CARGO
AIR CARGO FACES TRYING TIMES – NEVER MIND ITS PRIME POSITION TODAY
Cruising Heights August-September 2020 `90 Volume XV Issue 3
CHOCKS OFF FOR GAUTAM ADANI
Six airports along with the crown jewel, Mumbai International Airport, has put the Adani Group firmly in the pilot’s seat in the country’s aviation sector. What happens from here on is something that only time will tell. GAUTAM ADANI
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CONTENTS
Cruising Heights
AUGUST-SEPTEMBER 2020 www.cruisingheights.in
FEATURES
14
14 COVER STORY
The Adani Group has got six major airports as well as Mumbai International Airport to manage. While it will aim to put its best foot forward, its main challenge will be to sustain the commitment it has given as part of the contract. What happens from here on is something that only time will tell.
22 SPECIAL REPORT
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As the world emerges slowly from the COVID-19 pandemic, Cruising Heights takes a look at the events of the past few months and finds out how flying has changed in unimaginable ways. For the country’s domestic carriers, however, it has been one step forward and two backward ever since the government allowed commercial services to start.
30 FIRST FLIGHT Full-service private carrier
Vistara recently made its first long-haul leap to London. That giant leap for the five-year old took the carrier many steps ahead in its journey to become the best global airline
36 INNOVATION Richard Branson and his
Virgin Galactic’s primary focus is ‘space tourism’ but it is leveraging its space technology know-how to develop superspeed point-to-point travel. August-September 2020 3
FIRST DRAFT K SRINIVASAN, Editor-in-Chief
JAGDISH RAJ: CIRCA 2020
T
MORE RECENTLY, WE HAVE THE CASE OF KUNAL KAMRA WHEN HE DECIDED TO ACCOST ARNAB GOSWAMI ON AN INDIGO FLIGHT TO LUCKNOW. NOW, WHAT KAMRA DID WAS PATENTLY WRONG. BUT THAT ISN’T THE POINT. IT IS THE ALACRITY WITH WHICH THE AIRLINES AND THE DGCA DECIDED TO DEAL WITH THE ISSUE. 4 August-September 2020
he Hindi films of the 80s and the 90s — at least most Hindi films — had that famous last scene where out of the siren-screaming police jeep the inspector jumped out, shot a round in the air and yelled, ‘Hands up’. That was the end for Messers Prem Chopra, Amjad Khan, Ranjeet, Kiran Kumar and many other villains of the day. One wise one cheekily described it as ‘the wisdom of the hind’. Fast forward to 2020, you can replace the firing in the air, the screeching tyres the wailing sirens and the hands up with the almost laughable orders of the Directorate General of Civil Aviation (DGCA). At least poor Jagdish Raj had the excuse that he was only following the director and the script, but in the case of the DGCA, they write their own script. And boy can the script get any worse? What frankly rankles is the fact that this isn’t the first time this has happened. Some years ago when journalist Tarun Tejpal was travelling to court in Goa, he was hounded from Delhi airport till he arrived in Panjim. The
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screenshot (opposite page) from Rohit Sardana of ZEE News informs you that there will be constant updates. And Zee wasn’t the only one. There were any number of other channels giving Tejpal the same treatment. At the time the DGCA did nothing. The inspector failed to arrive in the last scene.Some years ago when journalist Tarun Tejpal who was travelling to court in Goa, he was hounded from Delhi airport till he arrived in Panjim. The screenshot from Rohit Sardana of ZEE News informs you that there will be constant updates. And Zee wasn’t the only one. There were any number of other channels giving Tejpal the same treatment. At the time the DGCA did nothing. The inspector failed to arrive in the last scene. More recently, we have the case of Kunal Kamra when he decided to accost Arnab Goswami on an IndiGo flight to Lucknow. Now, what Kamra did was patently wrong. But that isn’t the point. It is the alacrity with which the airlines and the DGCA decided to deal with the issue. It leaves one with the feeling that as far the regulator or the powers-that-be are concerned the dictum is simple: “Show me the face and I will show you the rule.” Jagdish Raj be damned. Binoy Prabhakar summed it up perfectly in a piece on CNBC TV18: “No doubt, Kunal Kamra should not have confronted the television anchor on board the IndiGo flight. Kamra’s boorishness made the man who makes a living from boorishness smell like roses. “Condemnable as the behaviour was, did Kamra deserve the ban by four domestic carriers? Together,
these four airlines represent 86 per cent of the aviation market in India. A scrum of experts has weighed in about how the airlines did not follow the rulebook on imposing such bans. So, I will not venture there. What I’d like is tell readers what the flying ban on Kamra reveals about Indian aviation. There was no —there is still no — official communication from the aviation ministry or the regulator DGCA about keeping Kamra off planes in India. But the four airlines jumped at the chance of putting Kamra in a no-fly list. What triggered this quick-gun response? A tweet by the Aviation Minister “advising” them to do so. The head of DGCA, which is usually unmoved by most aviation incidents, agreed with the minister through a clarification to a media report.” The fact is IndiGo reacted like greased lightning to ban Kamra without an enquiry, a complaint from the pilot or even a notional follow-up of the due process of enquiry before putting a person in the no-fly list by the DGCA. SpiceJet, GoAir and Air India followed with their own ban. Civil Aviation Minister Hardeep Puri waxed eloquently on Twitter: “Offensive behaviour designed to provoke & create disturbance inside an aircraft is absolutely unacceptable & endangers safety of air travellers. We are left with no option but to advise other airlines to impose similar restrictions on the person concerned.”
Well done, Mr Puri, but what about the ruckus caused inside the IndiGo flight by the media scrum. Well, Mr Puri had nothing to say and the DGCA decided that it best issue a suo moto clarification and in typical Jagdisjh Raj “hands up” fashion decided that the best way to get rid of the problem was to completely ban photography at all inconvenient places including airports and aircraft. What the DGCA has done in the process is destroyed the opportunity that every passenger had of bringing to light sundry issues that one can face in a cabin. With no evidence, there will be fewer complaints and the airlines are certainly delighted. There would be fewer troublesome passengers to deal with. I won’t go on and on this. The angst is evident in the series of tweets put out by Devesh Aggarwal of Bangalore Aviation. And, like him, let me thank my fellow media professionals for their most unprofessional and idiotic behaviour. They have gone unpunished and the DGCA decided that the rest of the travelling public must pay up. What do you say to this sort of regulator?
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August-September 2020
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FACTS & FIGURES
QUOTE MARTIAL ) “If they’re (the Kerala government) against privatisation, they should not have participated in this. They are already running two privatised airports (Kochi and Kannur). Some people have suggested that there is an angle, regarding the person who has won the bid. That also does 1) HARDEEP SINGH PURI, Civil Aviation Minister, emphasizing the government’s decision to go ahead with the privatisation of Thiruvananthapuram airport where Adani Enterprises outbid the Kerala government entity KSIDC by more than 19 per cent, resulting in the state becoming ineligible to match the winning bid
—————— “We don’t think we’ll see 2019 delivery rates again before 2023 to 2025. The singleaisle market will recover before the widebodies… It is likely that the recovery will see massive demand, so the ramp-up will have to be steep. I see that in 2022 or 2023, a bit later for widebodies.” 2) GUILLAUME FAURY, , CEO, Airbus Group on how he sees the market for Airbus planes shaping up in the years to come
—————— “That’s the sad reality of what the pandemic means for airlines – far fewer employees, at least for a while… Some carriers are shrinking their workforce by 30, 40 percent. Some may not survive at all.” 3) ALAN JOYCE, CEO, Qantas on the hard decisions that the carrier would have to take in the current climate which is largely about survival and “also about eventually being able to grow again”.
—————— “I DON’T WANT ANYONE TO GET A SENSE THAT WE’VE GOT A GLOOMY FORECAST ON REVENUE OR DEMAND GROWTH…WE SAID AT THE START OF THIS PANDEMIC THAT THIS IS GOING TO BE CHOPPY. IT'S GOING TO BE UNPREDICTABLE. IT'S GOING TO BE DRIVEN BY FACTORS OUTSIDE OF OUR CONTROL…”
4) ED BASTIAN, CEO, Delta pointing out that demand and revenue may stay depressed for the rest of the year.
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US-based Delta Airlines' mask policy has seen the carrier banning passengers who refused to abide by the rule to keep masks on at all times (save eating or drinking). As of August 27, Delta said it had banned roughly 240 people from flying with the carrier. ———————
2k
US’ United Airlines recently announced the largest pilot furloughs in its history: 2,850 pilots would lose their jobs if the US government decided against another airline bailout. The carrier reportedly plans to furlough the pilots between October 1 - November 30, 2020. ———————
25mn
A group of United States Republican senators have backed the extension of the payroll assistance programme that would see airlines receive $25 bn. If approved, the programme would extend previous payroll assistance of $25 bn for airlines, $4 bn for cargo firms, and $3 bn for airports, which is due to expire on October 1, 2020. ———————
5k
Dutch airline KLM said it would cut 4,500-5,000 jobs as it embarked on a postCOVID-19 road to recovery that is set to be “long and fraught with uncertainty”. The announcement came a day after parent Air France-KLM reported a $3 bn net loss for the second quarter.
6 August-September 2020
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CruisingHeights VOLUME XV n NO 3
Editor-in-Chief K SRINIVASAN Managing Editor TIRTHANKAR GHOSH Consulting Editor S VASANTHAKRISHNAN Assistant Editor NIDHI SHARMA Senior Proof Reader RAJESH VAID Senior Designers NAGENDER DUBEY MOHIT KANSAL Picture Editor PRADEEP CHANDRA Staff Photographer HEMANT RAWAT Director RAJIV SINGH Director (Marketing) RAKESH GERA Subscription ALKA SHARMA Distribution BHUSAN KUMAR Legal Advisor VASU SHARMA Executive Director RENU MITTAL For advertising and sales enquiries, please contact: +91-9810030533, 9810159332 Editorial & Marketing office: Newsline Publications Pvt. Ltd., D-11(Basement) Nizamuddin East, New Delhi –110 013, Tel: +91-11-41033381-82
All information in CRUISING HEIGHTS is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part (s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase–I, Delhi–91 and printed by him at Archna Printers, D-127, Okhla Indl Area Ph-1, New Delhi -110020
Letters to editor Letters to editor It was heartening to read about the passenger survey done by full-service carrier Vistara, ‘We’ll get 65% fliers back in 6 months’: Vistara (Cruising Heights August 2020). The carrier continues to ramp up its operations and we read about its first-ever long haul flight to London from Delhi. With nearly 6,000 respondents, Vistara’s findings that it will get back 65 per cent of its fliers in six months brings hope not only to aviation but also a strong dose of assurance that flying is the safest form of travel. The road shown by Vistara could well be the boost that the flying public needs.
The crash that took place in Karachi forced the world of international aviation to take a long, hard look at the state of affairs in Pakistan aviation and what we have been told is nothing short of scandalous. How can a handful of people – more than 30 pilots, according to the country’s aviation minister Ghulam Sarwar Khan – play with the lives of millions of passengers? The minister also said that 262 pilots “did not take the exam themselves”. Simply put, someone else was paid to appear on their behalf. “They don't have flying experience,” he said. It is no wonder that PIA planes have not been allowed to land in many airports around the world.
* Rohan Gupta, Kolkata
* Vishnu Aggarwal, Jaipur
Sadly, we have to bid adieu to aviation’s rock star, the A380 (Cruising Heights August 2020). The big bird was on its last stages and the Corona virus hastened its exit. The write-up was painstakingly done. Indeed, the making of a plane – and, in this case the A380 – requires so much effort. The centre of action, Levignac and its residents, will no longer have to be woken up by the rumblings of the huge trucks carrying parts of the A380. The French had a name for the route, the Itinéraire à Grand Gabarit. The A380 wanted to go down in history as a ‘game-changer’ but it will, perhaps, only get a chapter in aviation annals. But in its heyday, it was a sight at airports. Like a mother towering over the small planes, the A380 was to put it simply towering. And the comfort it provided – from economy to the first class suites – will remain unparalleled.
The fake pilot issue is not new in Pakistan. The story mentioned that the fake pilot virus had affected the country’s aviation in January 2018, when the country’s Supreme Court, particularly the then Chief Justice Saqib Nisar had pointed his finger at the alleged appointment of pilots holding fake qualifications. The Chief Justice had said that the country’s airlines and the civil aviation establishment was corrupt. And there was enough proof. The court had called the then Prime Minister Shahid Khaqan Abbasi who was also the head of private airline Airblue to appear in court. “Isn't it a matter of clash of interests?” the Chief Justice had asked when he came to know that the Prime Minister was also the head of Airblue. “Shahid Khaqan Abbasi will have to appear in the capacity of a chief executive officer and not a premier,” he had then said. In fact, in the investigation that followed the degrees of 16 pilots and 65 cabin crews turned out to be forged. Their licences were suspended but – as is usual – nothing happened. The forgery and suspension were mentioned when the Karachi crash happened. Who can save Pakistan’s aviation?
* R N Tiwari, Mumbai Your story, Pakistan’s real scandal of ‘fake’ pilots (Cruising Heights August 2020), exposed the goings-on in Pakistan aviation. Those at the top in the country’s aviation ministry now have to face the hard truth that all its pilots are not qualified to fly.
* Ghulam Chaudhary, Delhi
All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin East, New Delhi -110013, OR mail to cruisingheights@newsline.in The total number of pages in this issue: 62
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PANORAMA
THE FLIGHTS TO `NOWHERE` It’s not new, but it has been repackaged and remarketed and the travelling public is loving — the flights that depart and land at the same airport. Desperate for revenue with most of their fleet grounded, airlines are now seeking to bring the experience of flying without a destination in mind. And, boy, is it working !
The original idea came from Taiwan's Civil Aviation Administration organizing a flight that never actually left the ground. The idea was to recreate the feeling of travel and lift people's spirits. The trip started like any normal one with passengers required to check-in, get their boarding passes, and go through the usual security and immigration checks. Onboard food and drinks were served alongside a quiz and a water salute outside the airport fire engines.
Taiwanese loved the idea so much that the concept has gone into actual flights loved the concept so much they have now extended the idea to actual flights. The flights depart and land at the same airport meaning that there is no quarantine needed for participants.
Eva Air, one of the largest Taiwanese airlines, recently held a Hello Kitty-themed flight. The flight made a sightseeing loop over Taiwan's northeast coast before viewing Japan's Ryukyu Islands. The return leg gave passengers a view of the beautiful southeast coast.
8 August-September 2020
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PANORAMA
Cruising Heights
Singapore Airlines is looking to launch no-destination flights that will depart from and land in Changi Airport next month. dubbed "flights to nowhere" SIA also plans to explore a partnership with the Singapore Tourism Board to allow interested passengers to partially pay for such flights with tourism credits given out by the government.
And in Japan’s ANA sold tickets for a charter flight to nowhere. About 300 passengers paid for a so-called Hawaiian resort experience on an Airbus SE A380 that typically flies the Tokyo-Honolulu route. The passengers were picked through a lottery. Crew wore masks and Hawaiian shirts and served cocktails during the 90-minute trip.
China Airlines, EVA air's main competitor, has has also joined the party and aimed their flight experience at children. The flight allows children to pretend to be cabin crew on a two-hour trip .In the morning, they take a course on how to be cabin crew and are given uniforms to wear for the sightseeing flight in the afternoon.
Qantas has offered sightseeing trips over Antarctica for many years. With almost all international travel for Australians banned, Qantas recently announced they would resume these flights later this year. The Antarctica flights on a Boeing 787 Dreamliner aircraft are more of a long haul proposition as they take up to 13 hours. The aircraft flies at 10,000 feet so as not to disturb the wildlife. Pilots have multiple flight plans to search for the best viewing areas if there is bad visibility.A business-class seat with full in-flight service costs A$7,999 ($5,850).
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DIGEST
MARKET SHARE
July was a cruel month
The passenger load factor of the country’s domestic carriers fell drastically in July, according to the figures released by the DGCA
OTP at Growth: YoY = -54.84 % MoM = -82.30%
2020
21.07
89.3
IndiGo
93.2
Air Asia
40 20
2019 600
900
60.2
300
56.2 53.1
119.05
1200
00
1500
Spicejet Air India (Dom)
34.4 52.1
70.0
50.5
120 45.5
Vistara
60
MoM
26.4
60 20
00 00
July 20 00
40 00
00.0
00.0 00.0
4.23
27.8 54.9
56.2
56.6
60.7
57.9
120 100 80 60 40 20 00
68.0
ir ir o ia ra jet ir ns an ge ia et nd ceJ o A diG r As ista Tru ar A Ha ecc rita m A t n D a oo G In Ai V r I Spi i S a H A Z w Air ir A Pa
56.5
Passenger Load Factor
97.6
825.64
80
98.1
2019
100
Go Air
80
YoY
000
95.9
100
372.85
2020
91.3
Passenger Growth
Bengaluru, Delhi, Hyderabad and Mumbai.
Jun 20
ir ir o ia ra jet ir ns an ge ia et nd ceJ o A diG r As ista Tru ar A Ha ecc rita m A t n D a oo G In Ai V r I Spi i S A wa Air ir H Z A Pa
J
uly 2020 saw a whopping fall in passenger traffic. The passenger load factor — most important for the profitability of carriers — showed a sharp decline due to limited air operations because of the COVID-19 outbreak, according to the latest figures released by aviation regulator, Directorate General of Civil Aviation (DGCA). Scheduled domestic flights were allowed at one-third capacity from May 25, 2020. The flights came after two months of suspension due to the COVID-19 pandemic lockdown. In fact, Corona had started having its effect on passengers from late February 2020. 10 August-September 2020
The data from DGCA pointed out that passengers carried by domestic airlines during the seven months (January-July 2020 period) were 372.85 lakhs against 825.64 lakhs during the corresponding period of the previous year thereby registering a fall of 54.84 per cent and a monthly fall of 82.30 per cent. It may be noted that the drop was lower than June 2020 when the figure was at 83.5 per cent, year-on-year. The negative figures notwithstanding, IndiGo took the lead in market share — in terms of passengers carried — improved to 60.4 per cent. SpiceJet came second with 15.7 per cent while Air India was reduced to a single digit: 9.1 per cent.
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DIGEST
Cruising Heights
Commercial
49.2% Operational
14.0%
Conse/Misc
22.3%
Technical
Weather
2.1%
12.4%
Various reasons of cancellations
Vistara (4.2 per cent) and AirAsia India (6.2 per cent) — the two Tata JV carriers — came next. GoAir, trailing at the end, recorded 3.8 per cent of the market share. Second in terms of market share, SpiceJet, however, had the highest occupancy (70 per cent) followed by IndiGo (60.2 per cent), AirAsia India (56.2 per cent), Vistara (53.1 per cent); GoAir (50.5 per cent) and Air India (45.5 per cent). As far as on-time performance (OTP) of scheduled domestic airlines computed for four metro airports — Bengaluru, Delhi, Hyderabad and Mumbai — AirAsia led the list with 98.1 per cent, followed by
IndiGo (97.6 per cent) and Vistara (95.9 per cent). Though passengers were fewer and airline frequencies lower, July 2020 saw scheduled domestic airlines receiving 378 passenger-related complaints. The number of complaints per 10,000 passengers carried for the month of July 2020 was around 1.79. Topping the list was Air India (Domestic) with 17.7, followed by Trujet (1.0), SpiceJet and GoAir (0.6 each), Vistara and AirAsia (0.3 each). The reasons for the passenger complaints were: Refunds (87 per cent), Flight problems (5.6 per cent), Baggage (2.9 per cent) Customer services (1.9 per cent) and Staff behaviour (1.3 per cent) among others.
