Wilbur Wright, and safely delivered after a one-hour, 60He ends his blog with a hope: “If we bring just a little bit mile flight across the North-Eastern USA, an event that of their spirit into our industry there simply is no reason will be duly celebrated this month”. why the next hundred years of air cargo should not be as He goes on to point out: “Half-hidden behind the truly glorious and successful as the first.”
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GLOBETROTTING
No checking, please! WITH the busy holiday travel season and with the virtual security threat from Al Qaeda, US Homeland Security made it clear that new full-body scan checks would become the routine. But a software engineer was not allowed to board a flight when he refused the scanning, as it revealed an image of what’s under his clothes. He even refused a groin check. Homeland Security
But Liege is not Beauvais officials defended the heightened airport security screening measures but said they would consider adjustments. “This is all being done as a process to make sure the travelling public is safe,” said a security official, adding that the scans did not pose health risks and that privacy safeguards had been adopted to prevent the images from being saved or transmitted.
JOURNEY on air did not turn pleasurable when a plane carrying passengers went to a destination other than the one it was supposed to. More than 100 Ryanair passengers spent four hours in a dark cabin without food and water when the plane was diverted from France to Belgium provoking the ire of passengers. The passengers were mostly French tourists who were supposed to land near Paris after returning from holidays in Morocco. The passengers
Bravo! THE quick reaction of an alert flight attendant saved a woman from sure death. The incident occurred when Mary Kay Stupfel went for shopping and suddenly went into cardiac arrest. It was then that flight attendant Jacqueline Countryman began chest compressions at the grocery store, while fire fighters arrived and brought her back to life. The flight attendant will be honoured with a Citizen Life Saving Award for saving Stupfel’s life.
Compassionate cabin crew
Tattoo trouble DAM PEARSON was questioned on a Delta flight over his ‘atom bomb’ tattoo. A Los Angeles food stylist, Pearson was settling into his seat aboard a Delta Airlines flight at Los Angeles International Airport, when a flight attendant tapped him on the shoulder and asked him to come to the front of the plane. His first thought: “I’m getting an upgrade!” But that was not to be! Questioned by the captain and the flight attendant about his tatoo, Pearson said it referred to a childhood nickname. After answering a few
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questions, Pearson, who is a frequent Delta passenger and has flown more than 228,000 kilometres with the airline this year, was allowed to return to his seat. Before the plane took off, he posted on his Twitter account: “Just pulled off Delta flight, passenger said I was suspicious looking due to my tattoos.” His tweet had exploded on the social media service by the time he landed. It was “retweeted” by many in Los Angeles’s close-knit food world, where Pearson is well known. In spite of the ignominy, Adam is still willing to fly on the airlines. CRUISING HEIGHTS December 2010
HOW worthwhile can anyone make use of a day-off? The cabin crew of SriLankan Airlines demonstrated their compassion and humane side when they spent their day off constructing a Children’s Home for tsunami-affected orphans. Travelling across the island on their day-offs, the crew members of the airline gathered support from the army and various organisations to make this project a success. The home is constructed on 9,000 square ft, which consists of a girl’s dormitory, a boy’s dormitory, a hall, a study, a library, and a large kitchen. The involvement of the Flight Attendants Union and the cabin crew in commu-
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Drunken capers
nity uplift projects in the Trincomalee District commenced in the immediate aftermath of the tsunami. In addition, they travelled to most parts of the island, which were affected, to physically help out, which snowballed into a project that later involved building 48 houses for those who had lost their homes.
And they lived happly ever after… IN a novel way to flout American marriage laws, the captain of a flight turned into a priest to sermonise a wedding — that too a gay wedding. When the passengers were fast asleep, two gay men tied the knot aboard a commercial flight in front of the captain. It all started as passengers disembarking from the overnight Virgin America Flight 28 from San Francisco to New York City began tweeting about the wedding. The plane, they wrote, had diverted over Canada while the captain officiated at a ceremony in the galley. At least, that was the story. But even as the romantic tale spread like wildfire across social media networks, the airline itself cast doubts on its veracity. “There was a wedding on my flight to New York!” wrote Matt Mullenweg, a San Francisco entrepreneur, who developed the Word Press blogging software. “The captain flew briefly over Canadian airspace so two gentlemen could marry.” A few passengers indicated they hadn’t seen the ceremony themselves, but that a member of the crew had announced it over the loudspeaker and the cabin burst into applause.
WHAT happens when a drunken woman boards a flight? She can prove to be dangerous. A British holiday jet had to be diverted en route to the Caribbean after an allegedly drunken woman passenger began shouting incoherently and also attacked the cabin crew. Staff on the
Thomson Airways Boeing 767 flight from Manchester had to put restraints on the woman. The plane, which was heading to the Dominican Republic with 260 passengers aboard, had to divert to Bermuda where police met the flight and removed the woman.
Illustrations by Rajeev Kumar
said the flight had left Fes, Morocco, three hours late but had been unable to land in Beauvais, France, because the airport there had closed. The plane later landed in Liege, in southern Belgium, instead. The passengers were furious when there was no water and the toilets were locked. Among the passengers was a two-month-old baby. Later, the passengers refused to come out even after the crew had left the aircraft. After several hours of negotiations, officials convinced them to leave the plane and wait inside the airport for buses that took them to their original destination.
Regardless of the story’s dubiousness, it continued making the rounds online and was eventually picked up by major media outlets.
Bumpy ride on a flight HAVE you ever heard of going on a free bumpy flight? Yes, it’s true that one of the passengers, who was on board a Westjet flight, had ended up hitting her head when the flight hit some heavy turbulence. Jenelle Hynes, airport communications coordinator for Kelowna International Airport, confirmed that Airport, Operations Specialists attended a medical call for the arriving flight, though the injury was not severe.
