Indian aviation news sept oct by rajeshnatarajan

www.indianaviationnews.com - Indiaâ&#x20AC;&#x2122;s only website for Civil and Military Aviation news XXVII

Sept-Oct 2013

07-09 November, 2013

SPECIAL FEATURE IAF Anniversary

FACE TO FACE

Gp. Capt. RK Bali, Secretary, Business Aircraft Operators Association

MRO SECTOR

SPECIAL REPORT

CAPA-SITA WHITE PAPER

GAINING MOMENTUM With more talks are being held with the government and key policy makers, MRO industry players hope to see some solution to its long-pending issues

1000+ E-JETS. 65 AIRLINES. 45 COUNTRIES.

1,000 deliveries haven’t changed the world. Only the way the world flies. With our 1,000th E-Jet delivery, we pause to celebrate. And to applaud what our family of aircraft has meant for all of commercial aviation. For our airline customers. And for their passengers as well — those who benefit most directly from E-Jets as champions of change. In that visionary role, E-Jets marked the creation of a whole new category — right-sized aircraft that blurred the line between regional and mainline jets. Aircraft that delivered a superior passenger experience, whether on short hauls or five-hour legs. Tools that carriers have used to build or expand their networks incrementally and therefore more profitably. The result has been greater connectivity, more frequency, more choices for travelers. In fact, E-Jets have helped open whole new markets. For entirely new segments of consumers. People who now can afford the magic of flight for the very first time. It’s an experience that still remains beyond the reach of many. But it seems a little closer as each E-Jet rolls off the line.

EDITORIAL www.indianaviationnews.com

Silver lining for Indian civil aviation

Founder Late ALKA SEN Publisher & Advertising Director HIRAK SEN Email-hirak@yahoo.com Editor-in-chief PULAK SEN Email-sen.pulak@gmail.com Editor SYED AMEEN KADER Principal Adviser AIR MARSHAL M. S. D. WOLLEN (Retd.) Advisers ADMIRAL J. G. NADKARNI (Retd.) LT. GEN. N. S. NARAHARI (Retd.) B. K. SINHA (Retd.) Dy. MD, IA B. P. BALIGA, (Retd.) Sr. VP, JET AIRWAYS

he recent statement of Civil Aviation Minister Ajit Singh in favour of privatization of ailing flag carrier of the country, Air India is a silver lining to the Indian civil aviation industry. Dr. Motntek Singh Ahluwalia, Dy Chairman of the Planning Commission and a world-renowned economist’s echo of the same statement is cannot be disregarded. It is yet another story as to when the actual process will begin amidst opposition and pending general elections next year. Ajit Singh said, “The government of the day will have to look at privatisation and build a political consensus on the issue before taking a position. I never said I am going to do it.” Similarly, Dr. Ahluwalia said, “Air India is a good case for privatisation, as nowhere in the developed world do you have countries running their flag carriers anymore.” Maintaining that the Government would not give any more funds to the airline after the equity infusion of Rs 30,000 crore until 2021, Singh said, “I am firmly of the view that government should not be in the service sector, like hotels.” It is quite true. Take the classic case of state-owned BOAC turning into a privatized British Airways. The United GAINING Kingdom Government established a British Airways Board in 1972 to manage the two nationalised airline MOMENTUM corporations, British Overseas Airways Corporation and British European Airways, and two smaller, regional airlines, Cambrian Airways and Northeast Airlines. In March 1974, all four companies merged to form British Airways. After almost 13 years as a state company, British Airways was privatised in February 1987. Today, British Airways is one of the biggest airlines in the world. Similar exercise went into privatization of Air France, the national carrier of France and subsequent acquisition and merger with neighbouring country’s flag carrier, KLM. The Minister’s statement on privatization of the airline despite its poor financial health may have stemmed from that fact that a leading Middle Eastern carrier reportedly evinced interest in acquiring its MRO subsidiary, Air India Engineering Services Limited. Before I conclude, I would like to once again invite you to the MRO India 2013, India’s only exhibition and conference that takes place on November 7-9, 2013 in Mumbai. Industry leaders from home and overseas will converge at the must-attend event to discuss and debate on issues revolving around the growth of the Indian MRO industry. All the leading MRO and airline companies will also exhibit at the annual event. www.indianaviationnews.com - India’s only website for Civil and Military Aviation news XXVII

