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EDITOR-IN-CHIEF’S NOTE

A deep divide gets deeper! n June 25, the Air India strike entered its fiftieth day and K Srinivasan attained one more unwanted record of being the longest-ever strike by pilots in India. And if that is not enough, the poor souls, not used to anything less than club class and five star privileges are on hunger strike at Jantar Mantar in Delhi and Azad Maidan in Mumbai. That the Ministry of Civil Aviation has let them stew in their own juice and finally boil in the withering heat of an Indian summer is quite obvious to everyone. That they enjoy no public sympathy is also quite apparent. But one reason why Civil Aviation Minister Ajit Singh and his band of officers are able to revel in the bravado of ‘pancaking’ the pilots, is the effort that the erstwhile Indian Airlines team has put in to make sure that there isn’t a single blip on the radar because of the strike. One recently flew on several Air India (Domestic) flights. And frankly the level of delivery on board and the conspicuous commitment to on-time performance was delightful to say the least. While that’s an area that Rohit Nandan has no doubt worked on, the fact of the matter is that the erstwhile IA (Indian Airlines) segment of Air India strained every muscle to ensure that the strike had literally no impact on the airline. In a way it was payback time by them for the manner in which Air India had dealt with them when they went on strike last year — again a very poorly managed effort with terrible timing although the reasons for the strike were valid and sound. IA never forgot that and this summer they have returned the compliment with interest. Call it vicarious if you like, but the fact of the matter is that the huge number of bilaterals granted over the years it carries in

the Gulf and elsewhere now come so handy that it literally doesn’t matter if Air India isn’t flying. Actually, someone I know was travelling to Toronto the other day and with the Air India non-stop cancelled, they simply transferred this gentleman and his family to Etihad and he was on his way. In fact, he called from Canada and said: “I think I have discovered an alternative.” What all this has done is create such a deep divide within Air India that it is literally, what was described as “an India and Pakistan” situation by one staffer. They simply don’t want to work with each other, socialise with each other and even seen on the same desk. “Don’t even ask sir, if they have their way, they will not even allow us to board an international flight,” said one traffic assistant as she was checking me in at Mumbai airport recently. And that’s the real worry for Messers Ajit Singh and company. He now has to deal with a sullen, angry and unhappy segment of Air India that believes it has been done in and is looking to extract revenge. And in the process, Air India will once again be a minefield of angry individuals where the quality of service will be the last priority as the IA and AI gangs go about settling their woes. Has anyone got any answer to that? How do you erase this Radcliffe line? Moreover, what will be the reaction if the domestic wing were to go on strike? With Kingfisher down and air tickets shooting to sky high prices, can they allow for the sort of drift we have seen these past 50 days. Unlikely, for there will be chaos at every airport. Or, is it that the government acts only when it is under pressure. All right, the pilots were foolish, but who is being sensible?

srini@newsline.in

CRUISING HEIGHTS July 2012

contents HEMANT RAWAT

TOUCHING THE LUCKY 'SEVEN' p26 SEVEN YEARS INTO ITS OPERATIONS, SPICEJET HAS BLOSSOMED INTO A PROMISING AIRLINE. WHILE THE LOW-FARE AIRLINE IS FURTHER EXPANDING ITS WINGS IN THE INTERNATIONAL SKIES, IT IS ALSO ENHANCING CONNECTIVITY TO TIER II AND TIER III CITIES IN INDIA. SO WHAT IS ITS STRATEGY? SIMPLE. THE AIRLINE IS TAKING CALCULATED RISKS WHILE ACQUIRING MORE AIRCRAFT AND FLYING TO MORE DESTINATIONS.

IATA

Good news for fliers who are afraid of airport full-body scanners. A study by the Marquette University College of Engineering, US, has found out that the radiation dose from fullbody x-ray scanners in airports extends to organs beyond the skin, but is still lower than health standards. The study is the first non-government funded research to estimate the amount of radiation to individual organs. The research was completed by Taly Gilat Schmidt, an Assistant Professor of biomedical engineering at Marquette, and Michael E Hoppe, a Marquette graduate student. The study estimated the radiation exposure to 29 organs — including skin, eye lens, heart and the brain — using complex mathematical models that more accurately represent the shape and tissue density of human bodies and organs. The Marquette study used four models: a 34-yearold male, a 26-year-old female, an 11-year-old female and a 6-year-old male. While radiation is deposited beyond the skin, the study concluded radiation doses in organs for all four models are below recommended standards and considerably lower than radiation levels of other x-ray procedures, such as a mammogram. Gilat Schmidt said the results of her test suggested that the risk to passengers was negligible even for children, frequent fliers and pilots. "Even the risk analysis experts will tell you it's negligible," she said. While others have tried to compare the radiation exposure during flight to the radiation from the x-ray scanner, Gilat Schmidt preferred comparing to other medical procedures. "It's common to compare the amount of radiation from a backscatter x-ray scanner to the amount during one minute of flight. But the types of radiation are completely different." Schmidt found that the scanners expose all passengers to less than a third of the maximum recommended dose of 0.25 micro-sieverts.

HEMANT RAWAT

Off the cuff

Scanners pose little risk

NEWS DIGEST

p21

Jet Airways and its subsidiary Jet Konnect posted a straight fifth quarter loss. In another story, read about the ailing Air India in which a former CMD bares his heart on the perils of merger and de-merger of Maharaja. CRUISING HEIGHTS July 2012

IATA AGM 2012

p34

The International Air Transport Association in its annual general meeting announced developments in three key initiatives: Direct Data Service (DDS), New Distribution Capability (NDC) and IATA Innovation and Partnership Awards.

contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST

CARGO

CRUISING HEIGHTS

p55

Volume VII No 3

With the submission of the working group's report, Air Cargo Logistics in India, the scenario for the air cargo Industry has changed suddenly for the better. Industry stakeholders can look forward to a better future as the recommendations of the working group goes on the floors.

NET EXPRESS

Editor-in-Chief

K SRINIVASAN HEMANT RAWAT

TIRTHANKAR GHOSH Group Consulting Editor

R KRISHNAN Consulting Editor

FOCUS

p37

iXiGO recently unveiled Trip Planner, its innovative travel portal. The site responds by giving a unique visual representation of options, i.e., infographics for the answer. In another major development, Travelport, Egypt Air start a new Global Distribution System (GDS) partnership.

Managing Editor

p66

British Airways has launched a slew of promotions to mark the Diamond Jubilee of the Queen Elizabeth II's reign. The carrier's tempting and promotional offers include specials for university students travelling to the UK, the US, Canada. BA is also revamping its New World Traveller Plus.

NANDU MANJESHWAR Assistant Editors

JUSTIN C MURIK , NIDHI SHARMA Copy Editor

ASHOK KUMAR Senior Sub-Editor-cum-Reporter

PUNIT MISHRA Senior Designer

RUCHI SINHA Design

MODASSAR NEHAL, MOHIT KANSAL NAGENDER DUBEY Picture Editor

PRADEEP CHANDRA Photo Editor

HC TIWARI Photographer

HEMANT RAWAT —————————— Director (Admin & Corporate Affairs)

RAJIV SINGH Director (Marketing)

RAKESH GERA Senior Manager (Sales & Marketing) IXIGO.COM

PRAVEEN SHARMA

AIR FORCE CHOPPERS

p43

The Directorate General of Civil Aviation (DGCA) has chalked out a plan to make helicopter travel safer in the country. Pawan Hans mulls starting chopper services between Delhi, Vrindavan and Mathura while Bell Helicopter and Guanchen Aviation sign an MoU for the first flight training school in China.

p47

Are strategic bombers of any use in today's kind of warfare? Russia and China seem to be only two countries that are serious about producing strategic bombers. India is in dire need of a strategic bomber as we take a detailed look at the combat aircraft ahead of proposed Indian fighter programme.

Cover Design: Ruchi Sinha Cover Photo: Bombardier

The total number of pages in this issue: 72+4

CRUISING HEIGHTS July 2012

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

“ PERISCOPE

Designing for humans “Airlines are improving their margins by charging for bags, window seats and food. But what most people really want is space and that's what we can offer.” JOHN LEAHY, AIRBUS'S CHIEF OPERATING OFFICER for customers on designing seats for obese travellers.

LETTERS TO EDITOR

Turbulence in the time of clear weather (June, 2012) was interesting to read. Air India pilots have time and again held the government and the public at large to ransom with their neverending demands and strikes. The Air India management has rightly cracked the whip on the striking pilots by sacking them. However, the management has not been able to resolve the crisis as both pilots and the Air India management are not ready to budge even an inch from their points of view. As a result, passengers who are stranded at airports all over the world are having a tough time. Ramesh Rana, Kanpur

A Swiss plane to train (June, 2012) unveiled very important questions about trainer aircraft in India. Indeed, it is really a disgrace that the country has not been able to produce trainer aircraft indigenously even after so many years. Finally, the long pending demand of basic trainer aircraft has been met with the 75 Pilatus planes. The aircraft will help the IAF to replace its fleet of 1988 vintage HPT-32 basic trainer aircraft. I think, with the induction of Pilatus planes, India would be able to produce better pilots than ever before and the result would lead to fewer air accidents. Ram Sharan, Patna

The interview of Air Marshal (Retd) Rajkumar “Only nine helipads are licensed in the entire country” (June, 2012) provided valuable insights into the chopper accidents in India. Helicopters are frequently used to ferry VIPs in India. Several leaders such as YS Rajasekhara Reddy, GMC Balayogi, Dorjee Khandu and O P Jindal were killed while others, like Jharkhand Chief Minister Arjun Munda, had narrow escapes. In my opinion, helicopter operations in India are still in its growing stage. Due to frequent copter crashes, air safety norms have taken a serious hit. Violation of air safety norms such as overlooking flight standards and safety protocols too, have to be seriously looked into by the government. Kailash Manohar, Lucknow

“We have 440 commercial planes, that is international, domestic, turboprop, big planes and all airlines put together. It is nothing. We could continue to add planes and still would not be able to meet demand.” INDIGO PRESIDENT ADITYA GHOSH on the number of commercial planes in the US vis-à-vis India

Apple of discord “We are upset about being restricted in Europe, but restricting us will not bring any benefit to anyone else. ” QATAR AIRWAYS' CEO AKBAR AL BAKER on the complaints by European carriers.

Setting the standards “India has recognised the value of aviation and the importance of upholding global standards with its leadership in opposing Europe's unilateral inclusion of aviation in its emissions trading scheme.” TONY TYLER ON INDIA'S OPPOSITION TO EUROPE'S UNILATERAL INCLUSION of aviation in its emissions trading scheme.

Not a rosy picture “It's a perfect storm of adversity now facing airlines, The Euro is going South, the pound is going South, fuel costs are still too high.” EMIRATES AIRLINES PRESIDENT TIM CLARK on the present conditions in the airline industry that could force carriers to downsize.

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

Optimism unlimited

CRUISING HEIGHTS July 2012

Free access “I think (a codeshare agreement) might make sense for us, particularly to India. We have had meetings with atleast five different Indian carriers who have individually advised that they would be open to some level of cooperation.” BAHRAIN AIR CEO RICHARD NUTTALL on codeshare agreements with Indian carriers.

If you thought airports are only stopovers, you might be thinking wrong since airport restaurants are enhancing airport cuisine above the level of burgers and sushi while raising the bar. Airport dining has come a long way in the past few years. With more airport restaurants opening up, the traveler is getting quality that he had never experienced earlier: not only are there new ingredients but there is local flavour and interesting concepts. Innovative menus coupled with good service are making airport restaurants great meeting places. The better restaurants that are located in the public areas of their respective airports, such as Hong Kong's Hung's Delicacies and La Moraga in Malaga, Spain, have become favourites for non-travelling locals, achieving the hitherto unthinkable by turning the airport into a

foodie destination. CNN has come up with a list of such restaurants that are raising the bar in terms of airport dining. The top restaurants are: One Flew South, Hartsfield-Jackson Atlanta International Airport, US Hung's Delicacies, Hong Kong International Airport, Hong Kong La Moraga, Malaga Airport, Spain Plane Food, London Heathrow Airport, UK Bubbles Seafood and Wine Bar, Schiphol Airport, Amsterdam, The Netherlands Altitude, Geneva International Airport, Switzerland

COLD STATS

Airport restaurants that strike a chord

LOOKING GLASS

Need for overhauling “The need of the hour is to abolish all taxes like excise, import duties, sales tax and service tax on aviation for a period of 10 years.” AMBER DUBEY, PARTNER AND HEAD (AVIATION), KPMG on the policy issues behind Indian aviation.

A direct approach “Air operators in the country are facing adverse financial and operating conditions. Issues of taxation, user development fee and high input costs were affecting the aviation sector, one of the major drivers of economic growth.” CHAIRMAN OF KINGFISHER AIRLINES VIJAY MALLYA on the problems encountered by air operators in India.

CRUISING HEIGHTS July 2012

TRAFFIC DATA January-May 2012 witnessed a growth of 5.34 per cent in the number of passengers carried by domestic carriers. The figure was 258.07 lakh as against 244.98 lakh during the corresponding period of the previous year. The marketshare of Air India reduced to 16.2 per cent in May compared to 17.6 in April. The domestic carrier that held the top position in the market was IndiGo with 24.9 per cent. Jet Airways was next with 21.4 per cent. However, if Jet Airways' figure is coupled with its subsidiary JetKonnect's 6.5 per cent, it was the leader with 27.9 per cent. The other carriers' figures were: SpiceJet (18.5 per cent), Air India-Domestic (16.2 per cent), GoAir (7.2 per cent) and Kingfisher (5.2 per cent). The passenger load factor in the month of May 2012 increased due to the beginning of the peak season, according to the figures released by the Director General of Civil Aviation. IndiGo led the carriers with a seat factor of 86.3 per cent in May (it was 82 per cent in April), GoAir's was at 78.1 per cent (80.8 per cent in April), SpiceJet's was 82 per cent (April: 80 per cent), Kingfisher 73.3 per cent (April: 77 per cent), JetKonnect 80.5 per cent (April: 76.8 per cent), Jet Airways 77.1 per cent (April: 77.3 per cent) and Air India 70.6 per cent (April: 70.5 per cent). The number of passenger complaints recorded by scheduled domestic airlines in May 2012 was 868. The number of passengerrelated complaints was 1.6 per 10,000 passengers carried. GoAir had 1.9 complaints per 10,000 passengers while IndiGo had 2, Air India (Domestic)

and Jet Airways both had 1.5 each, SpiceJet and JetLite had 1.4 each and Kingfisher had only one. IndiGo led the airlines in the overall on-time performance of airlines in May 2012 at six metro airports — Delhi, Mumbai, Chennai, Kolkata, Bengaluru and Hyderabad — with 91.5 per cent. The other airlines that followed were: GoAir 88.6 per cent, Jet Airways and JetKonnect 85.6 per cent each, SpiceJet 80.8 per cent, Kingfisher 80.2 per cent and Air India (Domestic) 78 per cent. IndiGo's on-time performance at Bengaluru was 96.5 per cent. The carrier's performance at Delhi was 93.3 per cent, Hyderabad (93.2 per cent), Chennai (85.6 per cent), Kolkata (84.6 per cent) and Mumbai (84.8 per cent). Jet Airways and JetKonnect's ontime performance at Chennai was 96.8 per cent. At other airports it was: Kolkata (92.9 per cent), Hyderabad (88.4 per cent), Bengaluru (85.8 per cent). The carrier's performance at Delhi was (77.7 per cent), and Mumbai (81.5 per cent). GoAir flies to only five of the six metro airports. The carrier's ontime performance at Kolkata was the highest at 95.7 per cent. In the other four metros, it was: Delhi (92.7 per cent), Mumbai (87.5 per cent), Bengaluru (83 per cent) and Chennai (71 per cent). Kingfisher flies to four metros. Its on-time performance at Chennai was 82 per cent followed by Bengaluru (85.9 per cent), Delhi (78.4 per cent) and Mumbai (78.1 per cent).

SpiceJet's on-time performance at Kolkata was 90.7 per cent. The carrier's performance at Hyderabad was 81.5 per cent, Delhi (77.9 per cent), Bengaluru (83.7 per cent), Mumbai (75.9 per cent) and Chennai (81.5 per cent). Air India's on-time performance at Kolkata was 88.6 per cent. The carrier's landings and take-offs at the other metros were: Hyderabad (78 per cent), Bengaluru (83.6 per cent), Chennai (68.2 per cent, Delhi (79.1 per cent) and Mumbai (70.5 per cent). According to the data received by the DGCA, the overall cancellation rate of flights in May 2012 was 1.3 per cent. Leading the carriers was Air India-Domestic (3.5 per cent) followed by Kingfisher (3.2 per cent), JetKonnect (1.7 per cent), SpiceJet (0.8 per cent), Jet Airways (0.7 per cent), GoAir (0.5 per cent) and IndiGo (0.1 per cent). Air India’s on-time performance at Kolkata was 85 per cent. The carrier’s landings and take-offs at the other metros were: Hyderabad (84.7 per cent), Bengaluru (82.6 per cent), Chennai (81.2 per cent), Delhi (79.7 per cent) and Mumbai (73.9 per cent). According to the data received by the DGCA, the overall cancellation rate of flights in April 2012 was 1.5 per cent. Leading the carriers was Air India-Domestic (5.2 per cent) followed by Kingfisher (3.3 per cent), Jet Airways (0.6 per cent), JetLite (0.5 per cent), SpiceJet (0.4 per cent) and GoAir and IndiGo (0.1 per cent each). The reasons for the cancellations: Miscellaneous 29.8 per cent, technical 30.7 per cent, operational 10.2 per cent, weather 20.2 per cent and commercial 9.1 per cent.

LCCs INCREASE MARKETSHARE 10

CRUISING HEIGHTS July 2012

¢ PASSENGERS CARRIED BY SCHEDULED DOMESTIC AIRLINES

¢ MARKET SHARE OF SCHEDULED DOMESTIC AIRLINES

Passengers carried by domestic airlines during Jan-May 2012 were 258.07 lakh as against 244.98 lakh during the corresponding period of previous year thereby registering a growth of + 5.34%. 2011 300

Air India (Dom) 16.2% IndiGo 24.9%

2012

Jet Airways 21.4%

Pax Carried (in Lakhs) 244.98

250

Growth

258.07

- YoY (+ 5.34%) - MoM (- 0.87%)

Jet Airways + JetLite = 27.9%

200

GoAir 7.2%

JetLite 6.5% Kingfisher 5.2%

150

SpiceJet 18.5%

100 54.96

54.48

¢ CANCELLATION DATA OF SCHEDULED DOMESTIC AIRLINES

50 0 YoY

• Overall Cancellation Rate in May 2012 – 1.3%

MoM

IndiGo

¢ On time performance (otp) 100

91.5

88.6

85.6

80.8

80.2

0.5

Jet Airways

OTP AT SIX METRO AIRPORTS

0.1

GoAir

0.7

SpiceJet

0.8

JetLite

1.7

OTP (%)

Kingfisher

3.2

Air India (dom)

3.5 0

0.5

1.5

2.5

3.5

Cancellation Rate (%) 20

¢ CAPACITY VS DEMAND IndiGo

Apr 12

100

May 12

Demand (RPKM)

9.5 2.9

3 2

5.8

14.5 10.8

16.8

12.2 7.9

16.3 12

18.5 15.4

11.9 6.9

-0.33

¢ PASSENGER LOAD FACTOR OF SCHEDULED DOMESTIC AIRLINES

Capacity (ASKM)

40 19.4 20.5

SpiceJet

17.4 16.6

Jet Airways+JetLite

GoAir

18.5 15.7

Kingfisher

% Change over Month

Air India (Dom)

15.8 14.9

-10 -20

86.3

80.8

73.3

80.5

76.8

77.3

77.1

70.6

70.5

Seat Factor (%)

78.1

-30

-40 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Year over Year

¢ REASONS FOR CANCELLATION

Technical 30.7% 0 Air India

JetLite

SpiceJet

Jet Airways

IndiGo

Kingfisher

GoAir

Consec/Misc 29.8%

The passenger load factor in the month of May 2012 has increased due to ongoing peak season.

Commercial 9.1%

¢ PASSENGER COMPLAINTS OF SCHEDULED DOMESTIC AIRLINES Weather 20.2%

• Total number of complaints (May 2012) - 868 • Number of passenger related complaints - 1.6 per 10,000 passengers carried

Operational 10.2%

¢ REASONS FOR DELAY 1

Kingfisher SpiceJet

1.4

JetLite

1.4

O p s 16.9%

Air India (dom)

1.5

Jet Airways

1.5

Airp o rt 4.1%

1.9

GoAir

Reactio n ary 63.0%

IndiGo 0

0.5

1.5

2.5

No. of Complaints/10,000 Pax

CRUISING HEIGHTS July 2012

T ech 6.7% AT C 2.6% W x 1.3% Pax 1.8% Ramp 1.4% Misc 2.3%

NEWS DIGEST

SHOWBUS.COM

Qantas in the dumps Heathrow 3 on track

New routes

Etihad announced that its Boeing 787s would operate to destinations including Dublin, Frankfurt, Kuala Lumpur, Beijing, Nagoya, Delhi and Istanbul.

Thai smile Thai Airways is going ahead with plans for an ultra low-cost carrier despite increasing concerns about growing capacity impacting the Thai aviation market. The carrier is working on the setting-up of an ultra low-cost airline with Nok Airlines sometime next year. The airline will be called Thai Smile. Smile plans to offer customers premium-light flight services on short routes.

Easy comes to Africa EasyJet founder Sir Stelios Haji-Ioannou is coming to Africa with his brand of low-cost flying. Ioannou will soon be a shareholder and board member of an African budget airline with a London listing. FastJet, as the new airline is likely to be called, is preparing to launch services in Ghana. The business model comes from the Ioannou-owned Easy Group and the aircraft colour — you bet it — a shade of orange! Sir Stelios called Africa “the aviation industry’s last frontier”. Fastjet’s logo has evolved from red to an orangey warm red. Apparantly, market feedback suggested that African fliers felt the orange logo “a little more confrontational”.

Sir Stelios Haji-Ioannou

EASY.COM

David Cameron has slowly but surely taken a U-turn on building a third runway at Heathrow airport. It is clear that the conservatives have cooled to the idea of a new hub in the Thames Estuary. Cameron has left open the option that the Conservatives would campaign at the 2015 election in favour of expanding Heathrow — it would delight business but anger greensQuestioned in the Commons the British PM declined to rule out a change of heart. While restating the coalition’s position, he said: “We must not be blind to two important considerations: how we expand airport capacity overall and how we ensure Heathrow operates better.” Meanwhile, Tony Tyler, Director General of the International Air Transport Association (IATA), launched an attack on the government’s failure to expand Heathrow. “What is happening in the UK I think is very sad because the UK has traditionally played a leading role in world aviation and it has done that over many decades. But it is going to see that leading role badly eroded unless something is done about hub capacity in the South East and that really means Heathrow.”

CRUISING HEIGHTS July 2012

Qantas is in trouble. The airline said that it expected underlying profit before tax — its preferred measure of financial performance — in the year to June 30 to be AD$50 (£32m) to AD$100m, compared with AD$552m in the previous year. A soaring Australian dollar and a bitter battle with unions over wages and conditions that saw Chief Executive Alan Joyce ground the entire fleet for 48 hours in October also cost the airline dearly. Qantas’s international business is expected to post a loss of over AD$450m, more than double the loss of AD$216m in the last financial year. In contrast, its far healthier domestic unit and low-cost offshoot Jetstar are expected to book a combined profit exceeding AD$600m. “We remain focused on returning Qantas international to profitability in 2014 and for Qantas international and domestic combined to exceed their cost of capital on a sustainable basis within five years of August 2011,” said Joyce. In a bid to halt the dramatic slide in profits, Joyce recently announced Qantas would split its international arm from its domestic operations.

BOMBARDIER

Bombardier China ‘bhai-bhai’ Bombardier plans to help Commercial Aircraft Corp (Comac) win approval for 26 regional and business aircraft worldwide over 20 years, more than either Boeing or Airbus. Bombardier is working with Comac on new aircraft to help cut development costs and to gain greater access in China as it works on its own CSeries plane. The CSeries, which sits 110 to 145, competes against the smaller versions of Boeing and Airbus narrowbody planes. “We intend to have much more success in China,” Fuller said. Montreal-based Bombardier had sold fewer aircraft in China than Boeing or Airbus, he said. The planemaker said that it had sold 75 business jets and 30 commercial aircraft in Greater China. Bombardier and Comac said in March that the C919 and CSeries would share a common cockpit, paring research costs and boosting the appeal of the planes as pilots would be able to fly both of them with little extra training. The two have also committed to jointpurchasing of aluminum alloys and Chinese companies will supply parts including the fuselage for the CSeries.

Gatwick tops

HERE’S AN EXAMPLE FOR DELHI’S AIRPORT EXPRESS. A MARKETING CAMPAIGN, WHICH BOOSTED ONLINE BOOKINGS FOR GATWICK EXPRESS BY 150 PER CENT, HAS WON THE TOP HONOURS AT THE GLOBAL AIRRAIL AWARDS. GATWICK EXPRESS HAD ATTRACTIVE ONLINE DISCOUNTS WITH BACK-TO-BACK FUNNY ADS TO BOOST SALES AND EMERGED WINNERS. THE NON-STOP SERVICE BETWEEN GATWICK AIRPORT AND LONDON VICTORIA SCOOPED MARKETING CAMPAIGN OF THE YEAR AT THE AWARDS CEREMONY IN STOCKHOLM. CRUISING HEIGHTS July 2012

NEWS DIGEST

Free iPads at Toronto CANADIAN COMPANY OTG, WHICH RUNS AIRPORT FOOD OUTLETS AT TORONTO’S PEARSON AIRPORT WILL, PROVIDE FREE IPADS AT THE AIRPORT. THE IPADS WILL BE SECURED TO TABLES WITH A SELECTED SUITE OF APPS-FROM FACEBOOK TO GAMES TO MCOMMERCEPRELOADED ON THE DEVICES, WHICH WILL BE COMPLETELY FREE TO USE. WHILE THE IPADS WILL BE DESIGNED TO LURE PEOPLE INTO THE AIRPORT RESTAURANTS, THEY WILL INFORM YOU HOW MUCH TIME YOU HAVE BEFORE YOUR FLIGHT LEAVES AND THEN SUGGEST YOU VISIT AN EATERY IN THE MEANTIME, FOR EXAMPLE, THEY CAN BE USED SIMPLY AS TIME-KILLING ENTERTAINMENT DEVICES, NO STRINGS ATTACHED.