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Cruising Heights
DIGEST
Saudi Arabian ‘yes’ will change aviation history Will flights between Israel and the United Arab Emirates (UAE) be as normal and routine as most other flights? On September 2, Saudi Arabia took the first step to move to the ‘normalcy’ mode when it announced that it would allow any flights going to and from the United Arab Emirates to fly over its territory. This one simple move would give Israel access to traverse through the Saudi FIR (Flight Information Region) airspace for the first time. The Saudi announcement came at the request of the United Arab Emirates — days after the first direct flight from Tel Aviv to Abu Dhabi on August 31. El Al Flight 971, carrying high-level Israeli and US delegations, flew southeast down almost the entire length of Saudi Arabia to reach its destination in Abu Dhabi. It was the first time an Israeli plane was given permission by the kingdom to use its airspace. The El Al flight followed the historic announcement that both countries were opening their embassies in each other’s capital and normalising relations. The UAE and Israeli governments have jointly stated that tourism and “direct flights” will be among the subjects covered by bilateral agreements to be signed over the next few weeks and months. The flight from Tel Aviv to Abu Dhabi on August 31 passed through Saudi airspace, the first time the kingdom of Saudi Arabia had formally allowed an Israeli commercial jet to overfly its territory. But the real coup happened two years earlier when Air India had received approval to fly directly to Israel and commenced direct operations between Delhi and Tel Aviv that passed over the kingdom. The latest September 2 decision of Saudi Arabia to officially allow flights to and from Israel from the United Arab Emirates makes the route more commercially viable, cutting a nearly seven-hour journey in half. While there is tremendous potential if the airspace of the region opens up, there are still many unanswered questions that need to be answered before one can witness the possibility of flights between the two countries – although a timeframe has yet to emerge and other complexities remain unresolved. While Bahrain has allowed overflights, there 12 August-September 2020
is still a question mark on what the other countries in the region will do. But with KSA softening its stand, observers believe it a matter of time before the Arab airspace is truly free and open. The Israeli Prime Minister Benjamin Netanyahu, however, is on overdrive and has outlined that Israel is working on opening a corridor over Saudi Arabia for flights to the UAE. "We are working with maximum energy, and we have already begun to work on opening an air route over Saudi Arabia, which will simply shorten flights between Israel and the UAE," he told reporters and added. “I estimate that we will reach an agreement that will genuinely allow direct flights between Tel Aviv and Dubai. It is a major revolution." He is right it is a major revolution and will actually help cut the time of most flights east by several hours as it avoids a lengthy detour along the Red Sea, doubling the distance. Abu Dhabi and Tel Aviv are close to nearly 2,000km apart and for the moment all the UAE airlines – Emirates, Etihad, Air Arabia – will be able to operate seamlessly through the Bahrain, Baghdad or Jeddah flight information regions (FIRs) without a problem. The big question is if El Al will be able to do the same and transit Arab airspace. This is particularly critical in the case of the vast Jeddah FIR, encompassing Saudi Arabian airspace, the size of which serves as a barrier to efficient flightpaths between Israel and several Asian destinations. Without Saudi transit, El Al flights to the UAE would need to fly a lengthy detour south along the Red Sea, doubling the distance. For the record: Royal Jordanian routinely operates through Israeli airspace to Amman. The Israeli and Jordanian government signed a peace treaty in 1994. Israel also has a treaty with Egypt, reached in 1979. There are air services between Cairo and Tel Aviv www.cruisingheights.in
operated by the specialised carrier, Air Sinai, which is a spin-off brand of EgyptAir dedicated to serving the route. Air Sinai has started using all-white Airbus A220s for the Tel Aviv link, and has previously carried out the flights with Embraer 170s and Boeing 737s. The transit of Saudi airspace became a high-profile issue more than two years ago when Air India started operating to Tel Aviv from Delhi along a route which took it through the Jeddah FIR – provoking the ire of El Al, which complained about the distortion of competition given that the Israeli carrier was forced to operate a longer route. Meanwhile, the Israeli airline Israir is planning to launch Tel Aviv-Dubai flights beginning in October, pending receipt of an official permit. Israir said that it will offer Israelis a four-night vacation package starting at $700, according to the Israeli business daily Globes, which reported that El Al Israel Airlines and United Arab Emirates carriers, Etihad Airways and Emirates, also will offer Tel Aviv-Dubai flights. The first Israir departure from Tel Aviv to Dubai already appears on the Ben-Gurion International Airport flight schedule for October 2 at 10 am, according to the report. Israeli aviation and tourism expert Yossi Fischer was quoted in the report as saying, “Israeli aviation is going to completely change. The UAE is the world’s strongest aviation power. Above and beyond its influence on passenger flights and mainly connection flights to eastern destinations, the change will also be expressed in cargo transport.”
DIGEST
FAA grants Amazon approval to start first Prime Air deliveries The Federal Aviation Administration has given Amazon approval to operate as an "air carrier" in the United States. This will allow its drones to deliver packages to US customers under a trial programme. Amazon has not yet clarified where exactly it will offer deliveries, but the company occupies several test sites in the northwest of the US and the Vancouver area. In 2016, Amazon also performed trial deliveries in Cambridge, United Kingdom, but it did not grow into a regular delivery service. Another company, Wing, has been performing drone deliveries in Virginia since 2019, while smaller companies are also waiting for FAA approval. Amazon has said it’ll kick off its own delivery tests, though it hasn’t shared any details on when and where exactly those will begin. The FAA clearance for these trials is adapted from the safety rules and regulations it imposes for companies operating a commercial airline service, with special exceptions allowing for companies
Suing EasyJet A British-Israeli woman, Melanie Wolfson, has sued for violation of an Israeli law that prohibits discrimination against customers based on race, religion and gender, among other things. The lady was flying from Tel Aviv to London last October when an ultra-Orthodox man and his son asked her to switch seats with a man a few rows ahead, according to Haaretz newspaper. Despite Wolfson having paid extra for an aisle seat, an EasyJet flight attendant offered her a free hot drink as compensation for having to move. She eventually complied with the request as she reportedly felt she had no choice and didn’t want to hold up the flight. During another EasyJet flight to London two months later, Wolfson was again asked to move seats at the request of a group of ultra-Orthodox men. This time, Wolfson re-
to bypass the requirements that specifically deal with onboard crew and staff working the aircraft, as the drones don’t have any. These guidelines are at best a patchwork solution designed by the agency and its commercial partners to help provide a way for them to get underway with crucial systems development and safety testing and design, but the FAA is working toward a more fit-for-purpose set of regulations to govern drone airline operation for later this year. That will mostly be related to authorising flights over crowds — but any drone flights will still require constant human observation. Ultimately, any actual viable and practical system of drone delivery will require fully autonomous operation, without direct line-of-sight observation. Amazon has plans for its MK27 drones, which have a maximum 5 lb carrying capacity, to do just that, but it’ll still likely be many years before the regulatory and air traffic control infrastructure is updated to the point where that can happen regularly.
fused, but two women switched with the men and took the seats next to her. After having multiple complaints to the airline ignored, Wolfson sued the airline.
Air Wizz Abu Dhabi launch in October Wizz Air Abu Dhabi’s launch has been delayed until mid-October. The airline recently took delivery of its first aircraft at the end of August and had been eying operations from the start of October. Wizz Air is a Hungarian low-cost carrier that operates out of several east-European hubs. It flies an exclusive fleet of 120 Airbus A320 aircraft. It was founded in 2003 by investor Indigo Partners, owners of three other low-cost-carriers: Frontier, JetSmart and Volaris. The airline plans to push past the 40
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Cruising Heights
Airport check-in costs money! AirAsia Group Bhd is now charging customers a fee to check-in at airport counters, in part to encourage them to minimise physical contact with staff during the coronavirus pandemic. Travellers who do not check-in via the airline’s website, mobile app or airport kiosk will be charged 20 Malaysian ringgit ($4.83) for domestic flights and 30 Malaysian ringgit for international flights, though some exceptions will apply. AirAsia Group Chief Operations Officer Javed Malik said the fees would help motivate travellers to make use of the airline's investment in digital technology. AirAsia last month reported the biggest quarterly loss in its history due to the devastating impact the pandemic has had on travel demand, with revenue down 96 per cent. The airline said it had applied for bank loans in its operating markets and had been presented with proposals from investment bankers, lenders and potential investors to raise capital. million passenger mark this year. The carrier is partnering with the Abu Dhabi developmental holding company PJSC in order to launch the new entity. The news comes at a time when Abu Dhabi-based Etihad is collaborating with Sharjah-based AirArabia to launch its own LCC. Abu Dhabi-based Etihad Airways has inked a deal to set up its own low-cost carrier. In partnership with the Sharjah-based budget carrier Air Arabia, Etihad’s new low-cost airline is seen as a vital element of Etihad’s turnaround plan.
August-September 2020 13
Cruising Heights
DIGEST
United’s Mega move to save industry On Sunday, August 30, United Airlines caused what is surely a seismic quake of the quality of 8 on the Richter scale by announcing that it was scrapping for good its $200 change fee for all economy and premium cabin seats in flights throughout the 50 US states, to Puerto Rico or the US Virgin Islands. “Following previous tough times, airlines made difficult decisions to survive, sometimes at the expense of customer service,” said the airline’s CEO, Scott Kirby. “United Airlines won’t be following that same playbook as we come out of this crisis. Instead, we’re taking a completely different approach — and looking at new ways to serve our customers better.” That was followed one day later when Delta said it was also cutting its $200 change fee for all flights in the same sectors barring the basic economy fare tickets. American followed up by announcing its own elimination of change fees for premium cabin and most main cabin tickets on its domestic and short-haul international flights. Delta’s CEO, Ed Bastian, said: “We’ve said before that we need to approach flexibility differently than this industry has in the past, and today’s announcement builds on that promise to ensure we’re offering industry-leading flexibility, space and care to our customers. We want our customers to
book and travel with peace of mind, knowing that we’ll continue evaluating our policies to maintain the high standard of flexibility they expect.” A radical bid to revive air travel demand by permanently sacrificing billions of dollars in fees to change tickets has left US airlines isolated, as European and Gulf carrier feel the tactic would undermine the higher fares paid by premium travellers. Data shows US carriers last year earned $2.8 billion or 1.1 per cent of revenue from cancellations and change fees. The general belief is that revenue loss is going to win over customers and benefit the airline in the
long term. The move comes as US and European passenger traffic remains more than 80 per cent below 2019 levels, according to July data from IATA Asia-Pacific is down by 72 per cent. While airlines globally have suspended change fees during the pandemic, those outside the US are resisting making the concessions permanent. Lufthansa has announced a waiver until year-end, while Air France-KLM has set no date for a resumption of fees and says it is unlikely to make them permanent. Lowcost carriers EasyJet and Ryanair also said there were no plans for lasting fee changes. Analysts say restoring fees could prove near-impossible through the weak northern-hemisphere winter – and will only get tougher as consumers increasingly take new terms for granted. Axing fees would undermine the value to a corporate customer of paying more upfront for flexibility, Qantas Chief Executive Alan Joyce told the CAPA Australia Pacific Aviation Summit: "If every airfare is going to be flexible, your revenue management system I think fundamentally breaks down," Joyce said and was supported by Qatar Airways CEO Akbar al-Baker. Many feel the U.S. fee waivers will ultimately return maybe in some other form.
United’s new non-stops from India United Airlines has announced plans to expand its global route network with two new, nonstop services between India and the United States. Starting in December 2020, United will fly daily between New Delhi and Chicago and starting in Spring 2021, daily between Bengaluru and San Francisco, the first-ever nonstop service between Bengaluru and the US. Together with the airline’s existing services from New Delhi and Mumbai to New York/Newark and New Delhi to San Francisco, United will offer more nonstop services from India than any other US carrier. “These new nonstop services will strengthen our international route network 14 August-September 2020
and provide our customers from India with even greater travel choice and the possibility to connect via our hubs to destinations across the Americas,” said Marcel Fuchs, United’s Managing Director International Sales. “By introducing the first-ever nonstop service between the two international technology hubs, Bengaluru and San Francisco, we are proud to open up new opportunities for both business and leisure travellers.” The new routes are subject to government approval. United has served India since 2005. In addition to the new nonstop services from Bengaluru to San Francisco and New www.cruisingheights.in
Delhi to Chicago, United offers its customers from India year-round nonstop flights from New Delhi and Mumbai to New York/ Newark and New Delhi to San Francisco. Flights are conveniently timed to connect at United’s US hubs with an extensive network of services to destinations throughout the Americas.
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Cruising Heights
ANZ: Grounding complete fleet Hit hard by the coronavirus pandemic, Air New Zealand has decided to ground its entire fleet for a year at least. Air New Zealand said it is grounding its entire Boeing 777 fleet until September 2021 due to the ongoing impact of COVID-19, newshub.com. nz reported recently. In March, the state airlines decided to cut 3,750 jobs, nearly 30 per cent of its 12,500-strong workforce. New Zealand has 1,792 coronavirus cases, including 120 active cases and 39 imported as well as 24 fatalities. The pandemic has hit the country’s economy, badly affecting busi-
nesses. The data released by the government in June for first quarter of the current fiscal showed New Zealand's economy shrunk by 1.6 per cent – the largest drop in 29 years.
Bangalore Airport joins hands to bring Metro home Bangalore Metro Rail Corporation Limited (BMRCL) and Bangalore International Airport Limited (BIAL) recently signed a Memorandum of Understanding to take forward their joint efforts by way of a unique Public Private Partnership (PPP) with an innovative financing mode to establish the 4.95 km airport section of the ORR-Airport Metro at an estimated cost of `800 crores. This Metro connectivity to BLR Airport, likely to be commissioned by December 2024, would provide a sustainable and efficient mode of transport to the residents and business commuters from all parts of the city, facilitating the city to realise its economic potential and ease traffic congestion on the roads leading to the airport. BMRCL will construct the Airport Metro section, along with civil, electro-mechanical, other associated facilities, works and related assets, whereas BIAL will develop, manage and maintain the two metro stations that will be located within the Airport boundary. This Airport section is a part of the total 56 km metro line named “ORR-Airport Metro” from Central Silk Board Junction to Kempegowda International Airport, Bengaluru Terminals via KR Puram and Hebbal. The ORR-Airport Metro is being established by BMRCL at a total estimated cost of `14,844 crores and is likely to serve 7.8 lakh commuters daily. The two stations within the airport boundaries are likely to see the daily ridership of 0.6 lakh commut-
ers in 2024, increasing to 1.88 lakh commuters by 2041. The civil work on the Airport metro section is likely to commence in March 2021. Almost two-thirds of the 94 acres of the land required for the ORR-Airport Metro has been acquired and handed over to BMRCL. Speaking on the occasion, B S Yediyurappa, Chief Minister of Karnataka, said, “All agencies of the state and central governments and stakeholders in the city should work in tandem towards the goal of the comprehensive and integrated multi-modal connectivity infrastructure for the new century as set by Prime Minister in his address to the Nation on the 74th Independence Day.” “At BIAL, we are extremely excited to participate in enabling metro connectivity to and from Bangalore Airport, creating the potential for easy access between Bengaluru and the Airport. There is an increasing need to offer seamless experiences, and BIAL is committed to offering travel options to simplify the passenger journey,” said Hari Marar, MD & CEO, BIAL while speaking on the occasion. www.cruisingheights.in
Ed Dandridge to head Boeing Communications
The Boeing Company has named Ed Dandridge as the company’s Senior Vice President and Chief Communications Officer, effective September 28. Dandridge succeeds Greg Smith, who has served as interim Chief Communications Officer since July in addition to his role as Executive Vice President of Enterprise Operations and Chief Financial Officer. Dandridge will report to Boeing President and CEO David Calhoun and will serve on the company's Executive Council. In this role, Dandridge will oversee all aspects of Boeing’s communications, including business unit communications, corporate communications, media relations, public affairs, leadership communications, employee engagement and corporate branding, as well as channel and content marketing.
SIA trims by 4,300 Singapore Airlines Ltd. is eliminating about 4,300 jobs as it contends with the devastating impact of the coronavirus pandemic on the aviation industry. The cuts will be made at Singapore Airlines and its SilkAir and Scoot units. Discussions are underway with unions and arrangements will be finalised as soon as possible “Having to let go of our valuable and dedicated people is the hardest and most agonizing decision that I have had to make in my 30 years with SIA,” Chief Executive Officer Choon Phong Goh said in the statement. “The next few weeks will be some of the toughest in the history of the SIA Group.”
August-September 2020 15
Cruising Heights
COVER STORY
JEWEL IN THEADANI CROWN: Mumbai International Airport will have to get back its numbers to boost the Adani Group’s reputation as an airport manager.
AIRPORTS ON A PLATTER –
ADANI’S WORK IS CUT OUT
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COVER STORY
Cruising Heights
Now that the Adani Group has been given six airports to manage – it has got into the business for long-term benefits -- the real challenge will be to sustain the kind of commitment it has given as part of the contract. With six airports from AAI and the crown jewel Mumbai in its pocket, the group has put its best foot forward. What happens from here on is something that only time will tell. www.cruisingheights.in
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DOORWAY TO THE GOLDEN TRIANGLE: Jaipur Airport has the ability to bring in high tourist numbers.