Crime turns into contest CAN you believe that an act of criminal mischief did not land Steven Slater in jail but actually earned him a new job? The former flight attendant became a cult hero after his actions on board a JetBlue plane. In August, an argument took place between Steven Slater and a rude passenger. After landing at JFK, he went on the public address system, swore at the passenger who he claimed had treated him rudely, grabbed a beer and exited via an emergency chute. This infamous leap by Steven earned him a new job: of judging travellers’ “craziest” stories. Slater, who as a result of his actions, lost his job and wound up in court, will be a judge in the “Mile High Text Club” contest, which invites travellers to SMS their most outrageous travel stories. The job is part of a deal with a mobile communications company that allows in-flight texting on wi-fi equipped planes.
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DOMESTIC AIRLINES
Jet’s transition to DIAL’s T3 JET Airways along with its low-cost arms — JetLite and Jet Konnect — has successfully shifted its domestic operations to the swanky Terminal 3 of the Delhi’s Indira Gandhi International Airport. Nikos Kardassis, CEO, Jet Airways, said, “The smooth and successful migration of the flight operations to DIAL’s T3 has been possible due to the hard work, dedication, commitment, meticulous planning and efficient execution by all the members of our team. I would also like to thank senior officials from the Ministry of Civil Aviation, the DGCA and DIAL for their involvement, support and guidance in making this a successful transition... Going forward it will help Jet Airways transform Delhi into a critical international transit hub and I am certain that our guests will significantly benefit from the world-class infrastructure of DIAL’s Terminal 3.” For the convenience of its guests, the airline group manned over 32 integrated check-in counters, located at islands C and D, for both domestic and international travel, significantly reducing check-in time for the airline’s guests. All check-in counters and boarding gates for the domestic services close 45 minutes and 25 minutes prior to departure respectively. Italian getaways with Jet: Jet Airways has introduced exclusive Italian holiday packages through JetEscapes, the airline’s range of domestic and international travel packages. Designed to provide guests with an enchanting Italian travel experience, the JetEscapes packages will coincide with the airline’s launch of a daily non-stop service to Milan commencing December 5, 2010. ITALIAN EXPERIENCE: Jet is offering its The JetEscapes ‘Tour passengers an opportunity to explore a of Milan’ packages will hitherto unknown side of Italy.
Kingfisher to launch 22 new flights this winter WITH an aim to provide seamless connectivity to its passengers, Kingfisher Airlines has decided to operate 22 more flights this winter and has added four new routes on its network, namely Varanasi-Khajuraho, Udaipur-Jaipur, Jaipur-Jodhpur and New Delhi-Agra. Apart from it, the airline has also announced one each additional flights on the Mumbai-Ahmedabad, New DelhiLucknow and Mumbai-New Delhi sectors. Kingfisher has also decided to reinstate its Mumbai-KolkataMumbai flight, while New Delhi-Indore-New Delhi flight would provide better connectivity to Lucknow, Srinagar, Ludhiana, Dehradun, Amritsar and Nagpur. In addition, two additional flights
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offer guests a range of six attractively priced holiday packages to Italy, including such famed and historic destinations as Milan, Rome, Venice and Lake Como. JetEscapes Italy packages have been priced competitively with three price options starting at an attractive offer price of `45,975, which includes Jet Airways’ return Economy air tickets to Milan, accommodation at a three star hotel with breakfast, airport/local transfers, travel insurance and sight-seeing. In addition to which JetPrivilege members may also avail of five JP miles on every `100 spent. Jet’s fan following: Jet Airways has become the first Indian, and among the top five carriers in Asia, to add over one lakh fans on Facebook. The airline will mark the crossing of this important milestone, which was achieved in less than a year, with the launch of an exciting new Jet to Milan contest with immediate effect, until December 14, 2010, on Facebook at www.facebook.com/ jetairways, to celebrate the launch of its maiden service to Italy. As part of the contest, guests must upload an image of any destination in Italy, tell us a little bit about the place in not more than 200 characters and answer three simple questions on Jet Airways’ new services to Milan. A lucky winner will win return couple tickets, on Jet Airways’ daily, direct service to Milan from Delhi. For your consideration, travel needs to be undertaken before March 31, 2011. From Delhi/Mumbai to Colombo: In order to enhance connectivity, Jet has introduced daily direct flights to Colombo from Mumbai and Delhi. The commencement of these two new flights between India and Sri Lanka, is in addition to the existing double daily Chennai-Colombo-Chennai services, which were launched in 2004. The airline will deploy the state-of-the-art Boeing 737-800 aircraft, offering eight Premier and 162 Economy Class seats and seamless connectivity onto several destinations across North America, Europe, as well as destinations across the Gulf, Middle East and Far East on the Jet Airways network.
between Mumbai and Ahmedabad would allow the travellers to take their connecting flights to London, Bangkok, Singapore, Hong Kong, Coimbatore, Goa, Bengaluru, Kochi and Thiruvananthapuram. Manoj Chacko, Executive Vice President, Commercial, Kingfisher Airlines, said, “These new services will offer easy connectivity to popular winter destinations which feature prominently on the tourist circuit. Besides, the launch of additional frequencies on existing routes will mean that Kingfisher Airlines will offer far more connectivity and multiple options to travellers on these routes both on our domestic and international route network.”