Changes at EADS Tom Enders, the new Chief Executive of EADS, wants time to ponder any changes in a letter to the over 1.3 lakh employees. Decisions are likely by fall. A manager with a reputation for straight-talk, Enders is likely to examine all options in the top job at EADS, where he took over from Louis Gallois. In his letter to the employees, Enders stressed the continuity Tom Enders of strategy with Gallois and the critical need to expand their footprint globally. The 53-year-old Enders is famous for his “Straight to Tom,” electronic hotline at Airbus urging staff to ideate with him. He is likely to tour shop floors and have direct interaction with colleagues in the coming months. “These encounters will certainly fuel changes in strategy, structure and organisation to be discussed with the executive committee and board of directors in autumn and share with all shortly after,” Enders wrote to the staff. Ender’s successor at Airbus, Fabrice Bregier, however, moved more quickly with appointments and meetings. In his letter to employees, Bregier stressed the importance of the company’s crucial A350 airplane project, a competitor to the Boeing 787 Dreamliner, and underlined the fragility of supply chains. “Regarding our position in the market I do not underestimate the challenges we face with regards to the development and ramp-up of our programmes, particularly concerning the robustness of the supply chain,” Bregier said in a letter to Airbus staff.

The Jumbo’s new avatar

Lufthansa— launch customer for the Boeing Intercontinental— launched the new Jumbo jet on the inaugural Frankfurt to Washington route. Lufthansa’s newest Christoph Franz flagship aircraft will provide service between the two cities initially six days a week. “The Boeing 747-8 Intercontinental is an exceptional aircraft,” said Christoph Franz, Chairman and CEO of Deutsche Lufthansa AG. “With its addition to our fleet, Lufthansa has created a product that is not only in line with our company’s commitment to innovation, technology and efficiency, but that also offers qualities and features that are sure to maximise our passengers’ in-flight experience. Travellers to and from Washington DC are in for a memorable flight and Lufthansa looks forward to expanding our 747-8 Intercontinental service to other US markets in the coming months.” Lufthansa’s 747-8 Intercontinental is equipped with 362 seats in a three-class configuration (8 First Class, 92 Business Class and 262 Economy Class).

CRUISING HEIGHTS July 2012

No free pass to Indian celebrities THE US HAS RULED OUT ANY SPECIAL SCREENING FOR VIPS AND CELEBRITIES UNLESS THEY HAVE DIPLOMATIC EXEMPTION, BUT SAID THAT IT WAS IN TALKS WITH SEVERAL COUNTRIES TO FACILITATE HASSLEFREE IMMIGRATION PROCEDURES. INDIA IS NOT AMONG THOSE COUNTRIES WITH WHICH THE US IS HAVING SUCH NEGOTIATIONS. “I’M NOT AWARE OF ANYTHING RIGHT NOW,” JOHN WAGNER, EXECUTIVE DIRECTOR OF ADMISSIBILITY AND PASSENGER PROGRAMMES WITH THE US CUSTOMS AND BORDER PROTECTION, TOLD FOREIGN JOURNALISTS WHEN ASKED IF THE US WAS HOLDING ANY TALKS WITH INDIA TO FACILITATE QUICK AND HASSLE-FREE IMMIGRATION PROCEDURES FOR PEOPLE COMING FROM INDIA. HOWEVER, US CITIZENS AND THOSE HOLDING PERMANENT RESIDENCY CAN APPLY UNDER THE “GLOBAL ENTRY” PROGRAMME, UNDER WHICH ONCE CLEARED BY THE FEDERAL AUTHORITIES, AN INDIVIDUAL WOULD NOT HAVE TO GO THROUGH THE IMMIGRATION OFFICER, BUT WOULD HAVE TO USE THE SERVICES OF A TOUCH-SCREEN KIOSK TO ENTER THE COUNTRY.

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WHAT A CATCH!

ETIHAD GOES VIRGIN

511 cellphones and 124 laptops were left behind by travellers at Delhi airport at last count this year. Many are still lying with airport authorities. The total value of such items stood at `1,76,52,268 in the first five months of this year, officials said. In a data compiled (till May this year) by the Central Industrial Security Force (CISF), which guards the domestic and international terminals of the IGIA, the force has restored to genuine passengers unattended bags, mobile phones, laptops, camera and wallets carrying cash totalling over `1.22 crore.

THIRD ON THE LIST third largest airline in The Brazil will come up when the country’s low-fare regional airline Azul will merge with fellow Brazilian regional airline Trip. The airlines have created a new parent company, named Azul Trip to oversee their integration. Their combined fleet would total 112 aircraft, operating 837 daily flights on 316 routes to 96 cities. It would control some 15 per cent of the domestic Brazilian market in terms of revenue passenger miles and operate 29 per cent of all domestic departures. Combined, the two companies now employ 8,700 people. Although both Azul and Trip similarly concentrate on secondary markets largely unserved by Brazil’s dominant majors, Gol and TAM, both have managed to expand quickly.

4 per cent of Virgin Australia is what Etihad Airways has bought as it pushes ahead with a strategy to acquire minority stakes in overseas carriers. “We’re building a strong business model. And part of that business model is partnerships,” Etihad CEO James Hogan told the media. “We do have two large competitors on our doorstep. And we will never match their aircraft order book.” Etihad spent $35.6 million on the 3.96 per cent stake and aims to acquire as much as 10 per cent of the Australian carrier, Hogan said. The deal marks the fourth publicly disclosed stake Etihad has taken in another carrier since December. Etihad bought nearly 30 per cent of Air Berlin in December, 40 per cent of Air Seychelles in January and 3 per cent in Irish carrier Aer Lingus.

511

4% 3100$ 240

uthep

din

PAY MORE TO UNITED

num

ber

CHINA: 240 BY 2020

240 is the number of airports China is expected to have by the year 2020, according to Civil Aviation Administration of China (CAAC) chief Li Jiaxiang. China plans to build 70 new CHINATAIWAN.ORG

airports and to renovate or expand 100 existing airports in the coming years. By the end of 2015, the number of airports for civil aviation use is expected to exceed 230, with passengers set to reach 450 million. By then, there will be 2,700 transport airplanes and 2,000 general aircraft. By 2020, the China will satisfy the market needs for 700 million air passenger trips.

CRUISING HEIGHTS July 2012

100 dollars is the new fee for those wishing to check a second bag on trans-Atlantic flights. The charge had earlier been $70. United and Continental, which merged in 2010, collected a combined $630.2 million in baggage fees last year, according to the US Bureau of Transportation Statistics. Delta’s fee total was the largest, at $863.6 million, according to the agency.

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Star Alliance CEOs in Vancouver

AGM in Beijing. The Sri Lankan flag carrier will join the alliance late next year. Cathay Pacific Airways as its sponsor will guide it through the implementation process. The carrier already codeshares with Oneworld memberdesignate Malaysia Airlines, which is itself due to join the alliance this year. “With the world airline industry increasingly focused on alliances, SriLankan has carried out in-depth analysis of the options open to the airline as we enter this latest phase of our development. Oneworld is very clearly the best option for us. Joining the alliance will help put SriLankan more firmly on the global aviation map and vastly improve our connections with the rest of the world,” says airline Chairman Nishantha Wickremasinghe. After Air Berlin joined the alliance this year, Oneworld now has 11 active members. According to the blog — One mile at a time — ``Oh, and there’s one other interesting thing about SriLankan Airlines. They win the award for most awkward lounge massage in the world. They offer complimentary 15-minute massages in their business class lounge in Colombo. However, expect them to literally have you take your clothes off in the lounge and be massaged in “public” while mostly undressed. Fun stuff…” For the record: SriLankan will add three new destinations in southern India.

The annual Star Alliance strategy meeting of CEOs marks the fifteenth anniversary of the world’s first and most comprehensive airline alliance that was founded in 1997 by Air Canada, Lufthansa, Scandinavian Airlines, THAI and United Airlines and has since grown to encompass 25 of the world’s leading airlines worldwide. “We are pleased to host the chief executives of our Star Alliance partners in Vancouver for this annual forum to discuss the strategy for Star Alliance going forward,” said Calin Rovinescu, President and Chief Executive Officer of Air Canada. “Over the past fifteen years,

Star Alliance has consistently distinguished itself as the world’s premiere airline group. Star Alliance was founded on the principle of offering customers the reach of a global network beyond what any single carrier is able to do on its own and rewarding our respective customers’ loyalty by providing reciprocal privileges across the world’s leading airlines,” said Mark Schwab, Chief Executive Officer of Star Alliance.

Garuda Indonesia to join SkyTeam in 2014

Jet in talks with Star, Skyteam for global tie-up

in two years. “The effective date of Garuda Indonesia expanding SkyTeam’s presence in Southeast Asia has been planned for early 2014. This is due to Garuda’s selection of a new IT platform and the time necessary to migrate the airline to the new system,” SkyTeam Managing Director Michael Wisbrun said at a press conference. As of today, the airline flies to 19 international routes in Southeast Asia, East Asia, Middle East, Amsterdam and Australia.

Naresh Goyal recently told journalists. In an informal chat with Indian mediapersons on the sidelines of the 68th Annual General Meeting of the International Air Transport Association, Goyal said that the airline was looking to expand its international operations to destinations that were economically viable. However, Jet Airways has yet to begin the process of joining a global alliance. Air India’s entry into Star Alliance has been stalled due to a variety of factors.

flag carrier Garuda Jet Airways is in talks with two National Indonesia is set to join the global global airline alliances — Star airline alliance SkyTeam withAlliance and Skyteam — Chairman

Austrian’s Star Alliance terminal opens The new Austrian Star Alliance Terminal at Vienna Airport has been commissioned. According to Austrian Airlines, the new terminal is 150,000 square metres in size. It offers passengers a new and better quality of travel. The new Star Alliance Terminal is staffed by 690 Austrian employees who ensure convenient and enjoyable travel. The terminal’s modern architecture has a pleasing atmosphere. This arises from its sunlight-washed spaces and generously-apportioned views of the aircraft standing on the apron outside. The terminal has a large number of shops and restaurants. These while away passenger AUSTRIAN AIRLINES

SriLankan Airlines is joining Oneworld. The announcement was made during the IATA

Air Canada hosted the chief execu tives of more than 20 Star Alliance member airlines in Vancouver recently. AIR CANADA

SriLankan Airlines to join Oneworld

CRUISING HEIGHTS July 2012

times of waiting and enhance the excitement of traveling. As a Star Alliance hub, the terminal has a special role to play. It is home to Austrian Airlines, Lufthansa, SWISS and their partners in the Star Alliance, whose other members include Adria Airways, Croatia Airlines, EGYPTAIR, LOT and TAP. These memberships enable all passengers traveling on the world-spanning network maintained by the Star Alliance to also make use of the short times of transfer found in Vienna. The new terminal permits the passengers to avail themselves of the services provided by the Star Alliance.

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et Airways, along with its all-economy subsidiary JetLite, now rebranded as Jet Konnect, posted a straight fifth quarter loss, suggesting that not enough had been done on the cost-cutting front. As a result, JetLite/Jet Konnect went for a 23 per cent hike in fares, while the full-service carrier Jet Airways increased its fares by 15 per cent since November 2011. Fares were hiked again in March 2012. The full impact of the increase in fares, its officials say, will be felt only in the current full fiscal 2012-13. The real expression on the state of Indian carriers, including Jet, was conveyed by the carrier’s promoter Naresh Goyal at the recently concluded IATA meet at Beijing. He said the air fares in India were about 300 per cent higher than those in China and some other countries because of high taxes. The fares charged by the Chinese carriers was about one-third of what the Indian carriers charged. This was because there were no taxes in China and to top it all, the Chinese carriers were all state-owned and, therefore, had strong government backing. Goyal was clear about one issue: ATF imports. He said that direct ATF imports by his airline were not an option because his airline did not have the infrastructure to handle it. Interestingly, Goyal has a close long-standing association with Mukesh Ambani, whose Reliance Industries also exports ATF from India. Another interesting revelation he made before the media in Beijing was that he was not opposed to FDI from foreign carriers. In fact, it is believed that Goyal had put a spanner in the Tata-SIA airline project, and later even ensured that Vijay Mallya’s Kingfisher Airlines (KFA) did not receive any FDI from foreign carriers to rescue his airline. Now that KFA is bankrupt and Jet is in a commanding position despite the losses it has incurred, there has been a total transformation in Goyal’s attitude to FDI by foreign carriers. Policy issues apart, Jet Airways is now going ahead in

Despite turbulence, Jet claims growth full swing with its cost-cutting exercise. The airline has decided to terminate the contract of 72 of its high-cost expatriate commander pilots. This can be understood in the light of the airlines’ decision to curtail its monsoon schedule, which it does every year. Moreover, there has also been an increase in the availability of local pilots or resident Indian pilots. Jet raised fares, chucked out foreign pilots but still continued to be in the red, raising the need to further cut costs. Moving in that direction, Jet Airways decided to lower the commission of travel agents from the present three per cent to one per cent. While this move has evoked protests from travel agents, the state of Kingfisher and the suspense about Air India have forced them to go along with Jet Airways. For instance, after MakeMyTrip decided to confuse potential passengers booking through its site by hiding the name of the airline for a lowpriced ticket, Jet withdrew its ticket sales through MakeMyTrip. However, the carrier reversed its move after travel agents made amends. The circumstances might be unusual, but it is noteworthy that there has been no strong boycott from the travel agents despite the fact that they are now getting only one per cent commission, even though fares have risen by 20 per cent. It may be mentioned here that nearly 10 per cent of Jet Airways’ revenues comes from agents. Incidentally, even Air India took the same steps as its market share dropped. In the case of Jet Airways, the market share has virtually remained steady. The situation may change tomorrow when airlines begin to cut top-end fares following their assurance to DGCA, who recently pulled them up for the steep fare CRUISING HEIGHTS July 2012

hike. The real imponderable will be the behaviour of Air India that has seen a sharp drop in the market share of its domestic operations and virtual stagnation on the passenger load factor. It is important to throw light on the fact that despite possessing more aircraft, Air India’s domestic market share is less than that of not only IndiGo, but even SpiceJet. Meanwhile, Jet Airways, which also has 15 wide-body and 101 narrowbody aircraft, includuing ATRs, has managed to hold on to its market share. So the real battle will be fought in the current fiscal. And should Air India begin to cut fares to increase load factors (as this is a very important condition of the turnaround plan), then it will create more problems for Jet than that for the LCCs. It appears that Jet was aware of this fact when it decided to do away completely with the JetLite brand, and rechristen its low-fare arm as Jet Konnect, which is expected to account for 80 per cent of its domestic operations in the months to come. Jet Airways wants to get passengers on board its business class. So, it went back to the agents’ commission. Simultaneously, Jet Airways is shifting to Global Distribution System, which will bring down costs considerably. The airline’s CEO Nikos Kardassis in a statement said: “We are also looking at recruiting qualified Indian pilots in the market.” It may be recalled that Jet reduced its business class seats in its Boeing 737s used by Jet Konnect from 16 to eight, thus increasing overall capacity by 16 per cent per flight. Kardassis said that the airline wanted to increase revenue per flight and make its assets more productive. This strategy is paying off and with the same number of planes, its market share as well as revenues are rising.

NEWS DIGEST Reconfiguration has helped in higher revenues per flight and lower cost per seat. Compared to an operating loss in Q3 (October-December) 2011, it made an operating profit in Q4 (January-March) 2012. Its domestic business class saw a 14 per cent rise. Jet Airways' total income in fiscal 2011-12 was `15,173 crore compared to `12,951 in the previous fiscal. Its total expenses in 2011-12 was `14,590 crore, as against `11,135 crore in the previous fiscal. But interest cost, higher depreciation etc resulted in a loss of `1,236 crore in 2011-12, compared to a small profit of `9.69 crore in fiscal 2010-11. Learning from its past experience, Jet has decided to cash in on ancillary revenue by either directly selling tickets to passengers or via a la carte features and through FFP (Frequent Flyer Programme) activities. Speaking to newsmen, Jet Airways Chief Commercial Officer Sudheer Raghavan said: “Going by consumer preferences and the global trend, we are compelled to change our business model.” Perhaps, ultimately it will move towards a situation where it will not need travel agents. Meanwhile, Jet has sought government permissions to expand its services from the present 370 to 518 flights a week by winter of 2012. This follows the government decision to end Air India monopoly over bilateral traffic rights. Naresh Goyal had also mentioned at Beijing that his airline wanted to go to few places in Europe, and was looking at those destinations which would make money, such as Paris, Munich, and Frankfurt, to name a few. And to boost its network, Jet is in talks with both Star Alliance and Sky Team. Talking about foreign flights, Jet CCO Sudheer Raghavan said that the airline would launch an additional four flights a week between Mumbai and Kuwait as part of its plan to expand its Gulf presence. The new services will provide seamless connectivity to passengers from Kuwait flying to the Jet hub in Mumbai as well as to Hong Kong, Singapore, Bangkok, Dhaka, Kathmandu and Colombo. These additional flights will complement the present daily flights between Mumbai and Kuwait. Jet Airways currently operates 46 daily flights to the Gulf. Against this backdrop, CAPA said that Jet airways, besides possible leasing of at least ten A 330-300, was evaluating the possibility of acquiring 100 Airbus A 320 Neos. Kapil Kaul, Chief Executive Officer-Indian Subcontinent & Middle East, CAPA, said that at the current price, without taking into account the list price,

the actual price for the order could be between $3.5 billion and $3.75 billion. Earlier, CAPA and Kaul had said that Jet Airways would be the biggest beneficiary of the near demise of KFA and that Jet Airways would see a sharp rise in its market share. However, events between April and May 2012 showed otherwise, and instead of Jet, it was IndiGo and SpiceJet that got a major share of the cake. When asked about the possibility of Jet Airways acquiring 100 A 320 Neos, Airbus industry’s Senior Vice President for Sales and Marketing, and also President, Airbus India, Dr Kiran Rao said, “We are in talks with Jet Airways for nine A 330-300s. As of now, we don’t have a fixed timeline to deliver them. But Jet will definitely induct four A 330-300s from October this year.” On the issue of Jet’s reported interest in 100 A 320s, Rao said: “We are in talks but let rumours remain rumours.” Talking about these issues, Goyal

(Clockwise from top left) Nikos Kardassis, Sudheer Raghavan, Kapil Kaul and Kiran Rao.

presented an entirely different view. When asked about buying 100 A 320s, he said, “We are only planning to induct four more Airbus A 330-300s by the early part of financial year 2013-14.” Our own sources tell us that Jet wants to scale down its narrow-body fleet by six to seven per cent. Even as these issues have attracted different comments from two directly connected persons — the seller, Kiran Rao, and the buyer, Naresh Goyal, CAPA seems to have a different perspective. Notwithstanding different opinions on similar issues, Jet could encounter a problem similar to that being faced by Air India — from The Indian Pilots Guild (pilots of Air India flying the wide body CRUISING HEIGHTS July 2012

aircrafts overseas). The IPG went on strike on a number of issues, one of which has been its refusal to permit pilots/commanders of erstwhile Indian Airlines to take up flying training on Boeing 787 Dreamliners. Their claim is that the move will impinge upon IPG members’ career prospects and seniority. In a somewhat similar case, Jet Airways pilots, represented by their body — Society for Welfare of Indian Pilots (SWIP) — raised objections to the possibility of appointing commanders and co-pilots of A 330-300 from KFA. KFA flew its last A 330-300 flight from London to Mumbai on April 10, 2012. Presently, all its five A 330s have been surrendered, rendering 36 commanders and 36 co-pilots without work. While a few of them chose to take up jobs outside India, those unemployed sought to join Jet, which is increasing its A 330 fleet as part of an earlier plan. However, the Society for the Welfare of Indian Pilots immediately told its management that the induction of KFA pilots would hamper their own career prospects. The fact that KFA pilots said that they would join on a two-year contract was not taken kindly by Jet pilots. What finally transpired is not known. If the statement of Nikos Kardassis is any indication — sacking of expat pilots and possible employment of Indian pilots — it is possible that some of the KFA commanders and co-pilots of A 330s could find shelter in Jet Airways. There is, however, a bigger question, i.e., if the four A 330-300s should come in the early part of the financial year 2013-14, how will the KFA pilots keep their licences, including type-rating current? The situation in Kingfisher has become so hopeless that even Naresh Goyal is not worried about FDI from foreign carriers. This may seem like a case of history repeating itself, somewhat similar to the case when the big newspapers in India had initially refused and lobbied against the entry of foreign media holding stakes in Indian media. However, once media FDI was allowed, the very same opposing newspapers were the first to induct foreign partners. Jet Airways expects to register better yields in fiscal 2012-13. Intense competition from low cost carriers, seasonality of business and rising fuel costs, besides a weak rupee continue to pose major challenges. The airlines’ Senior Vice President (Finance), M Shiv Kumar said: “We have seen 31 per cent growth in traffic besides passenger and capacity growth.”

HEMANT RAWAT

The trouble with Air India, according to a CMD he 14th report of the Committee on Estimates (2011-12) relating to the Ministry of Civil Aviation — Development and Regulation of Civil Aviation — made a very interesting revelation. Presented to the Lok Sabha during the recent Budget session, the report on Air India Limited had a very juicy content. The Committee asked the Chairman and Managing Director (CMD) of Air India about issues relating to the merger of Air India and Indian Airline businesses, following which the National Aviation Company of India Limited was incorporated under the Companies Act 1956 on March 30, 2007. It is now five years since the legal merger took place, but hurdles continue to beset the national carrier. The Committee reviewed the progress made on areas such as (a) progressive integration of network/schedules, progressive cross-utilisation of aircraft fleet, leveraging scale for joint procurement (fuel, insurance etc) and initiation of Passenger Services System project (with the implementation of the system in March 2011 there will be a single code for the airline). During the evidence, the Committee

on Estimates asked the Ministry of Civil Aviation/Air India about Air India’s aircraft to personnel ratio, and its status in comparison to other airlines of the world. Air India CMD stated: “The ratio in Air India Limited is about 226 personnel per aircraft, whereas the private airlines in India are working at around 100 and 110. So we have about 32,000 employees. Plus we have another 10,000 contract workers and 2,000 casual workers. So it works out to be 44,000 employees who are with us.” He also said: “Today a low cost carrier like Ryan Air, which is the best in the world, has only about 40 to 45 personnel per aircraft. They outsource the balance completely. They only have core employees with them. However, in Air India, there is a legacy issue, which has to be understood. Wherever Air India had started the services, many a time it had to even perform the airport operator’s duties like handling the terminal, baggage, XRay machine and handling everything else.” The CMD further said, “We have loaders in three categories. There are loaders of daily wages, to whom we pay `150 under NACIL by Indian Airlines, `180 by Air India. Then we have contract CRUISING HEIGHTS July 2012

AIRING VIEWS: Air India pilots staging protest.

workers on our job and fully-paid employees. So in the case of loaders, we have got six grades of promotion for a loader in NACIL, known as Loader Assistant, Loader-I, Loader-II, Senior Loader and a Chief Loader. The seniormost loader earns around `35,000 per month everything put together, whereas a contract loader gets around `6000-`7000, and the casual loader gets around `4,000. If I increase and make payments to everybody completely, it involves lot of legacy issues.” The Committee then asked the CMD to explain why the losses had increased after the merger. The then CMD (perhaps, the report was referring to Arvind Jadhav) Air India, stated: “I would like to draw your attention to the fact that the year 2008 gave the highest yield as every airline was in a position to make profits. Two things happened in 2008. Fuel accounts for around 40 per cent of our total expenditure. I spent about `8,000 crore for fuel alone and 40 per cent is my expenditure. The fuel prices in those days were around $65 per barrel and it has gone up to $145 per barrel. The competition was tough and no carrier was able to increase its tariff and rates at all.