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MORE AIRPORTS ARE LIKELY TO COME UP FOR PRIVATISATION AS THE GOVERNMENT LOOKS TO EARN REVENUE FROM CONCESSION AGREEMENTS AND LET THE STATEOWNED AAI FOCUS ON CREATING INFRASTRUCTURE AT REMOTE PLACES AND TIERIII CITIES TO GET MORE AIRPORTS ON THE MAP OF THE COUNTRY. 18 August-September 2020
n November 2008, the state-owned Airports Authority of India (AAI) invited bids for privatisation of six airports. These six were: Jaipur, Guwahati, w, Thiruvananthapuram, Mangalore and Lucknow. Barring Mangalore, the rest are state capitals. The highest bidder was announced in February 2019. At all six airports, the highest bidder was the Adani Group! In a country like India, where privatisation of any state asset is not smooth and has led to strikes, court cases and agitations in the past – airline and airport privatisation is definitely tricky. The count of private airports in India, one of the fastest growing markets in the world in the pre-COVID-19 era, is less than the fingers on one’s hand. With the current government firmly pushing ahead with privatisation and the minister category stating that running airports and airlines is not what the government should do, more and more airports are likely to come up for privatisation as the government looks to earn revenue from concession agreements and let the state-owned AAI focus on creating infrastructure at remote places and Tier-III cities to get more airports on the map of the country. The concession agreement was signed in February 2020 for Lucknow, Ahmedabad and Mangalore. The other three airports saw the approval being granted in August 2020. In this backdrop, the Adani group is placing a long bet on the infrastructure sector in general and airport sector in particular but it will take years to know if this bet has played out well, or not. The bids were for a period of 50 years. Private airports in India When it comes to classification of airports in Inwww.cruisingheights.in
dia, it is a big mess. Private airports, consortium airports, Defence airports with civil enclaves, state government-owned airports, privatelyowned airports and AAI-owned airports: India has a variety like no other! While Mumbai and Delhi are well known for their private airports, the humble beginning in the modern era on the private airport front started in Kochi – the commercial capital of Kerala. The city was relying on the Naval airport at Willingdon Island which not only had limitations on watch hours but also the limited runway length meant that international flights could not be accommodated. With the boom in the Gulf states attracting people from the South Indian state, a new airport became the need and thus was born the first public-private airport in the country. The airport was funded by non-resident Indians from more than 25 countries and opened in 1999. This heralded the country into an era of privatisation where six metro airports were envisioned to be privatised. With opposition from state governments, Chennai and Kolkata were dropped from the list. This led to Brownfield development at Mumbai and Delhi while Bengaluru and Hyderabad got new Greenfield airports. Bengaluru, the emerging IT capital of India back then was dependent on the Hindustan Aeronautics Limited (HAL) airport, while Hyderabad had limited space at its old airport at Begumpet which was shared with the Indian Air Force. Mumbai, without any scope for expansion had its international terminal crumbling and busting at the seams and the same was true for Delhi which had run out of space at its terminals. As this round of privatisation took place, two groups emerged: GMR and GVK. The GMR
COVER STORY group bagged development of the Greenfield airport at Hyderabad and management of Delhi airport while the GVK bagged the development of the Greenfield airport at Bengaluru and management of Mumbai airport. These were done as consortiums led primarily by GMR and GVK at respective airports but with a stake by the staterun AAI as well as foreign partners. While the two cities, Hyderabad and Bengaluru, got new airports, Mumbai and Delhi got new terminals. Mumbai saw its ship-shaped Terminal 2 being demolished in batches to create a majestic new structure while Delhi saw an additional terminal being built in the form of T3 and replacement of Terminal 1 with a grander and modern structure. At all the four airports, capacity grew manifold almost overnight when the new structures and airports were in place. But it took much longer to move on to the next phase of privatisation. Meanwhile, a few other airports came up which included Kannur in Kerala, Shirdi in Maharashtra and saw privatisation of the Maharashtra state-owned Nagpur airport – first hived off into what is known as the MIHAN project that also has a Boeing shop for heavy engineering checks for Air India aircraft. In terms of classification, there are seven joint venture airports in the country: Delhi, Mumbai, Bengaluru, Hyderabad, Nagpur, Kannur and Kochi. One joint venture airport with the state government which is Shirdi, ten state government-owned airports and the rest being either defence airfields or those owned by AAI. The six airports and the value they bring When the Adani Group outbid all others, one wondered how the group would sustain to pay AAI the per passenger fees which it has committed. In the first phase, the Cabinet approved only three airports. The first is Ahmedabad. It is the seventh busiest airport in the country, right after the top six metro airports. The airport has two terminals but a single runway without a parallel taxiway which restricts the number of movements per hour and an apron which can hardly accommodate more flights now. With the global focus on the state of Gujarat and connectivity to central India, and other western states being stronger from Ahmedabad, the airport will become a prized catch for the group to grow. Lucknow is the capital of the most populous state in the country and has been ranking on top lately on the ease of doing index. Mangalore, though not a state capital, is an important commercial centre in Karnataka which also serves parts of Northern Kerala. The second phase saw approval of another three airports being granted to the Adani group - for which the group had the best bids in place. Jaipur is the capital of Rajasthan which is one of
the most popular places for foreigners in India who travel the golden triangle of Delhi - Jaipur - Agra and use Jaipur as a gateway to the rest of the desert state of Rajasthan. Guwahati is the busiest airport in the North East and a key gateway. Apart from that the airport is also the most popular halt for the mandatory Route Dispersal Guidelines in Indian skies. Thiruvananthapuram, though the second-most used airport is Kerala, is the gateway to a lot of tourist places in the state and serves the state capital. With just one group winning all six airports in the first phase, the government started assessing whether to limit the number of bids per player. This kept the Adani group on a waiting list for a few months until the remainder of three airports were also allocated. The group is yet to take over any of these airports, primarily due to delays attributing to the pandemic. Jewel in the crown:MIAL In late August, it was announced that Adani Airport Holdings will have a majority stake in Mumbai International Airport Ltd. (MIAL) which operates the Chatrapati Shivaji Maharaj International Airport at Mumbai. Interestingly, MIAL holds a 74 per cent stake in Navi Mumbai International Airport and this opens the gateway for the Adani Group to control Navi Mumbai international airport as well. The Adani Group is also going to take steps to buy out other investors in MIAL which includes the Bidvest group of South Africa. When these transactions are complete, MIAL will be a Joint Venture between Adani Group and AAI. This is likely to help financial closure for Navi Mumbai airport which has been pending for a while with the GVK group not being able to do the same. The Navi Mumbai airport has been in the plans for nearly two decades and only recently work has started to get this to realwww.cruisingheights.in
Cruising Heights
GATEWAY TO THE NORTHEAST: The busiest airport in the North East, it will become the gateway to South-East Asia.
THE COMPETITION FOR THE ADANI GROUP WILL BE THE GMR GROUP WHICH APART FROM RUNNING DELHI AND HYDERABAD AIRPORTS VERY EFFICIENTLY, HAVE ALSO BAGGED THE AIRPORT AT MOPA - GOA AND RECENTLY SIGNED A CONCESSION AGREEMENT FOR THE AIRPORT AT VIZAG. August-September 2020 19
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IN GLOBAL FOCUS: Ahmedabad airport will become a prized catch for the Adani Group to grow.
BAGGING SIX AIRPORTS FROM AAI AND THE CROWN JEWEL MUMBAI, THE ADANI GROUP SEEMS TO HAVE PUT ITS BEST FOOT FORWARD. WHAT HAPPENS FROM HERE ON IS SOMETHING THAT NEEDS TO BE WATCHED CLOSELY. 20 August-September 2020
ity. While New Delhi airport had land to develop and expand, the current airport at Mumbai could not even achieve what it intended to – thanks to the encroachment around the airport. In October last year, the GVK group had tried to sell its stake to foreign partners but that deal now stands cancelled. Mumbai until 2008-9 was the busiest airport in the country. Today, it is the world’s busiest single runway airport in the world, though it lost the tag of the busiest airport in the country to New Delhi. Things have changed by leaps and bounds since the time GVK took over MIAL and today, air traffic movements have increased substantially, thanks to MIAL engaging world’s renowned consultants like NATS to improve airside infrastructure and build Rapid Exit Taxiways (RETs; it cannot be compared with New Delhi, because New Delhi has three runways, two of them are parallel and a fourth one is being created. New Delhi also had space to expand, where it built a new terminal - the Terminal 3 - which became an integrated terminal and saw Air India move its hub there leading to further expansion and consolidation of the route network). As of today, Mumbai, the second busiest airport in the country can support traffic much more than what it can handle and does not have land available for ancillary revenues for the operator like establishing an MRO or providing hangar space to airlines. And the number 2 rank comes even without having a good hub-andspoke model in place. It has gained prominence purely on the basis of the large city it supports, its financial capital status and the lack of other options for flying internationally for cities in the vicinity. The Adani deal comes in the backdrop of the GVK group having received a lot of flak in recent times. This includes investigations by the Enwww.cruisingheights.in
forcement Directorate (ED), severe cash crunch, the inability to tie up funding for the Navi Mumbai Airport among others. The group’s other businesses have also not done well lately. The GVK group entered into the aviation business in 2005-6 when it won the rights to form a consortium for Mumbai airport for its maintenance, redevelopment and use of land rights. The iconic ATC tower at Mumbai, the second-tallest in the country and the award-winning Terminal 2 started coming up. While the GMR-led DIAL had it easy to set up Terminal 3 without worrying about existing operations, for the GVK-led MIAL, it involved managing existing traffic since Terminal 2 was replacing an existing and operational terminal. This period also coincided with the GVK group being part of the consortium to lead Bengaluru International Airport Limited (BIAL). BIAL was a Greenfield project and required closure of existing airports in Bengaluru. In late 2017, GVK exited BIAL completely selling the residual 10 per cent stake to Fairfax India Holdings Corporation. Early the same year, GVK sold 33 per cent stake to Fairfax India Holdings Corporation. The money raised from this was to be used for the Navi Mumbai airport along with retiring debt for the group. However, three years later, as it has turned out, the group has exited MIAL as well which automatically means that it will exit the Navi Mumbai project. The Navi Mumbai and Mumbai airport serves not just the Mumbai region but also surrounding cities like Pune and Nashik which are within driving distance and do not have their own connectivity. While Nashik has limited domestic flights, Pune – which is a IT powerhouse – does not have international flights beyond Dubai. As a result, Mumbai airport serves the city. The two airport system – that will come up first in New Delhi with the Jewar airport – will see two different groups compete for traffic while Mumbai will see the same group manage the two airports and come up with a formidable challenge to claim back the title of the leading city in terms of air traffic in the next decade. What is the likely bigger play? No large group is ever interested to get into any business without long term benefits and scale. The Adani group which had first come to limelight with the Mundra port project has come into a similar limelight right now. Bagging six airports from AAI and the crown jewel Mumbai, the group seems to have put its best foot forward. What happens from here on is something that needs to be watched closely. The privatisation policy has evolved in India over a period of time. While there is talk of limiting a player to certain airports only, will it be limiting the player per bid or overall needs to be seen? If an airport group is limited to the num-
ber of operational airports, one risks not having interest from major groups because that business may not be attractive enough for a larger play in the sector. On the other hand, there remains a risk of monopolisation of the airports sector if any particular group bags many airports. To balance this out, the bid is based on the amount that the operator will shell out to the government at per passenger level. Critics feel and, rightly so, that the winning bidder giving out the maximum amount implies that the amount will be recovered from passengers and airlines in one form or another. While this is true, passengers would be willing to use the airport and facilities only if they are good and we have seen that in Mumbai, Delhi, Bengaluru and Hyderabad. The competition for the group will be the GMR group which apart from running Delhi and Hyderabad airports very efficiently, have also bagged the airport at MOPA - Goa and recently signed a concession agreement for the airport at Vizag. GMR went global with its airport business, working in Maldives, Philippines and Greece as part of consortium and sometimes even being the lead member of the consortium across the globe. However, GMR may not be the only player with whom the Adani group has to compete. The Jewar airport project that saw aggressive bidding ended up with Zurich Airports being the winner and being granted the rights to operate for 40 years. Larger players like Fraport, Zurich or South African Airports have been active in the Indian space as the market matures and traffic grows manifold. The revenue opportunity is much larger compared to their home markets where traffic growth is restricted and traffic is highly seasonal in nature due to weather. Will the Adani group tie up with foreign partners and explore opportunities across the world? Or will the group partner with other players to improve the Indian airports which they have bid and won? Only time can answer those questions but going by the path GMR has taken, it needed a strong case study to showcase their work and that was the New Delhi International Airport’s Terminal 3 which changed the landscape for airports in terms of service, quality, connectivity and experience. This helped the group to grow stronger – first regionally and then globally. A similar proof would be needed for the world to believe that the Adani group indeed can go global! However, COVID-19 is playing a spoilsport on all industries and travel and hospitality is one of the worst affected. The group – which has aggressively bid for the airports and at times even offered a few times more than nearest competitor as a per passenger fee to AAI – has not yet taken control of the first three airports which were handed out. With depressed traffic num-
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PHOTOS: WIKIPEDIA
COVER STORY
bers and lack of bailout from the government, the sector has been facing headwinds and things do not look good in the near to medium term. The real immediate challenge for the Adani group will be to sustain the kind of commitments it has given as part of the contract but there has been a blessing in disguise. Ahmedabad, Jaipur, Guwahati and Mumbai had been running at peak capacity and at certain hours of the day, even higher than that. The pandemic and slow recovery has meant that traffic is coming back slowly. When the group takes control of these airports, it will not have to deal with high traffic to start with and will have some breathing space to plan and rationalise the existing infrastructure. A few of these airports are also in the middle of expansion like Lucknow and Guwahati. Both airports are seeing additional terminal space being created to handle the influx of traffic which they have not been able to cater to. Jaipur has seen talks of opening the older terminal which has been lying unused because the existing structure cannot support additional movements. Likewise, Ahmedabad has seen talk of using the international terminal for domestic operations because of availability of bays and space during day time. When GVK and GMR groups entered the aviation infrastructure or airports business, there were a lot of expectations from both. As it turns out, GVK is all but leaving the space while GMR has been successful; the return for GVK’s shareholders has not been good! In fact, the group has had other groups invest, withdraw and another group invest again with the latest investments coming in from French airport operators. Both the airline and airports businesses are unforgiving as has been seen in the past and sucks out liquidity from the operating groups. CH www.cruisingheights.in
TOURISTS’ FOCAL POINT: Thiruvanathapuram, the second-most used airport is Kerala, is the gateway to a lot of tourist places in the state and serves the state capital.
CONSIDERING SOME ADDITIONAL FLEET, CARGO OPERATIONS AND ENGINEERING NEEDS, AT BEST THE AIRLINES IN INDIA ARE OPERATING LESS THAN 40 PER CENT OF THEIR FLEET. THE EXCEPTION IS AIR INDIA, WHICH HAS BEEN INVOLVED IN THE VANDE BHARAT MISSION FOR REPATRIATION OF INDIAN NATIONALS. August-September 2020 21
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ONE ON ONE
“Right-sizing won’t be a matter of appetite, but rather the only way to survive” Raul Villaron, the newly-appointed Asia Pacific Vice President for Embraer’s commercial aviation business, believes that those airlines that move forward to create a mixed fleet now will have the power of flexibility to match capacity to demand and to rebound quicker. Speaking to Cruising Heights, he emphasised that in view of passenger bookings collapsing at an unprecedented pace, airlines with a mixed fleet strategy will have the power of flexibility, aligning capacity to demand, as and when required.
“AIR TRAFFIC WILL NOT COME BACK UP AGAIN UNTIL THE VIRUS CAN FINALLY BE CONTAINED… THERE ARE MANY UNKNOWNS AND THAT IS WHY WE BELIEVE A FLEXIBLE OPERATION IS KEY TO REDUCING THE IMPACT OF EXTERNAL FACTORS, ALLOWING AIRLINES TO ADJUST AND REBOUND QUICKER.”
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In your opinion, how can the Indian airline Industry recover in these challenging times? We believe that in this unpredictable period, flexibility is key to an airline’s operation. Airlines with a mixed fleet strategy will have the power of flexibility to match capacity to demand and to rebound quicker. Passenger numbers in India for the month of August 2020 are 76 per cent lower than that of August 2019, and flights deployed were 32 per cent of 2019 levels. Large single-aisle aircraft account for over 80 per cent of current fleet in service in India, which limits airlines’ ability to adjust the capacity offered to the oscillations in market demand, especially during this critical time. The time to right-size has never been more appropriate. How long will it take for demand in air travel to return to 2019 levels and what will it take to restore confidence and demand in air travel? Air traffic will not come back up again until the virus can finally be contained. Some in the industry estimate that while the domestic markets will recover first, international traffic will be seen only by 2022 to 2024. There are many unknowns and that is why we believe a flexible operation is key to reducing the impact of external factors, allowing
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airlines to adjust and rebound quicker. Across the world, we see the E-Jets being utilised more than larger narrow-body aircraft as airlines gradually rebuild their networks by carefully adding capacity and frequencies to cities that were suspended during the height of the pandemic in their respective regions. As of midAugust the percentage of active E-Jets fleet in the APAC region including China stands at 80 per cent. With passenger bookings collapsing at an unprecedented pace, airlines with a mixed fleet strategy will have the power of flexibility, aligning capacity to demand, as and when required. Doesn’t a mixed fleet introduce complexity to an airline’s operation? Rather than complexity, multiple fleet types should be seen as an “insurance” to help airlines navigate the ever-changing environment. Although there is an inherent resistance to move away from a single fleet strategy, the additional cost of complexity is offset by lower fuel burn, maintenance and ownership costs of a smaller aircraft with a capacity of 100 to 150 seats. Additionally, after a fleet of 20-30 aircraft, the commonality benefit is marginal, if any. Above this threshold, the economy
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of scale, savings in fuel, maintenance, and ownership of a second (smaller) aircraft more than offsets the complexity cost of a second fleet type. The ‘one-size-fits-all’ approach has never sounded more obsolete, while rightsizing has never been more appropriate. A diverse and flexible fleet will be instrumental in helping airlines re-establish networks by optimally balancing capacity and demand. As the headwinds ease, airlines with right-sized fleet will recover faster and stronger. Will this crisis re-shape the way people travel? Travellers need to be constantly assured about the health and safety aspects of air travel. All in the aviation industry have a part to play in continued awareness-building about the meticulous safety measures in place at every touch point of the passenger journey - contactless procedures at airports, frequent deep-cleaning processes especially for high-contact surfaces, clean cabin air that is refreshed every two to three minutes, hospital-grade HEPA filters in the aircraft that effectively trap 99.97 per cent of contaminants as small as 0.3 microns, top to bottom air circulation and minimized contact between crew and passengers. Beyond that, we could also see an increased preference for non-stop, pointto-point operation that negate the need to transit at large and congested hubs, especially given the complexity of social distancing measures. This can be made economically viable when operating smaller aircraft. We see this as a win-win scenario: less congested airports and flights, less pressure on airport infrastructure, shorter travel times, higher profitability for airlines and the potential to stimulate the economies in other cities and regions of a country. Airlines are cash-strapped and are fighting for survival. Airlines in Asia have large backlogs which is an issue they will have to tackle. Will there be any appetite for new aircraft purchases? In some cases, a re-fleeting or right-sizing won't be a matter of appetite, but rather the only way to survive. Some airlines might not be able to keep flying the same fleet, with the same size, going forward. Reducing overall costs will be the only alternative.
A 100 to 150-seat aircraft will offer airlines the benefit of matching capacity to demand and scaling frequency up or down depending on the need. It also offers over 25 per cent lower trip cost when compared to a 180-seat aircraft. Airlines probably never had such high leverage as they have now. Now is the time to negotiate and resize the business. It is a matter of survival for everyone. We have solutions in the short term and long term for airlines. If airlines cannot afford buying new aircraft now, bear in mind that there are pre-owned E-Jets in the market at attractive rates. Airlines can also count on Embraer support for entry into service and operation. The initial cash required is minimum and the cost savings is immediate. Among the top aviation markets in Asia, India stand out as one of the worst-hit countries, which means the road to recovery is a long one. Demand has dried up at an unprecedented level. Bookings are now down around 80 per cent to 90 per cent in Delhi and Mumbai compared to the same period last year for example. Only right-sized aircraft can provide the flexibility to align capacity and frequency to demand, as and when required. Embraer is known for being flexible and understanding the customer’s needs. Regardless if airlines are looking for new or pre-owned, purchase or lease, Embraer can design a special solution for each airline to help them to weather the storm and prepare for a blue sky ahead. CH www.cruisingheights.in
August-September 2020 23
Cruising Heights
SPECIAL REPORT
Fear of flying – it’s here to stay!