Senior Designer RAJESH NATARAJAN Circulation & Business Manager SURESH DAPHAL Editorial & Admin. office 603, Palm Beach Apartment J. P. Road, Versova, Andheri (W), Mumbai 400 061 . India. Tel./Fax: (+91 22) 26365604 Email: info@indianaviationnews.com International Advertising Representatives Mike Elmes Aerospace Media Tel.: +44 0125 5871070 Fax: +44 0125 5871071 Email: mike.elmes@aerospacemedia.co.uk David Harrison Aerospace Media Tel: +44 01689 837447 M: +44 (0) 7768 892 869 Email: david@aerospacemedia.co.uk Registered office 603, Palm Beach Apartment J. P. Road, Versova, Andheri (W), Mumbai 400 061 . India. Printed and published by Hirak Sen for the proprietors, Indian Aviation News Service Private Limited.

Sept-Oct 2013

07-09 November, 2013

SPECIAL FEATURE IAF Anniversary

SPECIAL REPORT

FACE TO FACE

CAPA-SITA WHITE PAPER

Gp. Capt. RK Bali, Secretary, Business Aircraft Operators Association

MRO SECTOR

With more talks are being held with the government and key policy makers, MRO industry players hope to see some solution to its long-pending issues

Hope to see you there!

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Visit www.indianaviationnews.com for daily aviation news updates INDIAN AVIATION

Sept-Oct 2013

CONTENTS

INDIAN NEWS

05 COVER STORY

MRO Sector: Gaining momentum

GLOBAL NEWS

SPECIAL FEATURE

IAF ANNIVERSARY

24 MRO India 2013 Conference Schedule

SPECIAL REPORT

FACE TO FACE

Capa-Sita White Paper

INTERVIEW

Air Marshall P Kanakaraj, AVSM, VSM, Air Officer Commanding-inChief, Maintenance Command, IAF, Nagpure INDIAN AVIATION

22 Gp. Capt. RK Bali, Secretary, Business Aircraft Operators Association 01 04

Sept-Oct 2013

INDIAN NEWS C-17 Globemaster III Inducted into the IAF

will enhance the operational potential of the IAF with its payload carriage and performance and would augment the strategic reach of the nation during Operations, Disaster Relief or any similar mission. The induction of the C-17 is a major milestone in the modernization drive of the IAF. Presently three aircraft have been delivered and are operational. The newly inducted C-17 Squadron (81 Squadron) will be based in Hindan.

Indian Navy receives first Hawk Trainer Jet

iving impetus to the long standing strategic airlift of the Indian Air Force, the Defence Minister AK Antony last month formally inducted the Boeing C-17 Globemaster III into the IAF at a special ceremony held on Sept 2 at Hindan airbase of the IAF. The Induction ceremony was attended by a host of dignitaries including the Minister of State for Defence Shri Jitendra Singh, the Chief of the Air Staff Air Chief Marshal N A K Browne, Vice Chief of the Air Staff Air Marshal Arup Raha, Air Officer Commanding-in-Chief Western Air Command Air Marshal SS Soman, the US Ambassador to India Ms Nancy Powell and other Senior Officials of the IAF, USAF and Air warriors of the newly formed C-17 squadron “SKYLORDS”. Describing the induction of the C-17 Globemaster III in the Indian Air Force as a ‘defining moment,’ Antony said, “With this, the IAF has taken a giant stride towards its goal of acquiring multi- spectrum strategic capabilities, essential to safeguard India’s growing areas of interest.” Antony said the government had expedited the process of procuring 10 C-17 Globemaster III from the United States as part of the Foreign Military sales programme because it was felt that there was a need for a capable strategic airlift platform. Antony said the rapidly evolving geopolitical environment around us calls for a robust national security architecture. “Traditional Challenges to our national security