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HEMANT RAWAT

p a le t n ia g a s e k a t s k r Air Wo

Executive EAG Co-founder and said, “We a ech Director, Paras Dham king at loo n bee ly ent have also rec Indian the the exciting potential of first our ned ope aviation market and , we So 1. 201 in re the ice branch off partnership warmly welcome this will help ich wh rks with Air Wo o India and facilitate our entry int re fully the mo t allow us to exploi unity by ort opp t rke Indian ma tfolio of replicating the full por that we ia Ind for aviation services for the ped elo dev lly sfu ces have suc Middle East.” (EAG) addressing the will Empire Aviation Group cials of Air Works and Offi : -UP Meanwhile, Air Works TIE GIC ATE STR set p. and tie-u r jets media after unveiling thei focus only on business said, “In rks u Wo lur nga Air Be in or, ect ice Dir iness jets up a command off our long term and Good news for private bus of lhi ion De uat in s tin ice con off l n Works wil and liaiso significant add owners in India as Air to ing such strategy shop for p Mumbai, for provid -sto lio, one a tfo m por e the e vic ser provid our es. “We to vic es liti ser abi nce cap ds. In this aircraft maintena ighted to announce meeting all their travel nee metro del is er oth rks to Wo Air and exp ly o recent will als Empire in nt me est k is respect, Air Works lin inv ic ng ssi teg mi this stra made a cities later. The only e company has a e, Th announced that it had anc up. ten Gro ain (m on O iati Av MR bai-based aircraft engine very a , del t mo nex strategic investment in Du ss r ine Ou . great bus repair, and overhaul) list, Empire team and ent em d nag nte private aviation specia ma poi ur ed Go enc t,” eri exp target would be tha within the Aviation Group (EAG). a strong reputation rks Wo Air out. p hel l ry. wil ust ind The move er and regional and international Middle Steve Hartley, Co-found the in int by tpr t tha foo its ent se fid con said, increa ly G ful EA of are or We ss aircraft Executive Direct East and provide world cla es in y together, Air Works sel vic clo ser ng our rki wo nch lau its l to “We wil a strong management services ve to New and EAG can build ording to a Bengaluru and will mo acc n ia, atio Ind avi in ing ers erg tom em cus the in partnership is ise Th nch ai. fra mb has funded Delhi and Mu e ddl Mi the and ia press release. Air Works Ind o help us to markets of through a with Air Works will als Air Works ke ma to this strategic investment is base and aim e ss Th t. ine Eas ruals and broaden our bus aircraft solutions mix of internal acc d Asia and -en st -to We end in an ng eri re `120 cro service off structured debt finance of y.” compan . India, and beyond.” rship, from KKR and Company Commenting on the partne ing nag Ma ur, Vivek N Go

As a result, Air India and Indian Airlines, both put together, had an operating loss of `7700 crore. Kingfisher had a loss of about `4000-odd crore. Jet Airways also had a similar loss. These losses were on two accounts. One was on account of excessive fuel prices and we can give the information for the entire industry to you. We are making representation as Chairman of the Indian Airlines Association. We have been making representations to the Ministry of Finance and the Ministry of Civil Aviation.” When the Committee further asked if the airlines had made profits when the oil prices were low, the then CMD Air India stated, “Yes, sir. We were making profits, but the profits were not very high. In the airlines business, one will never get

returns more than 4 to 5 per cent. But the losses are something around `5,000 crore.” When asked about the problems being faced by Air India, the then CMD said: “We are supposed to be full-service carriers. On per-aircraft basis, KFA and Jet Airways have only about 150 employees, whereas mine goes to around 226 employees. And if I take the contract labour, etc. into account, then the total number of employees with me is around 40,000, which works to about 3,000 employees per aircraft. I have shortage in terms of pilots, cabin crew and engineers, who are necessary for the aircraft to run. But I have a large number of employees when it comes to ground handling, ground transport, back office issues, etc. I CRUISING HEIGHTS July 2012

pay `3,600 crore as salaries annually to all these 40,000 employees, whereas my competitor Jet Airways pays only `1,800 crore. I have a `1,800 crore burden on me. I cannot retrench them and cannot send them home”. The Committee asked the CMD, Air India, about the justification for keeping employees on contract labour as there were excessive employees in the organisation. The then CMD said: “Today, if I have a loader, he is of my age, which means that he is 50 years old. On the other hand, my competitor is using a 25-year-old loader. He has to physically pick up the baggage. The productivity of my loader is, therefore, low. I have six cadres in loaders, namely Loader I, Loader II, Loader III, Senior Loader,

Chief Loader and Loader Team Loader. We have had no recruitment for loaders for the last 15 to 20 years. Hence, all the loaders have come into the top category and they are taking the same salary of `50,000 or so, whereas I can get them at `12,000 in the market.” The Committee further asked whether the loaders get `50,000 without overtime or with overtime, and if the airlines had excess staff, why was overtime being paid. To this, the then CMD said: “It is with overtime. The overtime has been identified as a union agreement that since we could not increase their salaries, we give the increase in salary in the name of overtime which is permanent.” When asked why the integration of Air India and Indian Airlines was still incomplete, the then CMD, Air India, said: “Air India is separate and Indian Airlines is separate. Air India salaries are different; designations are the same but the salaries are different. Air India’s rules for promotion are separate, their timings are separate. Air India works for five days. Indian Airlines works for six days a week. These are all part of the agreements with the Unions. You change that to 28 hours or 24 hours or something like that, we have requested the government to please give us the permission to renegotiate the agreements on hand.” On being pointed out by the Committee that due to lack of proper integration between Air India and Indian Airlines, both the airlines were suffering post-merger, the then Air India CMD said, “That is precisely what I am trying to explain. The legacies and challenges before us are these. I have two cultures to merge into one culture. I would like to submit very clearly, with all the information which I have on hand, if the merger had not happened, one of the airlines would have died. There are no two opinions about it. The point is, whatever projection was given at the time of the Budget was correct. But two things happened. One, the fuel prices skyrocketed and the shareholders could not come out with the money into this. It allowed the company to do what it wanted to do. What did the company do? It borrowed money to meet the expenses. Now it cannot even return the money. I cannot return `18,000 crore.” “Now, let us look at what has happened in other places. PAN AM and Transworld Airlines (TWA) were two airline companies which are now dead. Now in their place are Delta, American Airlines and Continental. Jet Blue and others are coming up. Worldwide over, whichever airline had a very strong

domestic presence, it survived, and those which are only international have all died.” The then CMD continued: “Lufthansa last year had suffered $1.2 bilion loss for the first time. But they have a very strong presence in Europe. British Airways (BA), earlier known as BOAC, and British Eastern Airways were merged to become BA. Same was the case with Japan Airlines, where the domestic and international airlines had to be merged. In fact, they have been given financial packages for support.” The Committee then desired to be specifically apprised of the timeline for the completion of the merger. The Ministry of Civil Aviation in response to this wrote in February 2012: “The merger has been completed in many identified areas and the major milestones are being achieved, albeit slowly due to the precarious financial position of the company. The major milestone of a single ACP (Aviation Coooperation Programme) has been achieved and issued by the DGCA. The cut

came. As a result, what has happened is that today I do not have one flight to Malaysia. Previously we used to have 21 flights to Malaysia from Delhi but we are now dormant; we had 60 per cent market share in Malaysia. My competitor is using A 330 which is a wide-body aircraft. Thai Airways has got wide-body coming from Delhi to Bangkok. Singapore has got a wide-body from Delhi to Singapore. Emirates has a wide-body from Delhi to Dubai. What am I offering? I am offering Airbus A 320, a 25-year-old aircraft, sometimes with all sorts of penalties on it. I can carry only 60-80 passengers. When you ask for the bookings, it is booked, but when you get into the aircraft, it is half empty because of penalties. Why am I being asked to run with penalties?” On being enquired further by the Committee on penalties being imposed on Air India, the then CMD said, “What happens is we have aircraft such as A 319 which require a higher weight

IN DEEP CRISIS : An Air India plane at one of the airports.

over to the new PSS system has also been completed and the company has migrated to a Unicode System. About 71 per cent of merger-related integration process had been completed.” On queries by the Committee as to how Air India could be revived in the presence of so many issues, the then Air India CMD stated: “I only want to submit that if some good support is given to us, then it is possible. I as the Chairman of the company cannot generate `10,000 crore in a year. It is not possible. I cannot do anything with depreciation. We have ordered for 27 Boeing 787 aircraft and made the presentation that the order got delayed. It should have come to us in 2008. In the Cabinet note when it had gone, we had asked that with the 787 coming, we will have four per cent of internal rate of return (IRR). But the aircraft never CRUISING HEIGHTS July 2012

exemption. If we do not get the higher weight exemption, then the DGCA and everybody would not allow you to fly the aircraft accordingly. They will reduce your weight. So the pilot has to calculate the total weight he can take and there is load restriction. Therefore, if I am flying from Delhi to Kuala Lumpur in A 319, I can carry only 70 passengers when I am supposed to carry 140 passengers. But that is not the right aircraft. The right aircraft has still not come to me. I have lost `6000 crore in the last three years from the markets that are dominant. Who is going to pay me? So what we have done is that we have written very clearly on the tag of Boeing. We took to laws and we have said very clearly that we are not going to agree to any damages on delays and all that based upon the contract. We have given a $1.1 billion notice to the Boeing people.”

COVER STORY

SPICEJET

READIES ITS RECIPE FOR SUCCESS

SPICEJET HAS HAD ITS GOOD TIMES AND ITS BAD TIMES. INVESTORS AND CEOS HAVE CHANGED SO OFTEN THAT ONE CAN HARDLY REMEMBER ALL THE NAMES. HOWEVER, ALL THAT IS A THING OF THE PAST. IN ITS EIGHTH YEAR OF OPERATION, CEO NEIL MILLS WITH AMPLE BACKING FROM PROMOTER KALANITHI MARAN IS CRAFTING OUT A STRONG LOW-COST CARRIER, AS R KRISHNAN AND TIRTHANKAR GHOSH FOUND OUT. DESPITE THE DIFFICULT TIMES, IT LAUNCHED THE REGIONAL OPERATIONS AND IS WELL ON ITS WAY TO MAKE A SUCCESS OF IT. 26

CRUISING HEIGHTS July 2012

“ SpiceJet

is a very Q&A interesting target for foreign airlines

”

Continued on Page 30 `

See Page 28 `

HEMANT RAWAT

ften described as “boyish looking”, SpiceJet’s CEO Neil Raymond Mills is certainly no boy in the Indian aviation business. Behind the boyish looks is a pragmatic and experienced chief executive who knows the low-cost business inside out. No wonder, he is certain that SpiceJet will make money from this depressed market. Perhaps, that is why when we asked him whether the present time was a good one to be in aviation or not, Mills put it rather bluntly: “Life is tough but not impossible.” Making the most of the tough times, Mills has pushed SpiceJet to carve out a niche for itself and usurped the dream of India’s LCC pioneer Capt G R Gopinath of making every Indian fly. Only this time around, SpiceJet wants to give everyone “the power to fly” and what better way than swooping in on the Tier-II and III cities — creating markets where none existed before — and enabling the average Indian to not just fly to the next big city but abroad. Mills has crafted out a two-pronged approach: on one hand he wants to expand his regional footprint and on the other move forward on the international front. SpiceJet is not interested — at least for the moment — in pumping in more capacity in the metro-to-metro connections; in fact, he said, it had been overdone: “The metro markets need to settle down after a while. Let the markets fully absorb the present capacity and then we will think about putting in more. To keep pumping in capacity indefinitely… people do not grow there. Markets don’t grow overnight. You have got to give it time to

A MONTH AFTER CELEBRATING SPICEJET’S SEVENTH BIRTHDAY, NEIL RAYMOND MILLS IS LOOKING FORWARD TO THE NEXT ONE. HE SPOKE TO CRUISING HEIGHTS ABOUT THE REGIONAL AND INTERNATIONAL OPERATIONS AND THE “GOOD” PEOPLE HE WORKS WITH. EXCERPTS:

COVER STORY Is this a good time to be in aviation?

No it is not a totally bad time to be in aviation. It is a challenging time for sure. Myself and my competitors all have our challenges. But for us it is interesting: we have got all sorts of opportunities that are opening up with international operations that are now starting with Dubai having been announced and commencing on 25th (June 2012). On that date, we fly from both Delhi and Mumbai. We have also planned for a whole bunch of other international operations at the moment, not with India. India has now given us the permission - but after a long time — and we have actually asked the foreign countries — the third-party countries - to give us the permission. All of that is in the process.

times are challenging but we pay salaries every month and we pay them on time. It is not only important but absolutely vital in order to make sure that your staff are 100 per cent focused on flying the machines you have to pay them on time.

line, it does have a lot of interest, particularly if the bilateral rights that are not available now for some of the foreign carriers. We have some international bilateral rights and as we are showing over the next couple of months, we are starting to use them.

What about your competition?

Now with fuel prices slightly lower,

Air India is not out. Well, it still has 17 per cent of the domestic market. All the noise that is being made in the press is about international operations. Domestic has not been affected. 17 per cent is still a significant proportion of the total business, the total volume in the country. You can’t possibly say that Air India is out.

The first amount of reduction in the fuel price — it moved from about $117 where it sort of stabilised down to about $106107 - did not make any difference to us because the exchange rate of the rupee went the other way. So with the weakening of the rupee and at $10 a barrel, our savings disappeared. By the time it should have hit me, the exchange rate had moved the other way, so I got no net benefit. So I think my net change in fuel cost in May was 0.65 per cent, or half a per cent. That was not enough to bother about too much.

Q&A

I remember you speaking about fly-

ing to CIS countries…

No we haven't got to that yet. The ones that we have announced are for Guangzhou in China, Hong Kong, Riyadh in Saudi Arabia, Colombo in Sri Lanka, Malé in Maldives, Kabul in Afghanistan and Bangkok as well. We applied for all these and we have received permission. We will fly to these places in summer. Would it be very difficult to start all these operations considering the fact that you had a loss in the first quarter…

Let’s not get too negative here. Yes, they were not great results. The `249 crore (Spicejet reported Q4 losses at `249 crore, despite a 46 per cent increase in sales to over `1,100 crore) loss was partially driven by an engine adjustment. It was a one-off engine adjustment …part of a long-term engine contract. `25 crore was for the one-off engine adjustment. We paid money for maintenance of our engines in order to get a longterm deal. We know our costs will now be taken care of to go forward. We are not just working on today but we are actually working on improving tomorrow…Making sure that what we do tomorrow (is on the right track). The

Kingfisher is almost out and Air India is losing ground.

Last time you had said that there

would be consolidation in the Indian aviation industry…

No, I think the term I used was rationalisation and not consolidation. Consolidation assumes one company is going to buy another and I am regularly asked, “Do you have any interest in buying anybody out?” “No, I have enough troubles of my own, I don’t need to buy some more.” So I don’t need anybody else’s trouble and airline consolidation in India doesn’t have a long track record. So I don’t think we want to do that. What about all this news about peo-

ple interested in taking a stake in SpiceJet?

Taking a stake in SpiceJet is definitely an option from both Private Equity Investors particularly from overseas and from foreign airlines. For foreign airlines, SpiceJet is still a very interesting target because we have one of the best networks in India. We carry 36,000 people a day and if they can actually do something to turn that into overseas passengers for their networks and also accessing not merely the metros but also the Tier-2 and Tier-3 cities. There are 34 airports now in India that we serve with 270 flights a day — domestically. It’s a big network for somebody else to want to gain access to. So for a foreign air-

how are you managing to run your airline?

So what is your strategy now? Are you in an expansion mode?

Both of those are still correct. We are going to continue to expand. We will fly to more international destinations and we will add more regional aircraft to increase our network coverage in India because we feel that there is a big chunk of the country yet to be covered. With a few more Q400s, we will definitely have the best network in India and that will certainly help going forward. Now that the seventh birthday is over, how do you see the SpiceJet brand progressing?

I think the brand is already very strong and that’s why 36,000 people fly with us everyday today. They don’t do that because they like me or they like the colour red or something. That is what the brand stands for and what our good people actually deliver. We have a great staff and the services they deliver to customers is second to none. That’s what people come back for. People certainly don’t come back because I’m the CEO. Interesting but naive, CEOs don’t make that much difference as much as we would

I remember you speaking about flying to CIS countries… No we haven’t got to that yet. The ones that we have announced are for Guangzhou in China, Hong Kong, Riyadh in Saudi Arabia, Colombo in Sri Lanka, Malé in Maldives, Kabul in Afghanistan and Bangkok as well. We applied for all these and we have received permission. We will fly to these places in summer. 28

CRUISING HEIGHTS July 2012

So what is your strategy now? Are you in an expansion mode? Both of those are still correct. We are going to continue to expand. We will fly to more international destinations and we will add more regional aircraft to increase our network coverage in India because we feel that there is a big chunk of the country yet to be covered. With a few more Q400s, we will definitely have the best network in India and that will certainly help going forward. like to think. Actually our staff is what makes the difference, particularly to the customers. Do you think there will be a time

when you and IndiGo will rule the skies? The situation is such that no one will dare to venture at this point of time into the aviation industry.

I think venturing into the Indian aviation industry at the moment would be a very brave decision. There are certainly a lot of carriers that have their issues today. I don’t think together with Indigo, we will have the entire market. I think the proportion of the market that the low cost carriers will have in India, is going to progressively grow and that’s for two reasons. We are both very strong carriers that deliver good products — and I have a lot of respect for Indigo as a competitor. And versus our competition, there is no real differential on the service that we deliver. If at all there is anything, I believe ours is better. Our on-time performance is better, our aircraft are better, our customer service is better. How do you rate the performance of the Q400s?

The performance is just fine. The aircraft has been pretty reliable. We’ve had one or two issues from time to time because it’s a new aircraft type not only for us, but for the entire region. So it is as much a reflection on the experience than on the machine. But the aircraft has settled down very well. More currently we are doing 59 flights a day on seven aircraft. So the utilisation on sectors for aircraft per day is 8.4 which is very high for regional operations and is in fact very high for Q400 operators in any part of the world on per aircraft basis - even though we have only been operating these aircraft for a relatively short period of time. Do you make money on the regional operations?

The regional operations will positively contribute within 12 months. This is what we gauge and certainly emerges from the trends that I analysed this morning (June 13). We will never become hugely wealthy from regional operations

because the revenues are much less but they are a good addition to the network. It does make the overall network much stronger because you are in a position now with Dubai (as one of my foreign destinations), I will be able to sell a Rajamundry-Dubai. The route is RajamundryHyderabad, Hyderabad-Delhi, DelhiDubai and we actually have customers booking that. It doesn’t matter from where the customer comes from in India, we can touch him and he can touch us because he knows that the connecting service that we provide is very good. The option for a guy from Rajamundry is much more limited and if he travels on one of the international carriers via one of the big hubs, his cost is huge. We think it’s perfectly viable and it is not an unpleasant product. The connectivity and the inter connectivity certainly starts to make a difference. It’s not the normal way a low cost carrier would go but you have to adapt the model and that’s what we are doing. Are your metro operations making money?

For us the metros are not a challenge but they are not hugely contributing in the way that they should and that is because the fare dynamics within those markets are a little bit mature. There is too much competition happening in a short period of time. So we will keep flying them. They need to remain an important part of our network and it is a fair way of deploying our airplanes between metros and other cities. We will continue to be there, but the growth will not be in those areas. So, am I going to put more flights between Delhi and Mumbai? Probably not. Do you think there is enough capaci-

ty in the metro markets?

The metro markets need to settle down after a while. Let the markets fully absorb the present capacity and then we will think about putting in more. To keep pumping in capacity indefinitely… people do not grow there. Markets don’t grow overnight. You have got to give it time to mature. I think the metro-tometro connectivity is maybe being overCRUISING HEIGHTS July 2012

done. I don’t think India has been overdone but the metro-to-metro connectivity is being potentially overdone. What are your business plans in your

eighth year of operations? Are you planning to have any new promotions?

We are not looking at any short-term promotions but we will go into the new season from July… the demand goes down (after that). We are a low-cost carrier and we have some plans but we have not announced anything yet. As of today, we have a lot of areas of interest, particularly in international operations as well as the regional domestic operations. So we are focusing on those as well. You can only focus on so many things at once. What about your other ancilliary revenues’ business like SpiceJet tours, etc?

That part works reasonably well but it is not a huge proportion of our business. It is only a small add-on. What is, however, becoming a bigger and bigger proportion of our business is cargo. Cargo is much larger and is continuing to grow. And that is also due to the service level because what we are delivering is really good service to our customers. We don’t have claims on damages because we don’t damage goods. Last month (May) we did 5,500 tonnes of cargo. Cargo for us has become a big proportion of our business. At the moment it contributes four per cent to our revenues. For a low-cost carrier that’s quite good. Do you offer special products in cargo — like door-to-door delivery, etc?

We do it all. Now, we have a relationship with our partners where we do door-to-door service, we do express, mail, courier services, etc. We now move fragile goods, perishables. As a non-containerised, narrow-body, lowcost carrier, we are actually doing a huge amount of cargo. We bring in perishables into the metros and commodities out of the metros into the Tier II and Tier III cities. So it’s not necessarily a one-way traffic.

COVER STORY Continued from Page 27 `

mature. I think the metro-to-metro connectivity is maybe being overdone. I don’t think India has been overdone but the metro-to-metro connectivity is being overdone.” In addition, SpiceJet has instituted measures to ensure that its airplanes are utilised to the maximum. As a result, its revenues have soared and market share has expanded. This, notwithstanding its smaller fleet compared to the big boys like Jet and Air India and the truly bigger LCC IndiGo. SpiceJet’s market share rose to 18.5 per cent from 17.7 per cent in April, according to the latest data released by civil aviation regulator DGCA. One of the other reasons for the rise in its marketshare is the fact that SpiceJet did something ‘out of the box’ to make the Q 400s popular. It used the social media to popularise the regional launch and achieved, according to simpliflying.com 88 per cent load factor in the first two weeks of the Q 400s flights. In the process, the carrier got a lot of “new fans, followers and increasing engagement manifold on their social media channels”. The campaign began with the ‘Name the Plane Contest’ after the carrier’s convention of naming each of its planes after a spice. Launched on SpiceJet’s Facebook page, people were asked to give in the ‘spicy’ names for the planes: there were more than “100,000 impressions in a matter of few days and an equally overwhelming response with hundreds of name suggestions”. After the contest ended, it was followed up with an introduction to the Q400. In addition, there was another contest to name the destination the flights were going to. The contest received a whopping 350,000 impressions. To add to that was a 29 per cent increase in the number of fans. In fact, so impressive was the social media campaign for the Bombardier Q 400 launch that the story was highlighted by the Huffington Post. What does all this mean? Perhaps, it is a signal that SpiceJet has already acquired a critical mass and in so doing it has unfolded a different model than IndiGo which topped the market share as per DGCA data for May 2012 for any standalone carrier. The difference is only that while IndiGo touched 24.9 per cent market share with more than 50 A 320s, Spice acquired 18.5 per cent market share with 34 Boeing 737s and seven Bombardier Q400s. If one were to compare oranges to oranges — that is A 320s to the B737s — then the difference of 16 narrow-bodies led to an additional mar-

READY TO ROLL: SpiceJet Bombardier Q400s lined up at the Bombardier Delivery Centre.

One of the other reasons for the rise in SpiceJet’s marketshare is the fact that it did something ‘out of the box’ to make the Q 400s popular. It used the social media to popularise the regional launch CRUISING HEIGHTS July 2012

ket share of only 6.4 per cent. But with lesser number of A 320s GoAir acquired 7.3 per cent market share in May 2012. Earlier, it was expected that Jet Airways and JetLite now all under Jet Konnect would make the best of Kingfisher’s drop in market share and, perhaps, Air India’s (domestic) as well. This did not happen as is evident from the rise in market share of both IndiGo and SpiceJet. One may well ask what about the seven Bombardier Q400s, which SpiceJet has been flying? The story is precisely here. Against the hub and spoke model of IndiGo, SpiceJet has gone intensively with its own hub and spoke by using Hyderabad as a hub for its regional carrier Q400 (carries 70 passengers and also space for cargo) and connects 12 Southern regional destinations. The passenger load factor of Spice rose from 80 per cent in April 2012 to 82 per cent in May 2012 while that of IndiGo rose from 82 per cent to 86.3 per cent. With yields up and less intense competition, SpiceJet expects that it will also make profits in the current fiscal 2012-13. This is notwithstanding the total loss of `605 crore it incurred in fiscal 2011-12 compared to profits of `103 crore in the previous fiscal 2010-11. The regional services have opened

up a new avenue for revenues and one that SpiceJet is nurturing to the hilt. Mills confided that cargo was becoming a big business. Speaking about the ancillary sources of revenue, he said that while SpiceJet tours were working out reasonably well, it was not “a huge proportion of our business. It is only a small add-on…What is, however, becoming a bigger and bigger proportion of our business is cargo. Cargo is much larger and is continuing to grow. And that is also due to the service level because what we are delivering is really good service to our customers. We don’t have claims on damages because we don’t damage goods. Last month (May) we did 5,500 tonnes of cargo”. He went on to say that cargo, “At the moment it contributes four per cent to our revenues. For a lowcost carrier that’s quite good”. SpiceJet’s cargo business has been doing so well that it has a whole bunch of services that it offers to forwarders. “Now we have a relationship with our partners where we do door-to-door service, we do express, mail, courier services, etc. We now move fragile goods, perishables. As a non-containerised, narrow-body, low-cost carrier, we are actually doing a huge amount of cargo,” said Mills. The carrier brings in perishables into

Speaking about the ancillary sources of revenue, Mills said that while SpiceJet tours were working out reasonably well, it was not a huge proportion of the business. CRUISING HEIGHTS July 2012

the metros and commodities out of the metros into the Tier II and Tier III cities. “It’s not necessarily a one-way traffic. Things like car parts are obviously coming from the metros into the Tier II and Tier III cities,” said Mills and he has put both the Boeings and the Q 400s into the cargo services. “The Q 400s obviously have a lower capacity but they are starting to carry more and more cargo now because you are building the markets …earlier there weren’t any.” The aircraft that was serving these cities in the past — the ATRs — had zero uplift capacity, “while the Q 400s can actually carry cargo because it has capability and some power in the engines. So carrying cargo isn’t a challenge,” emphasised Mills. Such rapid expansion, especially on the regional routes, has forced SpiceJet to spend nearly double on fuel and power from `1,226 crore in 2010-11 to `2,196 crore in 2011-12, which incorporated the Q4 results that is JanuaryMarch 2012. With rising fares, occupancy, etc, the carrier expects the first quarter Q1 (April-June) 2012 to show positive results financially and sizeable profits for the year as a whole. Along with fuel, the airline also had to recruit more personnel and spend nearly `402 crore on wages/salaries, which it has defined as employee expenses during 2011-12 compared to `240 crore in 2010-11. Overall its total income rose from `2,960 crore in 2010-11 to `4,019 crore in 2011-12. In such a scenario, SpiceJet promoters thought it fit to acquire more stake in their own airline. As on March 31, 2012, the airline promoters held 43.5 per cent stake of which Kalanithi Maran’s Kal Airways Private Limited held 35.4 per cent. Besides, about 3 per cent was held by Maran. The shareholding pattern showed that SpiceJet promoters held 43.5 per cent, Mutual Funds/Banks/Indian FIs held 12.9 per cent, FIIs/NRIs/OCBs held 3.9 per cent and Indian public/others, the balance 39.7 per cent. As the beginning of the new financial year in April 2012, the promoters infused `100 crore into SpiceJet taking the total holding to 49 per cent. This is the second time promoters have infused fresh capital. Earlier in October/November 2011, the promoters had put in `130 crore. Does that mean that the promoters are buying stakes in order to sell it later when the FDI policy on allowing foreign carriers to hold stakes in domestic Indian carrier is formally announced and adopted? Perhaps, so. In any case, when Kalanithi Maran offered to buy back 20

COVER STORY per cent stake in SpiceJet from the public as per SEBI guidelines soon after he picked up 34 per cent stake from earlier stakeholders William Ross, Royal Holdings (of NRI Bulo Kansagra) and others in June 2010, there was hardly any response. That he offered a price of `54 per share hardly evoked any public shareholder’s response. Later when the price fell to over `30, Maran carried out open market operations and upped his stake. He did the same now by further increasing the promoter stake. So what is his gameplan? Simple. Make the airline profitable and expand international operations along with increasing its regional presence in Tier II and III cities. According to AAI, there is a virtual air travel boom in regional centres/airports, which is much more than what one is witnessing in the six metros. In the last five years, on an average traffic across Tier II and III cities grew at a Compounded Annual Growth Rate (CAGR) of 25 per cent while it was only 9.7 per cent in the six metro airports. According to SpiceJet CEO Neil Mills, his airline is taking calculated risks. It has infused fresh capital, which will provide enough ballast to acquire more aircraft and fly to more destinations. SpiceJet at present has 34 Boeing 737s and seven Q400s. It will add three Boeing 737s and four Q400s before the end of the current financial year 201213. Said Mills, “A couple of aircraft are coming by the year-end. We will be taking three aeroplanes between now and next March on the Boeing side and then we will be taking five or six Q4s over the next couple of months.” At the beginning of April 2014, SpiceJet is expected to have 41 Boeing 737s and 15 Q400s. According to Neil Mills, the airlines in India were much more disciplined today. The lack of discipline had earlier pulled every carrier down while fares were below cost. Now they cover costs and, therefore, yields were better and higher. As for SpiceJet, Mills mentioned how he utilised each aircraft. His Boeings, he said, would “not be doing anything above six hours (flight duration)… five or five-and-a-half hours will be the absolute maximum that we can go to because that is the physical limits of the Boeings (that we have)”. He also pointed out, “We are just going to stretch the capabilities of the machine and utilise them — most of our international flying will be done at night. So the utilisation will be mixed between domestic and international flights. That way we can get the most out of the airplane because

STRONG CONNECTION: SpiceJet Q400 NextGen delivery ceremony. (L-R) Simon Roberts, Vice President and General Manager, Turboprops and Toronto Operations, Bombardier Commercial Aircraft; Sivasubramanian Natrajhen, Chief Operating Officer, SpiceJet; Neil Mills, Chief Executive Officer, SpiceJet; Chet Fuller, Senior Vice President, Sales, Marketing and Asset Management; Kalanithi Maran, Chairman, SpiceJet; and Kavery Kalanithi.