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IndiGo spreads its wings in the East
IN an endeavour to strengthen its existing route network in East India, IndiGo has launched three new flights, connecting the eastern hub of Kolkata to Agartala, Ahmedabad and Jaipur. The airline operates its third non-stop daily flight on the KolkataAgartala route, while second non-stop daily flights to Jaipur and three daily on Ahmedabad route. The new flights will provide increased frequencies on the routes and offer greater travel options for its customers. Speaking on the addition of new routes to its services, Aditya Ghosh, President, IndiGo, said, “Kolkata is a very important
destination for us. I am humbled by the support that we have got from this market. Despite the fact that we are the youngest airline, the people of Kolkata as well as the entire eastern region have made us the fastest-growing airline. IndiGo is also reinforcing its commitment to on-time performance by announcing new frequencies from Kolkata to Ahmedabad, Agartala and Jaipur. It is our constant endeavour to provide greater flexibility of choice for our customers, and we continue to offer them an on-time, hassle-free and affordable experience.” With this expansion, the airline now serves 207 daily flights connecting 22 destinations across the nation. Good karma, indeed!: Taking the joy of celebrating Children’s Day to a more meaningful level, IndiGo has launched its ‘Good Karma’ campaign, in partnership with an NGO ‘Save the Children’. The special initiative, for lesser privileged children, will honour the spirit of childhood, wherein all 6E passengers will have the opportunity to contribute to their welfare, and collectively help them provide good basic necessities of life, including quality education, protection, and health. This programme is purely voluntary for IndiGo passengers, who can contribute `10 by simply visiting the ticket page on the airline’s website www.goindigo.in and ticking on the box called ‘Good Karma’. Passengers’ contribution will be added to the total fare of the ticket, and will be given to the NGO.
Delhi Duty Free launches website DELHI Duty Free Services Pvt Ltd (DDFS), at T3 has launched its website — www.delhidutyfree.co.in. The website features a wide range of duty free products across categories such as perfumes, confectionery, cosmetics, liquor, tobacco and destination along with interesting information on speciality concepts — Uisge Beatha and walk-in Humidor. The Uisge Beatha is an innovative whisky concept developed to showcase malt whisky exclusively from Scotland. While, the walk-in Humidor is a concept to present the finest premium cigars from Cuba, Honduras and Dominican Republic to give cigars a specialist positioning and thus
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Children’s day out at BIAL BENGALURU International Airport Limited (BIAL) played host to 50 children from Kannamangala Government School. On the eve of Children’s Day, a special programme was put together by the Corporate Social Responsibility (CSR) team of the airport to engage and enthral the little ones with a quiz and a grand tour of the airport. Ashwathappa, a teacher at the school, commented, “While the airport tour was very well organised and educated the kids on how an airport works, the fun and games organised just for them kept them in high spirits through their special day. Accompanied by eight of our teachers and 15 volunteers from the airport, this is a day that they will cherish for a lifetime.” Aged between 10 and 15 years, the children hail from families of farmers. Most have watched with awe as aircraft soared above their houses but never have they seen where they landed or took off from. BIAL, in its active CSR programme, engages children from schools like these around the airport to give them a first-hand glimpse into a world unknown to them. “I always wave out to the aircraft in the sky, but today we actually got to see where they stand still. I hope to travel in one of these someday,” said Sangeeta, a 12-yearold from the school. With aspirations soaring, another child Mohan, said, “When I grow up, I will become a pilot and fly one of these aircraft!”
SMALL INTERVENTION, BIG CHANGE: BIAL filled with smiles on Children's Day, engaging little ones from a neighbouring school.
create the right ambience in which to purchase. Abhijit Das, Head of Marketing, Delhi Duty Free, said, “The idea behind launching the website was to provide travellers around the world an opportunity to browse through the extensive range of products available in our duty free shops at leisure, from the convenience of their homes, and to hence save them the time and last-minute hassle of browsing through products at the airport. We are sure travellers will find this feature extremely useful.” The website takes and extends the brand attribute throughout its design, contrasted by a sharp white background. Images are large, bright and colourful and used to compliment the contemporary look of the site. The website is designed in such a manner so as to ensure that users find relevant products and promotions with minimum clicks.
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INTERNATIONAL AIRLINES CX simplifies extra baggage charges CATHAY Pacific Airways (CX) has introduced a new and simplified method of calculating extra baggage charges for flights to all destinations in its network. The key element of the new system will be a switch from the current charging rate for extra baggage, which is based on ticket fares, to a system that is calculated in accordance with a structured system of travel zones. The main reason for the change is to simplify the handling of charges for extra baggage and special baggage. Now passengers can view a transparent and easy-to-understand grid of charges through the airline’s website, www.cathaypacific.com, and can calculate exactly what charges they will have to pay by referring to the zones in which their travel originates and ends.
BBC shows on BA flights BBC Worldwide, the commercial arm of the BBC, has secured a deal with British Airways (BA) to supply fresh new programming titles, presented in branded channel environments reflecting BBC Worldwide’s thematic channels, including BBC Entertainment, BBC Knowledge, BBC Lifestyle and CBeebies — the first-ever tailored pre-school channel for the airline. From this December, over 100 BA aircraft equipped with the airline’s in-flight entertainment service will feature the new channels and become home to critically acclaimed series such as Luther (BBC Entertainment), Celebrity Master Chef (BBC Lifestyle) and Top Gear (BBC Knowledge). While, CBeebies will appear as a bespoke channel, hosted by well-loved presenters Sid Sloane and Andy Day, and will show universal favourites in
Emirates boosts operations to Saudi Arabia EMIRATES will advance its existing operations in the Kingdom of Saudi Arabia with an additional 10 services per week to Riyadh and Jeddah, underscoring the increased economic ties between the UAE and Saudi Arabia. With a 71 per cent increase in operations and a 75 per cent increase in overall passenger capacity, the new services will further boost business and leisure trade between the two Arab nations. However, the service has already started to Riyadh with five additional services per week, taking its weekly service to 12 flights, while service to Jeddah will commence from January 2, 2011. The additional services to Riyadh will be serviced by an Airbus A330-200 with 12 First Class seats, 42 Business Class seats and 183 Economy Class seats. Jeddah will benefit from a second A380 service with capacity to seat 517 passengers in a three-class configuration. Emirates remains committed to the Saudi market with a total of 38 flights per week to four cites, including Riyadh, Jeddah, Dammam and Al Medinah al Munawarah. Bend it like Emirates: For football fans who missed the FIFA 2010 World Cup or those who just cannot get enough of the “beautiful game,”
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the Night Garden, Zingzillas, Charlie and Lola and Penelope K, by the way. Ian McDonough, SVP & GM EMEA, BBC Worldwide Channels, said, “As a company, we are committed to serving our international audiences with the best British content across a range of media platforms. This deal enables viewers to access some of their favourite BBC shows on BA aircraft as well as providing us with a valuable opportunity to extend the reach of our channel brands. The deal forms part of our wider channel strategy to provide content wherever, whenever and however they choose — even when they’re thousands of feet in the air.”