INDIAN AVIATION

have evolved into complex multi-dimensional threats. A long-term comprehensive capability enhancement approach by and for our Armed Forces is the need of the hour. On its part, the government remains fully committed to this responsibility.” Lauding the stellar role played by the IAF in rescue and relief operations during the recent Uttarakhand flash floods, he said, “Today’s induction of C-17 will further boost IAF’s capability for Humanitarian Assistance and Disaster Relief .” Referring to the Indo-US strategic partnership, Antony said the induction of C-17 adds another important milestone in this relationship. Recalling the journey embarked by the IAF to fulfil the futuristic needs of Air operations, Air Chief Marshal NAK Browne said “The induction of ten C-17 aircraft promises to be a game changer on how we conduct air transport operations. The C-17 fleet will provide tremendous flexibility in terms of operational response options in any future campaign. The long range, heavy lift capability will allow the commanders to induct Troops, squadrons, Re-locate Forces as well as shift forces between theatres rapidly”. The C-17 would form an extremely important component of the strategic airlift capability and reach of the IAF. The government accorded approval to buy 10 C-17 Globemaster III along with associated equipment for the IAF in June 2011. The first of the 10 aircraft touched down in India on 18th June 2013 and the delivery of all 10 is expected to be completed by November 2014. This aircraft

The Indian Navy has received the first of 17 Hawk Advanced Jet Trainers, becoming the third naval operator of the Hawk along with the US Navy and the Royal Navy. The 17 Hawk aircraft ordered by the Indian Navy form part of a contract for 57 aircraft signed in 2010 of which 40 are for the Indian Air Force. Among its 18 customers worldwide, India is the largest operator of the Hawk Advanced Jet Trainer with 123 aircraft ordered to date, of which over 70 have been delivered to the Indian Air Force. Hawk trainers already in service with the Indian Air Force are performing well. Adding to the Indian Navy’s fleet of aircraft, the Hawk provides the ideal platform for pilots to transition smoothly to the Navy’s frontline aircraft. Hawk effectively integrates air and ground based elements offering the most efficient and cost-effective method of training pilots. BAE Systems has worked closely with the Indian MOD and Hindustan Aeronautics Limited (HAL) to establish a production line in India where the Hawk aircraft are assembled. Guy Griffiths, Group Managing DirectorInternational said, “The introduction of the Hawk to a new user is a momentous occasion, and further testimony to the aircraft’s global success. This marks another significant milestone in our longstanding partnership with HAL which has established a track record operating a world-class Hawk production capability. We are committed to strengthening our relationship with HAL and exploring long-term sustainable business opportunities, globally.” Looking forward, Griffiths added, “We have also submitted our response to HAL’s Request for Proposal for a potential order to supply products and services for the manufacture of 20 additional Hawk aircraft to the IAF, and are now looking forward to partnering with HAL in providing the Indian Air Force’s display team this fantastic aircraft.” BAE Systems’ Sea Harrier aircraft, which pioneered the short take off and vertical landing for jet aircraft, was bought by the Indian Navy in 1980 and the company continues to support them. Sept-Oct 2013

INDIAN NEWS INS Vikramaditya aviation tests passed INS Vikramaditya, Indian Navy’s aircraft carrier successfully completes all trials in the Barents and the White seas and will be handed over to India in the middle of November. The INS Vikramaditya, the Indian Navy’s stateof-the art aircraft carrier has passed all tests and is returning from the testing area in the Barents Sea to Sevmash for an official handover ceremony. All participants in the trials–the Indian and Russian crews, the delivery team, government commission members and observers–are expected soon at Severodvinsk, where the practically combat-ready ship is due to return after two-and-a-half months of sailing and passing tests on the Barents and the White seas. On July 3, INS Vikramaditya, refurbished on behalf of the Indian Navy, sailed to the White Sea for repeat trials (after repairs on its steam boilers were completed). This time around, the power plant was beyond reproach – the ship achieved the required 29 knots while demonstrating good manoeuvrability. This was followed by joint trial missions with the Northern Fleet’s naval aircraft at the Barents Sea. The MiG and the Sukhoi aircraft performed daytime and night-time take offs and landings, with different sets of armaments and fuel loads. According to unofficial reports, both the equipment and the people operating it performed brilliantly. In any case, the customer’s representatives were on hand to witness the action and were happy with what they saw. Once INS Vikramaditya arrives at Sevmash, the shipyard’s workers will get down to preparing the ship for official delivery to the customer. A special handover ceremony has been tentatively scheduled for November 15.