According to SpiceJet CEO Neil Mills, his airline is taking calculated risks. It has infused fresh capital, which will provide enough ballast to acquire more aircraft and fly to more destinations CRUISING HEIGHTS July 2012

the airplane cost remains the same, whether it is on the ground or in the air.” Added to that the fact that SpiceJet delivers value for money. Mills said: “India is a very pragmatic market. While value for money is attractive in any part of the world, it is particularly attractive in this part of the world. Everybody wants a deal of some sort or another and I believe what we deliver as our normal product is a very good deal and our passengers are comfortable with that.” Pragmatic indeed! And now with fuel prices coming down and SpiceJet planning to make its own arrangement for fuel supply by importing it as an actual user, the carrier could get at least one per cent saving and experts believe that its costs can come down further. SpiceJet’s fuel bill in 2011-12 was more than `2,000 crore. So, a minimum one per cent saving could mean `20 crore and should the fuel prices come down further, it could mean even more savings. The airline has already indicated its strong preference to grow regionally. Its yields are pretty attractive on these sectors. Besides, it is planning to expand its international destinations (see interview with Neil Mills): Hong Kong, Kabul, Riyadh, Guangzhon over the next few months. It had already started ticket sales to Dubai from Delhi and Mumbai for the flights that started on June 23. In fact, within a week of its launching Dubai destination, it had sold 6000 seats. It is targeting Maldives from Trichy and Trivandrum using its Q400s and plans to tap the medical tourists and trading community. SpiceJet is using the Q400 on the Chennai-Colombo route. The question that is being asked is: Where will SpiceJet find the finances to fund expansion — be it aircraft acquisition or connecting more destinations

both domestic and international? It is in this context that SpiceJet has been looking out for Private Equity (PE) investors. Should the FDI policy allowing foreign carriers to pick up stakes in Indian domestic carriers be permitted, then SpiceJet could even look at a stake sale to foreign carriers. In an interview to a daily in early June 2012, Neil Mills said that SpiceJet was keen to offload a part of its stake to an overseas investor as soon as the government opened its FDI door to foreign airlines. The Spicejet Board has already reached a consensus on selling a part of its stake to a foreign investor. Mills remarked that it could be either a financial investor (read PE) or a foreign airline. Earlier, there were rumours that SpiceJet was in talks with PE funds like the Blackstone Group, Bain Capital and, perhaps, even KKR. According to Mills, it was true that many airlines had expressed interest but how much SpiceJet would sell would depend on the offer (see Neil Mills’ interview). While European airlines may not be interested, the potential airline partner will have to be either a Gulf or South East Asian carrier. When Mills was in Dubai some time ago, he had raised doubts whether all the airlines would be able to take delivery of all their aircraft orders. In the case of SpiceJet, it is yet to take delivery of 30 more Boeing 737s worth $2.6 billion. Between the time they placed the order in November 2009 — when President Barack Obama visited India — and now, the rupee has depreciated sharply vis-a-vis the dollar. So SpiceJet, like any other competing domestic carrier that wants to acquire new aircraft, will have to earn more rupees to pay for the same amount of dollars. Perhaps, we should see Mills’

The Spicejet Board has already reached a consensus on selling a part of its stake to a foreign investor. Mills remarked that it could be either a financial investor (read PE) or a foreign airline.

GREAT SERVICE: Cabin crew serving fliers in a SpiceJet Boeing.

H C TIWARI

CRUISING HEIGHTS July 2012

observation with this aspect in mind. But an optimistic Mills said Spicejet needs for the next three years were covered by leases from third parties. The aircraft it ordered directly from Boeing will begin to arrive between 2014 and 2019. During this period some of the leases will expire and, therefore, free up cash. SpiceJet hopes to make money in the first quarter (April-June of 2012-13 fiscal) and this will only improve in the subsequent quarters. As of now, indications are that the airline may make profit in the current financial year 2012-13. According to market analysts, SpiceJet net sales may well post a 27.6 per cent CAGR to `6513 crore for the period 2011-12 to 2013-14. The aviation industry is witnessing a structural change: carriers have increased ticket prices and competition is coming down. The renewed optimism for SpiceJet is based on the expected rise in non-metro traffic, which could grow by as much as 20 per cent in the second quarter (JulyAugust 2012). The share of small regional airports is expected to be around 50 per cent in the next few years from the present 33 per cent. Of the 29 cities, which have shown high traffic, SpiceJet and Jet Airways fly 26 per cent and 45 per cent of their daily flights to these cities, respectively. The advantage, which SpiceJet enjoys, is that it has a low debt and has rapid expansion plans. For instance, during the fiscal 2011-12, the interest cost of SpiceJet as a percentage of net sales was just 1.3 per cent as against 6.6 per cent for Jet. It is no wonder that Neil Mills said his airline was confident about the future particularly as it would launch numerous international routes very soon and on the cost side control it further by directly importing ATF. He put it rather matter-of-factly when CRUISING HEIGHTS asked him about plans for the futur: “We are not looking at any short-term promotions but we will go into the new season from July… the demand goes down (after that). We are a low-cost carrier and we have some plans but we have not announced anything yet. As of today, we have a lot of areas of interest, particularly in international operations as well as the regional domestic operations. So we are focusing on those.” Another important factor for SpiceJet’s success under Mills is the fact that the CEO is deeply appreciative of the “good” people working with him. As he pointed out in the conversation, it is the SpiceJet staff that are delivering a good product and it is the product that is making the carrier popular among the people.

CRUISING HEIGHTS

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Online travel company Expedia is planning to take the unique inititive of opening retail outlets for the Indian market, a move that may have been triggered by restrictions in the Indian market, including poor broadband penetration and problems related to online payment. This is a strategy that it has not adopted anywhere else worldwide. While noting Expedia had become a familiar name in the online travel space, Vikram Malhi, the company’s country head, confirmed plans to set up offline retail stores. However, it is not the first online travel company to have offline presence in India, an arena which already has the presence of players like MakeMyTrip (with 54 stores across India), Yatra.com (23 outlets, including one in Kathmandu). In a reverse kind of a situation, traditional travel companies such as Cox & Kings and Thomas Cook are eyeing the internet for retaining hold in the industry.

NET ORGANISED: A set of happy travellers who are well organised with the internet

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booking. These queries are of a varied nature. It is here that Trip Planner steps in at the research and planning phase and provides users with a one page snapshot of crisp, curated content around the trip and the destination. “This includes things like distance, optimal modes of transport, driving directions, places to stay, eat, see and nearby destinations among others. All of this is presented in an informative and engaging user interface,” said Bajpai. However, the process of recognising the customer need was not a cakewalk. There were challenges like understanding the problem and identifying a solution. Since it was a first-of-its-kind effort, everything from the multi-modal transportation engine to the content aggregation or curation system had to be built from scratch. There was also lack of accurate information for many places, routes, modes of transport etc for many smaller/ remote destinations. The firm spoke to several users, took feedback, analysed trends and completed several iterations over several weeks before coming up with the product. The aim has been to provide a technical platform with intelligent understanding, giving information with the experience of interaction with a human being, and not a machine.

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XiGO clears the clutter of excessive information on the Internet with Trip Planner, its innovative travel portal— The computer is easily of the wonders of our times, but it can throw up problems of information saturation. For something as simple as planning a trip, it may provide us with overwhelming amounts of matter through horizontal search engines, but yet not give us the direct answers we seek. To deal with such a scenario, the India-based travel search engine iXiGO.com recently launched Trip Planner, a unique portal where customers can type their queries in a variety of languages besides English: French, Spanish, Italian, German and Portuguese. The site responds by giving a unique visual representation of options, i.e., infographics for the answer. Since the site contains enormous data/information on the arena of travel, the promoters of the website believe that it will give answers to possibly everything that you want to know about, therefore increasing the likelihood of arriving at a decision much higher and faster. Explaining the concept, Aloke Bajpai, Chief Executive and Co-Founder of the company, iXiGO, said that users had innumerable questions even before they made the decision of meta-search or

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INTERVIEW Niklas Andreen, Group VP, Hospitality and Partner Marketing, Travelport.

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GURU MANTRA Opportunities for substantial growth remain strong for GDS.

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HI-TECH BOARDING SIM-based NFC trial at Toulouse-Blagnac.

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“At Travelport, we provide the relevant information” Niklas Andreen, Group Vice President, Hospitality and Partner Marketing, Travelport GDS, is upbeat about prospects in India as far as providing hotel accommodation on the GDS is concerned. Readying to launch Travelport’s new product ‘Rooms and more’, he told Tirthankar Ghosh, that would help travel agencies provide a whole range of options to the domestic traveller or those visiting India. is India so important for Q: Why Travelport as far as the hotel business is concerned? One of the top countries as far as hotel bookings are concerned, India is one of the BRIC countries looking at growth. Compared to other countries it has a larger middle class and fewer number of outbound travellers from here. And as a tourist destination, it has attracted visitors all along. On the business side too, more and more businesses are coming out of India. It is an important business hub as well.

È What will Travelport be doing extra other than the business of air bookings that you are doing now? Our core business has always been in air bookings that’s what we are helping travel agencies with now.

What we are doing extra now is to roll out different products that will help the traveller. One component that we will do differently is to look at how to add much more Indian content to the core GDS; it will help the business travel agencies include domestic business travel as well. The other business that we are looking at is the ‘Rooms and more’ product that will have more Indian content so that you don’t get international comparisons. And the third part — we are making a huge investment — is making sure that we have the people who have the confidence to help travel agencies use more of our products. Technology, people, confidence: that is how we are going… È How different will Travelport be from the Expedias of the world? Expedia is one of our customers on a global basis, and it is an

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The one-stop solution for hotel rooms ravelport’s ‘Rooms and more’ is an innovative solution that offers travel agencies access to a wide variety of accommodation around the world. It does not matter which GDS the travel agency uses but it provides the freedom to shop and book bed and breakfasts, boutiques, five-star deluxe hotels, budget accommodations and everything in between. Travelport Rooms and More also features a streamlined commission payment process that delivers monthly payments in the local currency. Travelport’s global reach and partnerships with hoteliers, lodging providers and hotel aggregators worldwide mean that ‘Rooms and more’ can deliver competitively priced, up-to-the-minute availability for accommodations on every continent. The content that the agency needs to

online tavel agency. That is not Travelport’s ambition to compete. Travelport’s ambition is to be the provider. We want to be the market place for Expedia. We can be the content provider. Likewise, we will provide content to the traditional travel agencies: whether they are internationally recognised or even the local travel agencies in places like Bengaluru, for example. È Have you not entered the Indian market late? We don’t think so. We have always been very much part of the business. Some of these online travel agencies have aggregated some of the content but a lot of the Indian content has not been aggregated yet and a lot of it is not available for international distribution. And the international travel agencies booking travellers to India do not have access to the small Indian hotels. So I feel that we are here absolutely at the right time since the hotel side of the industry in India is yet to take off. È What kind of potential do you see — of the hotel industry — roomwise? We have a growth plan that we are following and we are continuing to grow on the business travel side. We continue to work with business travel agencies by adding content. Today the average business agencies do 50 to 60 per cent of their hotel bookings on GDS. I would expect that to go up to 90 to 95 per cent. On the leisure

satisfy every type of request — from cost-conscious to free-spending travellers, and those who are particular about surroundings and amenities — are all listed there. According to Niklas Andreen, ‘Rooms and more’ has 200,000 to 300,000 of an estimated half a million hotels around the world in the system. It was, however, difficult to provide an exact figure of how many hotels were on ‘Rooms and more’ because the providers often have overlapping inventory. The solution is becoming popular. More than 6,500 travel agents in 70plus markets have been using ‘Rooms and more’. Today, Booking.com and Expedia are believed to be competing for hotel share around the world. The two, however, are not alone: according to experts, there are around a dozen side, we service a much smaller segment…around 20 per cent because we have not been able to provide leisure content. I want that to grow substantially as well. È As you mentioned there is potential in the hotel business but on the other hand, you mentioned that the hotel business in India is fragmented. How do you propose to move on? That is part of the dialogue we are having with ITQ. (Our talks are on) How can we facilitate content for the Indian market? In fact that is what the Expedias, the Cleartrips and Makemytrips are doing. With ‘Rooms and more’ we are actually bringing in content from wholesalers. What we are trying to make sure is that the travel agent gets all that content at his fingertips. È How do you see the business in APAC and India? As far as APAC in general is concerned and India in particular — there is really a good future. Despite the recession, the ‘Incredible India’ campaign has made a marked difference in helping India get recognition as a tourist destination. There has been a large influx of tourists to India. The direction where India is heading is absolutely the right one. If you look at the cultural heritage, the natural wildlife, the sun, the beaches, etc., you have all that to be a hugely successful leisure destination. But you are still not there…However, India is on a good CRUISING HEIGHTS July 2012

aggregators in the fray to attract travel agency bookings in Travelport ‘Rooms and more’. Rooms and More, which will figure on Travelport’s Universal Desktop, looks like a metasearch site. What is important is that agents are not sent to the aggregator sites to complete their hotel bookings. That is because Travelport acquired hotel metasearch engine Sprice in May 2010, and that is what gives the backbone to ‘Rooms and more’. The travel agent’s experience is similar to a traditional metasearch — Andreen refers to it as the “meta-book” experience — with all the bookings taking place within the ‘Rooms and more’ site instead of Expedia or Booking.com. To top it all, Andreen mentioned that Travelport had started discussions with professional review providers for adding to ‘Rooms and more’. trajectory to get there. ‘Rooms and more’ in India will help the Indian traveller — there will be a choice of more hotel rooms, both domestic and international. Rooms and more will help the Indian traveller agencies become more effective, become more successful and provide better service to their customers. È The Internet, according to you, has been providing the traveller with a wide range of choices. At Travelport, are you not limiting those choices? It is not about limiting. You should have as many choices as you want. The key word is influence. We don’t want all the information. What we need to do at Travelport is understand how to provide the relevant information. If I say I have $150 to spend the night, I don’t have to give you every five or four-star hotel in the world. We will narrow the search to what is really relevant. That is just one of the parameters. È As a layman, if you were to travel to India, where would you go: to a travel agency or the Expedias of the world? I would look at multiple alternatives. That is part of human behaviour. Also it depends on the situation. If I am just going for a weekend with my friends, I would not really care how a hotel room looks like, I would most probably use an online channel. But if I were to go on a honeymoon with my wife, I would probably be inclined to talk to someone with knowledge about the details, because everything looks good on the screen.

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TripAdvisor City Guides cover 50 places

City Guides, the highly rated and free mobile application by TripAdvisor, the world’s largest travel site, which can be conveniently accessed even when the user is offline, is now available for 50 leading destinations around the world. This has more than doubled its original portfolio of travel guides. Three new features have been added to the Android version of the application, enabling travellers to view local transit stations, create personalised maps, and see itinerary suggestions from travel experts, in addition to reviews and opinions from the greater TripAdvisor community. “Users have already raved about the ease of use and helpfulness of TripAdvisor City Guides, with more than a million app downloads to date,” said Adam Medros, Vice President of global product at TripAdvisor.

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Air France adopts Amadeus Airline Ancillary Services

Starting June 5, the Amadeus Airline Ancillary Services (AAAS), an endto-end solution, compliant with industry standards, was adopted by Air France for the distribution of its Ancillary offering to travel agencies. It enables the French flag carrier and one of the world’s largest airlines to sell services across all its channels, including its website, ticketing offices and travel agencies. The solution is available in France where travel agents can now offer Seat Plus for their customers with EMD (Electronic Miscellaneous Document). Seat Plus enables travellers to book a seat with more legroom during long-haul flights. “Air France wants to offer a

consistent service to our customers regardless of how they book with us,” said Jean Wieviorka, Air France VP Corporate and Distribution. “Thanks to the Amadeus solution, our customers can select Seat Plus when purchasing their ticket on airfrance.com or with any travel agent, or add on the service to their booking at any time before departure.” Furthermore, Air France can customise its offer to its most loyal passengers. For instance, using AAAS, Air France can offer Flying Blue Gold and Platinum members — who identify themselves with their Flying Blue card number when purchasing their ticket — Seat Plus free of charge.

China Airlines’ email boarding pass China Airlines has joined the growing trend of mobile boarding passes, an important step towards preserving the environment and doing away with the need for passengers to print out traditional paper boarding passes. The carrier’s mobile boarding pass can be used on services from Osaka Kansai,

“Future of travel depends on innovations” The future of travel will depend on technological innovations, says Ankur Bhatia, Executive Director, Bird Group.

È Do you think the market was ready for this concept? It wasn’t in 2001. Today, we have grown by leaps and bounds because all the action is happening online; retail is happening online, travel is happening online. I guess we still have a long way to go in terms of online travel-related information.

È Technology and innovation today are the key drivers for any organisation’s success. What unique measures are you taking in this regard?

Hong Kong and Frankfurt airports and has already been used by more than 1,000 passengers. Boarding passes are emailed to passengers who check-in online. They can also be downloaded via the airline’s iPhone app. The mobile boarding pass can be scanned at the gate by handheld devices in just two-three seconds.

We constantly work towards offering our customers a host of solutions to streamline their online travel transactions. BirdRes, for example, is the state-of-the-art B2B distribution channel that offers solutions for providers/suppliers who may or may not be available on a GDS platform and would like to distribute their content in a B2B space.

You recently won the ‘Entrepreneur of the Year’ award. How do you visualise the future of the online travel industry? Travel as we see it today, will become more collaborative over the next decade, both in terms of how people travel and how the industry interacts with travellers. The future of travel will depend on technological innovations that will reduce stress, uncertainty and chaos that surrounds the traveller today. It will allow the traveller to learn from the experiences of friends, family and fellow travellers more intelligently.

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È Do you think smaller Indian hotels getting access to online booking provides them the right platform? Many independent hoteliers don’t understand why the GDS is critical to their success. The first step is to identify and get demos on potential GDS providers so a cost effective choice can be made if the property is not connected. If the property is targeting corporate travel, a GDS ad campaign may provide a launch into that segment that heavily makes reservations through travel agents using the GDS.

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Opportunities for growth remain strong for GDS

“In the aviation space from the Global Data Systems (GDS) perspective, domestic aviation grew by 13 per cent yearon-year in FY 1112 as against 18.9 per cent the previous year,” informed Marco Gorin, Chief Marco Gorin Commercial Officer, InterGlobe Technology Quotient. However, Indian carriers on the GDS grew by 5 per cent while domestic Low Cost Carriers (LCCs) grew by 25.9 per cent. In terms of growth, this represented a significant slowdown in the growth for Indian domestic GDS carriers with a variance of 7.7 per cent from the previous year against a variance of only 4.1 per cent in the LCC space. As for the hospitality space — it remains highly fragmented. We estimate the total number of room nights in India to be around 2 lakh but only a fraction of that is currently available through online platforms at roughly 4,000 room nights. The current economic outlook may present some challenges to the industry in 201213 with rising inflation, overhead costs and fuel prices threatening profitability. While the immediate future may present some challenges, the level of investment in increasing domestic capacity both in the aviation and the hospitality sector remains strong in anticipation of continued growth. As a GDS provider, we are extremely well positioned to capture opportunities for substantial growth, particularly in those segments which, unlike air, are not commoditised. Our line-up of new solutions in the coming months are aimed to provide travel agents in India with a substantially larger role to play in this space and is quite exciting.

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AirAsia, Amadeus launch ‘Amadeus LCC Smart’

Amadeus LCC Smart, a bespoke solution for travel agencies in Asia Pacific to book AirAsia content, was recently launched by Amadeus, a leading travel technology partner and transaction processor for the global travel and tourism industry, together with AirAsia Inc., the Low Cost Carrier (LCC) from Phillipines. This new travel booking tool will allow travel agencies to easily book AirAsia content using a web-like interface in the Amadeus global distribution system (GDS) and will be available free of charge to travel agencies using the Amadeus Selling Platform distribution system in the

Philippines, Japan, Malaysia, Vietnam and with more markets in Asia Pacific in 2012. The launch of this innovative solution has come as a response to the increasing demands of travel agencies who do not wish to use a green screen, but prefer to use a simple, graphic user interface (GUI). “This partnership also provides easy access not only to Philippines’ AirAsia destinations, but to AirAsia’s extensive network that spans more than 20 countries and 75 red hot destinations across Asia and Australia,” said Marianne Hontiveros, CEO of AirAsia Inc. at the launch event held in Manila.

SIM-based NFC trial at Toulouse-Blagnac

For testing the technology of a combined effort between Toulouse-Blagnac Airport and SITA, a total of 50 passengers will be selected for an innovative SIM-based Near Field Communication (NFC) trial, which will allow passengers to pass through key touch points using their mobile phone. This follows SITA’s unveiling of a proof of concept for the use of NFC at the end of last year. The trial, a joint effort between Toulouse-Blagnac Airport, SITA, Orange and BlackBerry, is one of the latest efforts to prove the practicality of NFC as a means to enhance customer experience. Similar trials were carried out in 2009 by Air France, Nice Côte

d’Azur Airport, Amadeus and IER, and SAS Scandinavian Airlines had introduced the NFC Smart Pass last year. The smartphone will effectively become a pass that will allow the passenger access to car parks, the boarding gate via a premium access zone, and a premium passenger lounge. Any changes to flight information and boarding gates will also be communicated via the NFC-enabled BlackBerry.

Travelport, Egypt Air reach agreement

Marking the start of a new Global Distribution System (GDS) partnership,

a recently signed new global full content airline agreement between Travelport, the business services provider to the global travel industry, and EGYPTAIR, that will come into effect immediately, will be giving all of Travelport’s Galileo, Worldspan and Apollo-connected travel agents worldwide access to the carrier’s full range of published fares and inventory. Captain Hossam Kamal, Chairman and CEO of EGYPTAIR Holding

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Company said, “By dovetailing our longterm growth strategy with Egypt’s tourism goals, we aim to offer products and services via the global travel trade that encourage travellers to fly with us and discover a truly magical destination. With an impressive global network of loyal travel agency users, Travelport is ideally positioned to help us nurture this everimportant relationship.” “As a respected national carrier and one of the most experienced airlines in the Middle East and Africa, EGYPT AIR is a valued airline partner of Travelport and we look forward to working with them closely over the next several years to maximise their exposure to travel agents and increase the accessibility of their fares,” said Rabih Saab, President and Managing Director for Travelport Middle East and Africa.