Qatar CEO honoured QATAR Airways CEO Akbar Al Baker has been recognised for his role in the airline’s long-term contribution to the economic growth of Qatar at the Leaders in Aviation Awards held at the Grand Hyatt Doha. The awards ceremony, hosted by Qatar’s Civil Aviation Authority, marked the beginning of this year’s Doha Aviation Summit. Chairman of Qatar Civil Aviation Authority Abdul Aziz Al Noaimi presented an award trophy to Al Baker during the evening’s proceedings. Al Baker was duly delighted to receive the recognition: “It is with pride that I serve my country to help develop a national airline that truly is Qatar’s first global brand. Thirteen years ago, I was given a mandate to create a national airline with one
Emirates is offering competitively priced packages for the AFC Asian Cup Qatar 2011. The tournament, which takes place in Doha from January 7 to 29, 2011, will see 16 of Asia’s top national teams compete for the AFC Asian Cup 2011, FOOTBALL ACTION: Emirates’s sporting including the United spirit will take football fans to AFC Asian Cup Qatar 2011 in Doha. Arab Emirates, as well as Korea Republic, Japan and Australia, who played in the FIFA 2010 World Cup tournament. Russell Sheldon, Senior Vice President, Network Passenger Sales Development, Emirates Airline, said, “The packages have been designed so that football fans living in the UAE and the rest of the Gulf region can fly to Doha, watch their favourite team play, and fly back the next morning.” Packages can be purchased through travel agents and Emirates offices worldwide, and they include a choice of hotels, as well as a match ticket. Participating hotels in Doha are La Villa Palace, Ayana Golden Coast Hotel, Movenpick Hotel and Ritz Carlton Hotel.
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goal — to be the best on the global stage. It has been a remarkable journey since 1997. Year-on-year, Qatar Airways has pushed the boundaries in the aviation THE MAN OF HONOUR: Qatar industry achieving what Airways CEO Akbar Al Baker (left) is many airlines have been presented with the award by Abdul Aziz Al Noaimi, Qatar’s Civil Aviation unable to do.” Authority Chairman. The awards ceremony was part of a welcome reception and networking dinner to start the second instalment of the Doha Aviation Summit, a three-day meeting that brought together senior executives from across the airline, airport and general aviation industries to discuss themes and topics relating to the region and the global industry as a whole.
Pioneering effort by Lufthansa LUFTHANSA and ET Now have launched a unique television series: ‘Pioneering Spirit — A Product of Lufthansa’, where pioneers of today will select pioneers of tomorrow. Shot on an elegant set modelled on a Lufthansa First Class Lounge, the television series comprises eight episodes. Each episode features one pioneer, who has blazed a new trail to write business history and this includes Dr Prathap Reddy, Founder, Apollo Hospital Group; Jagdish Khattar, CMD, Carnation India; Raman Roy, Founder, Quatrro; B S Nagesh, Vice Chairman, Shopper’s Stop; Vikram Bakshi, MD & JV Partner, McDonalds India (North & East); Anjan Chatterjee, Founder, Speciality Group of Restaurants; Rajeev Samant, Founder & CEO, Sula Vineyards; and, Shantanu Prakash, CMD, Educomp Solutions The show follows an interesting format divided into three distinct segments. The first showcases defining moments from the lives of the pioneers in an interview conducted by Shaili Chopra,
Dr Prathap Reddy Anjan Chatterjee Jagdish Khattar Rajeev Samant
B S Nagesh
Senior Editor and Primetime Anchor at ET Now. In the second, Shantanu Prakash Raman Roy Vikram Bakshi the pioneer reviews innovative business plans of three entrepreneurs selected out of hundreds for their pioneering spirit. In the third and final segment, the pioneer of today selects one among these as a “pioneer of tomorrow” to be rewarded with a free return ticket to Europe on Lufthansa Business Class and a coveted mentorship by The Indus Entrepreneurs (TiE), Knowledge Partners on the series, to help transform their business. Axel Hilgers, South Asia Director, Lufthansa, said, “Pioneering spirit is a core value at Lufthansa. The business legends and fresh entrepreneurial talent featured on the show reflect the amazing pioneering spirit that is the driving force of Indian entrepreneurship.” Entries to the programme are being invited through a simple onestep online registration process at a special microsite dedicated to the show at www.pioneeringspirit.in. Aspiring entrepreneurs can also log on to the Lufthansa India page on Facebook and upload their business models, for an additional chance to be voted the ‘Business Model of the week’ to win a Lufthansa gift hamper.