India re-elected in ICAO Council India has been re-elected in the new Council of International Civil Organization (ICAO) as one of the states making the largest contribution to the provision of facilities for international civil air navigation. The 38th session of the Assembly of ICAO completed the election of the Council in Montreal on October 1. The 36- member Council is the governing body of the Organization and is elected for a three-year term. The election process was divided into three parts, with the following states elected: PART I – (States of chief importance in air transport) - Australia, Brazil, Canada, INDIAN AVIATION

China, France, Germany, Italy, Japan, Russian Federation, United Kingdom and the United States. All of them have been re-elected. PART II – (States which make the largest contribution to the provision of facilities for international civil air navigation) – Argentina, Egypt, India, Mexico, Nigeria, Norway, Portugal, Saudi Arabia, Singapore, South Africa, Spain and Venezuela. Except Norway, Portugal and Venezuela, all others have been re-elected. PART III– (States ensuring geographic representation)- Bolivia, Burkina Faso, Cameroon, Chile, Dominican Republic, Kenya, Libya, Malaysia, Nicaragua, Poland, Republic of Korea, United Arab Emirates and United Republic of Tanzania. Bolivia, Chile, Dominican Republic, Kenya, Libya, Nicaragua, Poland and United Republic of Tanzania have been elected for the first time. A specialized agency of the United Nations, ICAO was created in 1944 to promote the safe and orderly development of international civil aviation throughout the world. It sets standards and regulations necessary for aviation safety, security, efficiency, capacity and environmental protection, amongst many other priorities. The Organization serves as the forum for cooperation in all fields of civil aviation among its 191 Member States.

Tata-SIA airlines gets FIPB nod The Tata-Singapore Airlines (SIA) joint venture full service airline will soon take to the skies. The Foreign Investment Promotion Board (FIPB) recently cleared this proposal in which Tatas will have 51 per cent stake, investing US$51 million initially, and SIA will have 49 per cent share and invest US$49 million to begin with. Economic affairs secretary Arvind Mayaram told reporters that the deal was cleared without any riders for the proposed Delhi-based airline. Tata-SIA will now require security clearance from the home ministry along with nods from first the aviation ministry and then a licence from the directorate general of civil aviation (DGCA). Tata-SIA had applied to FIPB on September 19 and got the same in just over a month. Tata-AirAsia application for starting a low cost airline had to wait for a longer time to get FIPB nod which they got on March 6, 2013. The ministry approved it in September and now the DGCA is in the process of issuing it the licence that may happen by December. So the entire process from filing for FIPB nod to actually start flying for TataAirAsia will have taken about a year.

This nod is the third clearance to FDI in airline sector after the government last September decided to allow foreign airlines to pick up to 49 per cent stake in Indian carriers. Apart from Tata Sons tie-ups to form an LCC and full service carrier, Abu Dhabi’s Etihad was allowed to pick 24 per ent stake in Jet Airways.

EADS to promote aerospace research in India Strengthening its research partnership with India, EADS signed a letter of intent (LoI) with CEFIPRA (Indo-French Centre for the Promotion of Advanced Research) at the IndiaFrance Technology Summit 2013 for creating a new innovation initiative called the ‘EADSCEFIPRA Aerospace Programme.’ Under this programme, calls will be given to leading Indian universities and institutes to propose research projects for funding. The programme aims to foster research in India in the field of aerospace, particularly related to topics such as avionics, composite materials, high performance computing, nanotechnology and applied mathematics. In addition, the letter of intent envisages the launch of ‘EADS Postdoctoral Fellowship’ in India. Directed towards young French scientists, it will sponsor 2-3 postdoctoral fellows annually to pursue aerospace related research work in top universities and R&D institutions of India. The duration of the programme will be 5 years starting from 2014. The LoI was signed by Arnaud Marfurt, VicePresident, Innovation Works (International Operations), EADS and Dr. Debapriya Dutta, Director, CEFIPRA. Speaking on the occasion, Arnaud Marfurt said, “This confirms our commitment to invest in promotion of aerospace research in India. India with its huge talent pool and top notch research institutes represents an important innovation hub for EADS. Such initiatives not only add value to our global R&D and engineering efforts but also bring us closer to our customers here.” The LoI comes close on the heels of EADS setting up a research Chair in the field of ‘Mathematics of Complex Systems’ in partnership with the Tata Institute of Fundamental Research (TIFR) in March in Bengaluru. Held by Prof. Mythily Ramaswamy, professor and researcher at the Centre for Applicable Mathematics, TIFR and Prof. Spenta Wadia, distinguished professor and Director, International Centre for Theoretical Sciences, TIFR, the Chair’s lead objective is to develop innovative research involving theoretical and computational work in general mathematics of complex systems including control theory and data assimilation. Sept-Oct 2013