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A SIGNIFICANT TIE-UP

FROM RUSSIA WITH LOVE

The first Bell Helicopterauthorised flight training school in China.

By 2014, Russia will be number two chopper exporter in the world

he Director General of Civil Aviation (DGCA) has chalked out a plan to make helicopter travel safer in the country. The plan comprises implementation of an Automat-

ic Dependent Satellite Broadcasting system (ADSB) to keep track of helicopters flying in remote and difficult areas. The ADSB would be a boon for those travelling to areas like the North-East or the

Towards safer chopper travel The days of frequent chopper mishaps and untraceable wreckage could soon be a thing of the past if a new plan by the DGCA is implemented.

forests of central India and the Deccan. The move comes following a few chopper crashes — the sites of which have been particularly hard to find, like that of Andhra Pradesh CM YSR Reddy in September 2009 and Arunachal Pradesh CM Dorjee Khandu in May 2011. In fact, it took several days to locate the crash sites despite the intensive search by Indian Air Force planes. According to DGCA Chief EK Bharat Bhushan, the Airports Authority of India (AAI) has been tasked with developing the system, which will have a blend of indigenous and foreign know-how. Signals from the Global Navigation Satellite System will provide pilots in the aircraft as well as controllers on the ground with an accurate position of the aircraft. The ADSB system will transform that position into a unique digital code and merge it with information from the aircraft's flight monitoring system — like the aircraft type speed, flight number, and if it is turning, climbing, or descending. This information is automatically broadcast from the transponder on the aircraft once a second. The system will not only help track the exact location of aircraft but also tell the pilots about all the aircraft in the skies around them. It will help keep aircraft safely separated in the sky and on runways. This will be a far cry from the present system of using radar data to track the position of aircraft in the skies and on the runways. ADSB ground stations also send out graphical information from the National Weather Service and flight information, such as temporary flight restrictions. Little or no additional training will be required as pilots will be able to see this Continued on Page 46 `

How ADBS works X A GPS receiver aboard the aircraft determines the aircraft's exact position. Y Data is broadcast to other ADSB-equipped aircraft in the area. Z Data is also broadcast to a network of ADS-B ground stations, which feed airport surface monitoring systems.

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FOCUS ON ‘COPTERS Robochopper performs first ‘Hot Hookup’ After creating history by resupplying US troops ¤Kaman in Afghanistan without a pilot onboard, the K1200 “K-MAX” helicopter has outdone

CAE

itself by picking up loads while hovering, performing what is called a 'hot hookup'. This means that the drone helicopter can now resupply troops with-

Bell's China training school

“Bell Helicopter is committed to growing our customer support and services in China,” said Eric Cardinali, Executive Vice President, Customer Support and Services for Bell Helicopter. “Partnering with Guanchen Aviation to provide a high-quality, local flight training solution is an important first step in meeting our customers' needs in the region. “As the need for vertical lift emerges around the world, we intend to replicate the successful operation of the Bell Helicopter Training Academy, located in Fort Worth, Texas, as a critical element of our strategy. Opening the first Bell Helicopter-authorised flight training school in China is a significant step as we begin this journey,” Cardinali said. After the initial internal training cycle is complete, the Anyang-based Flight Training School will be certified to provide factory-approved initial and recurrent-type training for Bell 206L and Bell 407 pilots. Over time, this Certified Training Facility (CTF) could expand to train more Bell aircraft types to meet future demands.

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MARINES.MIL

Bell Helicopter and Guanchen Aviation have signed a Memorandum ¤authorised of Understanding for the establishment of the first Bell Helicopterflight training school in China.

out the need to land to pick up supplies, thus speeding up the process. In addition to this, the hot hookup also leads to fuels savings as the helicopter travels further on the same amount of fuel. This hot hookup goes a long way in eliminating the need for a human operator manoeuvring the unmanned helicopter. The American Navy's Office of Naval Research is working on transforming the K-MAX into an all-weather fully autonomous drone-on-call that can deliver cargo to Marines in different kinds of environments. The K-MAX has carried more than a million pounds of consignments for the US Marine Corps in six months of being sent to Afghanistan as part of a test.

Prince William licensed to captain choppers After passing a test that included put¤survey ting out a simulated fire on a large vessel and searching for missing kayakers, the second in line to the British Crown is now qualified to captain a search-and-rescue helicopter. In spite of the new feat, Prince William still remains Flight Lieutenant Wales, as this does not

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entail a change in his military rank. The two-day tests were completed by the Prince just days before making a trip to London to be part of the Queen's Diamond Jubilee celebrations. As we know, Prince William is not the only chopper pilot in the family. His younger brother, Prince Harry, flies the AH 64 gunship.

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Russia looks to hike chopper exports

By 2014, Russia will become the second largest exporter of helicopters in the world, second only to the US. 99 helicopters worth $2.5 billion were sold abroad last year according to Rosoboronexport, the official Russian arms dealer. Five years ago, only 15 units were exported. Nearly 110 countries around the world operate over 8000 Soviet/Russian-origin helicopters. The demand for Russian helicopters is greatest in the Middle East, Africa, Asia-Pacific, Latin America, Russia, and CIS countries.

ANDREWBORROWS

Sikorsky S-300Cs to train Indonesian pilots

has announced the sale of two ¤fourSikorsky S-300C helicopters with an option for more, to IPTN North America, a subsidiary of PT Dirgantara Indonesia (PTDI)/Indonesian Aerospace (IAe). These S-300C helicopters will support the Indonesian Army's requirements to train more than 100 new pilots in the next few years. In March 2012, the Indonesian Minister of Defence, Purnomo Yusgiantoro, announced Indonesia's commitment to double Indonesia's military helicopters, increasing the need for helicopter training.

EUROCOPTER

X3 Enthralls America

The Eurocopter X3 had began its US ¤exceptional tour on June 20, 2012, to showcase its capabilities. This revolutionary helicopter was transported to America on a chartered cargo jetliner to the Grand Prairie, Texas-based headquar-

“The Asia-Pacific region is one of the areas in the world that has continued to sustain healthy economic growth in recent years. Specifically, Indonesia's economic success allows the country to fund a defence modernisation plan that maintains a minimally essential force in the country. Sikorsky is honoured to be able to support Indonesia's modernisation efforts with our S-300C training helicopters,” said Linda Scott, General Manager for Southeast Asia. The S-300C helicopter operates throughout the world in many demanding roles including military patrol, power line/pipeline patrol, commercial and military flight training, ranching, external load operations, animal surveys, aerial photography and personal transportation. The cockpit size, load capacity, performance characteristics, robust design and low direct operating costs make the S-300C an ideal chopper for these operations.

ters of American Eurocopter. During the tour, the X3 was available for assessments by selected American armed services personnel as well as potential civilian operators at five different locations around the Unites States. The X3 hybrid incorporates the vertical lift capability of a conventional chopper with the cruise speeds of a turboprop aircraft. The exceptional chopper easily exceeded its original speed target of 220 knots, achieving more than 230 knots in level flight making use of less than 80 per cent of available power. Even without the need for a passive or active anti-vibration system, the X3 has exhibited exceptional climb and descent rates along with very low vibration levels. The X3 has been lauded by experts who have praised its

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Towards safer chopper travel information on their cockpit traffic display screens. The Air Traffic Controllers will also see the data on the displays they are already using. Once installed the ADSB system will transfer some of the jobs for keeping safe spaces between aircraft from air traffic controllers on the ground to pilots who will have displays in the cockpits pinpointing all the air traffic around them, along with local weather displays. The US Federal Aviation Administration (FAA) considers the Automatic Dependent Satellite Broadcasting system the future of Air Traffic Control and has mandated that a majority of aircraft operating within its airspace has to be equipped with some form of it by 2020. For the FAA, ADBS is part of the Next Generation Air Transportation System (NextGen) which aims to change the air traffic control system from a groundbased radar system to a satellite-based one in stages between 2012 and 2025. Currently, there is no subscription fee for the ADBS or its benefits in the US. The aircraft owner pays for the equipment, and for it to be installed while the FAA administers and broadcasts all the services related to the technology. The technology will be used to shorten routes, save time and fuel, reduce traffic delays, increase capacity, and permit controllers to monitor and manage aircraft with greater safety margins. In India, all helicopter operators have also been asked to install an Early Ground Proximity Warning System (EGPWS) from January 1, 2013 by the DGCA. Together, it is hoped that these two systems will make chopper travel in Indian skies much safer.

excellent flight qualities, manoeuvrability, outstanding acceleration and deceleration capabilities. Beyond confirming its outstanding flight qualities, manoeuvrability, outstanding acceleration and deceleration capabilities, the hybrid aircraft has shown exceptional climb and descent rates along with very low vibration levels — all without any need for passive or active anti-vibration systems. With its unique set of capabilities, the X3 is being pegged for roles like longdistance search and rescue (SAR), coast guard duties, border patrol missions, passenger transport, off-shore airlift, along with inter-city shuttle services. It has been offered to the US military for roles like special forces operations, troop transport, combat SAR and medical evacuation.

AIR FORCE

A FIGHTER TO THE CORE: A Chinese XAC H-6

THE CASE OF THE

‘SHOW-OFF’ BOMBERS

ONLY TWO COUNTRIES — RUSSIA AND CHINA — ARE SERIOUS ABOUT PRODUCING STRATEGIC BOMBERS ALTHOUGH THE PLANES WILL HARDLY HAVE ANY USE IN TODAY'S KIND OF WARFARE. ABHIJIT BHATTACHARYYA TAKES A DETAILED LOOK AT THE COMBAT AIRCRAFT BEING MANUFACTURED BY COUNTRIES AROUND THE WORLD ONLY TO DISCOVER THAT THE PROPOSED INDIAN FIGHTER PROGRAMME STILL REMAINS A MYSTERY. Story on Page 48 `

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AIR FORCE ever before since the end of the Cold War have combat aircraft like strategic bomber and attack fighter aircraft faced such “realtime” crisis of confidence, demand and market along with diminishing customer interest. As things stand today, the successor of the strategic bomber of yesteryears is already a rare commodity with only two producers — Russia (Tupolev-160) and China (XAC H-6) — trying to make their product available in the military market. It began way back in 1967, when the Soviets planned their not-so-successful quest for a strategic bomber and relaunched the programme in 1970, Tupolev-160 (NATO name Blackjack), which was derived from the un-built Tupolev-135 bomber and the proposed commercial Tupolev-144 model. Significantly, the last days of the Soviet Union witnessed the world record performance set by Tupolev-160 on October 31, 1989, for “altitude and speed in a closed circuit and weight-to-altitude”. With the subsequent change and contraction of USSR to Russia, however, the Tupolev-160 did not go down in quality as “upgrade involving new avionics for navigation, attack and electronic warfare, with a high degree of commonality with parallel Tu-22M and Tu-142 (Tu-95M)” was clearly visible. The Tu-160 was

ir Putin ICTION: Vladim

STRONG CONV

The Chinese understanding of “bomber-powerprojection” made them start early, in September 1957, when they got the Soviet licence to produce the Tupolev-16 twinengine bomber.

in Tupolev 160.

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developed as a “significantly different” fifth-generation bomber. The four-engine Tupolev's stated goal is a force of 30 aircraft to be achieved by 2015. With a 40tonne weapon load at a maximum 275tonne take-off weight and service ceiling of 49,200 ft, Tupolev-160 appears to be one of the rare survivors in the midst of the vanishing species of strategic bombers. Obviously, economics today has become a major constraint for such a huge bomber with no “World Wars” in sight. This type of bombers, perhaps, could have been of use in a “Battle of Britain” like scenario or some “do-or-die” war between big powers of yesteryears. The Chinese understanding of “bomber-power-projection” made them start early, in September 1957, when they got the Soviet licence to produce the Tupolev-16 twin-engine bomber. The Chinese, however, never sat over the imported technology of the Soviet aircraft. They understood the importance of indigenisation of the imported equipment to reduce their reliance on foreign suppliers. They tried hard to “adapt” the foreign-made machine to their own requirement and improved the technology thereof. Also the Chinese, like the Soviet power of the Cold War era, sought overseas customers to enhance their national footprint in international arena. The Chinese exported a small number of the strategic bomber to Egypt which used them in combat against Libya in 1977. The most recent variant of this craft has also been kept in “export” order inventory. The Chinese aircraft, in comparison and contrast to the Moscow machine, nevertheless is not in the same power, payload, performance, range and weight of the original Soviet/Russian aircraft from where Beijing had sourced the strategic bomber. Thus, with service ceiling of 39,370 ft, 9-

tonne combat payload, reduced-powered engine, 971-nautical mile combat radius and a maximum level speed of 1014 kilometres an hour, the Chinese have a “strategic” but slow bomber the actual success/failure mission of which remained untested; hence, unknown. In fact, no strategic bomber of any Communist power has been used in the post-Second World War tension areas in the globe. Therefore, the efficacy of the possession of this type of aircraft would at best be an avoidable drain on shrinking military budgets of the contemporary world; and at worst will carry the stigma of “resultunknown”. Yet, given a chance, perhaps, every nation with a strategic geo-political agenda and ambition would like to possess a “bomber fleet” to fly past on its “National Day” and flex its muscles to evoke both awe and dislike to its neighbourhood. Of the several “attack fighters” (which stand apart from “multirole fighter”), China once again leads the way with two distinct models, the CAC FC-1 Xiaolong and XAC JH-7, followed by Russia's Sukhoi-34, Japan's Mitsubishi F-2; India's ADA Medium Combat Aircraft with Iran being the most determined amongst all the makers of this fighter. To the discomfiture of India, Chinese attack fighter CAC FC-1 Xiaolong is designated JF-17 Thunder by the Pakistan Air Force. Launched in 1991, the aircraft is a “single-engine variant of the (twinengine) MiG-29. Sino-Pak collaboration began with the 1995 memorandum of understanding (MoU), leading to “joint development and production contract in June 1999...” The Pak production line of the machine was formally launched at Kamra on January 22, 2008. Envisaged initially for Chinese and Pak air

To the discomfiture of India, Chinese attack fighter CAC FC-1 Xiaolong is designated JF-17 Thunder by the Pakistan Air Force.

CRUISING HEIGHTS July 2012

forces, the high cost of production of the machine, however, turned the Sino-Pak enterprise look beyond borders for export as at least a dozen countries in Asia, Africa and the Middle East are reported to have shown interest in the JF-17 by 2010. The aircraft appears efficient and impressive with a (Russian origin) Klimov RD-93 turbofan of 11,111 pound static thrust; 12.4 maximum take-off weight; 52,500 ft service ceiling and ability to fight in the air as well as attack the ground. Though referred to as an “attack fighter”, the limited payload of 3.5 tonnes makes the combat effectiveness of the craft tactically limited and mission-specific rather than taking on multiple threats during flight. Understandably, the Chinese made up the “deficiencies” of the CAC FC-1/JF-17 and supplemented it with XAC JH-7. Begun in the mid-1970s as a “pure” bomber project, the aircraft subsequently changed to an “all-weather ground attack role” with a possible export version for Beijing’s allies and customers. With a 9tonne combat payload and maximum take-off weight of 28.475 tonnes, 51,180 ft service ceiling and 891-nautical mile combat radius, the UK-supplied Rolls Royce Spey Mk-202 twin-engine Beijing aircraft does appear to fit well in the Chinese scheme of things to project power and play the international game. The aircraft certainly does match well with the multirole MiG-29 fighters of the Indian Air Force. Barred by its own post-Second World War Constitution (drafted and designed by the victorious Americans in the 1940s), Japan nevertheless is slowly but steadily emerging again as a technology hub of the state-of-the-art world armament industry. Japan, however, has been barred from exporting its own product. Hence, the striking similarity between the Mitsubishi F-2 attack fighter and the Lockheed Martin F-16 multirole fighter notwithstanding, the Tokyo machine could easily have had an export market of

AIR FORCE

its own. Redesigned, fully self-funded, and re-programmed, F-2 appears a formidable fighter. The US licence-built Ishikawajima Harima Industries single-engine gives an enormous 29,500-pound static thrust to the maximum take-off weight of 22.1-tonne aircraft carrying anywhere between 6 and 8 tonne armament to attack from the air. Along with a high speed of Mach 2 and a high altitude (50,000 ft plus) operational capability, F-2 still could be of some concern for those who may not see eye-to-eye with the rising Japan's military industrial complex nexus and the unforeseen repercussions thereof in the future of international geopolitics. USSR/Russia has always been in the forefront of military aviation for last 75 years. Hence, the Sukhoi-34, which is an improvement over the original conceptual design of Sukhoi-27, makes no waves. Nonetheless, it is an aircraft which is bigger than virtually all aircraft in its class. With a 44.35 tonne maximum take-off weight, 51,500 ft service ceiling, 11-14 tonne armament payload, two 29,760pound static-thrust engine, Sukhoi-34 has all the features of an attack fighter but appears to be reeling under the recession cycle of the military mart. With the first production rollout on July 6, 2006, it is likely to be only 20 aircraft per year by 2013 when export orders are expected from overseas buyers. However, Sukhoi34 in flight today appears to be a fighter with not-too-bright a future simply because Russians traditionally depend on the export customers. And that is comparatively very weak. The story of contemporary Iran's military design is a story of an enigma. Eschewed by the West and diplomatically dealt with by the Orient, Iran appears determined to have at least two attack fighters in its armoury. Designated Owj/Azarakhsh and Saeghe, Iran is reportedly acquiring some Russian origin

RULING THE SKIES: Tupolev 160 in a display at MAKS airshow in 2011.

If Iran is a branded “enigma”, India surely is a confirmed “mystery” as few can predict or foresee the outcome of the Indian fighter programme and fewer, perhaps, would dare prepare a (timetable) plan of action and rollout date of the nation’s attack fighter. CRUISING HEIGHTS July 2012

equipment to fit its aircraft's internal systems. Innovative ways also have been put in place to cannibalise its venture from the old stock of the US-supplied Northrop Grumman F-14 Tomcat fighters. Although it would be difficult to come to any firm conclusion about the progress of Iran's ensuing attack fighter programme, credible reports confirm emergence of an Iran with a successful aero-combat facility and ability within the next five years. And, that certainly could create a fresh scramble for more western technology by the Sunni neighbours of Shiah Iran. If Iran is a branded “enigma”, India surely is a confirmed “mystery” as few can predict or foresee the outcome of the Indian fighter programme and fewer, perhaps, would dare prepare a (time-table) plan of action and rollout date of the nation's attack fighter. Thus, although DRDO has been studying an advanced version of the Tejas (the long-delayed light combat aircraft), as a potential replacement for the imported Jaguar and Mirage-2000, none is sure as to when, where, what and how the progress of the DRDO thinking and analysis would be. It is still a concept! The aircraft would be “twin engine; possess stealth technology; have indigenously-built thrust vectoring power plant; armed with laser-guided weapons for greater weapon range and improved lethality”. Yet, there is a talk and a school of thought that advocate that it would be better and preferable, perhaps, to have potential collaboration partners in Europe, Russia and the USA! Clearly, therefore, the time and cost overrun of light combat aircraft are already playing in the minds of the Indian planners, which could give another (expected!) blow to India's entry into the big league of attack fighter manufacturing market with an unending status/status quo of “drawing board” medium combat air craft (aka MCA).

A I R

C A R G O

L O G I S T I C S

CRUISING HEIGHTS www.cruisingheights.in I July 2012

Wait and watch The key piece is in place in the air cargo jigsaw puzzle; stakeholders wait for easier times.

Ready for 100% screening

Boeing draws a big zero

Western sunrise for air cargo

US and EU sign a deal to end screening duplication

Air cargo downslide = No freighter orders in May

Ahmedabad gets ready to become a perishable hub

LAST IN/FIRST OUT

TRENDS

All set to an aviation hub airports that would get international status this year are Lucknow, Varanasi, Coimbatore, Trichy and Gaya. Sometime in the beginning of this year, a FICCI-KPMG Knowledge Paper had pointed out that India could be a global aviation hub and the third-largest aviation market in the world by 2020 if an eight-point action plan was put into action. The paper entitled “India: The Emerging Aviation Hub” called for the establishment of an Air Cargo Promotion Board (ACPB) to counter the challenges in the air cargo sector and make India an air cargo hub for the region (see also story on following pages). Since passenger and cargo traffic had shown growth and modernisation and enhancement of capacities at metro and non-metro airports had taken place, the paper said that the country now stood at the opportune moment where a few fundamental changes could help it becoming a global aviation hub.

THE PRIME MINISTER'S initiative to boost infrastructure will provide a push to the 17 new airports, including seven international ones that are coming up. The move has been prompted by the loss of outbound air traffic from the country to airports like Dubai and Singapore. Among the airports that have been proposed include the one at Navi Mumbai, Goa and Kannur. By July-end, PPP projects would be finalised for a dozen-odd existing airports as well as for a number of greenfield airports. The

May mayhem: Drop in air freight prices AIR FREIGHT rates have dropped significantly, as per the preliminary rate data for May on two headhaul air cargo trade routes.According to the Airfreight Price Index, published monthly by Drewry, demand has softened substantially compared with the same time one year ago. Reports from Drewry point out that there has been a year-on-year decline of around 12 per cent. Martin Dixon of Drewry was quoted saying that followed “a 4 per cent year-on-year decrease in April”. He went on mention that in March and to some extent in April, rates had been buoyed by the launch of Apple's iPad3 - clearly showing that airfreight pricing was subject to short term changes in demand. Incidentally, over the past year, airfreight rates on AsiaUS and Asia-Europe routes had been going down due to falling demand, and of late rising capacity.“As the latter is driven in part by developments in the passenger market, capacity does not readily adjust to cargo market changes, and over the past year passenger and cargo markets have been moving in different directions, hence the over-capacity and impact on freight rates,” said Dixon. He also said that some adjustment to cargo capacity had taken place since the start of the year with airlines grounding freighters while a number of all-cargo operators had been forced out of the business.

“Global means the world — not Europe, the US or China — you don't have to be in those locations. You define that the moment you step outside your borders. We don’t know how to do business in the US — and we don’t want to do business in the US. You need to know what your core competency is and stick to it.” ) Fadi Ghandour

Founder and CEO of global logistics company Aramex, who will be retiring by the end of 2012.

CRUISING HEIGHTS July 2012

IN A BID to welcome industries, the Odisha government has identified six industrial centres that will be developed into logistics parks. These are: Rourkela, Paradeep,

Kalinganagar, Jharsuguda, Angul and Dhamara. These parks will be put up on 50150 acres of land and will see between `50 and 500 crore of investment. Warehouses, distribution centres, storage areas, offices, parking lots, truck terminals, container rail terminal, containerhandling facilities, cold storages, air cargo facilitation points, service stations, hospitals and restaurants will be put in the logistics parks. To be developed on a public private partnership (PPP) mode, the parks would be served by roads, railways, inland waterways and airports. Pushing the whole initiative on a fast-track, the commerce and transport department of the state has been asked to identify land and shortlist investors. Meanwhile, the Container Corporation of India’s (Concor) proposal to the Odisha government to set up a logistics park at Kalinga Nagar steel hub in Jajpur district at a cost of `70 crore has been cleared. The logistics park is expected to be commissioned within three years of acquisition of land and will offer multi-modal transport solutions for existing and upcoming steel industries in the Kalinga Nagar cluster.

CARGO

Towards a secure cargo regime The TSA and the EU have signed an air cargo security partnership programme that will result in more efficient transportation of cargo.

n June 1, 2012, the US Transportation Security Administration (TSA) and the European Commission announced an unprecedented air cargo security partnership with the European Union and Switzerland paving the way for improved information sharing, stronger security, and more efficient transportation of cargo between the US and the EU. Air cargo traffic between the EU and the US amounts to over a million tonnes a year travelling each way across the Atlantic, which is over 20 per cent of all outbound air cargo from the EU (2010 figures). Effective June 1, the TSA and the EU mutually recognise their respective air cargo security regimes. While TSA has recognised other countries as having equivalent air cargo security, the announcement marked the first time that the TSA had recognised a union of nation states. As a consequence of this EU and Switzerland-wide recognition, private industry can move cargo through the 27 EU Member States, the US and Switzerland, while following a single set of security rules. The close cooperation between the European Commission and the TSA permitted the air cargo security regimes in place in the EU and the US to be compared in detail and to be confirmed as ensuring an equivalent, high level of security. Through TSA’s National Cargo Security Programme

John S Pistole TSA Administrator

Agreement with the EU and Switzerland will ease the burden on industry and allow for the free movement of goods and commerce between our nations.

(NCSP) recognition process, the agency analysed the air cargo programmes of its international counterparts, and determined if they were comparable to what was required in the US. Additionally, harmonised air cargo screening allowed industry to follow a single programme when transporting cargo between nations. TSA Administrator John S Pistole said: “The agreement with the EU and Switzerland will ease the burden on industry and allow for the free movement of goods and commerce between our nations. It will also strengthen security by ensuring that we share information and work together towards our common interests”. “With this mutual recognition of our

Siim Kallas Vice-President (Transport), European Commission

comprehensive and solid regulatory frameworks we create significant savings and simplification for our freight transport industry while maintaining a high standard of security,” said Siim Kallas, Vice-President of the European Commission responsible for transportation. According to the TSA, more than 80 per cent of cargo on international passenger flights into the United States is screened, up from around 65 per cent two years ago. Along with the EU, the US also announced a new mutual recognition initiative with Canada. Cargo shipped on passenger aircraft in either of the countries would be screened at the point of origin and would not need to be rescreened at the

With this mutual recognition of our comprehensive and solid regulatory frameworks we create significant savings and simplification for our freight transport industry.