DECCANCHRONICLE.COM/
As the world emerges from a pandemic, AMEYA JOSHI takes a look at the events of the past few months and finds out how flying has changed in unimaginable ways
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ntering into 2020, the entire aviation ecosystem was looking forward to a record year. Airbus and Boeing – the two biggest aircraft manufacturers – opened the year with record order books. Boeing was keen to get the B737 MAX back in the air while Airbus was looking to expedite the A321XLR that has been attracting both attention and orders in large numbers. While the narrow24 August-September 2020
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body market was clocking one order after another, the widebody market was no different with fierce competition between the Airbus A350XWB and the B787 Dreamliner. To top it all, the B777X from Boeing had made its first flight and looked set to get back on track after multiple delays. Airports were no different. The world over, airport operators were expanding and pump-
restrictions for travellers coming in from a few countries. Airlines started reducing frequencies to South East Asia – partly due to drop in demand and party due to restrictions in place from the government. But, COVID-19 snowballed into something which nobody had seen before. Termed as unprecedented, COVID-19 engulfed one
BOEING
ing in more money. From the much-awaited third runway at London Heathrow to investments in upgrading technology at existing terminals, building new terminals and looking at ways to automate everything under the sun -- airports were also helping the Information Technology sector make inroads with newer solutions. This also involved the creation of new aprons or parking bays, adding runways, retail and lounges amongst others. At the epicentre were airlines that had placed record orders and were looking to move towards more fuel-efficient and newer generation planes like those from the Airbus A320neo family, A220, B737 MAX and the E2 family from Embraer. While the focus was on reducing emissions, it was also on lowering costs and improving passenger experience. All these moves were made with a single focus: expand and expand profitably. The rush and growth with airports and aircraft manufacturers were fuelled by the appetite of airlines, both low cost and full service, to grow and connect newer destinations – both within and outside the country. This was further aided by countries changing visa regimes and welcom-
Cruising Heights
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ing travellers, making travel a focus area for countries and centre of economic activity. Come February 2020, and the world changed with Coronavirus or COVID-19 as named by the World Health Organization (WHO) playing havoc. China in particular and South East Asia in general had started seeing an increase in cases of COVID-19. From first informing that the disease was non-communicable to calling it a pandemic, even the WHO was criticised for its handling. By the end of February, the world had started seeing a sudden drop in traffic to China, Thailand, Malaysia and Singapore. Soon, India had put in place
country over another. After China, the next epicentre shifted to Italy, then the rest of Europe, India, Mexico, Brazil and the Americans. Slowly, global travel came to a grinding halt. Planes were grounded, airports wore a deserted look, countries went into a lockdown and the economy came to a standstill.
HOT COMPETITION: Both Boeing (left, the B787) and Airbus (right, the A350) saw fight for numbers in the widebody market.
Surviving the worst Industry body IATA (International Air Travel Association) released numbers for airlines operating their schedules. Not surprisingly, most of the major European carriers operwww.cruisingheights.in
August-September 2020 25
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DECCANCHRONICLE.COM/
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THE NEW NORMAL: Flight crew in PPE gear await passengers to board.
26 August-September 2020
ated less than 10 per cent of their schedule in the month of April, the crucial month globally when almost all countries had gone into a lockdown. Airlines like Virgin Atlantic or Air Baltic came to a complete halt, while many others like Air Canada converted a few of their larger passenger aircraft like the B777 to carry cargo by removing most of the seats. The only thing that moved in the month of April and most of May was cargo. From pharmaceuticals to Personal Protection Equipment (PPE) kits and fruits and vegetables to emergency medical equipment, the world was mostly seeing cargo planes and revenue coming in from cargo. Innovative ways were found to carry cargo. With all dedicated freighter aircraft plying to their capacity, cargo on seats became the norm. While cargo flights with cargo on seat became the norm, there was another casualty as carriers tried staying afloat and that was www.cruisingheights.in
older planes or even younger planes with four engines. A host of airlines like British Airways, KLM, Qantas or Virgin Atlantic retired their B747s, the iconic Jumbo jet. Reason? High costs and low demand. While the Boeing B747s were older, a few carriers also parked A380s with little chance of returning to scheduled commercial service. The reason was two-fold. The A340s, A380s and B747s are large aircraft. With a slump in demand, it is unlikely that the airlines can fill up the seats and deploy them profitably. On the other hand, these four-engined planes also consume a lot of fuel which increases the operating cost for the airline. The problem is not restricted to larger and four-engined aircraft. American Airlines, United and Delta – the three large American carriers – have also retired some of its planes. These include the Boeing B757 and B767 aircraft. With an average age of 20 years or more, these aircraft were in line for a phaseout in 2021 or early 2022 but the sudden drop in demand saw them being benched immediately – never to return to active service. There was a clear indication that the softened demand was here to stay with no chances of recovery. Airlines would thus operate to few destinations, operate lesser number of flights and with reduced frequency. IATA estimated that traffic would be back to pre-COVID levels only in 2024. In India, IndiGo has already announced that it would phase out the older A320ceo aircraft from its fleet while GoAir has already grounded its A320ceos and is operating only the A320neo aircraft. Vistara, too, has started the scheduled return of its A320ceo aircraft to its lessors. Airlines also asked for funds from governments – and, quite a few governments did extend help to save jobs. However, it was short lived. Most governments could only provide ‘first aid’ as they continued to battle COVID-19. The help that came were in the form of long-term debt and not a cash handout. Yet, airlines resorted to leave without pay (LWP), job cuts, aircraft retirements and more to save every possible penny. The restart Ironically, the restart for commercial passenger operations came from the place the virus started: China! The first market to get off the hook was China with airlines resuming domestic passenger services to all destinations except Wuhan, the epicentre of the Corona virus. By the end of May, most major airlines started getting off the ground for commercial service. While China was first off the block, Australian carriers started limited domestic flights followed by airlines from Singapore, Thailand, Malaysia and Indonesia.
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In Europe, Lufthansa and British Airways were one of the first to take off with other carriers from the Lufthansa group, Swiss, Austrian and Brussels Airlines, joining in. The European Union which had harped about its open borders for all these years had to suddenly find ways to close road, rail and air traffic between the EU members. Countries closed borders for everyone and repatriation flights, evacuation flights and cargo flights became the norm. Grounded aircraft, airports full of parked planes and airlines working with governments for a bailout started making news. The United States never really stopped services but apart from grounding aircraft and retiring planes, there were massive groundings. Working with the government under the aegis of CARES Act, the airlines managed to hold on to the jobs for its employees a little longer. However, come September, airlines continue to struggle to keep employees in their jobs. The Middle Eastern carriers led by the big three or ME3 as they are called, Emirates, Etihad and Qatar, also resorted to cargo flying but amidst all the doom all around, Qatar Airways
rose to the challenge and continued its operations unabated for all the time that the world was going into a lockdown. From operating repatriation flights for other countries to helping the shipping companies ensure crews could reach home and new crews could be back on the ships to keep businesses running. As for India, starting March 25 to May 24, airlines remained grounded. In a surprise announcement, the Minister of Civil Aviation tweeted that limited services would begin from May 25. Starting with 30 per cent of the approved summer schedule, airlines are now permitted to operate up to 45 per cent of the approved summer schedule. However, this comes with umpteen riders like fare caps, both at the lower and upper ends. While at the central level there is a regulation in place, few states have resorted to their own rules related to capacity caps including Mumbai, the financial capital of the country, leading to hurdles for the airlines. This involved redrawing the network for airlines along with revising the prices and fare bands in the system to ensure that flights could re-start. Yet, an airline decided to delay the start by a week. www.cruisingheights.in
Cruising Heights
NEW MODE OF AIR TRAVEL: Passengers in masks and face guards – that is the way we will have to fly now.
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SAVIOURS: One of the ME3, a Qatar Airways plane being loaded with emergency medicines and equipment. Cargo is the only thing that moved in April and May this year.
THE ONLY THING THAT MOVED IN THE MONTH OF APRIL AND MOST OF MAY WAS CARGO. FROM PHARMACEUTICALS TO PPE KITS AND FRUITS AND VEGETABLES TO EMERGENCY MEDICAL EQUIPMENT, THE WORLD WAS MOSTLY SEEING CARGO PLANES AND REVENUE COMING IN FROM CARGO. 28 August-September 2020
The demand has been so tepid that Mumbai – once the busiest single runway airport in the world when it operated over 1000 movements in 24 hours saw only 976 departures in the month of June! This also saw some of the most eagerly sought-after routes being put on hold. This included additional flights between India and Vietnam, direct connection to Moscow from Mumbai, the much-awaited launch of American Airlines’ non-stop to Bengaluru from Seattle and Air France operations to Chennai, amongst others. Moving into the end of August, the Indian government has allowed flights to and from the United Arab Emirates but restricted to only those passengers who would terminate their journey in the UAE and not have the UAE airports like Dubai or Abu Dhabi as connecting points. As more and more points come into air bubble agreements, regulations are being set in place to ensure that a person either has a COVID-19 negative certificate just before travel or the person has to quarantine at point of arrival in India. One of the reasons why air traffic is not allowed without barriers is that there is shortage of space for institutional quarantine. Regulations with re-start The nature of the pandemic which the world is tackling is such that a passenger can still be a carrier of the disease without showing any symptoms and that is what makes the options difficult for airlines. People are still wary about travel. As the world changes due to COVID-19, aviation is changing in more ways than one. Gone are the days when serpentine queues moved to get into the terminal, followed by similar lines to reach the check-in counters and then security. The “new normal” means that queues are far and few and at places where they are, social distancing has meant the need for much more space to accommodate less than half the number of passengers as before. Airlines started with flights without service. Minimal service included drinking water. Meals were off the menu, with some carriers in the United States returning with meal offerings starting with meals to passengers in premium classes of travel. The world over, rules are in place to ensure that passengers who are not wearing face masks would not be allowed to fly. Airlines in the United States have even threatened to ban passengers for a limited period if they refuse to wear a mask. Masks are mandatory in all parts of the world as it has been proven that the spread of the disease can be contained with a multi-layer mask. Airlines and aircraft manufacturers have been at the forefront to advertise how air flows are controlled in the aircraft. They have taken pains to emphasise that the HEPA filters that are used -- these cirwww.cruisingheights.in
culate the air rapidly -- push the flow of the air being from top to bottom helping to contain the spread of the infection. The initial few days leading up to restart of aviation saw discussions around the empty middle seat regulation. While a few carriers in the United States went ahead, no Indian carrier followed the rule to keep the middle seat empty. Even IATA suggested that any rule to enforce an empty middle seat would mean that airlines would record unprecedented losses and the operations would be unsustainable. In India, the crew is compulsorily in PPE (Personal Protective Equipment) kit, while airlines are also handing out PPE kits to passengers, especially those on the middle seats. This was followed up with face shields. Globally, airlines are offering masks, wet wipes, face shields as a standard kit before boarding. Will this be the new normal? While there is still no clarity on what the new normal will be, but from pre-COVID to now, meals have dis-
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days. The airport is now providing for a PCR test at the airport with the results being available within a couple of hours. With a negative test, there would no longer be a requirement for quarantine. As the world started getting out of a lockdown, more airlines and countries have started demanding a negative certificate or asking for quarantine or mandating a test on arrival. The costs of the tests are prohibitive in some instances and the rapid tests have not exactly been correct. There have been instances of the tests giving false positives or false negatives. Besides, a person may have come in contact with a COVID patient but does not show symptoms of the disease. So, while the test would turn out to be negative, there are changes that the person could turn positive a few days later. With limited quarantine facilities available, India has not yet started international travel. Instead it has opted for what the country calls an air bubble – an arrangement which is reciprocal and allows airlines of two countries to fly nonstop. On arrival in India, a passenger is quarantined before he or she can proceed to his home. In cases where the person’s hometown is not the same as the airport or city where the passenger has landed, it leads to multiple quarantines with another one at the destination. This definitely sets back business travellers who are willing to fly! However, slowly but surely regulations are changing. More air bubble arrangements are being made and quarantine regulations are being relaxed with the ability of a traveler to go home or do business if the traveller has a COVID-19 negative certificate being issued in 96 hours to travel.
appeared, magazines and newspapers are not part of the seat back pouch and masks, PPEs, face shields are in. And amidst all this, passengers are still missing in the numbers that were the norm only a few months ago. Testing In mid-April, Dubai based Emirates became the first airline to conduct a blood test before flying. All passengers on its flight to Tunisia were tested at the airport in coordination with Dubai Health Authority (DHA). These rapid tests give results in 10 minutes, helping know the status of the passenger pre-boarding. In May, Vienna airport announced a facility to conduct PCR tests for COVID-19. Austria mandates a 14-day quarantine for passengers arriving by any mode of transport from outside the country. Passengers arriving at Vienna airport have been asked to show a COVID-19 negative certificate or go in quarantine for 14 days. The certificate cannot be older than four
Way forward The challenges for airlines and aircraft manufacturers are many. A new worry for airlines are aircraft that are ready for induction with Airbus, Boeing and other manufacturers. While both the global manufacturers are cutting down production and laying off people, no airline is in position to increase capacity or induct capacity. While in India, there is forced reduction in capacity, at many other places, the reduction is by choice. A combination of this means that for the airlines and airports, revenue will be much lower than many years in the past. With finances not being at their best for most of the airlines and airports, the going could get tougher in the months to come. While the world awaits a vaccine, simple steps like testing at airports could help revive air travel and will go a long way to PPE kit-free flying which will attract more passengers leading to an overall improvement in economic condition -- of airlines, airports and indirectly help the country’s and world’s economy. CH www.cruisingheights.in
THE DEMAND HAS BEEN SO TEPID THAT MUMBAI – ONCE THE BUSIEST SINGLE RUNWAY AIRPORT IN THE WORLD WHEN IT OPERATED OVER 1000 MOVEMENTS IN 24 HOURS SAW ONLY 976 DEPARTURES IN THE MONTH OF JUNE! August-September 2020 29
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SPECIAL REPORT
Flying with eyes shut It has been one step forward and two backward for the country’s domestic carriers ever since the government allowed commercial services to start. However well-intentioned the move by the aviation ministry to cap fares may have been, it has posed huge challenges for the carriers, writes AMEYA JOSHI.
HEALTH MINISTRY
STANDARD REGULATIONS: Thermal screening of inbound passengers is now a normal in all airports.
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THERE WAS A FEAR THAT THE INITIAL DAYS OF OPERATIONS WOULD SEE A SHARP RISE IN AIR FARES. A SUDDEN SPIKE IN DEMAND WOULD MEAN THAT AIRLINES WOULD CHARGE HIGH FARES – MORE SO SINCE THE AIRLINE INDUSTRY WAS WITHOUT ANY REVENUE FOR TWO STRAIGHT MONTHS! 30 August-September 2020
s the Indian government allowed re-starting commercial air traffic services, it came with a caveat. The government decided to cap air fares! This was the first time since air travel was liberalised in India that a regulation of this nature was put in place. Time and again, Indian aviation has faced criticism for over regulation, but, so far, fares have remained untouched. In the early part of the decade, after much debate, airlines were asked to publish fare bands and fares. Each airline registered in India has to publish this data on its website. In fact, India remains one of the unique markets to have such rules. Fare capping In a surprise announcement, the Minister of Civil Aviation had tweeted the restart of operations starting May 25. But the regulator, Directorate General of Civil Aviation (DGCA) also came out with an upper and lower cap for the fares which could be charged on a particular route. The fare bands were decided by the flight time. The flights in the country were divided into seven bands with the lowest air fare in the country being INR 2000 and the highest being INR 18,600. This excluded the taxes. The surprise announcement led to airlines scrambling to adjust their fare www.cruisingheights.in
bands and ensure compliance. Why upper fare band? There was a fear that the initial days of operations would see a sharp rise in air fares. There were many who were stranded across the country since nobody had seen the lockdown coming. A sudden spike in demand would mean that airlines would charge high fares – more so since the airline industry was without any revenue for two straight months! The upper fare band would help the government manage perception since otherwise it was bound to face flak like it does every festival season when air fares soar to new highs. Why lower fare band? The interesting bit was the lower fare band. There have been times when air fares have touched so low that they have been cheaper than First Class AC fares or at times even air-conditioned bus fares. So, why would anyone have a lower fare band? While the market leader IndiGo had a good cash surplus, other carriers had not been that lucky. SpiceJet, Go Air and national carrier Air India have been having issues with financing. As for Vistara and AirAsia India – in which the TATA group holds 51 per cent stake – have seen repeated fund infusions. It was largely believed that once the initial demand was catered to, there would be a slump
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THESTATESMANCOM
GONE ARE THE NUMBERS: Shorter queues at security – this one at Delhi Airport -- have become the new normal with fewer passengers taking flights.
and there could be ways to attract passengers by dropping fares. This would severely hurt most airlines and the one which was the richest would have the power to push all others out of the market! While this meant a potential loss for the customer, it was by and large helpful for the larger industry. Reality & challenges Contrary to initial expectations, traffic remained steady with July seeing an uptick of 5 per cent over June – which was the first full month of operations. The average daily flights have risen from around 600 to 800 daily flights with the daily average passenger count settling around 75,000 passengers from the initial 50,000. While this is much lower than what a normal month would have looked like in Indian aviation, one has to factor in that the government has allowed only 45 per cent of the schedule to be operated. In addition, certain states and airport have put in their own rules and regulations disallowing certain cities to have direct non-stop flights, which has severely restricted the planning capability for airlines. This has thrown up challenges for airlines: on the crewing side as well as the planning side. But the real challenge is revenue. The constraints are far too many to ensure operations are cash positive, leave aside profitable. The fare bands were carved out when fuel was below INR 30,000 per kilo litre at Delhi, the largest airport in the country. As the government extended the fare caps by three more months until November, the fare bands have remained the same, while fuel has crossed INR 43,000 per kilo litre. While the intention of having a lower cap for the fare band was to protect airlines, the fare cap
not increasing in line with the input cost – which is primarily fuel – would deal a heavy blow for the airlines and does not bode well with the concept. Who else does it? Not many countries have a concept of capping fares. Even in India, the ambitious Regional Connectivity Scheme (RCS) or UDAN (Udey Desh ka Aam Nagrik) has subsidised seats and cap on fares but it is restricted to a few routes. Many countries have such schemes in place where air fare is subsidised and fares capped for routes which are remote and need connectivity. However, there is a fare cap in Indonesia. Airlines there have to follow an upper fare cap and cannot charge arbitrarily but have to depend on the occupancy. Indonesia is not exactly known as an aviation market and has seen many carriers collapse due to financial difficulties. Airlines in India, like the world over, are already taking a lot of hits due to the Covid-19 pandemic. With large orders, tepid demand, cap on deployment of capacity and fare limits in place, there is little or no room for manoeuvring. If the air fare caps extend beyond the end of November, it could mean serious trouble for the airlines in India. IndiGo – which started the lockdown with a kitty of INR 20,000 crore – has already decided to raise INR 4,000 crore. If that is any indication of what lies ahead, other carriers should be a worried lot. India can ill afford any more carriers going bust. For consolidation to happen, it would require liquidity which is currently missing in the market. A business continuity is now dependent on extensive testing at airports before boarding and a vaccine which still looks few months away! CH www.cruisingheights.in
IT WAS LARGELY BELIEVED THAT ONCE THE INITIAL DEMAND WAS CATERED TO, THERE WOULD BE A SLUMP AND THERE COULD BE WAYS TO ATTRACT PASSENGERS BY DROPPING FARES. THIS WOULD SEVERELY HURT MOST AIRLINES AND THE ONE WHICH WAS THE RICHEST WOULD HAVE THE POWER TO PUSH ALL OTHERS OUT OF THE MARKET! August-September 2020 31
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FIRST FLIGHT
Vistara lives up to its name
The country’s only full-service private carrier, Vistara, recently made its first long-haul leap to London. That giant leap for the five-year old took the carrier many steps ahead in its journey to become the best global airline. It was in keeping with what CEO Leslie Thng had told TIRTHANKAR GHOSH not too long ago, that if the carrier had to become the best airline in the world, it would have to fly to more destinations globally.