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Special eco-friendly coffee onboard! AS part of its complimentary onboard beverage service, American Airlines now offers Java City coffee to all its customers inflight. This special eco-friendly, handroasted coffee is 100 per cent Rainforest Alliance Certified, grown on sustainably managed farms. Rob Friedman, Vice President, Marketing, American Airlines, said, “We are committed to exploring greener options for all of our products, both inflight and on the ground, to enhance the travel experience for our loyal customers. Java City strikes the perfect balance by offering a high-quality, great-tasting, eco-friendly coffee.” Coffee onboard the airline is served in 10 ounce cups which are co-branded with Java City and the Rainforest Alliance logos in addition to the American brand. Java City uses a sustainably grown, Central American blend of 100 per cent Arabica Beans. The specialty coffee blend is Rainforest Alliance Certified, a seal awarded to farms, plantations, and cooperatives that meet comprehensive and rigorous standards covering social, labour, and environmental conservation issues. “American Airlines’ commitment to sourcing Rainforest Alliance Certified coffee shows that consumers around the globe are embracing sustainability,” said Tensie Whelan, President of the Rainforest Alliance. “Passengers can enjoy their cup of coffee knowing that it comes from well-managed farms, where ecosystems and wildlife are protected and where workers enjoy access to health care, education, decent wages and dignified housing.” AA’s Chicago-Delhi route turns 5: American Airlines (AA) has celebrated the fifth anniversary of the launch of its daily non-stop flights between Chicago O’Hare and Delhi. AA began operating the service, which is the longest non-stop flight in its global network, on November 15, 2005. Operating with Boeing 777 aircraft, the 7,483mile-long flight features 16 First Class, 37 Business Class and 194 Economy Class seats. In India, AA employs 53 people, who joined in celebration before preparing for the arrival and departure of the day's flights. Philip Lewin, Country Manager, India, American Airlines, said, “It is hard to believe that it is already five years since American became the first airline to operate non-stop daily service between India's capital city and the bustling city of Chicago. We have remained committed to the US — India market despite the global economic downturn and we look forward to growing our business in the years to come.” In a further boost to its commitment to India, AA will modify the timing of its Chicago-Delhi flight schedule, to provide more convenient onward flight connections for customers arriving in Delhi.
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TRAVEL & TOURISM Yatra.com, American Express in pact YATRA.COM, an online travel company, has partnered with American Express (AXP) to provide enhanced value and exclusive benefits for AXP’s corporate card members. This partnership will allow American Express Corporate Cardmembers to avail five times reward points on all hotel bookings made on the dedicated microsite www.americanexpress.yatra.com. With this new alliance, Yatra.com is aiming to attract business travellers to expand its corporate travel business. American Express is a preferred supplier of corporate card solution to a significant number of top corporates/ organisations in the country. Speaking on the alliance, Pratik Mazumder, Head of Marketing and Strategic Relations, Yatra.com, said “We are happy to partner with one of the largest and globally renowned banks to expand our corporate travel business. This initiative has been taken to extend value-added services to our customers and to reach out to the business travellers.”
A deal to promote ‘farm tourism’ MAHINDRA Homestays, part of Mahindra Holidays and Resorts India Ltd. (MHRIL), has signed a memorandum of understanding (MoU) with Punjab Heritage and Tourism Promotion Board (PHTPB) to promote and market ‘farm tourism’ spread across various regions of the state. The Punjab Tourism has currently registered 23 farmstays. Realising the potential for rural tourism, PHTPB has decided to promote farmstays as an exciting
STAY IN PUNJABI STYLE: Mahindra Homestays tying-up with Punjab tourism to promote a unique concept of farmstays as an exciting alternative to hotels.
alternative to hotels, mirroring an authentic experience of true Punjabi hospitality. As per the agreement, Mahindra Homestays will assist the tourism board in training, branding and marketing the farmstays to its members, inbound foreign tourists and domestic travellers and will also impart professional training to the identified farmhouse owners on aspects of hospitality, safety and hygiene. Vimla Dorairaju, Head, Mahindra Homestays, said, “We are very happy to be associated with PHTPB. Today, we offer tourists a bouquet of more than 753 rooms in 270 plus homes in 49 locations spread across 14 states. We believe that we will be able to replicate our success in promoting farmstays in Punjab.”
Click and win! India has a wealth of creative and photographic talent that is waiting to be acknowledged. The Better Photography ‘Photographer of the Year 2010’ is back yet again to recognise, appreciate and honour the best in imagery. Singapore Tourism Board in association with Better Photography Magazine and Mercury Travels has launched a special microsite www.betterphotography.in/singapore/ to enhance reader experience. The microsite is launched with the aim of engaging with the viewers and updating them about interesting developments, special packages and promotions like the ‘Online Voting Contest’. Participants need to shortlist their much-loved Singapore picture and vote for it. Whether you are a photographer or an avid explorer, these 80 images are sure to inspire you! Lucky winners stand a chance to win an enriching and enjoyable four nights/five days photography package to Singapore by Mercury Travels. With the Mercury Travels Better Photography package, you can explore picture-perfect Singapore in a never seen before manner! The final face-off is back with bang and will be held yet again at its inaugural destination — the multi-faceted and vibrant cosmopolitan of Singapore. The eight finalists will get a chance to travel to Singapore for the ultimate challenge where they will explore the vivacious islandnation. From food, fashion, nature and shopping, to romance, sports and nightlife the contestants will share their stories and their journeys through these images. This exciting contest is valid till January 15, 2011. So grab your cameras and start clicking!