CRUISING HEIGHTS July 2012

border or prior to upload in the other country. “With the two countries mutually recognising each other’s air cargo security programmes, the efficiency of screening is improved and the burden on the industry is reduced,” the TSA said. Meanwhile, the 100 per cent security screening order by the TSA beginning December 3, 2012, will also apply to India. Cargo screening at Indian airports has been going on at piecelevel for years. It may be pointed out that on May 16, the TSA had announced: “Beginning December 3, 2012, all cargo shipments loaded on passenger aircraft must undergo screening for explosives, fulfilling a requirement of the Implementing Recommendations of the 9/11 Commission Act.” Incidentally, the TSA has a bilateral memorandum of understanding (MoU) with India on security issues. In fact, a number of countries have air cargo inspection programmes that are often considered better than the one instituted by the US. John Sammon, TSA’s Administrator in charge of the screening programme, believes that the US State Department should negotiate agreements with the countries and bring all of them on the same page. At the same time, however, the International Civil Aviation Organisation (ICAO) is talking with countries to ensure ratification of security amendments that will apply worldwide.

CARGO

Envirotainer steps into Indian cold chain market It is a move that will tap into the burgeoning cold chain industry that will be worth ` 40,000 crore by 2015.

o longer will the international pharma industry hesitate to connect with India. To tap the growing Indian market, Sweden’s Envirotainer has singled out and tied up with an Indian partner: the Chennai-based TTL Active Cold Chain Solutions. Globally recognised in the cold chain industry, Envirotainer along with its active cold chain partners reaches more than 200 airports within an average time of 30 hours (under normal circumstances). Envirotainer’s partnership is aimed at propelling the Swedish giant’s business plans in the country; the burgeoning cold chain industry that will be worth `40,000 crore by 2015. TTL will not only enable Envirotainer’s entry in the country but also help its growth among air transportation and logistics providers and the healthcare and life sciences industry to ensure the integrity of their temperature-sensitive products. The partnership will also see TTL representing Envirotainer in business

COLD SOLUTION: IAG Cargo recently moved a Mid Infra Red Instrument (MIRI) - a key component of the James Webb Space Telescope from the Rutherford Appleton Laboratory in the UK to NASA's Goddard Space Flight Center in Maryland, US, in an Envirotainer to ensure maximum protection and temperature control throughout the journey; and, Stephen Maietta, Healthcare Sales Director of Envirotainer (left) exchanges partnership contract with Arun Vasu, Chairman & Managing Director, TTL Active Cold Chain Solutions

platforms and dealings and in various government and private forums. The move will shake up the Indian pharmaceutical industry that is worth approximately $8.8bn, with forecasts of 14 per cent yearly growth. More than 35 per cent of the revenues from pharma are a result of exports. Talking to Cruising Heights, Stephen Maietta, Healthcare Sales Director of Envirotainer, said that India had always been an important country from a business perspective. Terming the partnership as the “the first real representative type of

model of its type (Envirotainer has a GSA model in Japan),” he said that the company wanted “to expand our capabilities in the Asia-Pacific region, starting with India, as it is an important manufacturing market with very dynamic demands.” An optimistic Maietta pointed out : “The Indian market is on a growth path. There is such a mix of products from here." “If you go for generics you cannot miss out on quality. We are seeing our largest growth in Asia overall and

CRUISING HEIGHTS July 2012

India is part of that.” The focus for the partnership will, of course, be the pharmaceutical industry as experts are expecting an export boom: Exports are expected to cross $16 bn by 2013-14. In fact, India tops the world in exporting generic medicines worth $11 bn; thus the need for temperaturecontrolled containers to carry sensitive drugs. Maietta also said that the quality of products manufactured by the Indian healthcare and life science industry was at par with international standards and the export of these drugs internationally would continue to grow at a significant rate. TTL’s chairman and Managing Director, Arun Vasu, who was also at the meeting, said that the partnership could put an end to wastage of healthcare products. " Around 20 per cent of temperature-sensitive healthcare products are wasted during transportation due to a broken cold chain,” he said. “With this partnership we can bring world-class freight infrastructure and air transport technology in India to complete the chain. The cold chain market has been growing consistently and has huge potential to grow in the near future.” However, Envirotainer would not be putting in infrastructure right away for production. “As we go along, we will see how the aviation industry moves and then take action. There is a possibility that we could do something in the future,” said Maietta. As for development of infrastructure, “we have seen airports putting in infrastructure (for temperature sensitive cargo). A lot of changes are taking place but there is still a long way to go.” As for entry in the domestic market in the future, Maietta sees a “huge potential. We will have to evaluate the market once we pick up the skill set and expertise of operating here.”

CARGO

Aircargo matters

The situation has suddenly changed for the air cargo sector in the country. With the submission of the working group’s report, Air Cargo Logistics in India, industry stakeholders can look forward to a better future, reports Tirthankar Ghosh.

or quite a long while, air cargo in the country was looked at - and treated - as the stepchild of the aviation sector. That was partly because, as a cargo veteran put it rather succinctly, “Air cargo doesn't speak!” Well, air

cargo has spoken. The report by the Working Group on Air Cargo and Express Service Industry that was dated May 7, 2012, has made it clear that the government is interested in not only boosting air cargo and raising its status, but is

also keen to improve the conditions in which the sector operates. If recent indications are anything to go by - one of the first recommendations put forward in the report has already been implemented the future looks bright. Said Snehal Parikh, an industry veteran and former President of the Air Cargo Agents Association of India (ACAAI): “We hope that the report will be followed by the establishment of a strong, enduring implementation programme and a monitoring body that would ensure the effective implementation of the policy decisions taken by the Ministry based on this report.” Present ACAAI President Bharat Thakkar was optimistic. “In 2011, which marked the 100th year of Indian Civil Aviation, the government made tremendous progress…(as far LEAPING FORWARD: A view of a cargo terminal at an airport.

as air cargo is concerned),” he said. “The Ministry of Civil Aviation (MoCA) under Secretary Dr Nasim Zaidi announced the formation of the Working Group. The group drafted the Air cargo Policy within seven months

CRUISING HEIGHTS July 2012

and it was put on the MoCA website.” Thakkar went on to add that the air cargo stakeholders “are confident that the recommendations (of the Working Group) will be implemented in the deadlines set as was done with the formation of the Air Cargo Logistics Promotion Board.” It was sometime in December 2010 that the Civil Aviation Economic Advisory Council (CAEAC) decided to bring about changes in the air cargo set up. The industry had just weathered the global recession and almost every aviation stakeholder had come to the realisation that cargo brought in the money - hence the emphasis on enhancing infrastructure for the sector. Keeping in view the rapid growth in air freight and chalking out plans for the years ahead, the CAEAC set up a Working Group on Air Cargo and Express Service Industry. Comprising stakeholders - spanning across the whole spectrum of the sector, from freighter operators and freight forwarders to airports and, of course, the ministry of civil aviation -- the working group was tasked to recommend a slew of policy initiatives for the air cargo sector. The terms of reference were clear: Ê The working group would prepare and present a current snapshot of the industry and assess its future growth potential in the country; Ê The group would study the existing system of air cargo/express services handling in the country and identify areas that required improvement to seize opportunities in international trade and in the context of faster pace of economic growth in India; Ê The working group would “establish priorities of issues and recommend policy initiatives to address issues of significant importance to the air cargo/express

Bharat Thakkar ACAAI President

The air cargo stakeholders are confident that the recommendations (of the Working Group) will be implemented in the deadlines set as was done with the formation of the Air Cargo Logistics Promotion Board.

service industry”; and, Ê It would have to advise on action plans to aid implementation and monitor the impact of implementation. Chaired by the M Kannan, Economic Adviser, Ministry of Civil Aviation, the Working Group held seven meetings through 2011 and 2012 as well as a number of discussions of the sub-groups to formalise the 120-page report. In fact, the Working Group brought all the key stakeholders of the industry on one platform to discuss and deliberate the challenges of growth opportunities in the context of faster pace of economic growth in the country and identified areas that require

further improvement. The report has, according to Dr Nasim Zaidi, Secretary, Civil Aviation, “in-depth analyses of issues and comprehensive coverage of key aspects of the air cargo business” that would “lead to specific actionable points with timelines for implementation”. That the first of its kind report was a well-conceived exercise was pointed out by Tulsi N Mirchandaney, Managing Director, Blue Dart Aviation: “It has highlighted the issues and aspirations of our sector. We look forward to an equally aggressive implementation process.” The report points out that there is significant untapped

potential for air cargo in the country. It mentions that the total air-cargo volume of 2.3 million MT handled in FY2011 by all Indian airports put together was less than that handled by individual airports like Hong Kong, Memphis, Shanghai, Incheon, Anchorage and Paris. There were, however, a number of reasons for the sector to grow and catch up with the likes of Hong Kong, Shanghai and others. Just-in-time manufacturing coupled with the global outsourcing business model will continue to push demand for air cargo business in the country, says the report. The faster movement of raw materials, components, parts and spares will help firms to maintain lower inventories. In addition, the growth in passenger fleets will provide ample belly capacity for cargo movement both in the domestic and international segment. Added to that is the government's goal to double exports from $225 billion to $450 billion by 2014. Optimism for the air cargo sector arises from the fact that

India, along with China, could be at the epicentre of supply/redistribution in the region, and the fact that Free Trade Agreement concluded by India with South East Asian nations like Japan, Malaysia and South Korea and the likely India-EU FTA are expected to provide a boost to trade between these regions. The report lists out the key challenges - topping the list is, of course, infrastructure bottlenecks - and acknowledges that airports in the country were developed primarily from the passengers' view; hence, the requirement for development of cargo facilities was not taken seriously. “Cargo is generally the last part to be thought of and is relegated to that part of the airport, considered not important otherwise. This leaves the entire logistics of cargo - infrastructure and facility in a woefully inadequate and poorly managed area of the airport”. The report also points out that regulatory hurdles have not only stymied the growth of air cargo but also impacted the

Deadlines and action points T

he recommendation of the working group for the formation of an InterMinisterial Air Cargo Logistic Board was taken up by the Civil Aviation Minister and completed well before the three-month deadline set by it. There are other deadlines mentioned in the report.. Augmentation of offairport cargo logistic facilities within six months. The report has recommended action from the Central Board of Excise and Customs, the ministries of finance, civil aviation and commerce and industry stating that there is a clear and strong case for adding to offairport facilities for cargo processing and handling

for clearance. Irrespective of future proposals by air terminal operators to enhance or improve cargo handling facilities, demand will outgrow supply in the near future, cautions the report. Pointing out the example of ICD/CFS for maritime cargo, the report says that such facilities should be taken up on priority and “barriers if any for operationalising the policy initiatives of the Government in this regard should be removed without any further loss of time”. The recommendation states that guidelines be laid down for approving proposals for setting up Air Freight Stations and that the proposed Air Cargo

Promotion Board should ensure that these issues are sorted out so that Air Freight Stations become a reality to users from trade and industry. Tasking the ministry of Civil Aviation and Central Board of Excise and Customs to bring about changes in a timeline of six months, the report points out that there should be service levels for key performance indicators. Users of airport cargo facilities had pleaded for laying down appropriate performance standards relating to quality, continuity and reliability of service in respect of the cargo operations at the airport cargo terminal.

CRUISING HEIGHTS July 2012

The report, however, cautions that before undertaking this exercise it would be advisable to study the technicalities involved in a thorough and comprehensive manner by engaging expert agencies and by going through a process of consultation amongst the stakeholders. International benchmarks would also have to be kept in view while laying down standards for key performance indicators. Again with a timeline of six months and action from the ministry of Civil Aviation and the Airports Authority of India, the report has recommended models for facility development at airports. Stakeholders of major

industry spanning various departments and ministries. In what could be termed as a definite thrust towards all-round development, the Working Group has listed out initiatives and set aggressive timelines (see accompanying box) with the most important being the laying down of an integrated framework for an Air Cargo Logistics Policy within three months (see box). Vipan Jain, Regional Manager- Logistics, South Asia & Middle East, Lufthansa Cargo, pointed out: “The Air Cargo Logistics Promotion Board can be a turning point for the industry if all stakeholders work with an open mind and without any fear.” Vijay Kumar, Chief Operating Officer, Express Industry Council of India (EICI), was optimistic. “We hope,” he said, “that the interministerial group is formed soon to address the various regulatory constraints that the air cargo community faces to realise the full potential of this vital industry.” Even as this issue of Cruising Heights goes to print, the Minister of Civil gateway airports suggested the need for facility development for air express/cargo operators adopting innovative methods. As an example, the report points out that the Delhi International Airport had formed a partnership with specialised cargo operators such as Celebi and Cargo Service Centre. Promotion of key gateway airports as cargo transshipment hubs: The report has recommended that with action from the Central Board of Excise and Customs and the ministries of Finance and Civil Aviation, at least one cargo hub has to be set up within a year to promote and cash in on the transshipment business. Since handling and

Aviation has formed a 17member inter-ministerial board that would bring in efficiency in air cargo operations while meeting the growing needs of business and industry. Another important deadline - once again to be worked out in the next three months - is giving industry/ infrastructure status to the air cargo sector. Once that is done - with the concurrence of the ministry of commerce and industry, the Central Board of Direct Taxes and the Finance Minister - the industry will find it easy to source funds for creating infrastructure. The sector is presently being handled by multiple ministries like the Ministry of Civil Aviation, Ministry of Roads, Ministry of Commerce and Industry, etc. The lack of industry status has posed problems for the undercapitalised freight forwarders, integrators, cargo terminals and air express operators among others who find it difficult to raise funds through organised banking or financial channels. Experts point out that it is impossible for these clearance of transshipment cargo required the involvement of three key agencies to be working in tandem -- Carriers, Customs and Cargo Terminal Operator (Custodian) -- each of these agencies would have to adopt a holistic approach by fully understanding the extent of interdependencies among each other to achieve the objective of promotion of transshipment cargo at key gateway airports as cargo transshipment hubs, says the report. Promotion of dedicated freighter operations: Exhorting the ministry of civil aviation, airport operators and the Directorate General of Civil Aviation, the report

Dr Nasim Zaidi Ministry of Civil Aviation (MoCA)

In-depth analyses of issues and comprehensive coverage of key aspects of the air cargo business that would lead to specific actionable points with timelines for implementation.

stakeholders to invest in modern equipment and technology to increase efficiency and reduce transportation costs. Providing industry status to the air cargo sector would assist in the development of the sector and bring down the current logistics costs. In addition, “industry” status would facilitate easier access to finance through availability of organised financing and banking. Reflecting the views of industry experts that air cargo growth worldwide will be driven by Asia over the next two decades and that intraAsia growth will be expected to dominate world air cargo growth, the working group says that carriers should be incentivised to start freighter operations through conducive regulatory policy changes and provision of dedicated freighter facilities. Round the clock operations in air cargo complexes: With a timeline of six months for double shift operations, Customs, airport custodians, ground handlers, carriers, air freight forwarders, Bureau of Civil Aviation Security and the Ministry of Civil Aviation have been asked to revise work timings. One of the major causes of the significantly high dwell time at Indian airports for cargo operations and the

CRUISING HEIGHTS July 2012

has advocated the need to create strong air cargo infrastructure at the gateway airports of the country. It has also recommended the creation of transshipment cargo for which there is enough scope at Indian airports. Transshipment cargo comprises 60-70 per cent of total volumes handled by some leading airports but is negligible at Indian airports. Given its geographic location, India is well placed to capitalise on this opportunity. While neighbouring countries, particularly Bangladesh and Sri Lanka, have sizeable international trade with Europe and US, there is limited direct connectivity to US and Europe. The country, resulting congestion can be attributed to the limited number of hours of working by various agencies including the Customs administration. The report suggests that timings be changed to 24x 7 operations for all stakeholders. One of the major recommendations with a time line of a year involving the ministry of civil aviation and all other stakeholders is the creations of a National Aviation University that would take into account the current realities and the future potential for growth and frame regulatory standards for education and training courses relating to air cargo logistics in the country.

First boost for air cargo T

he Ministry of Civil Aviation has formed a 17member InterMinisterial Air Cargo Logistic Board comprising Ajit SIngh representatives from various central ministries and departments, that will lay down the policy guidelines for establishing air cargo facilities at airports and will also set performance standards relating to the quality of service in the air cargo logistic supply chain. The board was set up by Civil Aviation Minister Ajit Singh with the objective to resolve inter-ministerial issues that affect air cargo operations in the country. The Board will review, on a continuous basis, the general and sectoral policy regime governing air cargo logistic operations and remove the bottlenecks to efficiency. The new board follows the report of the working group on air cargo and service industry that has recommended policy initiatives. The broad framework of the board's functions will constitute: thus, has an opportunity to emerge as the preferred transshipment hub for these neighbouring countries to begin with. It is expected that the barriers to growth in transshipment which exist today in the form of process and procedural hurdles will be removed in a short span of time. Another major reason for India to become a transshipment hub, put forward by the report, are security regulations that are becoming stringent in Europe and USA (see story on page 55). “India is and will continue to be capable of complying with such regulations,” the report states. Added to that is the fact that the country has a large scope for multi-modal connectivity because of its vast coastline with access to modern ports in the region.

Ê Resolving inter-ministerial issues that affect the air cargo logistics operations in the country and to achieve better efficiency; Ê Reviewing, on a continuous basis, the general and sectoral policy regimes governing air cargo logistics operations with a view to remove bottlenecks to efficiency; Ê Monitoring and reviewing the functioning of the Cargo Facilitation Committees headed by Airport Directors of the Airports Authority of India and other private airport operators with a view to review the effectiveness of these bodies; Ê Laying down policy guidelines to establish air cargo facilities at airports, air freight stations/cargo villages including guidelines for the public-private partnership model of development of these facilities; Ê Acting as a coordinating agency to ensure expeditious clearance of the proposals for setting up of air cargo facilities at airports, air freight stations/cargo villages in

As the nation becomes a key node in the network of most global airlines, transshipment service would offer a significant market potential. “If the growth potential of this segment is appropriately harnessed, Indian airports can become cargo hubs of the region,” the report states. The working group has put forward one of its ambitious deadlines - this time of the year -of creating at least one cargo hub in the country while promoting key gateway airports as cargo transshipment hubs. In fact, in discussions with industry and trade representatives, the working group found out that at least four air cargo transshipment hubs in India could be developed by 2020. These cargo hubs can easily capture 20-30 per cent of the existing traffic along the

the country subject to fulfillment of all statutory requirements; Ê Laying down performance standards relating to quality of service in the air cargo logistics supply chain to be monitored by the Airports Economic Regulatory Authority (AERA) for implementation; Ê Reviewing the progress on development of major gateway airports as cargo hubs through facilitating transshipment; and, Ê Reviewing periodically implementation of proposals cleared by the Board. The departments and ministries on the board will be the Ministries of Environment and Forests, Ministry of Home Affairs, Ministry of Railways, Ministry of Road Transport and Highways, Ministry of Shipping, Planning Commission, and Representatives of Department of Agriculture and Cooperation, Central Board of Excise and Customs, Container Corporation of India, Ministry of Civil Aviation, Commissioner of Security, Board of Civil Aviation Security, Airports Authority of India, and others.

intercontinental routes, experts have stated. Commented Vipan Jain, “The report has changed our perception that cargo is a kind of neglected sector and never given the attention it deserves. As we all know, air cargo, particularly export, is the key indicator for development of any economy, and even a little boost to this sector can produce great results in terms of investment and employment.” The deadlines - given the present economic conditions - would perhaps be difficult to adhere to, but the first move has been made and the air cargo sector can look forward to better times. As a stakeholder who did not wish to be named, commented: “The mindset (of the stakeholders in the government) has changed -

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or, in the process of change and the environment will be much better from now on.” Well, ACAAI President Thakkar is confident that the future will be bright. He said: “India has been a strong contender for shaping the global economy and events like the economic meltdown or the Euro zone crisis can shake us but not hinder our growth. Air Cargo has shown a consistent double digit growth for the past few years despite many infrastructural constraints…With private terminals, Greenfield airports and the massive modernisation efforts in progress, our airports and cargo facilities are on a growth trajectory. In the years to come we will be a dominant country in the aviation sector including cargo capabilities.”

CARGO

India connection helps Schiphol as pharma hotspot At a recently-held meeting between the Lifesciences Steering Group and the Indian pharma and airline representatives, the focus was on the role of Schiphol in the pharma supply chain and the creation of a lifesciences supply chain strategy.

chiphol Airport’s cargo division is interested in carriers from India. Not too long ago, Schiphol Cargo set up a Lifesciences Steering Group with the intention of developing a strategy to promote lifesciences-related activity centred around the airport in Amsterdam. The move for the settingup of the group was prompted by the success of a trade mission to India at the beginning of this year by representatives from Schiphol Cargo and the Amsterdam Life Sciences Platform. These representatives met Indian pharma leaders to discuss the development of a pharma trade lane between India and Europe, with Schiphol as its distribution hub. At a meeting that took place on June 1 between the Lifesciences Steering Group and the Indian pharma and airline representatives, the focus shifted to the role of Schiphol in the pharma supply chain and the creation of a lifesciences supply chain strategy. Among those in the Lifesciences Steering Group other than Schiphol Cargo are AmsterdaminBusiness, Amsterdamse Innovatie Motor, Bioport Europe, Amsterdam Airport Area, Schiphol Area Development Company and the Holland International Distribution Council. According to Schiphol Cargo’s Bart Pouwels, lifesciences was one of the industry clusters that Schiphol identified as a key to

BUSINESS TO BUSINESS: Schiphol airport would give further impetus to the Indian pharmaceutical industry.

the further development of its role as a cargo port and logistics centre for northern Europe. The Lifesciences Steering Group has been tasked to target process optimisation in the lifesciences supply chain and assist stakeholders to establish best practices in the handling of pharma products. On its part, Schiphol Cargo will not only support the stakeholders in their efforts to maximise the huge potential of this fast-growing market, but also help ensure that the process is smooth. Schiphol’s interest in the pharma sector stems from the fact that the Netherlands is well known as a hotspot from where companies can keep track of their European operations. This dual combination — as a top logistics provider and a strong base for the lifesciences sector — makes Schiphol a top gateway for

Indian pharmaceutical companies to Europe and beyond. In fact, around March last year, a round table — aptly titled, PharmaHub Schiphol — was held to inform the Indian pharma and airlines about the position of the Amsterdam Metropolitan Area and Amsterdam Airport Schiphol as a gateway for pharmaceuticals to Europe and as a transit hub to South America, Latin America and North America. The importance of the meet can be gauged from the fact that it was moderated by Enno Osinga, Senior Vice President of Cargo, Amsterdam Airport Schiphol. Attending the meet were representatives from Dutch Customs, Cargo Services Centre (CSC) India, Air Cargo Agents Association of India, KLM Royal Dutch Airlines and others. One of the other reasons

CRUISING HEIGHTS July 2012

for Schiphol to woo Indian businesses is the fact that more than 75 Indian companies have launched new operations in the Amsterdam Area alone in the past five years. The Indian pharma connection — when it strengthens into a strong relationship — would provide solace to the drop that Schiphol has witnessed in the first three months of this year. Asian traffic for JanuaryMarch 2012 was down 15 per cent on 2011, at 129,974 tonnes. Looking at the traffic and tonnages, Schiphol Cargo Senior VP Enno Osinga commented that the aim for 2012 was to spread the business base more evenly. “We are examining ways of encouraging increased export business in collaboration with our cargo community,” he said probably with an eye to the pharma traffic from India.

CARGO

eflecting the downtrend in air cargo around the world, Chicagobased plane manufacturer Boeing has till date got no orders for jet freighters this year. The plane-maker's best year on record for freighter orders was in 2011: 79 planes valued at $19.5 bn. The fall in air cargo shipments -- 2.5 per cent worldwide through April 2012, according to the International Air Transport Association (IATA) -- "hasn't helped sales in any of our freighter airplanes. Most certainly it's in the mind of a lot of our customers and how they map out their near-term expansion plans", said Tom Crabtree, Regional Director of Cargo Marketing for Boeing, in an interview to Bloomberg. Touted to be the world's

largest cargo aircraft producer — the plane manufacturer has 90 per cent of the market for new freighters — Boeing has been witnessing a drop in demand for freighters. This has been largely due to two factors: the faltering Chinese economy and the European debt crisis. While cargo-only aircraft transport about 60 per cent of international air cargo shipments, the passenger planes take the rest as belly cargo. Incidentally, Boeing has cargo variants for three of its models: the twinengine 767s and 777s, and the four-engine 747-8, the costliest that the company offers at a list price of $333.5 million. The orders for the 747-8F began way back in November 2005 — and there were 70 of them — and the deliveries started in October last year. Till today, 16 had

been delivered through May 29, 2012. There does not seem to be any light at the end of the tunnel. The air cargo sector has been seeing downward trends. Even FedEx, the world’s largest cargo airline, for example, has seen a rapid drop in the US market. The daily package volumes in FedEx's express unit dropped 4 per cent in the US and one per cent for international for the quarter ended February 29, 2012. Keeping the low volumes in mind, FedEx recently retired 24 of its jets. Perhaps, what is worrying is the fact that lease rates too are falling primarily due to carriers reworking their growth plans. While lease prices vary on age, the monthly rates for factory-built 747-400 freighters that came earlier than the 747-8s, have

No takers for Boeing freighters With no orders for freighter aircraft till May this year, the US plane manufacturer could find the going tough.

FUTURE NOT UNDER CONTROL: Cargolux has been buying freighters on regular basis from Boeing.