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hen the Vistara flight landed at London Heathrow at the end of August, it was not only the carrier’s first longhaul destination but also as Vistara’s Chief Executive Officer Leslie Thng, put it “…in many ways, marks the beginning of a new phase of growth in the global skies for Vistara. This also gives us the opportunity to introduce India’s finest and only five-star airline to London”. The Delhi-London flight, though not a regular scheduled flight – a special, non-stop flight under the bilateral ‘transport bubble’ that would be operated from August 28 to October 24, 2020 thrice a week between the two cities – of the first of the two brand-new Boeing 787-9 Dreamliners brought to fruition
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Vistara’s desire to live up to its name. The carrier had, on August 11, 2014 got the name Vistara. Derived from the Sanskrit word “vistaar” which means limitless expanse, the vistaar was happening to foreign shores. That journey, for the country’s youngest full-service carrier, to foreign shores reached a milestone on August 6, 2019 when UK 115 took off from New Delhi for Singapore. That was the first international flight of Vistara. It was also the first time that a private airline started international operations before completing five years in the domestic skies (in line with the new rules framed under the National Civil Aviation Policy, 2016). And, when the flight reached Singapore, it was a homecoming of sorts (Vistara is part owned by Singa-
FIRST FLIGHT pore Airlines); the fledgling had left its nest to conquer distant shores and what better way to start the new chapter than saying hello to your second home! From then on, Vistara connected international destinations like Thailand, Sri Lanka and UAE, and others only to be halted by the grounding of all flight operations – both domestic and international – in March due to the covid-19 pandemic. Now that international flights have been allowed under bilateral air bubbles, Vistara has grabbed the opportunity to fly abroad and is expected to touch more international destinations. India has international air travel arrangements under bilateral air bubbles with USA, UK, France, Germany, UAE, Qatar and Maldives. In addition, the
Cruising Heights
government is in talks with 13 countries for resumption of international flights under bilateral air bubbles. These include Australia, Italy, Japan, New Zealand, Nigeria, Bahrain, Israel, Kenya, Philippines, Russia, Singapore, South Korea and Thailand. Speaking after the launch of Vistara’s first international flight to Singapore CEO Leslie Thng had said, “I think for an airline that is five years old to start inducting widebody and going medium to long-haul, it shows the confidence of both the shareholders – Tata Sons and Singapore Airlines -- about Vistara ...” The airline, he had mentioned then, had actually started preparing for international in 2018. But, there “is process we had to go through, in terms of getting the final approval
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Lie-flat beds in the Vistara Neo
hen Vistara received its first Airbus A321neo recently, it strengthened its commitment to expanding international operations. The aircraft -- which is part of the order of 50 from the Airbus A320 Family signed in 2018 -- flew to Delhi from Airbus’ production facility in Hamburg, Germany. That addition made Vistara the first airline in South Asia to offer lie-flat beds on a narrowbody aircraft and one of the few such airlines across the world. The new cabin products for the A321neo aircraft, includes world-class cabin interiors and features. As CEO Leslie Thng pointed out, “This new addition to our fleet reinforces our long-term commitment to international expansion plans, despite the challenges of the current times. The new cabin products on our A321neo aircraft truly complement our promise of providing a premium and world-class flying experience to travellers from and to India.” “The A321neo aircraft ensures operational enhancement, cost effectiveness as well as reduction of carbon footprint for us while enabling extra payload capacity, greater fuel efficiency and higher range. All of these aspects perfectly align with our international growth strategy”, he added. Featuring Vistara’s three-class cabin configuration, the aircraft has a total of 188 seats – 12 in Business Class, 24 in Premium Economy and 152 in Economy. All of them feature 4-way adjustable headrests and movable armrests. Vistara customers will enjoy seat-back entertainment and in-seat power/USB Charging Ports in every seat. The airline’s state-of-the-art In-Flight Entertainment (IFE) system features a content-rich multimedia library that total up to 700 hours of content, a superior map experience with 3D flight path map and flight tracker. The aircraft is also equipped with wireless connectivity, which will allow passengers to access the internet through onboard Wi-Fi, 3G mobile data through GSM and GPRS for SMS and MMS services, subject to necessary regulatory approvals. Vistara’s Business Class seats on the A321neo are upholstered in premium, genuine leather that recline into fully-flat beds. They come with 16” High Definition (HD) touchscreen in-seat TV, a Video Handset to navigate the IFE sys-
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tem and generous stowage space. The seats in Premium Economy and Economy cabins are upholstered in high quality, breathable fabric that provide an airy, modern in-flight experience. Vistara’s A321neo aircraft are powered by next generation CFM LEAP-1A engines that reduces noise footprint by nearly 50% and also emit less carbon. The A321neo aircraft are at least 20 per cent more fuel efficient per seat than the previous generation aircraft with the new technology engines and new aerodynamics of the wings (sharklets). The aircraft also boasts an increased operating range due to an additional Centre
Tank installed in the Aft Cargo compartment, which increases fuel capacity by 2300 kgs. Additionally, the Airbus Cabin Flex configuration on the A321neo also ensures optimum utilisation of space without compromising on cabin comfort. The powerful, in-built air filtration systems on this aircraft ensure elimination of viruses and bacteria to refresh the cabin air every 2-3 minutes. The Airbus A321neo aircraft are intended for use on short to mediumhaul international routes or destinations within seven hours of flying time. In March 2020, Vistara inducted its first widebody aircraft, the Boeing 787-9 Dreamliner, for long-haul international operations. Specials in the A321NEO • 12 lie-flat seats in a 2-2 configuration • Seat Manufacturer: Collins Aerospace • Seat Pitch: 63” | Bed Width: 20.05” (22.4” with armrest lowered) | Bed Length: 84” (82.19” in some rows) • IFE Monitor Size: 16” • IFE Touchscreen Video Handset • Four-way headrest, headset hook, cocktail table, reading light, coat hook • USB Port and 3-Pin charging point
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in every seat Control Unit for customers to control seat functions
Premium Economy: • Exclusive cabin • 24 seats in a 3-3 configuration • Seat Manufacturer: Collins Aerospace • Seat Pitch: 33” | Recline angle: 4.5” • Increased leg-room ensuring a high level of comfort • IFE Monitor Size: 10” (seatback monitor) • Audio jack and recline control • Four-way adjustable headrest • Plentiful storage space • USB Port and 3-Pin charging point in every seat Economy: • 152 seats in a 3-3 configuration • Manufacturer: Collins Aerospace • Seat Pitch: 28”-29” | Recline Angle: 3” • IFE Monitor Size: 10” (seatback monitor) • Four-way headrest for enhanced neck support • USB Port in every seat and 3-Pin Power Outlet (two for every three seats) In-Flight Entertainment and Connectivity: • System Provider: Panasonic (IFE system eX1) • In-seat touchscreen monitors in all three cabins with HD Display • Content-rich multimedia library for customers to enjoy: • Nearly 150 movies – Hollywood, Bollywood and Indian Regionals • Close to 500 short programs – Indian and Western • Almost 250 Music Audio Compilations offering 2000 soundtracks from various genres • Available Languages on IFE: English, Hindi, Simplified Chinese, and Japanese • 3D Flight Path Map provides a superior map experience • Flight Tracker and display of key flight data • Satellite Type: KU-Band • Types of Connectivity Services: Internet (onboard WiFi), SMS, MMS, 3G Mobile Data through GSM and GPRS
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Vistara’s safety video will keep you hooked
from the Ministry of Civil Aviation for international operations. That took a couple of months. What is more important for Vistara is we went through the process… We should be focusing and looking forward rather than backward…” That final approval came in March 2019 and the carrier started looking “in terms of where we could possibly fly to”. At that time, said Thng, there were “some changes in the domestic market, with the suspension of Jet Airways”. So, the carrier decided to “actually focus all our resources in terms of expanding our domestic network”. The CEO pointed out that though Vistara would be a global international player, “at the same time the domestic network would equally be important (for it)”. He had emphasized: “As a full-service carrier, we want to build a network that is relevant to a full-service carrier both domestic and international.” After landing in Singapore, Dubai and Bangkok came in quick succession. The carrier had chalked out plans to go beyond the three to a couple of more destinations in 2019. That was because, as CEO Thng put it, of the A320s as well as the B737s in the Vistara fleet with their limited range. He was candid: “We will not be able to go to Europe, for example, by 2019, but I think we do plan to go long haul as
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istara recently released its first-ever in-flight safety video that will be displayed in its brand-new Airbus A321neo and Boeing 787-9 Dreamliner aircraft. The new safety video combines necessary safety instructions demonstrated through various Yoga asanas or postures. The key objective of the video is to demonstrate safety instructions in a visually appealing manner to hold the interest and attention of customers. It also aims to take customers on a relaxing journey. This is the first time that an airline of Indian origin has gone beyond aircraft cabins to illustrate in-flight safety. Vistara also became the first airline in India and one of the very few globally to convey the safety messages through sign language in this video. Vistara’s safety video (See photograph on Page 41) was filmed over 14 days in cities/towns covering four Indian states and a Union Territory, featuring a senior member of the airline’s cabin crew and a certified Yoga instructor. The shooting of the video started in subzero temperatures up north in Ladakh against the spectacular backdrop of Pangong Lake and inside the Chemrey Monastery. It moved down south to the scenic Kannur beach and to the historic remnants of Hampi in Karnataka, then to the east on the extraordinary Dawki river in Meghalaya, and finally culminating on the grandiose cliffs of Malshej in the Western Ghats of Maharashtra. Vistara has developed the safety video in collaboration with its creative agency partners, FCB India. The videos will be played in Hindi and English. Said Surjo Dutt, National Creative Director of FCB, “Most safety instructions videos go unnoticed, playing in the background on our flights. But this one keeps you hooked from the very beginning. The essence of India – Yoga, clubbed with the awe-inspiring offbeat Indian destinations, wrap the life-saving safety briefing in the fabric of Incredible India. It gives the passengers something unprecedented to watch.”
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FIRST FLIGHT
FOCUS ON PASSENGER EXPERIENCE: Vistara’s new lie-flat beds in a narrowbody will be the first from an Indian carrier.
soon as we receive our Boeing 787-9s which is the Dreamliner.” Indeed, the planning for the long leap happened when the carrier received the first of the two Dreamliners in the beginning of 2020. Thng had said that the induction of the widebodies pointed to “the Indian aviation market… that the market will continue to grow”. He had, in fact, said that the market would “grow very aggressively both on the domestic as well as the international front and I think for Vistara to be one of the best global airlines, we would have to fly to more destinations”. But that was before COVID-19 which today has sent all plans – not only of Vistara but of carriers around the world – awry.
Y
ou have got to give it to Leslie Thng for being direct and to-the-point. This correspondent can recall a conversation with the CEO. In Singapore, when asked where the best local food was available in town, Thng had one word, “Home.” That was where the best food, the best comforts and the best facilities were. For Thng, on board or on ground, Vistara will always be where home-like hospitality comes with modern-day convenience. So, foil-
36 August-September 2020
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packed meals and plastic cutlery wrapped in paper tissue are out. Instead, there is real food that is presented on a tray with silverware and a thick napkin tied with a golden string. Added to that is comfort and quality. What the Vistara flier receives is a memorable Vistara journey. Short-haul or long-haul, Vistara has not lost its focus on the customer. Thng had put it rather matter-of-factly during his conversation at Singapore: “We would have to continue to invest a lot in our product and services. We are investing a lot on the Airbus 321 Neos (the first of which was delivered in March 2020)… together with the Boeing 787-9…We are investing quite a lot in terms of the product. We believe that we should have the best product in terms of the widebody for Indian airlines and the product should be comparable to many of the big international players that are flying in and out of India.” When aviation normalizes – at least to an extent – Vistara would like to fly to some ‘Open Skies’ countries. US would certainly be one that it will fly to. There is Japan, too. It will not be surprising to see Vistara touching, as Thng had said, “one or two points”. As for other Japanese destinations, “where we don’t have dense traf-
FIRST FLIGHT
fic, we need to rely on our partners to give us the connectivity. So, partner is important for us to be able to increase the number of choices and destinations to our customers. On the other hand, we would be working with them to let them fit into our domestic network as far as the destinations we fly surrounding India because many of them will not be able to launch a direct flight e.g. Europe to Varanasi, Europe to Raipur, or even Europe to the surrounding countries”, he had said. “So, I think that is where we have a value to them; likewise, we see a value in them giving us the feet beyond our destination. So, partnership is one that is equally important.” Thng had provided a clue to the carrier’s future plans – which has been paused by the COVID-19 pandemic – when he had mentioned partnerships. “If you look at how we form partnerships – that would give you an indication where we are seriously looking at operating to”. Singapore Airlines was Vistara’s first partnership before it started flying to Singapore. Also, it had signed a Memorandum of Understanding (MoU) with Japan’s national airline, Japan Airlines (JAL) in September 2017 to pursue commercial opportunities together and in 2019, the two airlines entered a codeshare
Cruising Heights
agreement, with the network of codeshare services having been expanded earlier this year. Recently, the carrier inked a partnership with JAL, to give members of their frequent flyer programmes the opportunity to earn miles/ points on each other, effective August 31, 2020. That partnership will enable Club Vistara members to earn and redeem CV Points on flights operated and marketed by Japan Airlines, covering an extensive global network that includes nearly 80 destinations across 20 countries and regions. Reciprocally, members of JAL Mileage Bank will be able to earn and spend their miles on flights operated and marketed by Vistara across a steadily growing network of destinations within and outside of India. Commenting about the partnership, Vistara’s Chief Commercial Officer, Vinod Kannan, said that the “strategic partnership with Japan Airlines helps us to strengthen our value proposition for Club Vistara members. It is in line with our broader strategy of forging more partnerships with like-minded airlines as well as non-airline brands to provide a wider choice of earn and burn options to our customers and make the programme the perfect lifestyle choice for today’s travellers”. www.cruisingheights.in
August-September 2020 37
Cruising Heights
INNOVATION
LUNCH IN NY,
DINNER IN LONDON…
FAST MOVER: Virgin Galactic’s concept of the Mach 3 aircraft. It will be total comfort inside.
38 August-September 2020
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INNOVATION
Cruising Heights
That’s no pipe-dream. Richard Branson and his Virgin Galactic’s primary focus is ‘space tourism’ but it is leveraging its space technology know-how to develop superspeed point-to-point travel. The Mach 3 aircraft that was recently announced is the result of that leverage. The plane will disrupt travel as we see it today. A report.
V
irgin Galactic Holdings, Inc, a vertically integrated aerospace and space travel company, which includes its manufacturer of advanced air and space vehicles, The Spaceship Company recently announced the first stage design scope for the build of its high speed aircraft design, and the signing of a non-binding Memorandum of Understanding (MOU) with RollsRoyce to collaborate in designing and developing engine propulsion technology for high speed commercial aircraft. This followed the successful completion of its Mission Concept Review (MCR) programme milestone and authorization from the Federal Aviation Administration’s (FAA) Center for Emerging Concepts and Innovation to work with Virgin Galactic to outline a certification framework. This also marked an exciting step forward in Virgin Galactic’s development of a new generation of high speed aircraft, in partnership with industry and government leaders, with a focus on customer experience and environmental sustainability. George Whitesides, Chief Space Officer, Virgin Galactic said, “We are www.cruisingheights.in
excited to complete the Mission Concept Review and unveil this initial design concept of a high speed aircraft, which we envision as blending safe and reliable commercial travel with an unrivalled customer experience. We are pleased to collaborate with the innovative team at Rolls-Royce as we strive to develop sustainable, cutting-edge propulsion systems for the aircraft, and we are pleased to be working with the FAA to ensure our designs can make a practical impact from the start. We have made great progress so far, and we look forward to opening up a new frontier in high speed travel.” Rolls-Royce, a leader in cuttingedge technologies that deliver clean, safe and competitive solutions to the planet’s vital power needs, has a proven record of delivering high Mach propulsion, powering the only civilcertified commercial aircraft (Concorde) capable of supersonic flight. “We are excited to partner with Virgin Galactic and TSC to explore the future of sustainable high speed flight,” said Rolls-Royce North America Chairman & CEO Tom Bell. “Rolls-Royce brings a unique history in high speed propulsion, going back to the Concorde, and offers world-class technical capabiliAugust-September 2020 39
Cruising Heights
INNOVATION
FOR A LUXURIOUS FLIGHT: The seats in Virgin Galactic’s development of a new generation of high speed aircraft, in partnership with industry and government leaders, will focus on customer experience and environmental sustainability.
WE ENVISION (THE HIGH SPEED AIRCRAFT) AS BLENDING SAFE AND RELIABLE COMMERCIAL TRAVEL WITH AN UNRIVALLED CUSTOMER EXPERIENCE. WE HAVE MADE GREAT PROGRESS SO FAR, AND WE LOOK FORWARD TO OPENING UP A NEW FRONTIER IN HIGH SPEED TRAVEL.” — GEORGE WHITESIDES Chief Space Officer, Virgin Galactic
40 August-September 2020
ties to develop and field the advanced propulsion systems needed to power commercially available high-Mach travel.” The Mission Concept Review, which included representatives from NASA, is an important programme milestone at which the Virgin Galactic high speed team confirmed that, based on the research and analysis work completed, its design concept can meet the high-level requirements and objectives of the mission. Previously, NASA signed a Space Act Agreement with Virgin Galactic to collaborate on high speed technologies. The basic parameters of the initial high speed aircraft design include a targeted Mach 3 certified delta-wing aircraft that would have capacity for 9 to 19 people at an altitude above 60,000 feet and would also be able to incorporate custom cabin layouts to address customer needs, including Business or First Class seating arrangements. The aircraft design also aims to help lead the way toward use of state-of-the-art sustainable aviation fuel. Baselining sustainable technologies and techniques into the aircraft design early on is expected to also act as a catalyst to adoption in the rest of the aviation community. The MCR concluded that the team can progress to the next phase of design, consisting of defining specific system architectures and configurations, and determining which materials to use in the design and manufacturing of the aircraft. The team will also work to address key challenges in thermal management, maintenance, noise, emissions, and economics that routine high speed commercial flights would entail. The design philosophy of the aircraft is geared around making high speed travel practical, sustainable, safe, and reliable, while makwww.cruisingheights.in
ing customer experience a top priority. Virgin Galactic is designing the aircraft for a range of operational scenarios, including service for passengers on long-distance commercial aviation routes. The aircraft would take off and land like any other passenger aircraft and be expected to integrate into existing airport infrastructure and international airspace
around the world. Virgin Galactic is working closely with international regulatory communities to ensure compliance with safety and environmental standards. Last week the FAA’s Center for Emerging Concepts and Innovation reviewed the project direction and authorised FAA resources to work with the Virgin Galactic team to begin to outline a certification framework during the pre-project guidance phase. Virgin Galactic believes that working together with regulators and industry leaders such as Rolls Royce and Boeing will support the mission to broaden and transform global travel technologies, with a focus on customer experience. If Mach 3 were to become reality, it will mean travelling from Los Angeles to Tokyo in three or four hours instead of the present 12hour flight time, or a two-and-a-half hour flight from London to New York. According to experts, the Mach 3 plane would be Virgin Galactic’s first step to commercial supersonic pointto-point travel. That will be the opportunity that Virgin Galactic will utilize to the hilt: transporting thousands of people per year around the world with regular frequency. Reports indicate that Virgin Galactic’s next step will see the development of the design, plan on what materials to use, and address the CO2 hurdle as well as the sonic boom. Incidentally, the signing of the MOU with Rolls-Royce came after the engine maker announced a tie-up with Boom Technology, one of three startups that is keen to bring a new supersonic jet in the market in the next few years. Branson had said in 2017 that Virgin Galactic would help to develop Boom’s planned XB-1 demonstrator that is planned for a virtual rollout event on October 7 this year. The rollout date was announced as the XB-1 is nearing
INNOVATION
completion of assembly in preparation for the beginning of ground tests this year and flight trials in 2021.