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FOCUS FEATURE
Simply
The Met N
ew Delhi’s The Metropolitan Hotel is now known simply as 'The Met'. After its recent makeover, the hotel unveiled its new avatar on October 10, 2010 (10.10.10). Ringing in its tenth anniversary, 'The Met', with its smart and swanky look provides a peek into the future of hospitality. It has raised its own benchmark of elegance — from design elements to understated service standards — several notches higher. If you really want to enjoy luxury, The Met is the place for it. With its innovative design, modern technology and eco-friendly practices, the hotel has incorporated new ideas and bright insights. As a complete package for business and travel comforts, The Met is the perfect destination for international business or upscale leisure travellers as it is conveniently located in the heart of business and commercial hub of New Delhi. The makeover with its modern and contemporary designs — albeit with an Indian touch — has been conceptualised by TID, a well known Singapore-based interior design firm. The transformation in the hotel's personality becomes apparent the moment you step in to the lobby, a grand space highlighted by a unique mix of
natural and surreal amoeba lights. The use of lighter colours and customised interior finishes not only adds to the lively atmosphere but also makes the hotel environment-friendly. The renovated rooms are more luxurious ensuring the guest is relaxed and the stay pleasurable. High-end facilities, state-of-the-art technologies like LCD TVs, lighting/airconditioning management systems and enhanced security systems make the hotel truly modern and urban. Improved design and amenities have been added to give the bathrooms too, a chic international feel.
RESTAURANTS & ENTERTAINMENT Sakura - Authentic Japanese Restaurant India’s first Japanese restaurant and an all-time favourite with expats and high fliers, Sakura continues to delight guests with its authentic fare from the land of the rising sun. W Chutney, Bar + Tandoor It consists of an indigenous fusion of pan-Indian cuisine. To entice the taste buds of Indian cuisine aficionados, the menu offers classical dishes from across the subcontinent with kebabs, curries, clubbed with exotic concoctions of cocktails and mocktails too. W
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W Zing - All Day World Cuisine Restaurant Impeccable service, scrumptious food and refreshing beverages make the “All Day Dining” an unparalleled dining experience. W Zing GourMET Shop For those with a sweet tooth, the Zing GourMET Shop puts forward a wide range of mouth-watering delicacies with its freshly cooked pies, cakes and savories. W Garden of Joy An outdoor venue for hosting celebratory events with its swimming pool courtyard is an appealing and welcoming. W EcoMet Programme The hotel has upgraded its environment conservation practices to maintain a balance between consumption and availability of natural resources. Complying with its ‘Smart’ personality The Metropolitan Hotel strengthens its EcoMet programme (the ecological philosophy of the Hotel based on the wisdom of Ayurvedic Science and knowledge of Modern Science) by implementing new policies based on three ‘R’s — reduce, reuse and recycle. The Met, a fine blend of style and substance invites guests to LIVE MET SMART at this prestigious property in New Delhi, India.
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SNIPPETS Sikkim gets the taste of Zuri hospitality AFTER destination properties in the UK, Kenya, Bengaluru, Goa and Kerala, The Zuri Hotels & Resorts now spreads its wings to the untouched East of India with the launch of the Retreat at Baiguney that combines plush luxury and exclusive guest services with the breathtaking vistas of Sikkim. Known as “The Retreat by Zuri, Baiguney, Sikkim”, the property is Zuri’s first adventure sports destination resort to offer options like paragliding, river rafting, river camping, mountain camping, jungle hiking, village trekking, etc, all under one roof. Tucked away amidst a breathtakingly natural environment, the resort stands against the backdrop of the Himalayan foothills, complementing flora and fauna and the pristine river Rangit flowing alongside. The rooms here are done in contemporary chic, swathed in orange, green and white linen with their cosy balconies. The experience extends to more pleasure with the Lil Green Bar, a muti-cuisine outlet and lounge Papillon and pool cafe The Jalapa. Bookings for the resort are now open and tariffs range from `4,000 to `8,500 inclusive of meals with additional packages on sightseeing and adventure sports.
The Dutch connection INDIAN travellers will now get an intellectually stimulating and creative vacation in Holland. The Netherlands Board of Tourism and Conventions (NBTC) and KLM Royal Dutch Airlines have joined hands to woo Indian travellers. “We are famous for our windmills and tulips, but there is much more than that — our museums, our history, our modern-day design etc. It is therefore not so strange that the Netherlands has become such an attractive tourism destination for Indian visitors,” said Bob Hiensch, Ambassador of the Netherlands. Indian tourists will get a glimpse of Dutch heritage and traditions with its lovely landscapes, windmills DUTCH EXPERIENCE: Indian and bewildering variety tourists have the of cheese. And, of opportunity to get a course, all these can be glimpse of Dutch toured with the ecoheritage and traditions through friendly mode of Netherlands Tourism transport; on a bicycle. Board and KLM And what else you can Royal Dutch Airlines alliance. indulge in! All the flourishing cities from Amsterdam to Rotterdam can be toured to know of the impressive architecture. And also Utrecht, to get a glimpse of its history with its nice antique stores. Both the countries are well connected. According to Air France-KLM, India remains one of KLM’s important growth markets and the airlines aims to provide better services to its customers in India. Celebrating 55 years of flying KLM to Delhi, the airlines is coming up with various promotional offers to
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further strengthen ties with India. At least 15 airlines connect India with Holland, of which there are 14 direct flights each week, operated by KLM from Delhi, and KLM and Delta Airlines from Mumbai.