CRUISING HEIGHTS July 2012

dropped as much as 15 per cent in the past six months, to a range of $640,000 to $855,000, according to experts. Resale values too of the older 747 freighters have gone down by as much as 9 per cent in a range from $44 million to $98 million. In the first four months of this year, 16 new Boeing freighters were delivered to customers. According to the company’s website, 85 freighters were delivered in the earlier three years. In fact, a number of 747-8 and 777 freighters that were ordered four or five years ago are coming to carriers now. There is, however, another view. In the present weak economic conditions, air cargo carriers would pay less by acquiring a used passenger jet and convert it to a freighter, according to Aengus Kelly, CEO of AerCap Holdings NV, a Schiphol-based lessor. He also said that conversions of older platforms were a lot cheaper than buying a new plane worth $130-160 million. For the moment, however, Boeing's backlog of new orders will help the company cushion the blow from no orders: it has 166 orders for the cargo versions of the 777, 747 and 767, according to the company’s website. Meanwhile, in February this year, Airbus decided to launch a passenger-tofreighter conversion programme for its A330 twinjet. The move was long overdue and considering the fact that its own estimate for freighters, issued in 2011, showed that there was a demand for 2,731 cargo aircraft over the next 20 years, split between 834 new ones and 1,897 conversions. In fact, earlier, Airbus had looked at the forecast being filled up with its newly-made A330-200F. Perhaps, the under-performance of that programme — a mere 69 orders to-date — prompted Airbus to revise its belief and put more emphasis on the converted planes.

CARGO

he financial condition of India’s carriers has not deterred stakeholders from continuing— or even initiating—infrastructure projects that will help the aviation sector flourish. This time around, little India is waking up to the immense potential of air cargo. No longer limited to the metro cities, states in the west of India such as Gujarat and Maharashtra and even Madhya Pradesh in central India, are chalking out elaborate plans.

The Gujarat government, for example, has revamped its aviation department. At the launch of the Gujarat civil aviation policy in June 2010, the government note pointed out: “Air cargo movement has grown nearly by 19 per cent as compared to 10 per cent and 9 per cent of growth in shipping and railways. In the context of Gujarat, one of the most industrialised states in India, the government wishes to encourage private players to utilise the aircargo route and include suitable provisions for

making a world-class cargo hub in Gujarat.” According to that policy, the federal government tasked the newly-created Gujarat State Aviation Infrastructure Company Limited (GUJSAIL) for the development of aviation and related infrastructure in the state. Hence, the recent invitation for proposals from entrepreneurs to start cargo and passenger services within the state. One of the most industrialised states of the country, Gujarat has one of the fastest growing

economies in India. According to a report that appeared in The Economist in July last year, the state’s infrastructure could be compared with that of Guangdong in China. The state not only has a better road network but also does not interfere with entrepreneurial corporations. This has led experts to comment that the state’s keenness to develop its aviation business augured well. Consider the facts: Gujarat accounts for 16 per cent of India’s industrial

Sunrise in the west As Ahmedabad airport gets ready to start perishable cargo operations, opportunities are opening up in Nashik and Indore. A report. CHARTING PLANS: Strategic location of Ahmedabad airport augurs well for the business community of Gujarat.

CRUISING HEIGHTS July 2012

output and 22 per cent of its exports. While 11 airstrips across the state have been identified, the government has clearly specified the kind of aircraft that would be needed. According to Vipul Mitra, who heads the state’s tourism and aviation departments, the federal government was working on a strategy to ensure longterm sustainability of aviation services. Even as moves to start aviation services take place, plans that were drawn up to establish an air cargo hub for perishable goods at the Sardar Vallabhbhai Patel International Airport at Ahmedabad are fructifying. The airport’s cargo potential is healthy. Ahmedabad airport handles only two per cent of the cargo from India. Of this 83 per cent is handled by the airport with 44 per cent cargo being domestic and 56 per cent cargo international. Piloted by the Gujarat Agro Industries, another federal government enterprise, the cargo hub is expected to cater to the huge quantities of pharma products, vegetables, fruits and flowers that the state of Gujarat exports. While the airport is within easy reach of Middle Eastern countries, it will cater to the diaspora from Gujarat spread out all over the world. To begin with, the cargo hub will be able to take away a sizeable share of exports that are now being sent through Mumbai airport. In fact, around 40 per cent of the vegetables sent out through Mumbai are from Gujarat. With the lack of space at Mumbai and the traffic gridlock around the airport, which is an almost daily occurrence, perishables often cannot make it to their destinations. The Ahmedabad cargo complex — delayed for around two years because of

NEW HORIZONS: The front view of the terminal of Devi Ahilyabai Holkar airport at Indore.

land issues — is all set to start operations. With its three temperaturecontrolled cold storages (zero, minus zero and plus 10 degree) besides X-ray machines, the cargo complex is, perhaps, one of the most modern in the country. Incidentally, Emirates picks up around 170 tonnes of cargo a week from Ahmedabad airport meant for the Middle East, the US and Europe and in November, another Middle Eastern airline — Etihad Airways — will start operations to Ahmedabad. Meanwhile, barely 200 km from Mumbai, facilities

The cargo hub is expected to cater to the huge quantities of pharma products, vegetables, fruits and flowers that Gujarat exports.

for cargo operations have been established at Ojhar airport in Nashik by a joint working group between Hindustan Aeronautics Limited (HAL manufactures aircraft for the Indian Air Force and owns the airport — the Nashik division builds the Sukhoi planes under licence from its Russian makers) and Container Corporation of India Ltd (Concor). The cargo complex is managed by private entrepreneur Clarion Solutions. What is special about the airport is that it can handle large planes like the AN-124s. The cargo complex comprises two warehouses, integrated packing centre for perishables, cold storage, screening, unitising, ground-handling services for airlines, CCTV surveillance, bar-coding, labelling and customs. While this airport too expects to take away at least 25 per cent of the cargo handled by Mumbai airport every month, it will cater to perishables including pharma products, automobile parts and engineering products from Nasik and nearby industrial regions.

CRUISING HEIGHTS July 2012

Air cargo operations at Ojhar were scheduled to start in March 2012 but have been delayed. Though the operators are hoping to start operations soon, reports mention that it is still not clear if the cargo unit will begin work. A few air cargo companies had initially shown interests, but nothing concrete has emerged so far. In fact, the operators are yet to tie up with any freighter operator. When it does start, it will benefit exporters of perishables such as flowers, fruit and vegetables, pharmaceuticals from Indore and automobile parts from Pune. Not far from Nashik is Indore. Recently, Minister for Civil Aviation Ajit Singh said after the inauguration of the new airport terminal building of the Devi Ahilyabai Holkar Airport, that a cargo hub at the airport would transform business, especially agribased. When the airport becomes an international one, its cargo unit would be able to cater to perishable and pharmaceutical shipments for which today exporters have to move their goods to Mumbai, Delhi or Pune.

CARGO JOTTINGS

TNT’s quest to end hunger

Relations and Advocacy (WFP) also participated in the walk. “TNT takes great pride in being a key part as well as the In a world where more than one billion people don’t have enough to eat, the United Nations World Food Programme host of the Walk the World event each year. Raising awareness of the fight to end hunger (WFP), together with its major is a constant need that knows no end, corporate partner TNT had their so to be a part of an initiative that annual global walk against child brings relief to so many hungry hunger on June 3, 2012 to help “End children around the world is a Hunger: Walk the World”. humbling and yet empowering Government dignitaries, UN agencies, feeling,” said Gerry Power, MD, TNT WFP corporate partners, their Express. employees, friends and families were “End Hunger - Walk the World”, part of the walk across 24-time zones provides a powerful demonstration of in 24 hours, to raise awareness about public support for WFP’s fight against hunger for one day, and raise money FIGHTING HUNGER: (L-R) Bob Hiensch, Netherlands Ambassador to India and Jerry hunger, with employees from the to feed poor school children. three supporting companies walking The walk which started from Power, MD TNT India. Lodhi Colony Main Market witnessed people from all age together with friends and family, as well as celebrities, local groups. Prominent personalities like Bob Hiensch, dignitaries, and WFP employees. In some countries, children Netherlands Ambassador to India; Jan Henderson, New who have benefited from the WFP school feeding programme Zealand High Commissioner and J K Raman Head-External walked in solidarity.

Blue Dart banks upon women power When Blue Dart Express first got to know that its service counters in Shillong had six Territory Sales Representatives (TSR), all of whom happened to be ladies, it decided to encourage recruiting women at its other counters as well. Women contribute about 13 per cent to the total workforce today. Women usually avoid tedious functions like sales which involve outdoor duties. But with Shillong setting an example, Blue Dart Express intends to induct women in sales and operations as well. For the first time, Blue Dart Express has hired women Management Trainees (MTs) in an integrated manner. They make up 20 per cent of the total MTs recruited thereby opting for sales and operations. “This is a welcome change considering that the logistics industry has always been perceived as a male bastion. We hope that this will encourage more ladies to consider the logistics industry as a lucrative career option,” says Barttanu Das, Senior Vice-President (HR), Blue Dart Express.

‘India-bound operations to grow’ Cathay Pacific Cargo remains bullish on India-bound operations. Nick Rhodes, Director (Cargo) of Cathay Pacific in an interview to Business Line divulged major plans for

BUSINESS TO GROW: Cathay Pacific Cargo plane at one of the airports.

India. He said, “India is an exciting market for us at this moment. We expect India’s contribution to our global (cargo) revenues to increase from 3.5 per cent to 5 per cent this fiscal and 10 per cent in the next 3-4 years. We have five destinations in India, including Bengaluru and Hyderabad which we added in the last two months. We are evaluating

other ports, such as Ahmedabad and Kolkata. Cargo output from India is about 53,000 tonnes annually outbound and a similar tonnage inbound.” On the strategy for India, Nick Rhodes asserted that increasing the volumes would be crucial for the cargo operations in India. “Strategy is simple - chase volumes around India, with focus on high yield cargoes such as IT products from Bengaluru and pharma from Hyderabad. For us volume is important here - if you can assure high volumes, you can afford a lower yield. Most of the competition is from Korea and China, but these airlines are more Asia-focussed. They are not as India-focussed as we are. For instance, we fly from India to Europe with no stops and such service is vital for cargoes such as pharma products, which do not like to sit on (airport) ramps in the heat (for a connecting flight),” he stated.

AirAsia wins coveted air cargo award AirAsia was named winner of the ‘Air Cargo Industry Customer Care Award 2012’ in Shanghai, China beating the likes of Emirates, Qatar and Etihad for the title. AirAsia received the award from Air Cargo Week (ACW), an air cargo news publication, after emerging first in a global survey that polled industry peers and shippers. ONE MORE IN THE KITTY: Sathis Manoharen (2nd from left), Regional Sathis Manoharen, Head of Cargo of AirAsia & AirAsia Regional Head of Cargo of X, receives the World's Best Air AirAsia and AirAsia X, Cargo Industry Customer Care award. received the award on behalf of the airline. Sathis said, “This award reflects how strongly the AirAsia brand has grown in the air cargo segment. We are proud to be recognised globally, and we are taking this win as a renewal of our commitment in offering high quality cargo service at equitable prices. We will continue to innovate to better serve our markets.”

Hi-tech push for India’s customs authority CHAMP Cargosystems recently announced that carriers and forwarders can now exchange mandatory messages with the customs authorities in India using the CHAMP automated Global Customs Gateway (GCG) service.

CRUISING HEIGHTS July 2012

SkyCargo is ‘Best Air Cargo Carrier’ Emirates SkyCargo was named Best Air Cargo Carrier Middle East for the 17th consecutive year at the Asian Freight and Supply Chain Awards (AFSCA). The AFSCA awards in Shanghai, GARNERING LAURELS: Michael Qu (right), Emirates' Cargo Manager China collects the organised by market Best Air Cargo Carrier Middle East award at leading transport and the Four Seasons, Shanghai. logistics newspaper Cargonews Asia, are widely regarded as the most authoritative and prestigious awards for the industry in Asia.

HAL unveils plans for multirole transport aircraft Hindustan Aeronautics Limited (HAL) recently signed a contract with Russia’s United Aircraft Corp Transport Aircraft (UAC-TA) to co-develop the 15 to 20-metric-tonne-payload multirole transport aircraft (MTA). The pair formed a joint venture,

Multirole Transport Aircraft Ltd, in 2010, following an intergovernmental agreement three years earlier. The MTA is likely to be derived from the Il-214 twinHEAVY-DUTY AIRLIFTER: The MTA is turbofan design by the expected to replace the Indian Air Force’s Ilyushin Design aging fleet of transport aircraft. Bureau. It will have a maximum takeoff weight of 65 metric tonnes; payload capacity of 15 to 20 metric tonnes; cruise speed of 430 knots; a range of up to 1,460 nm and a service ceiling of 39,400 feet (12,000 m). “The investment for the programme is $771 million,” said Indian Minister of State for Defence M M Pallam Raju. According to the news reports, India requires the MTA to replace its 105 aging Antonov An-32s. The total envisioned production is 205 aircraft, of which 100 will be for the Russian Air Force, 45 for the Indian air force and 60 for third countries. The MTA will be designed for cargo/troop transportation; para-dropping; and air drop of supplies, including a low-altitude parachute extraction system.

JINURAGHAVAN\WIKIPEDIA

CHAMP’s service already facilitates message exchange between carriers and 31 other customs authorities around the globe including the authorities in Canada, Mexico, Liberia and EU. The advanced customs solution converts messages to the specific protocols and formats required by the different authorities, simplifying the process and reducing declaration errors. Global Customs Gateway is the only service available to carriers that also sends automatic responses and messages which alert users to the changing status of customs filing. This proactive messaging will enable carriers to remain fully up to date on all their filings with the Indian customs authorities at all times.

Rajesh Goel new Celebi CEO Rajesh Goel has been appointed as the new Chief Executive Officer of Celebi Delhi Cargo Terminal Management India Pvt. Ltd. Goel will be reporting to Atilla Korkmazoglu, Çelebi Global Ground Handling and Business Development President, and will be responsible for providing strategic and tactical direction for enhancing the company’s business operations in India. The new CEO has over 20 years of experience in the logistics industry, and has worked with organisations in India and abroad like Agility Global Logistics, BDP International, DHL Worldwide Express, Samsonite and Airborne India Express.

FedEx SupplyChain enhances technology

daily driving habits of thousands of FedEx Express couriers. The eco-drive campaign empowers couriers at FedEx FedEx SupplyChain recently rolled out new and expanded Express with practical information and driving tips to operate visibility and control features, as well as new stocking locations their vehicles in a more environmentally friendly way. The to support worldwide FedEx Critical Inventory Logistics(R) programme underpins the company's unwavering customers with high-value, critical orders. commitment to environmental sustainability including the With recent expansions, FedEx has added more than 100 promotion of a vibrant green workplace culture. Among the new stocking locations worldwide to the FedEx Critical leading benefits of the eco-drive programme are fuel Inventory Logistics network -- with the largest network efficiencies, lower emissions expansions taking place leading to a cleaner within India and Mexico. environment, and vehicle FedEx has made these accident prevention significant investments to promoting safer roads. First assure customers that they launched two years ago at will have stocking locations FedEx Express in Japan, the available where and when programme now makes its they are needed to support way to EMEA. "The eco-drive their business growth programme has created worldwide. excitement at FedEx Express; Launches an eco- A GOOD BUSINESS SENSE: Logistical support of Fedex rests on our team members are proud drive campaign in the many transport systems. to be empowered with the knowledge and skill set to drive in a EMEA region: FedEx Express launched an eco-drive more environmentally sustainable fashion. We understand campaign in the EMEA region (Europe, Middle East, Indian that every investment-both large and small-counts in creating Subcontinent and Africa). The programme kicked off in the a more sustainable future for the company and our planet," United Arab Emirates before expanding to Switzerland and said Beth Galetti, Vice-President, Planning and Engineering of other countries across the region. The aim of the eco-drive FedEx Express, EMEA. programme was to improve fuel efficiency by changing the

CRUISING HEIGHTS July 2012

FOCUS

A CARRIER THAT HAS BEEN A PART OF EVERY IMPORTANT OCCASION OF QUEEN ELIZABETH II’S LIFE, BRITISH AIRWAYS HAS LAUNCHED A SLEW OF PROMOTIONS TO MARK THE DIAMOND JUBILEE OF THE QUEEN’S REIGN.

, Jubilee Olympics — BA ’s year

tion bra cele

celebrates in style

HEMANT RAWAT

ritish Airways (BA) is having a party and is extending the celebrations of Queen Elizabeth II’s Diamond Jubilee to everyone around with a host of offers and innovations. This is an emotional time for the national flag carrier: it has had a longstanding association with the Queen and the British royal family that began even before she ascended the throne. The Queen used the British European Airways (BEA), British Overseas Airways Corporation (BOAC) and British Caledonian Airways — all predecessor airlines of today’s British Airways — while she was still Princess Elizabeth. That bond has remained strong throughout her reign as head of the British monarchy. Travelling has been an integral part of Queen Elizabeth’s diary for the last 60 years. The Queen, who has ruled through the jet age, the space age and now into the digital age, has met more people from all walks of life, both at home and abroad, than any of her predecessors through local and international official visits, many of which have been shared with British Airways, making the airlines an integral part of her regime. The Jubilee was occasion enough for the airline to open its archives to reveal the long-standing history between it and the royal family. Way back on January 21, 1947, Queen Elizabeth visited London Airport to christen an Avro Tudor BOAC aircraft ‘Elizabeth of England’. Since then, the Queen and the royal family have regularly chosen British Airways for their international tours. Among the noteworthy journeys was when BOAC flew the Princess and the Duke of Edinburgh on their first transAtlantic flight from London to Montreal in 1951. Next year, the airline flew the then Princess on her first international visit with the Duke of Edinburgh, to Kenya. Whilst in Kenya, on February 6, 1952, Princess Elizabeth learnt of the death of her father King George VI and of her own accession to the throne as Queen Elizabeth II. Plans were made for her immediate return to London. Her British Overseas Airways Corporation (BOAC) aircraft, commanded by Captain Ron Parker, touched down in London in the afternoon of February 7. In between, there were a number of flights that the Queen took but the most memorable one that British Airways treasures was the one that the

Christopher Fordyce

Queen Elizabeth II seated inside a British Airways Concorde

The Queen arriving at the Heathrow airport on February 7, 1952

British Airways’ home hub, T5, at Heathrow

4 An inside view of the British Airways’ premium economy class

HEMANT RAWAT

Queen flew to end her Silver Jubilee year Fordyce was talking about BA’s proonly valid one way, i.e., on the outbound of travels: on November 2, 197, a Conmotions specially for university students half of the journey. In addition, five lucky corde took her home at 1,134 mph from travelling to the UK, the US, Canada and students will also have the chance to win Bridgetown, Barbados. select European destinations. It has teamed an iPad 3, for which they will need to regTo celebrate the occasion of the Diaup with partners like American Airlines ister online on ba.com. mond Jubilee of Queen Elizabeth II this and Iberia to provide special offers and To provide a forum to assist Indian year, a momentous occasion in the Kingattractive discounts. Said Fordyce: “We students to gain admissions at prominent dom’s history, and the Commonwealth have our students’ campaign that is about institutions abroad, the BA India FaceGames 2012, BA has been participating at to be launched… We are making sure we book page will supplement the initiative events both in the UK and across the world. have additional baggage allowances. And through the British Airways Student ConIn Windsor, UK, for example, BA there are other things like foreign currency, nect programme, by serving as a platform invited guests to attend the prestigious etc.” He went on to point out, “Our student where foreign university aspirants post Diamond Jubilee Pageant while in Shangoffer is extremely popular and we are their queries and participate in discushai, China, British Airways organised a delighted to be able to offer our young cussions related to studying abroad. ‘Pop-Up’ tea party with a special guest: a tomers an enhanced assortment of benefits In addition, BA has revamped its New look-a-like of the Queen. this year. Students travelling with BA this World Traveller Plus, British Airways’ One of BAs’ fleet of 747s features a year will receive exclusive assistance to premium economy product, in which over special emblem to mark the Queen’s Diamake their entire experience one of ease 1.2 million passengers travel every year. mond Jubilee and BA captains had made and comfort.” The new seats will be available on all of congratulatory announcements to mark the Under this annual promotional offer, the airlines new long-haul fleet including occasion on flights arriving into London university students bound for foreign unisix Boeing 777-300ERs, 24 Boeing 787s over the Jubilee weekend in early June. versities flying with BA between June 1 and 12 Airbus A380s. In a fitting coincidental tribute, BA’s and October 30, 2012 will be allowed to “We have the Olympics coming up home hub — Heathrow Terminal 5 — carry an extra piece of luggage weighing — that’s another big event happening was voted the World’s Best Airport Terup to 23 kilos in any cabin, in addition to and they will be expecting a lot of peominal by airline travellers at the World the permitted checked-in allowance. ple from India to London. BA has a lot Airport Awards held at Vienna. This is the While the outbound travel must be comof flights going back to India and we’ve state-of-the-art terminal from where BA pleted on or before October 30, 2012, got destinations from here: Delhi, Mumoperates its flights to India from London. originating in Delhi, Mumbai, Bengaluru, bai, Hyderabad, Chennai and Bengaluru. Opened on March 27, 2008, the terminal Hyderabad or Chennai, Any dependents We are one of the biggest European car— capable of handling 30 million cusaccompanying the student can also beneriers out of India and India is one of the tomers a year — is exclusive to the airfit with the free excess baggage. In the very important markets. We’ve been line’s customers. Speaking about T5, case of a return trip, the excess baggage is here for about 83 years. Christopher Fordyce, Regional ComIndia is a very big market,” mercial Manager, British Fordyce said. Airways, South Asia, At the British Airways’ said: “We want to make lounges in Heathrow, custravel as stress-free as tomers will be offered a possible for our cusregal afternoon tea, includtomers. Terminal 5 at ing a selection of traditional Heathrow ensures seamBritish sandwiches, sweet less connectivity for stutreats and a special Jubilee dents travelling on anothblend of tea from Twinings. er flight from London. All Premium customers in the transfers are made easy, as Business and Concorde you don’t need to change lounges are being invited terminals. Our young travto raise a toast to Her ellers have convenient flyMajesty with a champagne ing options to choose from cocktail, Pimms Royale, given our extensive netor the award-winning work as a result of our partEnglish sparkling wine, n of Queen asio occ the ing brat yce cele ONS: Christopher Ford ATI EBR nership with American AirBalfour Brut. CEL ND es MO loye DIA ’ emp ilee with British Airways Elizabeth II’s Diamond Jub lines and Iberia.” — Nidhi Sharma CRUISING HEIGHTS July 2012

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A STEP TOWARDS QUALITY: Air India is hoping for greater efficiency after embracing Crew Management System.

AI guides new Crew Management System AIR INDIA recently introduced a new Crew Management System. The new system replaces the old manual system eliminating the scope of any favoritism in the deployment and management of crew and other staff. The new system will ensure high levels of safety of operation, meet regulatory requirements, optimised crew utilisation and achieve crew satisfaction. The first phase of this system is operative for the cockpit crew while in the second phase the cabin crew along with support staff will be covered from the second half of this month. The Crew Management System is an integrated tool for crew planning (long, medium and short term) depending on the network plan and commercial schedule of the airline. This system will provide real-time visibility of operation and flexibility to manage disruptions by providing realtime crew availability. It will also manage and control crew duty time, leave and sicknesses and provide a firm plan of operation to management and crew. Invites bids to lease out five Boeing 777 aircraft: Air India is inviting bids to lease out five of its Boeing 777 aircraft. The aircraft is used by the national carrier for its long distance non-stop flights. The leased aircraft will be replaced with the Boeing 787 Dreamliners when the airline takes delivery of the aircraft and inducts them into the fleet. “It has a seating capacity of 256 which is less than a Boeing 777 so it will mean that the aircraft will be flying full most of the time and we don’t have to fly with empty seats,” said an Air India official.

Jet unveils flights between Mumbai and Kuwait JET AIRWAYS recently enhanced connectivity between Mumbai and Kuwait with the introduction of a second frequency four times a week to Kuwait. With the launch of this second service effective June 8, 2012, Jet Airways now offers 11 flights a week from Mumbai to Kuwait. Guests from Kuwait will also enjoy seamless connectivity from Mumbai to 50 other destinations on the domestic network as well as to the far-east and SAARC countries. Sudheer Raghavan, Chief Commercial Officer, Jet Airways said, “Jet Airways has established itself as a prestigious brand on account of the warmth of its service and quality of its in-flight product. We are happy to introduce this second frequency four times a week from Mumbai to Kuwait and are confident that this new service will prove equally popular with our guests. The new flight will provide seamless connectivity to guests from Kuwait flying to our international hub in Mumbai, as well as onwards on Jet Airways’ domestic network as well as to Hong Kong,

CONFIDENCE HIGH: (L-R) Anand Selvakesari, Country Business Manager, Global Consumer Group, Citibank India; Muge Yuzuak, Business Manager Cards and Personal Loans, Citibank India and Harpreet Grewal, Head, Credit Cards Product, Citibank India.