F
ast travel – at the speed of sound – has always been one of Richard Branson’s pet projects and it was in the middle of November 2016, that he announced a collaboration between his Virgin Galactic and an US startup to launch Baby Boom, a new supersonic plane that would be faster – and cheaper – than the Concorde. Boom has also got tentative orders from Branson’s Virgin Group and could be a competitor to the Mach 3 airplane. Blake Scholl, the man behind the mini Concorde commented: “This is supersonic passenger air travel. No bullshit, and it’s actually affordable.” That collaboration was a huge step in commercial air travel. Baby Boom would connect London and New York in just 3.5 hours, at an “affordable” US$5,000 return. On that day in November, Boom Technology unveiled the XB-1 Supersonic Demonstrator, a subscale prototype of the Boom supersonic passenger airliner. On display for the first time ever at Boom's Hangar 14 at Centennial Airport, the XB-1, was the Baby Boom. “60 years after the dawn of the jet age, we’re still flying at 1960s speeds,” said Blake Scholl, chief executive officer and founder of Boom. “Concorde's designers didn’t have the technology for affordable
supersonic travel, but now we do.” “I have long been passionate about aerospace innovation and the development of highspeed commercial flights," said Richard Branson, founder of Virgin Group. “As an innovator in the space, Virgin Galactic's decision to work with Boom was an easy one. We're excited to have an option on Boom's first 10 airframes. Through Virgin Galactic's manufacturing arm, The Spaceship Company, we will provide engineering and manufacturing services, along with flight test support and operations as part of our shared ambitions.” “The Boom airliner will be a core part of the intercontinental airline fleet,” said Mike Boyd, Boyd Group International. “Travelers are hungry for faster flights and airlines will be excited for a differentiated and profitable option for their premium travelers.” The XB-1 Supersonic Demonstrator has been planned to maintain Mach 2.2, with over 1,000 nmi (1,900 km) of range. Powered by three General Electric J85s, it is expected to be flight tested in 2021. In addition to the General Electric engines, Honeywell will provide the avionics, Tencate the carbon fiber, and composite structures fabricated by Blue Force, the Baby Boom will see final assembly and vehicle integration at Boom's facility at Centennial Airport. CH www.cruisingheights.in
Cruising Heights
BABY BOOM COMPETITOR: An illustration of the XB-1 Supersonic Demonstrator in flight. This plane from Boom Technology would fly at Mach 2 speeds
August-September 2020 41
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FOCUS
VACCINE DELIVERY
Public, private
partnership will spell success Barely eight months ago, the world knew nothing about the COVID-19 virus. Today, that virus has not only infected more than 25 million people but also caused the deaths of thousands. The only saviour was air cargo: flying in medical products and such stuff as personal protective equipment (PPE). The world also understood that disruptions in the supply chain can cause major problems in supplying health workers with the medical equipment they need. DHL with McKinsey & Company has published a White Paper that identifies the critical challenges in COVID-19 logistics.
W
ith first emergency use authorisations for COVID-19 vaccines expected to be effective in the last quarter of 2020, logistics providers are challenged to rapidly establish medical supply chains to deliver serums of unparalleled amounts of more than ten billion doses worldwide. DHL, working with McKinsey & Compa42 August-September 2020
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ny as analytics partner, has published a white paper (Delivering Pandemic Resilience: How to secure stable supply chains for vaccines and medical goods during the Covid-19 crisis and future health emergencies) on delivering stable logistics for vaccines and medical goods during COVID-19, and future health crises. Currently, more than 250 vaccines across
FOCUS seven platforms are being developed and trialled. As COVID-19 vaccines have leapfrogged development phases, stringent temperature requirements (up to -80°C) are likely to be imposed for certain vaccines to ensure that their efficacy is maintained during transportation and warehousing. This poses novel logistics challenges to the existing medical supply chain that conventionally distributes vaccines at ~2–8°C. In the paper, DHL evaluates how the transport of vaccines as highly temperature-sensitive product can be managed effectively to combat the further spread of the virus. The scope of this task is immense: To provide global coverage of COVID-19 vaccines, up to ~200,000 pallet shipments and ~15 million deliveries in cooling boxes as well as ~15,000 flights will be required across the various supply chain setups. “The COVID-19 crisis emerged with an unprecedented breadth and impact. It required governments, businesses, and the logistics industry alike to adapt quickly to new challenges. As a world leader in logistics, we want to share our experience of operating during
and appropriate partnerships within the supply chain can play a key role as governments work to secure critical medical supplies during health emergencies such as this.” Future public health crisis management to include public-private partnerships Since the outbreak of the pandemic, demand for medical supplies has surged. For example, UNICEF sourced 100 times more face masks and 2,000 times more medical gloves than in 2019. Bringing medical supplies from their distant sources to use at the frontline has been one of the most crucial activities in pandemic response management in the first phase of the health emergency. For PPE specifically, inbound logistics were a major challenge due to geographically concentrated production, limited airfreight capacity and a lack of inbound quality checks. To ensure stable medical supply in a future health crisis, a comprehensive setup of public health crisis strategies and structures needs to be established by governments with partnerships from both public and private sectors. To kick start the dialogue among the dif-
one of the biggest health crises in recent history, in order to develop strategies in an evermore connected world”, explains Katja Busch, Chief Commercial Officer DHL. “To protect lives against the pandemic, governments have moved towards a more active role in medical supply chains. Over the past few months, we have demonstrated that sufficient planning
ferent actors and improve pandemic resilience in medical supply logistics, DHL has provided a framework for the cooperation of logistics companies with authorities, politicians, NGOs as well as the life sciences industry. The framework helps to establish measures to ensure the most stable and safe supply chains possible. Besides an emergency response plan, this www.cruisingheights.in
Cruising Heights
August-September 2020 43
Cruising Heights
FOCUS includes a partnership network, strong physical logistics infrastructure and IT-enabled supply chain transparency. Lastly, a response unit with a clear mandate should be put in place to implement all critical activities at short notice. Cruising Heights reproduces a crucial part of the White Paper to provide a deeper understanding of the critical pain points that could destabilise the delivery of the Covid-19 vaccines.
R
ecent months have revealed the particular pain points that governments and NGOs have confronted in trying to ensure a broad, yet targeted provision of medical supplies across the core steps of the supply chain. Demand identification At the outbreak of the pandemic, timely identification of equipment demands at the national level was challenging not only due to a lack of consolidated transparency on domestic stock levels, but also due to challenges in forecasting. Forecasting demand proved difficult, since this requires a calibrated model for pandemic evolution as well as rigorous reporting and data analytics capabilities, which were often not in place prior to the pandemic. In addition, coordinating demand identification and consolidating demand data from developing countries have posed challenges to NGOs.
THE SUPPLY OF COVID-19 TESTING SUPPLIES AND THERAPEUTICS WAS FAR LOWER THAN THE GLOBALLY SURGING DEMAND, MAKING SOURCING AND SECURING VOLUMES A SIGNIFICANT PAIN POINT. FOR PPE, THE DEPENDENCE ON SUPPLIES FROM OVERSEAS, ESPECIALLY FROM CHINA, POSED CHALLENGES FOR GOVERNMENTS TO RAPIDLY LIAISE WITH QUALIFIED LOCAL SUPPLIERS. 44 August-September 2020
Sourcing The supply of COVID-19 testing supplies and therapeutics was far lower than the globally surging demand, making sourcing and securing volumes a significant pain point. For PPE, the dependence on supplies from overseas, especially from China, posed challenges for governments to rapidly liaise with qualified local suppliers. Fragmented supply and nebulous networks of contract manufacturers exacerbated the sourcing challenge, and attempts to quickly ramp up short-term production had a negative impact on product quality. Procurement When procuring PPE from overseas, agreeing to purchase terms with local suppliers has proven difficult for governments who often lack local knowledge and supplier liaisons. In the case of therapeutics and testing supplies, the urgency of the situation – combined with limited supply and lack of clarity regarding regulatory approvals – further complicated the procurement process. Allocation Activities related to allocation have also presented challenges for government players. For testing supplies and therapeutics, the wide gap www.cruisingheights.in
between current supply and surging demand is a driver of the allocation struggle. The higher number of stakeholders and decision-making bodies makes allocation especially challenging for countries with multiple levels of government (e.g. federal, state and local parliaments). Lack of real-time visibility on stock levels has made timely matching of supply and demand across countries even more difficult. Inbound logistics and distribution A highly concentrated production footprint and resulting bottlenecks in customs, along with limited air freight capacities, have posed major challenges in the flow of PPE. However, orchestrating a global supply chain of highly sensitive products across multiple transport modes is also a challenge governments face when dealing with tests, therapeutics and vaccines. While governments are assuming overall responsibility for end-to-end supply chain orchestration, two categories of activities are most relevant from a logistics point of view: inbound logistics and distribution. A closer look: Pain points and their root causes in inbound logistics and distribution During the COVID-induced PPE shortages, governments faced a range of different transport challenges. In the race to source PPE, a push-based sourcing approach predominated to ensure volume. This resulted in unpredictable supply in terms of volume, quality and delivery time. In many cases, local quality checks were insufficient due to time pressure, the increased bargaining power of suppliers, and the fact that many governments lacked access to local testing infrastructure. Outbound shipping was often delayed due to road transport bottlenecks on the way to ports and airports. For PPE, in particular, regional national lockdowns during the peak of the first phase limited not only production, but also much-needed shipping capacity. When supplies finally arrived at outbound ports, reliable estimates for arrival times (ETAs) on the receiving end were hard to come by. And when supplies did reach their destination countries, custom clearance processes added another hurdle. Custom clearance is often a lengthy process due to insufficient personnel and a lack of coordinated fast-track processes. Amid the COVID crisis, governments responded by relaxing custom clearance procedures (to varying degrees) in order to accelerate distribution to end users. As a result, things like supplier certification and product quality were not adequately verified. With less experienced and reliable actors suddenly appearing on the
FOCUS market in this “gold rush” environment, it was quite common to find large amounts of product that was insufficient in terms of quality, or even counterfeit. The distribution challenges faced by governments were twofold: First, in warehousing. Due to the time pressure and surging demand, warehouses not actually designated for life science products were nevertheless used for medical supplies, including PPE. This sometimes resulted in damaged or deteriorated supplies (despite relatively short storage times) because necessary conditions were not met (e.g., specialty packaging, precise temperature and humidity management). Even a product as simple as hand sanitizer, for example, requires careful handling due to its alcohol content, especially for longer-term storage. Moreover, products shipped on a push-based approach from various suppliers lacked standardization in terms of stock-keeping unit (SKU) formats and shipment information, which also led to inefficient warehousing operations. Second, limited real-time transparency on warehouse stock levels significantly limited options for orchestrating an effective last-mile delivery network. This also made it difficult to make reliable promises to end users and created friction in planning processes. Transportation planning and managing multiple carriers posed additional challenges that governments had not faced before. Characteristics of a successful logistics partnership Beyond the pain points in each of these areas, governments and NGOs have struggled to deal with an increasingly complex stakeholder landscape. This is the result of a fragmented tendering process in pursuit of greater cost efficiency along each step of the supply chain. At the onset of the pandemic, stakeholder complexity collided with high urgency and high levels of competition between countries. By partnering with a logistics provider throughout the entire supply chain, governments can benefit from integrated logistics planning, consistent quality services, and a simplified stakeholder landscape. In a global health emergency, an effective logistics partner should have the following minimum qualifications and capabilities: Access to a global shipping network at scale In times of global health crises, a logistics partner should have access to an established worldwide logistics network. For supply chains consisting of suppliers with global production networks, reliability will depend on a broad range of transportation capacities across modes, as well as established infrastructure for intercontinental shipments.
Local knowledge and access As the COVID-19 crisis has shown, getting medical supplies to a national port is only half the battle. Local knowledge and access are also key. If a logistics provider is going to ensure a stable supply of life-saving products, it must also have significant local warehousing capacity and experience with in-country logistics through its own infrastructure footprint or via a quality-controlled partner network. Process excellence Given the particular requirements of medical supplies, logistics partners should be certified for transporting and warehousing life science products. In a health emergency, a demonstrated commitment and ability to quality-check products at multiple stages – along with the capacity to support smooth and timely customs clearance (preferred handling) – are key to a quick response. Data-driven transparency and insights A logistics provider with extensive data capabilities can help overcome the transparency issues experienced during the COVID crisis. Such capabilities allow real-time visibility on shipment status and monitoring of a range of variables that can impact supply, including regulations, supplier health, and epidemiology. Resilience and crisis experience The uncertainty inherent to a pandemic or other large-scale public health emergency will test an organization’s resilience and adaptability. A resilient lead logistics provider with a track record in crisis situations can rapidly scale up capacity and consistently ensure high-quality services. www.cruisingheights.in
Cruising Heights
THE COVID-19 PANDEMIC WILL EVENTUALLY BE BEHIND US. HOWEVER, THE QUESTION IS NOT IF BUT WHEN THE NEXT LARGESCALE HEALTH CRISIS WILL COME AROUND. BY ACTING NOW – WITH INFORMED PLANNING, TEAMWORK AND EFFECTIVE PARTNERSHIPS – WE CAN PUT OURSELVES IN A BETTER POSITION THAN EVER BEFORE.” — FRANK APPEL, CEO, Deutsche Post DHL Group
August-September 2020 45
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AIRCARGO n IATA: Stable cargo demand in July n Tulsi Mirchandaney on air cargo in emergency response n Vaccine's last mile distribution plan ready
SUMMING UP THE TIMES:: Cargolux Airlines recently revealed a Boeing 747 with a new coating. The special livery has a mask on the nose of the aircraft where the cargo loading door is with the straps leading back to the airline’s name painted across the fuselage.
Air cargo moves amidst trying times The lifting of lockdowns and restrictions has not lessened the woes of the country’s freight forwarders. From the east to the west, north to south, forwarders are braving it out to keep the wheels of the exim trade moving. TIRTHANKAR GHOSH talked to four forwarders to find out how they are coping with the challenges in these COVID times. www.cruisingheights.in
August-September 2020 47
Cruising Heights
AIR CARGO
KEEPING THE WHEELS MOVING: An Air India plane preparing for a flight with emergency medicines and pharma equipment for COVID-19
me
t,
C
— Bharat Thakkar, Jt. MD, Zeus Air Services Pvt Ltd
ovid-19 has no desire of going away. Amidst lifting of lockdowns and restrictions, the air cargo industry has battled on pushing forwarders and air cargo stakeholders across India to keep their businesses going. In the beginning of August, India Ratings and Research pointed out in a report: “Ind-Ra opines a moderate recovery for sea and road transport post the easing of the lockdown restrictions, whereas air transport remains severely stressed.” The country’s exports level reached pre-COVID figures even as imports had been severely brought down. “Imports have remained sluggish, while a rebound in export to pre-COVID level led to India’s import-export mix changing to 58:38 (4 per cent for transshipment) in June 2020 from the normal split of 65:30,” the report said. As for air cargo, traffic was at 60 per cent of the normal levels in May 2020. The reason for the low freight traffic -- around 15 per cent of the normal air freight volumes in May 2020 -was the poor economy and lack of manpower. Operating from India’s No 1 airport, Delhi, Sunil Arora, veteran forwarder and present President, The Air Cargo Agents Association of India (ACAAI), agreed that business had picked up. “Exports have begun and have seen a decent jump in volumes -- from the absolute shutdown
48 August-September 2020
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“THE AVIATION MINISTRY SHOULD LESSEN OUR PROBLEMS…WE (CARGO INDUSTRY) HAVE A PRACTICAL DEMAND: WE WANT INDUSTRY STATUS SO WE CAN SEEK FINANCE FROM BANKS AT SENSIBLE INTEREST RATES.”
to the recent month where we have seen exports of high value commodities or necessarily required commodities like pharmaceuticals and perishables.” Indeed, a far cry from the mainstays of the pre-lockdown days: the primary air export commodity had been apparels and handicrafts from India to the west. These items, said Arora, have suffered and continue to see a sharp decline in exports. Apparels and handicrafts – because of their low prices -- cannot afford the increased freight rates and other attached logistics cost. According to various industry statistics and analyses, the ACAAI President said that even if normalcy happened fast, it would take anything between six and eight months for air freight figures to reach the pre-COVID tally. Was the lack of capacity a challenge for the air cargo sector? Arora pointed out that freight capacity had been considerably low and the deployment of additional frequencies was a slow affair. “Initially, even freight airlines did not optimally utilise their available fleet,” he said. In the last couple of months, with increased revenue generation, airlines have given freight priority over passenger movement,” he said. However, with restricted passenger travel, the total space capacity available has been much
AIR CARGO lower than required. The low available capacity has kept freight rates high. This has brought higher profits for airlines – covering up the huge losses incurred by all carriers due to the total shutdown. COVID, however, has had a salutary impact. Arora emphasised that these COVID times have proved and established the importance of cargo with every airline – specially, Indian flag carriers. In Kolkata in the east, Jaideep Raha, Member, ACAAI Managing Committee-cum-Regional Chairman, Eastern Region, was candid. He said that in comparison to the other regions, the export and import businesses were hit very badly in the Eastern Region. “Our overall shipment volumes in terms of revenue have gone down by almost 90 per cent,” he pointed out. As for reaching anywhere near pre-lockdown volumes, Raha does not see any hope till the end of the first quarter of 2021. As he put it: “We would look at -- provided the pandemic curve gets flattened by September 2020 – March 2021-end or mid-April 2021.” However, he was quick to point out that the exports of perishable items like fruits and vegetables have done considerably better. This was largely due to the efforts of the Ministry of Civil Aviation (MoCA) and AAICLAS’ (Airports Authority of India Cargo Logistics and Allied Services Company Limited) Krishi Udan initiative (The Aviation Ministry launched the Krishi Udan scheme on international and national routes to assist farmers in transporting agricultural products). The MoCA and AAICLAS, he said, “left no stone unturned and worked almost 24x7 to ensure that the exports of perishables do not get deterred in any way”. Shipment tonnage out of Kolkata, Raha informed, had been hugely affected. The mainstays for air cargo stakeholders have been primarily perishable items and some leather goods. One of the major reasons for the low volumes was the capacity constraint, that he described as the major contributor to “the downfall of our tonnage output ex-CCU. That and the steep increase in air freight rates was also a big deterrent to air exports from Kolkata. From the south of India, at Bangalore, Shesh Kulkarni, Managing Director, India of Noatum Logistics, was optimistic though “current volumes across the industry are not near prelockdown levels”. “Business,” he said “was slowly taking some meaning and shape.” Pointing to the volumes in the last three months, he said that “the trend has been good for us. May was better than April, June was better than May and July was better than June. So, with each month gone by, the trend has improved.” Kulkarni emphasised that “we are still far from reaching pre-lockdown levels… Honestly, in my personal opinion, we should expect more clarity on the situation either in September or
post-September.” His advice for the moment was: The need of the hour was to closely manage the day, week, and the month. He was, however, direct when he mentioned that rates were still high. That, along with the fact that flight options were limited -- some carriers are more active than others – had pushed rates up. “Our delivery levels have been impacted to the extent of shippers’ ability to deliver the freight. Certain industries like Pharma, FMCG, etc were doing well while other industries, have some catching up, to do. “Overall,” said Kulkarni, “we have not had a challenge with space. If you are willing to pay the premium, then space is available.” In the financial capital of India, Mumbai, the situation is similar. Veteran freight forwarder and former ACAAI President Bharat Thakkar, who is Jt. Managing Director of Zeus Air Services Pvt Ltd pointed out that “the logistics industry has come out of the shadows of uncertainty and the depression from the initial weeks of lockdown, the shocks of global casualties and growing illnesses due to the invisible foe…The best we can do is stay alive and survive 2020.” That he emphasised was the “biggest profit margin of our lives”. Thakkar said that exports had started but the industry tonnages were no way near prelockdown. The movement was slow and on the path to the long road of recovery. “With the offices of exporters opening, the payments of past shipments have started trickling in. However, with new shipments and high cost freight charges, the pressure on forwarders is more than ever,” he said. He also mentioned that “despite an ongoing collapse in demand for air cargo, the loss of bellyhold space in passenger aircraft simply means that global freight capacity www.cruisingheights.in
Cruising Heights
CURRENT VOLUMES ACROSS THE INDUSTRY ARE NOT NEAR PRELOCKDOWN LEVELS. BUSINESS HAS SLOWLY STARTED TAKING SOME MEANING AND SHAPE…THE TREND HAS BEEN GOOD FOR US. MAY WAS BETTER THAN APRIL, JUNE WAS BETTER THAN MAY AND JULY WAS BETTER THAN JUNE. SO, WITH EACH MONTH GONE BY, THE TREND HAS IMPROVED… WE SHOULD EXPECT MORE CLARITY EITHER IN SEPTEMBER OR POST-SEPTEMBER.”