Fortune Select Excalibur, Gurgaon welcomes you ITC’s fully-owned subsidiary Fortune Hotels brings its special ‘Select’ brand to one more location in Gurgaon. Opened recently on the main Sohna Road in Gurgaon, Fortune Select Excalibur is the chain’s 34th operating property, with135 elegantly appointed rooms offering the Fortune brand of hospitality in a new contemporary package. Living up to the contemporary high-flying mood of India’s fastestgrowing business hub Fortune Select Excalibur is an elegant, upscale, full service business hotel with in-room check-in and check-out facilities with SELECT FORTUNE: Experience personalised butler assistance. the Fortune brand of hospitality in Equipped with the latest a new contemporary package. technology and amenities, the hotel offers a variety of rooms, including Standard Rooms and Fortune Club Rooms with its Fortune Club Lounge. In addition, there are nine suites that have been carefully designed to offer splendid views, space, luxury and personalised butler service. Important in-room facilities for all categories of rooms include 24-hour room service, tea/coffee maker, satellite LCD TV, mini bar and high-speed wi-fi and broadband connectivity. Fortune’s branded dining options ensure that guests will be able to experience plenty of variety. In keeping with the fitness regime practiced by today’s high-flyers, Fortune Select Excalibur, offers its guests the facility of a state-of-the-art health club with a modern gymnasium, spa rooms for massages, a salon and an open air swimming pool picturesquely located on a landscaped terrace.
APPOINTMENT S Zuri’s new wine sommelier
THE Zuri Hotels & Resorts welcomes onboard Khuselo Mputo, the first wine sommelier for all their properties across India. A South African national, Khuselo comes with over a decade’s experience and learning in the Food & Beverage industry. Apart from his exceptional skills in tasting, Khuselo Mputo he has a deep understanding of budget preferences, thereby making him the perfect wine connoisseur for a young and chic brand like Zuri. Having worked at some of the best restaurants in London, his journey into wine began at the Sofitel St James’ Brasserie Roux where he was offered the job of sommelier. After heading Delaire Graff Restaurant in South Africa as the Head Sommelier, Khuselo has made his way to India to help the Zuri customer choose the right wine for the right occasion with the right kind of dish. His key areas of focus at Zuri would involve procurement of the best wine, wine storage and specialised service to the guests and wine customers. This wine-lover will also play a lead role in all the aspects of wine workshops, wine and dine events and training the hotel staff on wine.
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CALENDAR 2010
UNFAZED BY THE REVERSES OF 2009, THE AVIATION INDUSTRY HAS TAKEN STEADY STEPS TO GROWTH IN 2010. AND THE INDIAN SCENARIO IS NO DIFFERENT. WHILE THE BEGINNING OF THE YEAR SAW THE HORRIFIC CRASH AT MANGALORE, THERE WERE ALSO EVENTS TO CHEER ABOUT — ESPECIALLY THE NEW TERMINAL 3 AT DELHI. CRUISING HEIGHTS RECORDS THE EVENTS MONTH-BY-MONTH THROUGH 2010.
FROM
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LIGHT 2010 1
JANUARY
India’s domestic airlines flew a total of 43.846 million passengers in 2009, according to a Civil Aviation Ministry report. R K Tyagi Committee unveils investigative report on the late Andhra Pradesh Chief Minister YSR Reddy’s helicopter crash on its website. The report said that the crash occurred due to pilot’s error. SpiceJet announces its Q3 results (best ever) of `108.9 crore; Jet Airways makes a profit of `105.80 crore for the quarter ended December 31, 2009 and Kingfisher Airlines announces losses of `419.9 crore in Q3. India Post signs an MoU with Thomas Cook to provide foreign exchange and travel-related services through post offices.
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FEBRUARY
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MARCH
India Aviation 2010 is held from March 3 to 7, 2010, at Begumpet Airport, Hyderabad. More than 200 exhibitors participate. DGCA decides to introduce separate VFR corridors at Delhi and Mumbai airports. Air India becomes service provider for Genx. The airline also approves appointment of five new directors — Amit Mitra, Anand Mahindra, Harsh Neotia, Yusuf Ali and Fali Major. Aryan Cargo plans to launch international air cargo operations by April. Pawan Hans and Eurocopter announce two new JVs. Kingfisher joins Oneworld league. NIIT and SATS join hands.
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APRIL
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Budget 2010-11 allocates `1,200 crore for financial restructuring of NACIL. Jet Airways announces daily non-stop flights from Mumbai to Johannesburg from April 2010, while Kingfisher is all set to introduce daily non-stop flights from New Delhi to London from March. CISF unit of Mumbai international airport gets ISO 9008:2001 for quality certification. Middle-East carriers shine: Etihad wins “Best Long-Haul Airline” at Business Travels Awards in London and Emirates SkyCargo bags “International Cargo Airline of the Year”. Lufthansa names its first two A380s while its cargo section expands freighter services from India.
Terminal IC opens at Mumbai airport; CSIA receives “Airport Service Quality” award. Delhi airport launches a new website. IATA reports continued growth in air cargo. UPS announces the appointment of Mark Khambatta as Country Manager of India. Jet Airways adjudged as “Best International Airline” in Conde Nast Traveller India awards. Qatar airlines starts daily services to Bengaluru; Air Arabia completes five years in India. AirAsia X becomes first low-cost carrier in the world to introduce flatbed premium seats; CEO Tony Fernandes receives France’s highest honour: “Officier of the Legion d’honneur”.
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MAY
Air India Express Flight IX 812 crashes at Mangalore airport. According to government data, 158 passengers died while only eight survivors escaped death miraculously. Media reports confirm that it was pilot’s error that led to the Mangalore crash. Hyderabad and Delhi airports bag top honours from Airport Council International; Bengaluru International Airport Limited (BIAL) is awarded the best emerging airport by Emerging Markets Airports Awards (EMAA) and also receives ISO 27001 certification; P S Nair, CEO, Delhi International Airport Limited, elected the Director of Airports Council International (ACI), Asia-Pacific Regional Board; and Hyderabad International Airport bags “Routes Airport Marketing Award” for second consecutive year. Lufthansa Cargo receives “Best European Cargo Airline Award” at the 2010 Cargo Airline of the Year Awards. Emirates launches services to Al Medinah; Nas Air announces that it will introduce flights to India from June; and Safi Airways announces to enter India.