Citibank introduces first airline agnostic card CITIBANK India reaffirmed its strategy to be a leader in the cards segment by strengthening the offerings of India’s first airline agnostic card, Citibank

Singapore, Bangkok, Dhaka, Kathmandu and Colombo.” Engages young Jetprivilege members: Jet Airways recently conducted an educational excursion of Jet Airways’ aircraft maintenance hangar near the Chhatrapati Shivaji International Airport, Santacruz for its young JetPrivilege members aged between 12 to 21 years. JetSpark is a unique initiative by the airline to connect with, and build a long-term relationship with its young guests. Through this dedicated forum, Jet Airways ensures that the airline emerges as the definitive choice for these future flyers. The young travellers during their half-day visit were informed about the many facets of airline maintenance and operations. Sixty youngsters explored a B737-800 aircraft parked in the airline’s hangar and learnt about the working of the aircraft. They were also shown the interior of the aircraft, cockpit and the cargo hold. These members participated in quiz contests and interacted with flight engineers and cabin crew. Talks on to induct A330s: Jet is in talks with Airbus to induct A330-300 planes into its fleet. “We are in talks with Jet Airways for nine A330-300s and as of now we don’t have a fixed timeline to deliver them. But Jet will definitely induct four of them this year, starting October,” Kiran Rao, Airbus Executive VP (Sales and Marketing) and President Airbus (India) told Economic Times during the 68th AGM of International Air Transport Association (IATA). Tie-up with GuestLogix: GuestLogix announced that it would deploy its onboard retailing technology and point-of-sale (POS) handheld devices to power Jet Airways’ in-flight duty free programme, JetBoutique, in conjunction with Inflight Sales Group. The Jet Airways implementation represents more than 14 million annual passenger trips for GuestLogix. The Indian carrier will use the integrated solution to manage cash-and-credit card payments of duty free items onboard. “This is GuestLogix first win in India, and we are excited it is such a marquee client for the region,” said Tom Douramakos, President and CEO of GuestLogix. “We believe India represents an excellent growth opportunity for us. It is becoming a global destination for business and leisure travel, and with the growing local middle class population — who are now choosing air travel over rail — the region is set to expand. GuestLogix will be there

CRUISING HEIGHTS July 2012

PremierMiles Credit Card. In response to the changing preferences and behaviour among consumers in India, Citibank has mutually agreed to exit its co-branded card partnership with Jet Airways to introduce a more advanced Citibank PremierMiles Credit Card. The credit card gives the customers what they need by freeing them from the limitations of choosing one loyalty programme over another, while giving them the unparalleled flexibility of earning and redeeming miles across 100 domestic and international airlines. Anand Selvakesari, Country Business Manager, Global Consumer Group, Citi India, said, “Citibank India has maintained its leading position in the market by meeting and anticipating the changing needs of its customers. Our research shows that with the fragmentation in the aviation industry there is a significant increase in domestic traffic vis-à-vis international, consumer preference has shifted to low cost airlines and travel has become spontaneous. Keeping these in mind, we strongly believe that an airline agnostic card, the Citibank PremierMiles card, is the way for the future for cards in this industry segment.”

to provide Jet Airways and other domestic carriers with the technology to offer these travellers a sophisticated in-flight shopping experience.”

IndiGo ties up with CTC Aviation INDIGO AIRLINES recently tied up with New Zealand-based training organisation CTC Aviation Group for training its pilots. This initiative is in line with the expansion plants, which the company has embarked upon. “In line with this dynamic expansion, the company will be upgrading carefully selected First Officers to command positions,” said the Delhibased airline. IndiGo currently operates 56 of a total of 280 firm orders for Airbus A320 aircraft to be delivered by the end of 2025. The airline wants to take out its pilots out of their routine working environment and immerse them in a training development programme that will identify their needs. IndiGo introduces four new flights: IndiGo is further enhancing its customer experience with an introduction of four new flights in its network. IndiGo will now operate its second daily and direct flight between Delhi and Pune, and its new daily and direct flight between Hyderabad and Pune. These flights will give more choice to business and leisure travellers who are constantly on the lookout for new and affordable flying options. Speaking on the occasion Aditya Ghosh, President, IndiGo said, “It gives me immense pleasure in announcing these new flights connecting Pune to Delhi and Hyderabad. IndiGo is determined to provide the best travel

STRATEGIC TIE-UP: IndiGo airlines’ pilots will further improve their soft skills.

experience to all those who wish to fly these destination.It is our constant endeavor to provide more flexibility of choice for our customers as IndiGo continues to offer them on time, hassle free and always affordable flying experience.”

Glamour festival at Delhi Duty Free DELHI DUTY Free recently organised a month-long ‘Glamour Festival’ at its duty free shops. The Glamour Festival saw participation from leading international brands such as Clarins, Shiseido, OPTIONS GALORE: Delhi Duty Free shops Yves Saint Laurent, are doling out freebies like never before. Lancôme, L’Oreal, Chanel, Burberry, Christian Dior and Bvlgari. This was the second edition of the beauty festival. During the festival, international travellers got a chance to experience and get exciting offers on the widest collection of beauty and skincare products. Buyers from the perfumes and cosmetics section at the duty free shops won assured gifts, including bags, miniature-sets, travel kits and many more, on purchase of over $70 worth of products. A lucky draw was taken out every alternate day, and customers, who had filled in their coupons, stood a chance to win a three nights and four days resort stay voucher for Dubai or Goa. At the end of the promotion, travellers also won a premium gift hamper.

ON A ROLL: SpiceJet has been beefing up its international operations owing to competition.

SpiceJet starts flights to Dubai from Mumbai SPICEJET recently launched daily services to Dubai from Delhi and Mumbai. The carrier has deployed Boeing 737-800 aircraft on these routes. “The Government of India has taken substantial and positive steps to open the market and allow private carriers to connect with new international destinations. To leverage the opportunity and offer quality services at affordable prices to our guests, we are pleased to announce the launch of flights to Dubai with more destinations coming soon,” Neil Mills, Chief Executive Officer, SpiceJet said. Dubai would be SpiceJet’s third international destination. The airline already operates on two international routes — Delhi-Kathmandu and Chennai-Colombo. In domestic skies, SpiceJet connects 34 destinations.

CRUISING HEIGHTS July 2012

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INTERNATIONAL AIRLINES Air France-KLM receives prize

messages have already been sent. AIR FRANCE-KLM recently won the Innovation Prize in the Cool new features to hang out with: With the summer Customer Service category, awarded by the Echo Touristique, holiday season approaching, Air France is offering new services, for its exclusive “AF Connect” service. A real competitive asset, at the airport, on board and online. These new and innovative the “AF Connect” service enables services reflect the company's all customers to be informed strategy to enhance its range of throughout their trip of any flight products and services as part of its cancellations, delays, change of transformation plan. boarding gate or, after take-off, New destinations in Europe, delayed baggage delivery. Africa and Asia are just a part of Totally free of charge, this Air France's new features to offer service is available in 10 its customers 10 new products this languages: French, English, summer! These are: Express German, Italian, Spanish, Dutch, channels; baggage collection and Brazilian Portuguese, Romanian, delivery at the customer's address Simplified and Traditional in the Paris region; Gastronomic Chinese, and will soon be available dining and comfort on board; In in Russian, Korean and Japanese. INNOVATIVE PUSH: Air France-KLM has won the coveted prize. Business class, Guy Martin To benefit from this service, customers just need to provide signature dishes and a full sleep seat; A refined menu in contact details when they book their flight (e-mail, mobile and Premium Voyageur; New in-flight entertainment offer; A new phone number etc). As from seven days before departure, they Alizé seat on flights to the overseas departments; Los Angeles, will be informed of any changes affecting their trip and other Singapore by A380 and two new long-haul destinations and arrangements will be made. Launched one year ago, this service New destinations for long summer weekends and new travel has been highly praised by customers and over seven million apps.

Emirates introduces tally-enhanced screens

SA Airways unveils flights from Mumbai

IN A MOVE that will take Emirates stateof-the-art entertainment technology a step further, the carrier has introduced wider personal screens: 27-inch in First Class, 20-inch in Business Class and 12.1 inch in Economy Class. With the new cutting-edge HD-enabled screens, developed by Panasonic Avionics Corporation, Emirates passengers will now enjoy video content in bright, vivid colour and ultra-sharp detail, said a statement. The new hardware will complement Emirates’ new, enhanced Graphical User Interface (GUI), which was recently launched and designed specifically to make content and system features easier to navigate; bringing the huge range of choice across information, communication and entertainment (ice) to the passenger’s fingertips. The enhanced screens and GUI will be introduced on all new Boeing 777 joining the Emirates fleet and subsequently over the next year on Emirates’ A380 aircraft. “Emirates’ goal is to ensure maximum comfort and choice for passengers during their in-flight entertainment, communications and inflight experience,” said Adel Al Redha, Emirates Executive Vice President, operations and engineering. Unveils offers for Indians to Middle East and Europe: Emirates Holidays, the tour-operating arm of Emirates airline unveiled its latest A World of Choice 2012-2013 brochure, with the introduction of eight-brand new destinations spanning six continents and featuring over 100 destinations. Adding to the new destinations such as Argentina, Denmark, Ireland, Zambia, Zimbabwe, Dallas, Seattle and Vancouver, Emirates Holidays also reintroduced destinations such as Russia, Morocco, Malta and South Korea in the brochure in response to customer demand. Offerings in popular countries such as China, Thailand, South Africa and Germany have also been expanded to provide more travel options with a wider choice of cruises, safaris, palace hotels and dedicated wellness retreats.

SOUTH AFRICAN Airways recently announced an addition to its current Johannesburg-Mumbai flights. Due to an even stronger demand on this route, a further frequency has been added with South African Airways offering a total of six flights per week. This development is a positive indicator of South African SMOOTH RIDE: A South African Airways plane at Airways’ focus on one of the airports. the Indian travel segment that has witnessed substantial growth. Currently operating four flights a week, the airline started operating an additional flight from June 16, 2012. South African Airways flies A330-200 on the India-South Africa sector, offering 186 economy and 36 business class seats and is the exclusive carrier flying direct from Mumbai to Johannesburg. Speaking on the development, Sajid Khan, Country Manager, India, South African Airways said, “South African Airways has witnessed a steady performance, with growth in leisure tourism and MICE tourism. India presents an important market to South African Airways, and this increase in flight frequency is a step in the right direction to meet market expectations.”

AirAsia enters second decade A DECADE AGO, AirAsia came under new ownership and management and relaunched itself as Asia’s first low-cost carrier. The new incarnation began with a fleet of two aging Boeing-737s, six domestic routes and a staff of 250 Malaysian nationals. Ten years on, the AirAsia Group encompasses six airlines — AirAsia Malaysia, AirAsia Thailand, AirAsia Indonesia, Philippines’ AirAsia, AirAsia Japan and AirAsia X — serving 80 destinations

CRUISING HEIGHTS July 2012

on 142 routes, a practically all-new fleet of 103 Airbus A-320’s and 11 wide-body A330’s and A-340’s. AirAsia employees now number around 10,000 and they represent all the nationalities of ASEAN as well as nationalities from East, West and South Asia and elsewhere in the world. AirAsia reveals 'Annual Report App': AirAsia is proud to be the first airline and public listed company in Asia to launch an Annual Report App (AR App), providing convenience to the airline's investors in accessing AirAsia's annual report anytime and anywhere. The AirAsia AR App was officially launched by AirAsia Berhad Chairman, Aziz Bakar during the airline's 19th Annual General Meeting. Besides being paperless and great EXUDING CONFIDENCE: Tony Fernandes (left), for the environment, Group CEO, AirAsia unveiling ‘Annual Report App'! the new AR App presents user-friendly features, such as universal landscape and portrait views, gesture function with zoom, table of content with thumbnails, page scrubbing with thumbnails and tab functionality.

Flydubai scores first with CAR M status FLYDUBAI has become the first UAE airline to be approved under the latest airworthiness requirements known as CAR M by the UAE’s General Civil Aviation Authority (GCAA). The newly amended CAR (civil aviation requirements) for the airworthiness compliance of aircraft must be aligned by all UAE airlines by the end of June. A momento recognising the achievement was presented by the GCAA’s Director-Airworthiness, Ahmed Salem Al Rawahi, to Mick Hills, Flydubai’s Head of Engineering and Maintenance and comes after the airline worked in close cooperation with the GCAA to ensure that the engineering structure, manuals and procedures meet the new requirements. The airline’s Chief Executive, Ghaith Al Ghaith, said, “We are very pleased to receive this recognition, which is testament to

the hard work of the team to meet the guidelines set by the European Aviation Safety Agency (EASA) and the GCAA. As the aviation industry continues to grow, it is important for airlines to work together to align standards and we are proud to be the first carrier in the UAE to achieve CAR M status.”

JAL increases flights on Tokyo-Delhi route JAPAN AIRLINES (JAL) unveiled that it will add two more weekly round-trip flights on the Tokyo-New Delhi route, making it a daily service from October 28, 2012. As announced in a press release, adjustments were made to JAL’s international route and flight frequency plans for fiscal year 2012 (year ending March 31, 2013) after further analysis of current supply and demand conditions. To accommodate more high-yield corporate demand on this route, JAL has decided to increase the flight frequency to and from Delhi, and will also change to the larger 777-200ER aircraft, which offers Premium Economy service. This aircraft will be deployed three days a week from October 28 to November 30, until the switchover from the 787-8 currently assigned to the route is complete.

Siberia Airlines selects Zero Octa Zero Octa recently announced that Siberia Airlines has selected Zero Octa to provide Passenger Sales Audit services. Zero Octa's sales audit is aimed at helping airlines plug revenue leakages and significantly transform their balance sheets. Commenting on the occasion Alexei Kalashnikov, Deputy Director for Interline Agreements and Revenue Accounting, Siberia Airlines said, “We look forward to utilising Zero Octa's expertise to help streamline our passenger sales audit processes.” Peter O'Sullivan, Head of Business at Zero Octa said, “We are happy to have Siberia Airlines as our customer. Zero Octa's sales audit is considered by many to be the “best of breed” service provider in the revenue accounting, protection and revenue integrity service space. We are confident that Siberia Airlines will benefit from Zero Octa's global experience and strong operational expertise.”

Qatar acquires aircraft recovery equipment

on utilisation and conducting exercises, is a priority for the QATAR AIRWAYS recently enhanced its operations with airline and also a commitment to our passengers globally.” the acquisition of comprehensive aircraft recovery equipment The capability to conduct aircraft recovery implementation the first airline in the world to own the is a requirement by airports complete state-of-the-art kit. worldwide. The equipment acquisition The Qatar Airways aircraft recovery boosts the capabilities of Qatar kit is transportable and capable of Airways’ quick application in an recovering the world’s largest passenger emergency response scenario. aircraft, Airbus A380, from incident Developed by ResQtec, an sites anywhere in the world, in addition industry authority on the highly to any other aircraft types. specialised equipment, any airline At an investment of $3.2 million, requiring recovery service anywhere the equipment enables the airline’s GOING STRONG: A Qatar Airways plane on the worldwide can benefit from the stateDoha hub to be capable of recovering runway. of-the-art recovery service owned by equipment parts of any aircraft type following an incident Qatar Airways, which is fully deployable anywhere in the which renders an aircraft non operational. world. The Doha-based comprehensive kit is capable of “When we first looked to purchase a full end-to-end recovering salvageable, disabled aircraft anywhere in the aircraft recovery kit, we evaluated what benefits the equipment world. would bring not only to Qatar Airways and Doha International The recovery equipment acquisition also enables Qatar Airport, but rather as an investment for the industry as a Airways to join the International Airlines Technical Pool whole,” said Qatar Airways Chief Executive Officer, Akbar Al (IATP), an organisation backed by industry body, International Baker. “Obtaining the equipment, fully training an entire team Air Transport Association (IATA).

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TRAVEL & TOURISM World Ducati Week, courtesy Shell, Ducati

Surajkund Mela to become International

SHELL LUBRICANTS, the global market share leader in finished lubricants, and Ducati Corse came together for the World Ducati Week. This entailed a road trip from Dubai to Italy, where, Sundeep Gajjar, a motorcycle photojournalist from India, rode a Ducati MultiStrada across seven countries, including Iran, then Turkey, Bulgaria, Romania, Hungary and Slovenia, to reach the World Ducati Week in Italy on June 22. The event was sponsored by Shell Advance. This ride was flagged off in Dubai on May 19. The technical partnership between Shell and Ducati Corse that deals with the firm’s involvement in motorcycle racing, is a strategic relationship in which both parties embrace product development. The programme is extensive, covering technical support and consultation, plus product development and provision of tailored Shell Advance racing lubricants and Shell V-Power racing fuel. This technical partnership has been developed over the past 11 years and has become one of the strongest within the motorcycle world having produced six World Superbike Riders’ titles and nine manufacturers’ titles.

KEEPING in view the record participation of 12 nations in the Surajkund Crafts Mela, 2012, a unanimous resolution

T R I PA D V I S O R RECENTLY launched the second edition of its annual TripIndex, a travel price index of 48 key international tourist cities, major Indian metropolitan cities and popular holiday spots in India. The index helps travellers determine the cost for an evening out for two people in these destinations. TripIndex tracks the cost for travellers of one night’s accommodation, a pre-meal drink, dinner and a taxi ride in each city. According to Nikhil Ganju, Country Manager, TripAdvisor (India), “With a depreciating rupee, unrelenting inflation, skyrocketing airfares and an economic slowdown, Indian travellers have good reason right now to be concerned while they budget for their travel. TripIndex can help travellers; especially those who are budget conscious, with a quick and useful reference to decide on their holiday destination.”

Calgary Stampede turns 100 PULLING OUT their cowboy boots, donning their cowboy hats and celebrating their ranch roots, Calgary brings forth the Stampede in its grandest form this year! Celebrating 100 years of this show the Stampede Centennial Committee has pulled out all stops to make this year’s celebration greater than FOREIGN EXCURSION : Calgary Stampede ever in the beginning of annual fest has been one of the best. July. The opening day Stampede parade of this 10 days events, unfolds into a magnificent event of splendour and grandeur. Incredible sets, the finest western horsemanship, First Nations performers and 30 horses showcase their talent in a stunning new equine show. Chuckwagon racing is another attraction for the onlookers. Rodeos are at their best, competing and enthralling the

audiences with their acts. Along with this, the Stampede this year is boasting of a midway — the location where amusement rides, entertainment and fast food booths are concentrated — with new thrilling roller coasters rides. The most anticipated of the lot is the ‘Outlaw’ which promises an adrenaline rush to any who dares to get onto it. It sends riders blasting out of chutes on a twisting, stomachchurning adventure as wild as any cowboy’s eight-second rodeo ride. Also in the midway, is the longest temporary zipline in Canada, soaring for 260 metres (850 feet) over the Stampede Park at a speed of up to 60 km/h (37 mph).

Keys Hotels win prestigious award KEYS HOTELS recently awarded the ‘Trip Advisor Prestigious 2012’ Certificate of Excellence Award for six of its hotels and resorts across India. This accolade, which honours SKYSCRAPER : An outside view of Keys hospitality excellence, is hotel at Bengaluru. given only to establishments that consistently achieve outstanding traveller reviews on TripAdvisor and is extended to qualifying businesses worldwide. Approximately 10 per cent of accommodations listed on TripAdvisor received this prestigious award. Commenting on the occasion, Sanjay Sethi, Managing Director and CEO, Berggruen Hotels, stated, “We are excited to announce that six Keys Hotels have won a TripAdvisor Certificate of Excellence Award for 2012. Trip Advisor is the largest travel website in the world and we are honoured to receive this award. Most importantly we would like to thank all our guests who stay at our hotels and resorts and who take the time out to write reviews that have enabled us to win these awards.”

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TripAdvisor announces travel price index

GLOBAL TRANSITION: Surajkund Mela exudes vibrant colours of Indian culture and tradition.

6,805 Indians flock to South Africa SOUTH AFRICA received 6,805 visitors in February, 2012, up 24.9 per cent as compared with 5,449 visitors in February, 2011.

CRUISING HEIGHTS July 2012

Country Worldwide announces tie-up was passed at the 36th Governing Body meeting of the Surajkund Mela Authority to upgrade the Mela from the national level to an International level with effect from 2013. Henceforth, the Mela would be called the Surajkund International Crafts Mela. The Governing Body meeting took place under the chairmanship of R H Khwaja, Secretary (Tourism), Government of India, who is also the ex-officio Chairman of Surajkund Mela Authority, and was attended by various other eminent government officials. The Surajkund Mela Authority placed on record its appreciation of the efforts made by the Department of Tourism, Government of Haryana, in successfully organising the 26th Surajkund Craft Mela, 2012. It was also decided that an international conference on “Tourism in Rural Areas” shall be hosted during the forthcoming Surajkund International Crafts Mela, 2013 within the mela grounds. It was decided that the possibility of hosting similar melas in other states such as Kerala, Jammu and Kashmir, and Banaras would be explored by the Ministry of Tourism, Government of India.

Comfort Inn Alstonia opens in Amritsar CHOICE HOTELS India (CHI) recently opened the Comfort Inn Alstonia at Ranjit Avenue, Amritsar. CHI has signed an agreement with Amritsar-based Nijjar Group to offer management consultancy under its trademark Comfort Inn. The 57-room hotel offers Waves, a multicuisine restaurant; Corner Café, and bar/lounge Coral. The banquet hall, Celler, can accommodate up to 250-300 guests while Pearl is the conference room at the hotel. START THE BALL ROLLING : Hotel Alstonia. Vilas Pawar, CEO, CHI, said, “We are committed to offering international experiences with world-class services at the best value proposition. The warmth of international hospitality at Comfort Inn Alstonia will help redefine service standards offered to travellers.” Harpreet Nijjar, Owner, Nijjar Group said, “We are proud to announce our tie-up with internationally reputed chain CHI, known for their excellence in hospitality industry. With the growing demand for rooms in the holy city, travellers will get to stay in comfort at affordable prices.”

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South Africa saw an exceptional jump of 26.2 per cent in Indian arrivals with a total of 90,367 Indians tourists travelling to the country during 2011. The country’s overall growth in 2011 was largely due to a 14.6 per cent growth in the emerging markets of Asia. Hanneli Slabber, Country Head-India, Hanneli Slabber South African Tourism, said, “The number of Indian tourists flocking to South Africa has gone up steadily, making India one of the key tourism source markets for our country. The upward visitor arrival numbers can be accredited to our intensified efforts to increase South Africa’s visibility, and equally, the approach of diversification and tapping into new markets. Our focus has been on maintaining the arrivals share from traditional markets in India while pursuing new growth opportunities from emerging markets in India.”

CONTINENT Worldwide recently announced an agreement with Home Like Hotels Group to add, affiliate and upgrade 80 of its member hotels with the Urban Collection, Swiss Inns and Ancyra Inns & Hotels brand names. As part of the agreement and a very special invitation offer, during ten to twelve months as of June 2012; 40 member hotels of HLH will be upgraded to become Members of Continent Worldwide brands and the rest of the hotels will be affiliated after June 2013. Initially six of the HLH member hotels will become Swiss Inns and 14 will become members of Ancyra inns & Hotels. The rest of 20 properties will be member of Urban Collection brand and all hotels will still be marketed and managed by the Home-Like Hotels team. “We are proud to align with Home-Like Hotels, a successful hotel management group which clearly believes in and supports our brand growth strategy,” said Ethem Zagikyan, Managing Director of Continent Worldwide. “We look forward to a partnership of our brand alliance and furthering our association with Home-Like Hotels.”

Experience Hong Kong with Sandhya Mridul

GLAM QUOTIENT : Sandhya Mridul at The Ocean Park, Hong Kong.

HONG KONG Tourism Board (HKTB) recently announced its flagship marketing campaign for the FY 2012-2013 to boost tourism promotion in India. For the innovative promotional campaign, HKTB has tied up with the vivacious Bollywood actress Sandhya Mridul and Network 18 for its channels CNNIBN and CNBC TV18. The campaign will roll out through a travelogue giving a firsthand experience about the destination. Anchored by Sandhya Mridul, the travelogue kickstarted with an exciting half-hour programme where she took viewers around Hong Kong re-visiting and showcasing her favourite spots during her stay and also discovering new attractions in the city. The second capsule is scheduled to broadcast in the winter season and is targeted towards the young working segment and couples. It will showcase Hong Kong as a romantic destination. The second episode will also feature the Hong Kong’s popular Canto Pop Singer and Actor Aarif Lee.

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u Captain Trent Davey carries the ceremonial first fish, a 55 pound king salmon, down a red carpet shortly after Alaska Airlines flight 7802 landed carrying the season’s first Copper River salmon; v “It’s a hog!” says the Captain to the waiting reporters and onlookers; w Frank Ragusa of Ocean Beauty Seafoods walks down the red carpet (with the salmon) with three Seattle chefs who competed in this year’s Copper River Salmon Cook Off; and x Alaska Air’s B737-800 dubbed Salmon Thirty Salmon II in a fishy livery.

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CRUISING HEIGHTS July 2012

ALL PHOTOS: AIRLINEREPORTER.COM

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red carpet for the first salmon of the season out of Alaska! Believe it or not – absolutely true. As one report put it down so bluntly: “This is not just any fish, but many say one of the best in the world.” Obviously there was a huge crowd waiting to welcome the VIP salmon to Seattle. Ferried in by Alaska Air Cargo from Cordova to Seattle, it was left to the Captain of the flight to descend the steps with a 55 pound whopper (nearly 25 kg). It is no wonder that an elated Torque Zubeck, managing director of Alaska Air Cargo said: “We’re proud to be the first to bring wild and sustainable Copper River salmon, in many cases within 24 hours after the fish is caught. With enhanced food quality procedures and additional flights to support the Alaska seafood industry, we are going the extra mile to deliver seafood that’s as fresh as possible.” Though this is the third year of the now famous annual routine, Alaska Airlines is in love with the salmon: after all, it flew nearly 25 million pounds of fresh Alaska seafood to the states of USA and beyond last year, including nearly 1.8 million pounds of Copper River salmon. In a move that will make the salmon memorable, the carrier and the Alaska Seafood Marketing Institute announced plans to make the world’s longest, flying King Salmon on a Boeing 737800. However, this is not the first time that a B737 will be painted in a fish-themed livery. In 2005, the airline showed off the first Salmon-Thirty-Salmon on a Boeing 737-400. However, that fish vanished in the repainting that took place in 2011. The Salmon-Thirty-Salmon II will be nine feet longer and will feature salmon colored titles on the fuselage. In what can be signified a tribute to the mighty salmon, Marilyn Romano, Alaska Airlines’ Regional Vice President, Alaska mentioned: “This airplane celebrates Alaska Airlines’ unique relationship with the people and communities of Alaska. Because the new design will be featured on a larger 737-800, this 91,000-pound king will boldly promote the world’s finest seafood from the Hawaiian Islands to Boston and beyond.” n