INDIAN NEWS Six airports to be redeveloped through PPP Following the Inter-Ministerial Task Force recommendations for operation, management and development of select airports on public private partnership (PPP) basis, the request for qualification (RFQ) for selection of the prospective bidders for Chennai and Lucknow airports has been invited. The RFQ for these two airports are invited up to mid October, 2013 and financial bids are likely to be received by mid December, 2013. The other four airports namely Kolkata, Guwahati, Jaipur and Ahmedabad are likely to be taken on the same pattern shortly. The scope includes the entire airport including the airside and city side facilities on long term concession. The application for pre-qualifications are invited from single entity or a group of entities (the consortium coming together to implement the project). The SPV shall be formed for this purpose. In order to secure representation of the Airports Authority of India on the Board of the SPV, the concession agreement will include a provision for issue of a golden share in accordance with a shareholders’ agreement that would form part of the concession agreement. The concessionaire can levy tariffs for aeronautical services including the user development fee (UDF) as may be determined by AERA to start with. Such charges would be revised normally once every five years by the Airports Economic Regulatory Authority (AERA) in accordance with the AREA Act. The RFP would indicate the parameters for determining charges for aeronautical services as well as the UDF Bids will be invited for the project on the basis of the premium in the form of revenue share to the authority for award of the concession. The authority may prescribe a ceiling of revenue share and a bidder who wishes to make an offer above such ceiling shall have the option of giving such bid on the additional parameters as may be specified in the RFP. The concession period shall be pre-determined, and will be indicated in the draft concession agreement. The premium shall constitute the sole criteria for evaluation of bids. The project shall be awarded to the bidder quoting the highest premium. The selected bidder shall be required to protect the interest of the existing employees of the airports. No applicant, including its associate, consortium member or an associate will be entitled with the award of more than two airports out of the six airports to be awarded by the authority. Also, applicant, including its associate, shall not be eligible for award of more than one airport from Kolkata, Chennai and Ahmedabad airports. Regarding the technical capacity and financial INDIAN AVIATION

capacity due weightage is given to project experience on eligible projects in airport sectors and other core sectors as well as the construction experience of eligible projects of airport sectors. Based on the experiences, score and the criteria specified in RFQ, the applicants shall then be ranked on the basis of their respective aggregate experience scores and short-listed for submission of financial bids. The authority expects to short-list upto seven pre-qualified applicants for participation in the financial bid stage.

Beechcraft appoints Arrow as its Indian distributor As part of its increased focus on the Indian market, Beechcraft Corporation has appointed a new sales distributor for the country. Arrow Aircraft Sales and Charters Private Limited (ARROW) has been named Beechcraft’s sales distributor in India, promoting its range of piston-engine aircraft and King Air turboprops across the country. “We are pleased to announce ARROW as our exclusive sales representative for India,” said Richard Emery, Beechcraft president, Europe, Middle East, Africa and Asia Pacific. “In terms of growth potential, India represents one of the most exciting countries for business aviation in the world. This is why we are strengthening our presence in the region with this appointment, enabling us to better serve both existing and new customers.” ARROW was founded in 2009 and has quickly developed into a significant provider of business aviation services, including sales, charters and operation management. The company serves its customers from its headquarters in New Dehli, as well as offices in Mumbai, Kolkata and Sharjah in the UAE. “The Beechcraft King Air is a popular aircraft in India and leads the market share in the business turboprop segment,” said Samir Gupta, ARROW director and partner. “ARROW, with its positioning at the heart of the Indian aviation industry, is ideally poised to enhance the King Air’s already strong position in India, and we are very excited about working with Beechcraft.” The two companies kicked off their new partnership with a King Air 250 regional demonstrator tour last month. Beechcraft’s King Air models are particularly popular in India as a result of their durability, reliability, fuel efficiency and ability to operate in even the most extreme conditions. These

qualities have led to the King Air having a market-leading share of 81 per cent of the Indian business turboprop market, with 69 aircraft, the company said. Furthermore, Beechcraft delivered 21 turboprops to the region between 2008 and 2012, making India the second largest purchaser of King Airs in Asia Pacific throughout this timeframe, only behind Australia (34 aircraft). To date, the company has delivered more than 7,000 King Airs to operators in 127 countries around the globe, and the worldwide fleet recently topped 60 million flight hours.