— Shesh Kulkarni, MD, India, Noatum Logistics
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WE ALL UNDERSTAND THAT THE MARKET’S DEMAND-SUPPLY SITUATION GOVERNS RATES IN EVERY INDUSTRY BUT IN THE LOGISTICS INDUSTRY, IT IS DIFFERENT. THE GOVERNMENT MUST PROVIDE EITHER DIRECT FREIGHT SUBSIDY TO EXPORTERS, LOGISTICS HANDLING COST REBATES TO AIRPORT OPERATORS THROUGH THE AIRPORTS ECONOMIC REGULATORY AUTHORITY (AERA) AND KEEP A CHECK ON THE MULTIPLE TIMES HIKES HAVE TAKEN PLACE IN FREIGHT RATES.”
is still struggling to cope with the volume of goods that needs transporting”. Thakkar went on to say that economic activity had started picking up from the April lows as some economies unlocked and the demand for non-medicals have started increasing gradually. “But predicting the length and depth of the recession remains difficult.” The gap, he said, “between demand and capacity showed that there was a challenge in finding space on the aircraft still flying to get goods to the market… The prospects for air cargo remain stronger than for the passenger business, but the future was very uncertain”, he said. Economics globally, said Thakkar, had faced a hard landing. “Just imagine -- over 7.5 million flights were cancelled between January and June 2020. Came July and there was an increase of flight frequencies of rescue flights, freighters and pax freighters improved. However, the freight costs have remained high and if carriers do not look at that demand in the coming weeks, it will flatten for non-medical commodities,” he opined. Even so, he held out hope. “I am not an economist nor an astrologer but after hearing Piyush Goyal, the Minister of Railways and Minister of Commerce and Industry (in a webinar), I think we will reach pre-lockdown levels early. It (the economy) is expected to start ticking around the last quarter of 2021 or the first quarter of 2022.
F
— Sunil Arora, President, ACAAI
reight forwarders talking to Cruising Heights voiced some of the major challenges they had been facing since the lockdown was lifted. The biggest, perhaps, has been the rise in air freight. According to Sunil Arora, “The air freight rate has seen a sharp rise – in fact, manifold. How far can our exporters or other small medium enterprises afford to remain in business?” he asked. “With not much support from the government by way of direct subsidy or reduced handling cost from airport custodians, transporters, etc, full recovery seems to be a distant reality,” he said. Arora emphasised that the steep hike in air freight rates and there being no rate control mechanism has been a real dampener. “We all understand that the market’s demand-supply situation governs rates in every industry but in the logistics industry, it is different. The government must provide either direct freight subsidy to exporters, logistics handling cost rebates to airport operators through the Airports Economic Regulatory Authority (AERA) and keep a check on the multiple times hikes have taken place in freight rates. Since our own national airlines are not in a position to deploy the maximum space available for the Exim industry, the situation was creating a breeding ground for other major international freighter
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players,” he said. Arora highlighted the fact that freight forwarders get no support from the government and there are no reduced rates on lending or overdrafts. “Just moratorium schemes were not enough,” he said. “After all, we play a very integral role in protecting promoting and participating proactively to support EXIM industry,” he emphasised. “Freight forwarders, Custom Brokers, truck operators, warehousing and distribution network operators, Cargo Terminal Operators (CTOs) are going through the toughest times ever…support us like others or else the Indian establishments (air cargo stakeholders) will be history,” he warned. The ACAAI chief had words of praise for the Central Board of Indirect Taxes and Customs (CBIC) for the IT and automation in the process management of custom clearance that have delivered significant and vitally required new interface and modules. At the same time, he appealed to the Ministry of Finance through the Ministry of Civil Aviation “to give an empathetic consideration if not sympathetic to the plight of the air cargo stakeholders”. Bangalore-based Sesh Kulkarni felt that the Government has been proactive and have been engaging with trade and industry at various levels, and “have done well under the given circumstances. However, there are still gaps between intent and the actual reality on the ground.” While, he added that “it will not be fair on my part to squarely park the issue with
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the government or the aviation ministry, as the success of our industry is equally dependent on various other agencies/authorities. If any one of them does not measure up or comes short, then we as the trade or shippers or consignees end up holding the can. But, truth be told, the government and government agencies have responded far better in these COVID times, than what they did in the past.” Jaideep Raha enumerated the challenges the industry faced due to the lockdown: Shortage of staffs; Poor public transport availability; Containment zones and the fear psychosis in people, and, the steep hike in air freight rates that are 4 to 5 times pre-COVID period rates. The hike has made it “economically unviable for exporters to ship through air cargo. A further dip in import of raw materials was needed in the assembly line to manufacture exportable items: this was another big impediment for the exim industry.” Echoing Sunil Arora, Raha pointed out regretfully that “no specific comprehensive financial stimulus packages had been given to our air cargo logistic industry as such by the government or the aviation ministry”. The government, he said, “should look at compensating a percentage of the salary burden of the industry, reduce Corporate Tax and relax the payment of statutory dues. The government must provide subsidies for the high local transport costs since local suburban trains and buses are not plying and the staff are
coming in taxis and hired private vehicles…And there is the additional cost burden from regular sanitisation expenses. The government should subsidise the Professional Tax burden, reduce diesel costs to logistic operators, increase dwell time at the cargo terminal for both export and import handling and lower the terminal handling costs by giving subsidies to the Airport Cargo Terminal Operators. All these basic support moves by the government will greatly help the air cargo industry,” he said. Bharat Thakkar, however, looks at challenges positively. “Without problems,” said he, “there is no challenge…Like every industry, ours too faces the same challenge: maintain the wellbeing of our teams and their families during these uncertain times. Additionally, there is the lack of public transport and much more,” he pointed out. As for the government, Thakkar said that it was time “we understand, accept and realise that during such pandemic situations, everyone has a role to perform. We can keep complaining about delays in allowing the movement of people in the logistic industry, etc. As a matter of fact, in the past few years, the pace of our business has accelerated leaving our industry gasping. All talk and representations by our fraternity of system-driven processes without human intervention, has almost been completed. The goal of going paper-less has been a dream come true and whatever is left for total integration will be completed by 2020. These initiatives have taken us ahead of many countries. When the Single Window system was introduced and was successful, it made other major economics sit back and take note of how soon and seamless out Customs department managed and achieved it. This, while other countries -- after spending a lot -- were nowhere near ours. This was around 2018.” While the industry has come a long way since then, Thakkar said that what the aviation ministry should do is “lessen our problems”. Every industry, he said, wants the government’s financial support, but “our industry has no such demand. Instead we have a practical demand: we want industry status so we can seek finance from banks at sensible interest rates as we have been flatly denied benefits under direct tax. Thakkar also went on to point out that the existing structure of suspension of commercial rights within bilateral and multilateral agreements, imposed restrictions on the necessity for a quick change in air routes. The need to allow airlines to quickly change the geography of flights for cargo depending on the urgency of deliveries had to be revised. This was necessary since some countries did not allow transit of certain goods through their territories and that situation was developing quickly. He also mentioned that airports must release slots for cargo operations. CH www.cruisingheights.in
Cruising Heights
NO SPECIFIC COMPREHENSIVE FINANCIAL STIMULUS PACKAGES HAD BEEN GIVEN TO OUR AIR CARGO LOGISTIC INDUSTRY AS SUCH BY THE GOVERNMENT OR THE AVIATION MINISTRY. THE GOVERNMENT SHOULD LOOK AT COMPENSATING A PERCENTAGE OF THE SALARY BURDEN OF THE INDUSTRY, REDUCE CORPORATE TAX AND RELAX THE PAYMENT OF STATUTORY DUES. ALL THESE BASIC SUPPORT MOVES BY THE GOVERNMENT WILL GREATLY HELP THE AIR CARGO INDUSTRY.”
— Jaideep Raha, Regional Chairman (ER) ACAAI
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nQ&A
TULSI MIRCHANDANEY Managing Director, Blue Dart Aviation
‘The proven reliability of air cargo certainly bodes well for the future of business’
Right now, air cargo occupies a place in the imagination of the public that it has rarely had a chance to occupy. Currently and without doubt, in the near future, cargo will be a big ticket item for everyone in the air cargo chain: carriers and support groups from forwarders to airports on up. Cruising Heights spoke to TULSI MIRCHANDANEY, Managing Director, Blue Dart Aviation to find out what the future holds for air cargo in the country. Blue Dart has been at the forefront of transporting tonnes of essential cargo to keep the critical supply chain functioning and helping the nation to fight the coronavirus pandemic. Domestic flights apart, Blue Dart’s planes flew on the Kolkata-Guangzhou, China-Guwahati-Kolkata route, to bring critical PPE and COVID-19 related medical supplies. The carrier’s freighters touched Dhaka on the Dhaka-Kolkata route even as they flew on the Delhi-Guangzhou, ChinaDelhi, and Kolkata-Guangzhou, China-Kolkata routes throughout the month of April 2020 and beyond. l Do you see the worldwide acclaim of cargo as a positive for the future of the business? Air cargo has often been the sole mode of transportation for relief material during any emergency response situation. The visibility of this vital role has been greatly enhanced because of the extensive grounding of passenger airlines during the COVID-19 pandemic. The pandemic unified elements of the aviation industry to respond to an unprecedented crisis, with the transportation of relief material on freighters and even seats. The proven reliability of air cargo certainly bodes well for the future of business. Air freight proved a true lifeline in these critical times. Blue Dart was a part of the Government of India’s ‘Lifeline Udan’ initiative, and contributed its effort to the national endeavour in transporting essential goods and medical equipment. Blue Dart Aviation operated close to 2,800 flight cycles uplifting 40,000 tonnes of which 970 tonnes were international charters carrying urgent medical supplies and COVID-19 related relief material from Guangzhou, Shanghai, Hong Kong, Dhaka, Yangon and Hanoi during the pandemic. Among the material we transported within India and overseas were medical and pharmaceutical supplies including ventilators, PPEs, testing kits, reagents, enzymes, respirators, surgical masks, goggles and gloves.
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l How can air cargo best cope with the need for effective deliveries of vaccine when the antidote comes? The air cargo industry is going to play an incredibly vital role in the transport of vaccines. With the large number of clinical trials underway to create a potential vaccine candidate for COVID-19, an influx of business is seen and we expect this to only grow once we have a successful vaccine. Pharmaceutical and life science products require stringent handling and transport conditions to combat any risk of loss of potency or efficacy. Handling and transporting vaccines brings in another dimension to supply chain logistics – temperature controlled logistics (TCL). Having a well-oiled system for providing clients with a seamless TCL service for shipping vaccines, from first mile to last mile delivery would definitely help cope with the need for effective deliveries of the vaccine. However, the sheer volume of vaccines envisaged could pose a huge transportation challenge in meeting the urgent demand. A co-ordinated, well- planned delivery system would help save lives. The infrastructure and resources critical to the pharmaceutical supply chain will have to be even more adaptive, lean and agile in the foreseeable future. At Blue Dart, we have developed a range of superior Temperature Controlled Solutions that provide our clients with extensive and reliable
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express distribution, dry ice supplies including free top-up replenishments, real-time shipment status information, regulatory clearance, validation services and project management. Not just that, our packaging is constructed from recyclable, environmentally-friendly and cost-effective material. Blue Dart’s Temperature Controlled Logistics offers solutions from packaging to transportation, from direct distribution of samples, to clinical trial services to ensure that our clients receive their critical shipments within a committed transit time. We are prepared to handle an increase in volumes of vaccines and are keen to continue working as the ‘Trade Facilitator of India’, a role that we have assumed with great fervour especially over the last few months. We are also awaiting the guidelines that The International Air Cargo Association (TIACA) and Pharma.Aero are developing for the air cargo industry to enable optimal transportation of the COVID-19 vaccine. Taking these guidelines into account, our Blue Darters will be trained and equipped to handle vaccine shipments optimally. l What have you thought as the story of 2020 unfolds that you might share, especially, perhaps, learned during a similar parallel experience whatever the situation during your time in the industry?
Cruising Heights
Blue Dart has traditionally endeavoured to contribute to the national effort during difficult times. We’ve pitched in to support our nation during previous disasters – the Bhuj earthquake in 2001 and the Tsunami in 2004 – ferrying relief materials to areas inaccessible to other modes of transportation. It was no different during this pandemic. Certain situations call for decisive action and a cohesive team effort. Though we have been a domestic airline operator for the past 24 years, we launched our first international charters within a short span of less than a month to rise to the call of duty during COVID-19. l Can you share a favorite story from air cargo? How has the industry ramped up its services to serve during the pandemic that sticks out when you think about your experience? Blue Dart Aviation readied its international operations in under a month during this pandemic. Gearing up for international operations meant mandatory avionics upgrades, including installation of advanced Flight Management Computers, multi-mode GPS receivers and ADS-B transponders. It’s a tribute to our entire team who worked under the severe constraints of a complete lockdown to meet the compliance requirements for the international operations, and to finally execute the mission, entailing some prolonged periods away from family and home. www.cruisingheights.in
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July sees stable demand IATA figures for the month pointed out that though air cargo demand remained stable – it was at lower levels than a year ago.
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he data for global air freight markets in July released by the International Air Transport Association (IATA) recently showed that air cargo demand was stable but at lower levels than 2019. While there was some monthto-month improvement, it was at a slower pace than some of the traditional leading indicators would suggest. This was due to the capacity constraint from the loss of available belly cargo space as passenger aircraft remain parked. • Global demand, measured in cargo tonne-kilometers (CTKs), fell by 13.5 per cent in July (-15.5 per cent for international operations) compared to the previous year. That was a modest improvement from the 16.6 per cent year-on-year drop recorded in June. Seasonallyadjusted demand grew by 2.6 per cent month-on-month in July. • Global capacity, measured in available cargo tonne-kilometers (ACTKs), shrank by 31.2 per cent in July ( 32.9 per cent for international operations) compared to the previous year. This was a small improvement from the 33.4 per cent year-on-year drop in June. • Belly capacity for international air cargo shrank by 70.5 per cent in July compared to the previous year owing to the withdrawal of passenger services amid the COVID-19 pandemic. This was partially offset by a 28.8 per cent increase in capacity through expanded use of freighter aircraft. • Economic activity continued to recover in July reflected in the performance of the Purchasing Managers’ Index (PMI), an indicator of economic health in the manufacturing sector: • The new export orders component of the manufacturing PMI rose by 3.5 points compared to June, and was up 19.8 points since April • The PMI tracking global manufacturing output returned to above 50, consistent with month-
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on-month growth in output “Economic indicators are improving, but we have not yet seen that fully reflected in growing air cargo shipments. That said, air cargo is much stronger than the passenger side of the business. And one of our biggest challenges remains accommodating demand with severely reduced capacity. If borders remain closed, travel curtailed and passenger fleets grounded, the ability of air cargo to keep the global economy moving will be challenged,” said Alexandre de Juniac, IATA’s Director General and CEO. WorldACD that provides market data on air cargo, basing its information on primary sources and covering all countries in the world, pointed out that July’s volume was 8.2 per cent
“ECONOMIC INDICATORS ARE IMPROVING, BUT WE HAVE NOT YET SEEN THAT FULLY REFLECTED IN GROWING AIR CARGO SHIPMENTS. THAT SAID, AIR CARGO IS MUCH STRONGER THAN THE PASSENGER SIDE OF THE BUSINESS. AND ONE OF OUR BIGGEST CHALLENGES REMAINS ACCOMMODATING DEMAND WITH SEVERELY REDUCED CAPACITY...” —Alexandre de Juniac Director General and CEO, IATA
above June’s, while last year’s July figure was 5.5 per cent month-over-month (MoM). However, the July-volume was also down by 18.5 per cent year-overyear (YoY). At the same time, the price of air cargo per kg was 62 per cent higher YoY, but dropped by 9 per cent www.cruisingheights.in
MoM, from 3.12 USD to 2.83 USD. For the first time since the start of the year, the combined airlines’ air cargo revenues slightly dropped. Were things then getting a bit more normal, asked WorldACD. It then looked at capacity data for answers. “There is such a lack of capacity in the market that ‘normality’ still seems a long way off. Take the gap between the huge capacity drop, measured in Available Ton Kilometers (ATK), and the much smaller drop in cargo transported, measured in Freight Ton Kilometers (FTK): the gap was only 1 percentage point MoM, but over 20 percentage points YoY. The MoM change of the worldwide load factor was +1%, but with clear differences between freighters (+3%) and passenger aircraft (-8%). Though pointing to a fairly balanced change in both capacity and traffic between June and July, the overall gap still hints at a worldwide market trying to find a new footing: ‘normality’ will not seem what it used to be.” Looking at individual markets, WorldACD mentioned that the origins Europe and MESA (Middle East & South Asia) added most kilograms to their June figures (+13 per cent resp +14 per cent), whereby Europe managed to keep its prices reasonably stable (-2.5% MoM). Asia Pacific was the region performing least in MoM percentual changes: a 6 per cent volume growth was accompanied by a 14.4 per cent drop in USD prices per kg. WorldACD noted the following changes in Asia in July since top-dollars were charged in May 2020: • Prices (in USD/kg) from Asia Pacific as a whole fell by 41%, from 5.71 to 3.38; • Prices ex-China dropped by 53 per cent, from 7.80 to 3.63; • Prices ex-North-East Asia lost 32 per cent, falling from 4.66 to 3.19; and, • Prices from South Asia fell by only 13 per cent, and now stood at 3.84 USD/kg, i.e. at the highest regionto-worldwide level. CH
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‘Air cargo needs government support’ ICAO and UPU have urged national commitments and support for postal, air cargo, and express mail operators through financial aid and operational flexibility.