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JUNE
Des Vertannes takes over as Global Head of Cargo of IATA. DHL invests to enhance service logistics market in India. Qantas’ B777 freighter starts operations while the carrier goes for Trivandrum-based IBS’ Cargo. Lufthansa Cargo AG and Austrian Airlines form a new company Austrian Lufthansa Cargo gmbh; Lufthansa Cargo voted as top European cargo carrier in Asia by Cargonews Asia. Kingfisher joins Oneworld Air India signs a lease agreement for Nagpur base. Dragonair is awarded as world’s best regional airline.
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JULY
World-class Terminal 3 of Delhi International Airport Limited inaugurated by Prime Minister Dr Manmohan Singh. India’s biggest and the eighth largest terminal in the world covers 5.4 million sq ft area with a capacity of handling 34 million passengers per annum. BIAL receives a high rating in a survey carried out by Airport Councils International. Juhu airport gets consultant. Lufthansa Cargo meets TSA requirements. Jet Konnect launches flight to Ranchi.
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AUGUST
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SEPTEMBER
Photo: H.C.Tiwari
Jet Airways announces that it will start daily flights from New Delhi to Milan from end 2010. IndiGo launches insurance package in association with TATA AIG. Cathay Pacific launches flights to Moscow. Etihad admits first female captain. South African Airways receives Today’s Traveller Award for best international airline connecting India to Africa. Singapore Airlines announces the name of future CEO Goh Choon Phong.
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Praful Patel launches final operation phase of satellite navigation system GAGAN. Airports Authority of India announces its keenness to build airports overseas. Tata Steel announces the signing of an agreement with Deccan Charters to start three daily charter flights between Jamshedpur and Kolkata. Fedex connects South India to the world. IndiGo bags the Skytrax World Airline award for being the lowcost airline of India.
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OCTOBER
ICAO (International Civil Aviation Organization) gives nod to stabilise carbon emissions. India-Iraq bilateral arrangements finalised. DHL receives "Custom House Agent of the Year" Award at the Maritime and Logistics Awards 2010. ACAAI (Air Cargo Agents Association of India) first President J N Guzdar passes away. Jet Airways enters into a reciprocal frequent flyer partnership with BMI. Travelport named best GDS in the Asia Pacific. Etihad announces launch of services to Bengaluru from January 1, 2011. AirAsia named ‘best asian low-cost carrier’ by TTG. Oberoi, Lufthansa forge long-term ties. KLM celebrates 55 years of flying to India. Sanjay Agarwal, former CEO of SpiceJet, joins Kingfisher; SpiceJet appoints Neil Mills as CEO. Oberoi hotels ranked amongst the 30 best in the world by readers of Condenast Traveler , USA.
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NOVEMBER
Domestic air traffic perks up. The inquiry committee confirms that pilot error caused Mangalore crash. Pilot was sleepy and many operating procedures were not followed during landing. World’s first integrated aviation university in Bengaluru announced by Centre for Asia Pacific Aviation and Subramanya Construction and Development Company. Airbus A380s operated by Qantas Airways might be grounded for weeks as Rolls-Royce plans how to fix an engine problem that forced the plane into an emergency landing on November 4. Civil aviation ministry decides to roll out the new ground-handling policy in January 2011. The printer bomb found on the cargo plane at East Midlands airport. The bomb was removed from theplane during a two-hour stopover in the UK. China’s Commercial Aircraft Corp (COMAC) in a direct challenge to Boeing and Airbus, announces the first order for its single-aisle passenger plane, breaking into a market that may be worth $1.68 trillion over 20 years. The much-delayed project Navi Mumbai airport finally gets green nod on November 22. The environment clearance by the ministry has been accorded.
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Thumbs up for business
aviation!
he hard times that the aviation business has been going through in the US have seen a few individuals — all celebrities — coming together to exhort fellow Americans to start flying. In a unique move, the group comprising the National Business Aviation Association and General Aviation Manufacturers Association and known simply as ‘No Plane No Gain’, has taken upon itself to educate Americans about the importance of business aviation to the country and its communities, companies, and citizens. After all, business aviation contributes over $150 billion to the US economy every year, and provides over 1.2 million high-wage, stable jobs. Three top personalities — former astronaut Neil Armstrong, successful investor Warren Buffet and golf’s original superstar Arnold Palmer — have been appearing in
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advertisements to emphasise the message that flying is good for the country and the economy. Armstrong’s message is loud and clear: “You can settle for email and conference calls, but nothing beats being there.” Investor Buffet points out: “I originally called my plane indefensible. Today I call it indispensable.” And golfing legend Palmer emphasises: “Some folks say they have no use for business aviation. The truth is that it’s essential to all Americans. By using business airplanes, I’ve been able to live in a town not served by airlines, and compete all over the world like anyone else from any other place for more than 50 years.” Here is a lesson for all of us in the aviation business. Even if flying makes strange bedfellows, it is high time we forgot our differences and all of us got together to boost the business.
SUPPORTERS OF BUSINESS AVIATION: Former astronaut Neil Armstrong, golf’s original superstar Arnold Palmer and successful investor Warren Buffet have been appearing in advertisements to emphasise the message that business aviation helps companies be productive, communities be viable, and thus, the country be strong.
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RNI No. DELENG/2006/16897 Posting Dt. 8-9/12/2010 Reg. No. DL(E) 20/5294/2009-11