GKN opens engineering centre in Bangalore GKN Aerospace officially opens its advanced engineering centre in Bangalore, India in a ceremony on September 25th 2013. The Centre’s highly skilled engineering team, which extends the company’s one thousand-strong global engineering strength, is already contributing design engineering expertise to the company’s international aero-engine activities. Seventy highly qualified design and development engineers have transferred from Volvo’s Bangalore facility to the new Centre located on the old Airport Road at the heart of Bangalore’s aerospace and automotive activities. Over the next eighteen months a local recruitment campaign will increase the workforce in Bangalore to over 100 individuals. Today the Centre is supporting the company’s engine systems business, one of the three major aero-engine structures providers to the global aerospace market. In the future its activity will extend to provide engineering support for projects across the GKN Aerospace enterprise, including its market-leading aerostructures and transparencies operations. David Orth, newly appointed General Manager at the Bangalore engineering centre said: “GKN Aerospace is known for the strength of its engineering expertise and through this new Centre the company is adding India’s - and specifically, Bangalore’s - impressive engineering skills base to that expertise. We look forward to playing our part in creating effective design and engineering solutions that will help GKN Aerospace extend the performance of future aircraft and aero-engines.” Volvo Aero was acquired by GKN in October, 2012 and incorporated into the company’s aerospace business, GKN Aerospace. As a result, the aerospace engineering team within the Volvo’s Bangalore office is now moving to form the core of GKN Aerospace’s new Bangalore engineering centre. Sept-Oct 2013

INDIAN NEWS SITA systems at 10 more airports in India

Chandigarh airport goes international from December

The Airports Authority of India (AAI) has chosen SITA’s next generation Airport Management System to transform operations at ten airports across India, enhancing the passenger journey for 42 million passengers. The seven-year, multi-million dollar deal is part of a US$130 billion airport modernization project from the Indian Ministry of Civil Aviation. It comes as India prepares for annual passenger numbers to triple to 450 million by 2020. SITA has partnered with NIIT Technologies Ltd. for this first multi-airport project in Asia to implement Airport Operations Control Centers (AOCC). VP Agrawal, Chairman, AAI in his message to the Aviation ICT Forum 2013 said that AAI is integrating and automating airport operations at 10 of its airports including Chennai and Kolkata in technology partnership with NIIT Technologies Ltd, who will in turn implement SITA’s solution for central AODB and AMS. Once implemented successfully, it will help implement Airport Collaborative Decision Making (ACDM) which will greatly enhance both capacity and efficiency of the airport operations thereby making them more cost effective. GK Chaukiyal, Member (Operations), AAI said in his statement that in addition to Airport Operations Command and Control (AOCC), AAI is implementing Common User Terminal Equipment (CUTE) and Baggage Reconciliation System (BRS) at 38 airports in partnership with SITA. Hani El-Assaad, SITA President Middle East, India & Africa, said: “We have long history with India. With this new deal, SITA is now at the heart of operations at 41 of the country’s 43 passenger airports. SITA’s new system will help the airport authority create an integrated and cost-effective framework for its operations across 10 more airports. It will also facilitate collaborative decision making among all stakeholders, while streamlining business processes and enhancing the passenger experience.” Arvind Mehrotra, President Asia & Australia, NIIT Technologies said, “NIIT Technologies has vast experience and solutions implemented across 12 airports globally. We will be leveraging our expertise in the implementation of AOCC which will allow collaborative decision making for all the Airport operators in the day-to-day operations and enable efficient utilization of airport infrastructure at the 10 airports in respective cities.”