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he International Civil Aviation Organization (ICAO) and the Universal Postal Union (UPU) recently released a joint statement encouraging national governments to support their designated postal operators, air cargo carriers, and express mail operators through financial aid and operational flexibility. “These operators constitute critical infrastructure and are important partners in combatting the ongoing COVID-19 pandemic, while also driving economic recovery and expansion,” underscored ICAO Secretary General Dr Fang Liu. Signed by Dr Liu and the Director General of the UPU, Bishar A Hussein, the statement also reaffirmed their commitment as UN specialised agencies to foster greater international cooperation to help contain the virus and to protect the health of essential workers. “These personnel are keeping the world connected in terms of emergency food and many other medical and humanitarian necessities and ensuring that the world can still depend on efficient global supply chains,” Dr Liu commented. The joint ICAO/UPU statement mentioned: “In line with the recommendations and associated global roadmap of the ICAO Council Aviation Recovery Task Force, ICAO and the UPU are calling on member countries to facilitate the flexibility that Posts, air cargo carriers and express mail operators require in order to meet this critical demand, by assisting them with the necessary resources and working with them to understand the challenges and develop common solutions.” The statement pointed out: “As a critical infrastructure in the provision of essential services, Posts require support to maintain their operations in the face of the major challenges posed by the pandemic. Posts are actively engaged in the transport by air of vital medical and humanitarian supplies, consumer goods, and e-commerce and essential items needed to fight the current pandemic, including information materials for public dissemination and COVID-19 samples and test kits to support comprehensive research into understanding this disease. The fulfilment of the international postal service mission, as well as that of air cargo carriers and express mail operators, is
highly dependent on the support of member countries in recognizing the essential nature of these services, ensuring operators' financial stability and providing their workers with the flexibility required to undertake their duties.” The statement DR FANG LIU highlighted the recommendations and associated global roadmap of the ICAO Council Aviation Recovery Task Force (CART), which includes the need to Ensure Essential Connectivity as one of its ten Key Principles. Importantly, this principle puts air cargo, a key contributor to the global supply chain, in clear focus. Since the early days of the pandemic, ICAO has been engaging with global air cargo stakeholders, including UPU, as well as other global supply chain stakeholders. This coordination has improved information sharing and is helping to foster solutions to the unique challenges faced by the various stakeholders. “Going forward, ICAO and UPU will intensify our joint work initiated through the existing Memorandum of Understanding, and with a view to understanding how COVID-19 and geopolitical trends are affecting global supply chain evolution,” the ICAO Secretary General emphasised. “ICAO and the UPU will step up the analysis of each other’s e-commerce and traffic big data, so as to identify and report on the logistical constraints to e-commerce growth. Analyses of ICAO and UPU big data have helped to identify trends and forecast the growth of different categories of e-commerce items carried by postal authorities using air transport. These analyses and forecasts will continue to play a significant role in aligning member countries' e-commerce capacity and infrastructure plans with expected growth, thus ensuring that member countries derive maximum benefit from the additional value of e-commerce trade within their national economies, despite the pandemic,” the joint statement added. CH www.cruisingheights.in
BISHAR A HUSSEIN
ICAO AND THE UPU WILL STEP UP THE ANALYSIS OF EACH OTHER’S E-COMMERCE AND TRAFFIC BIG DATA, SO AS TO IDENTIFY AND REPORT ON THE LOGISTICAL CONSTRAINTS TO E-COMMERCE GROWTH. ANALYSES OF ICAO AND UPU BIG DATA HAVE HELPED TO IDENTIFY TRENDS AND FORECAST THE GROWTH OF DIFFERENT CATEGORIES OF E-COMMERCE ITEMS CARRIED BY POSTAL AUTHORITIES USING AIR TRANSPORT. August-September 2020 55
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Vaccine-ready:TIACA, Pharma.Aero tie-up While TIACA is preparing the guidance necessary for transportation of the COVID-19 vaccine, India’s National Expert Group on Vaccine Administration for COVID-19 has conceptualised and implemented mechanisms for “the creation of a digital infrastructure for inventory management and delivery mechanism of the vaccine including tracking of vaccination process with particular focus on last mile delivery”
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he International Civil Aviation Organization (ICAO) and the Universal Postal Union (UPU) recently released a joint statement encouraging national governments to support their designated postal operators, air cargo carriers, and express mail operators through financial aid and operational flexibility. “These operators constitute critical infrastructure and are important partners in combatting the ongoing COVID-19 pandemic, while also driving economic recovery and expansion,” underscored ICAO Secretary General Dr Fang Liu. The International Air Cargo Association (TIACA) and Pharma.Aero have joined forces to develop global guidance for the air cargo industry to enable optimal transportation of the COVID-19 vaccine. The guidance will be developed gradually in four work packages through a joint working group to ensure feedback from all stakeholders in the supply chain of air cargo and pharmaceuticals. In the past few months, air freight has demonstrated once again its vital role in the global 56 August-September 2020
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economy and distribution of essential medical supplies. In the months to come, air freight will again make an important contribution to the global public good and in fighting this pandemic by playing a vital role in the COVID-19 vaccine global supply chain. As pharmaceutical companies race to develop the COVID-19 vaccine, it is still unclear what impact this vaccine will have on the global supply chain, specifically, logistics requirements and the air cargo industry. To address these concerns, the joint working group will bring to the table all the key industry stakeholders, including pharmaceutical manufacturers and logistics businesses. The aim of this program is to provide the air cargo industry with more clarity of the demands, expectations and quality supply chain requirements, including but not restricted to critical trade lanes, air cargo capacity, handling and storage, track and trace requirements, for the transportation of the vaccines. At the same time, shippers will gain more understanding about the
AIR CARGO capabilities of the various logistics players. This will ensure that once the vaccine is available in the market, the air cargo industry will be ready to respond to the needs of the shippers and transport vaccines in optimal conditions to all corners of the globe. “COVID-19 vaccine delivery will be one of the biggest logistical challenges in modern history. No one company can own the end-toend vaccine supply chain,” said Neel Jones Shah, TIACA board member and Global Head of Airfreight at Flexport. “I’m proud to be a member of the TIACA and Pharma.Aero working group, which is doing the critical work of connecting all vaccine supply chain stakeholders to foster effective communication and collaboration. We need to start working together now to ensure the industry is prepared when the time comes.” “Setting up reliable end-to-end air transportation for pharma shippers is part of the vision and mission of Pharma.Aero. Amongst our members i.e. life sciences and pharmaceutical shippers, certified airport communities and air cargo operators, we have a track record of project-based collaboration,” says Nathan De Valck, chairman of Pharma.Aero. “As a result, Pharma.Aero is well-positioned to make a valuable contribution in preparing the air cargo industry for this immense challenge.” The working group will consist of members of both organisations and will also reach out to various international organizations. The results will be shared with the industry through white papers and webinars in later stages of the programme which aims to complete by end of 2020. How prepared are we in India to ensure that the COVID vaccine – when it does come – is made available across the nation to everyone? The COVID vaccine does not seem far away – and quite a few experts believe that India will have at least one vaccine if not by the end of this year but certainly by the beginning of next year. Prime Minister Narendra Modi, in his Independence Day speech, mentioned: “I would like to assure all the citizens that our scientists are working hard for the development of the vaccine. We will ensure that vaccine is produced at a mass-scale and reaches every citizen of the country.” He also said that three vaccines were currently under trials in the country and pointed out that plans had been chalked out for the production and distribution of the vaccine when it was ready. India is today one of the major vaccine manufacturers of the world. So, while the COVID-19 vaccine may be developed anywhere in the world, the production of required quantities may not happen without Indian manufacturers. Two of the world’s vaccine makers have tied up with Indian manufacturers for production of Covid-19 vaccines. While Serum Institute of India has agreements with two vaccine developers,
Oxford University-AstraZeneca and Novavax, to produce and supply their vaccines once they are approved, the Hyderabad-based Bharat Biotech International Limited has received approval from the Central Drugs Standard Control Organisation (CDSCO) to conduct a separate clinical trial of their Covid-19 vaccine ‘Covaxin’ through the skin. This correspondent tried to contact two of the vaccine makers in the country, Serum Institute of India (the largest vaccine maker in the world) based in Pune and Bharat Biotech, to find out the preparations for the distribution of the vaccine only to be to be emailed: “The team is busy right now and we would like to skip this...Right now vaccine development work is our priority and you should appreciate our team is working round the clock for the same.” The government’s National Expert Group on Vaccine Administration for COVID-19, met a few days ago to conceptualize and implement mechanisms for “the creation of a digital infrastructure for inventory management and delivery mechanism of the vaccine including tracking of vaccination process with particular focus on last mile delivery”. While the group discussed the broad parameters guiding the selection of COVID-19 vaccine candidates for the country, it also took a look at available options of delivery, cold chain and associated infrastructure for the roll out of the COVID-19 vaccination programme. Further, strategy and follow-up action on all possible scenarios to ensure equitable and transparent delivery of vaccine was deliberated upon. Issues related to vaccine safety and surveillance were taken up and strategy for community involvement through transparent information and awareness creation were discussed. Another important facet that was discussed by the expert committee was to position India as a global player on the vaccine front. A source pointed out that the experts emphasized that “India could provide a vaccine not only to its own population but also to its key partners in the neighbourhood, and to low and middleincome group countries. We will engage with all important international players, the WHO, GAVI (an international alliance for vaccines against infectious diseases), etc.” The International Market Analysis Research and Consulting (IMARC) Group in a recent report mentioned that India was one of the leading manufacturers and suppliers of vaccines in the world. “It solely accounts for around 60 per cent of the total vaccines supplied to the UNICEF, since the cost of manufacturing and clinical trials in India is relatively lower than in developed countries. Moreover, technological advancements and improved cold chain storage facilities have led to increased vaccine production capacity in the country,” the report said. CH www.cruisingheights.in
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TIACA AND PHARMA. AERO HAVE JOINED FORCES TO DEVELOP GLOBAL GUIDANCE FOR THE AIR CARGO INDUSTRY TO ENABLE OPTIMAL TRANSPORTATION OF THE COVID-19 VACCINE. THE GUIDANCE WILL BE DEVELOPED GRADUALLY IN FOUR WORK PACKAGES THROUGH A JOINT WORKING GROUP TO ENSURE FEEDBACK FROM ALL STAKEHOLDERS IN THE SUPPLY CHAIN OF AIR CARGO AND PHARMACEUTICALS.
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‘Most Trusted Brand’ accolade for Blue Dart Blue Dart, India’s leading express logistics service provider and part of the Deutsche Post DHL Group (DPDHL), has been listed as a Reader’s Digest Most Trusted Brand for the 14th consecutive year in a row. Commenting on the award, Balfour Manuel, Managing Director, Blue Dart said, “We are extremely proud to be recognized as a Trusted Brand for the 14th year. Blue Dart has always been a company that has been recognized as a Provider of Choice and an Employer of Choice which is what makes us an incredible Investment of Choice. As an organization that values customer centricity as one of its important pillars, service
quality is key in ensuring that we remain a premium brand. We thank our shareholders, stakeholders and customers for the confidence and trust in us”. The Reader’s Digest Trusted Brands survey primarily focuses on finding out which brands Indians trust the most and provides an objective and reliable reference for consumers throughout the country. Blue Dart played the critical role of an essential service provider during the ongoing COVID-19 pandemic by ensuring continuity of the mission critical pharmaceutical and medical equipment supply chain, partnering closely with the Government of India in its ‘Lifeline Udan’ initiative.
Kerry Logistics wins best practice award Kerry Logistics Network Limited has been conferred the titles of the Frost & Sullivan Asia Pacific Best Practices Awards for the fourth consecutive year, winning the “2020 Asia-Pacific Logistics Services Provider of the Year Award” and the “2020 Asia-Pacific Road Transportation Services Provider of the Year Award”. The Awards were presented last night in a virtual ceremony. Organised annually by global business consulting firm Frost & Sullivan, the Awards recognise outstanding achievements in the Asia Pacific covering various sectors. The recipients are selected through a rigorous measurement-based methodology that encompasses industry trends analysis and research interviews, according to parameters including revenue growth, market share in specific category and growth
in market share, demonstrated leadership in new product introduction and innovation, breadth of products and solutions, major customer acquisitions, subscribers and growth in subscriber base and business/market strategy. William Ma, Group Managing Director of Kerry Logistics, said, “We are thankful to the organiser for recognising our dedication and achievements over the years. The accolades are a testament to our commitment to industry best practices and our strengths as one of the very few Asia-based global logistics companies. While the global economic outlook is overcast by uncertainties, we are confident that we will leverage our extensive geographical coverage, solid presence in various markets and diversified business segments to continue serving our customers well.”
Bengaluru records 79 per cent cargo traffic growth Kempegowda International Airport, Bengaluru (KIAB/ BLR Airport) played a stellar role during the pandemic, facilitating shipment of ~71,406 Metric Tonnes (MT) of cargo, including 6,194 MT of perishables and 2,300 MT of pharma supplies between April and July 2020. During this period, BLR Airport’s cargo market share rose to 15.3 per cent from 11.2 per cent. While international cargo throughput was 51,728 MT, domestic was 19,678 MT during this period. Of this, perishables, including 507 MT of mangos, were delivered to 31 international destinations. Apart from perishables and pharma, the other freight processed during this period included electronic and engineering equipment, spares and readymade garments. Before the pandemic, BLR Airport’s cargo volumes were distributed between
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freighter and passenger aircraft in a 40:60 ratio. However, the lockdown and subsequent restrictions on international scheduled passenger flights, impacted cargo movements. Several airlines commenced ‘cargo-only’ flights using passenger aircraft to bolster depressed global airfreight capacity and drive a spike in cargo demand. About 40 per cent of BLR Airport’s cargo during the period April–July 2020, was transported by Passenger-to-Cargo (PTC: Passenger flights ferrying cargo) aircraft. As a result, BLR Airport recorded more than 2,990 Cargo ATMs, registering a 79% growth over the same period last year. In addition, BLR Airport processed 341 MT of COVID-19related cargo from March to July.
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GMR Hyderabad Air Cargo takes steps to ease exports
GMR Hyderabad Air Cargo (GHAC) became more business-friendly with the commencement of The Federation of Telangana Chambers of Commerce and Industry (FTCCI) Business Facilitation Center at its terminal. The New FTCCI Business Facilitation Center was inaugurated by the J S Chandrasekhar, Principal Commissioner of Customs in the presence of G Seetharam Reddy, Addl. Director General, DGFT (Director General of Foreign Trade), Saurabh Kumar, CEO, GMR Hyderabad Air Cargo and Ramakanth Inani, President FTCCI. The FTCCI lends its support to the industry and government to promote economic growth and crossborder trade through its various programmes and initiatives. The FTCCI Business Facilitation Center will significantly benefit exporters and cargo agents from Hyderabad and the South India region in multiple ways: • Now exporters and cargo agents can get the ‘Certificate of Origin’ at the GMR Hyderabad Air Cargo Terminal; thus, saving a lot of travel time. • The center will also offer Visa Recommender Letters for Overseas Travel for Business Promotion. • There will be time saving for documentation for export shipments specially for perishable shipments like fruits, vegetables and marine export shipments, which are to be exported in a time-bound manner to maintain the freshness of the produce. GMR Hyderabad Air Cargo also flagged off the first Cool Dolly Temperature Sensitive Shipment of Dr. Reddy’s Laboratories under 15-25 Deg. Centigrade. The Cool Dolly was flagged-off by J S Chandrasekhar, Principal Commissioner of Customs along with other members of the industry and trade.
Speaking on the occasion of the launch of GMR ‘Cool Dolly’ and FTCCI Business Facilitation Centre, SGK Kishore, Executive Director-South & Chief Innovation Officer, GMR Airports said, “GMR Hyderabad Air Cargo is constantly upgrading its services and offerings for the benefit of the Air Cargo Trade. We are thankful to FTCCI for setting up their exclusive business facilitation center at the air cargo terminal which will benefit the exporters and cargo agents and also boost the business efficiency across the entire value chain of air cargo. We are also very happy to operationalise our Cool Dolly product which will help ensuring end-to-end integrity of cold chain shipments moving via GMR Cargo Terminal and offer an enhanced offering to our trade and industry partners”. GMR Hyderabad Air Cargo (GHAC) Terminal is a Good Storage and Distribution Practices (GSDP) certified Terminal and maintain unbroken cool-chain for transportation of temperature sensitive pharmaceutical ingredients and vaccines. With the introduction of the Cool Dolly, the Mobile Refrigeration Unit for airside transportation, temperature integrity can be maintained at the airside apron while the export goods wait for the aircraft. This will prevent any temperature excursions and thus maintain the efficacy of the goods. The addition of this industry unique offering will greatly benefit exports from Telangana, Andhra Pradesh, Maharashtra and adjoining regions. The Cool Dolly has been developed in-house by GMR Hyderabad Air Cargo with inputs from Pharmaceutical Exporters and air carriers for transportation of temperature sensitive goods inline with World Health Organisation (WHO) guidelines. Pradeep Panicker, CEO, GHIAL, said, “We are thankful to FTCCI for having chosen GMR Hyderabad Air Cargo to initiate its Business Facilitation Center. This facilitation centre will surely give a boost to the business community, with added efficiency with faster turnaround times for all processes at the cargo terminal making it easier for business. It is a delight to facilitate Dr. Reddy’s pharma products through our recently inducted Cool Dolly. This new equipment adds great value to the entire cold chain and will prove beneficial to the consignors dealing in pharma and perishables in the region.”
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Planes in your driveway! H
ow would you like to step out of your home into a plane and fly away to any place you want? Well, there is the perfect home for you – one of the properties is for sale -- at Jumbolair in Anthony, just 11 km northeast of Ocala in Florida, United States. Known as Jumbolair Aviation Estates, the aviation-related gated community and airpark situated alongside the airport's runway, boasts of the largest private paved airfield in the United States. Among its residents are Hollywood star John Travolta and Arthur Jones (the inventor of the Nautilus cam). It is no wonder that Jumbolair highlights its airport to woo plane-loving property buyers. “Bring your Boeing! A mile of road can take you to a few places, but a mile of runway can take you anywhere in the world. Own an amazing private aviation property unlike any other in the world,” goes the introductory copy on the Jumbolair website. The 550-acre community is on the market for a cool $10.5 million. In the 1960s, the property was a 380-acre horse ranch owned by Muriel Vanderbilt Adams, the socialite, horse-breeder and great-great-granddaughter of railroad and shipping magnate Cornelius Vanderbilt. Whoever buys it will get the US’s largest private lighted runway, the five-bedroom Muriel Vanderbilt mansion with a swimming pool and fitness centre with original Nautilus equipment, a conference center/banquet hall with seating for up to 400 guests, a nearly 90,000-sq ft warehouse complex, and Jumbolair Aviation Estates subdivision,
a 38-lot private aviation residential development with access to the runway. John Travolta and his wife Kelly Preston were some of the first land purchasers at Jumbolair. In fact, his home has two runways that lead directly to his front door. The runway length allows Travolta, a certified pilot, to operate his planes. Among his many planes, he had a Boeing 707 jetliner but he has donated that to the Historical Aircraft Restoration Society near Wollongong, Australia. “Flying is everything,” said Travolta in an interview for Dassault Falconer magazine, adding that “it’s the ultimate to have your globe at your beck and call and the runway in your backyard. It’s a dream.” Bartow McDonald, Managing Director of SVN Florida Commercial Real Estate Advisors, who is the agent for the sale, was quoted saying that this was a once-in-a-lifetime opportunity to acquire a special asset with what he referred to as “a colourful history”. Speaking to Forbes, he said, “It’s what’s beyond the runway that makes Jumbolair so special. It is the ability to go anywhere in the world from your backyard.” CH
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