The Union Civil Aviation Ministry has given clearance for international flights from Chandigarh International Airport. The ministry gave Indigo and SpiceJet the clearance for international operations on September 6. Another private airline, Jet Airways, is still awaiting the nod. Initially, all these three airlines are expected to operate flights between Chandigarh and Dubai and other Gulf cities. The airlines are likely to start operations by December. SpiceJet and Indigo will operate direct flights between Chandigarh and Dubai, while Jet Airways has sought permission for direct flights between Chandigarh Abu Dhabi. The airlines are yet to decide on the air fare, timings and flight schedules. Chandigarh International Airport will replace the old domestic Chandigarh airport as the region’s second international airport after Raja Sansi International Airport in Amritsar. In 2011, the ministry gave clearance to Fly Dubai, a low-cost carrier of Emirates, for international operations from Chandigarh to Dubai but it remained on paper. The issue of operating international flights from Chandigarh has been hanging fire since 2009. International flights would mean more staffers, which need clearance from the MoD. Most important, the airport doesn’t have nightlanding facilities.

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TATA Sikorsky JV delivers indigenous S-92 helicopter cabin The India joint venture established between Tata Advanced Systems and Sikorsky Aircraft Corporation announced that its S-92 helicopter cabin production in India has become 100 per cent indigenous. The India operation is not only assembling cabins but also producing all parts needed for the assembly, before shipping the cabins to the US for aircraft completion and customer delivery. The S-92 helicopter cabin and more than 5,000 associated precision components are made at Hyderabad through a strategic collaboration between Sikorsky and Tata Advanced Systems Ltd (TASL). Sikorsky is a subsidiary of United Technologies Corp. The Tata-Sikorsky India JV also announced the Hyderabad facility of TASL completed another significant milestone in October by producing its 50thS-92 helicopter cabin. The TASL facility now has the capacity to produce

up to four cabins a month and is responsible for future design modifications. Shane Eddy, Senior Vice President, Operations, Sikorsky, said, “It is a tribute to the talent and dedication of the workforce in India that we have been able to create an ecosystem for aerospace manufacturing in order to achieve 100 per cent indigenization of the manufactured components and materials that meet stringent specifications of Sikorsky’s S-92 helicopters.”

“Sikorsky had laid out a roadmap in 2009 to extend collaboration in India to produce a complete helicopter here, subject to meeting stipulated objectives and goals, and indigenization of the S-92 helicopter cabins is a milestone in reaching that target,” said Air Vice Marshal (Retd) Arvind Walia, Regional Executive, India & South Asia, Sikorsky. S Ramadorai, Chairman, Tata Advanced Systems Limited said, “In a short span, Tata Advanced Systems has delivered on the challenge of indigenous manufacturing and assembly of cabins for S-92 helicopters. TASL’s capabilities across the aerospace value chain and its highly skilled and dedicated workforce have put India on the global map as a preferred destination for OEMs.”

Air Costa gets DGCA permit Regional airline Air Costa has received the air operator’s permit from the Director General of Civil Aviation, clearing the way for its take off. The airline is now set to commence its scheduled flight operations from October. “We will start with two E-170 and two E-190 Embraer E-Jets having twin class cabin,” KN Babu, CEO, said. Initially, the carrier will connect to Vijayawada, Hyderabad, Chennai, Bangalore, Ahmedabad and Jaipur. It will later expand to cities such as Pune, Goa, Madurai, Thiruvananthapuram and Visakhapatnam. The airline is promoted by the LEPL group based in Vijayawada, having interests in urban infrastructure, aviation, renewable energy, hospitality, education and entertainment. Sept-Oct 2013

GLOBAL NEWS procurement processes more efficient,” said Dmitry Mishutin, Director of the Procurement Department at Russian Helicopters. “Russian Helicopters strives to act like a public company, meeting global standards and best practice and setting the standard for other market players. We are pleased that this award recognizes the efforts that the company has made to increase transparency, including in its procurement processes.” The Leadership in Corporate Procurement awards are the most prestigious prizes recognising achievement by companies from across Russia and the CIS. The awards are handed out on an annual basis to companies and individuals that show leadership and set high standards in competitive procurement.

Dassault delivers 500th Falcon 2000

Nagoya orders Eurocopter AS365 N3+ Dauphin

urocopter Japan has signed a contract to supply Nagoya with an AS365 N3+ Dauphin for operation by the Nagoya City Fire Bureau as an upgrade for the service’s existing helicopter resources. Delivery of this new rotorcraft is planned in 2015 to the Pacific Coast city of Japan, which is the country’s fourth most populous urban area. The Nagoya City Fire Bureau has been using Eurocopter products for over 40 years since introducing helicopters into its equipment inventory, and it currently operates two AS365s. The aircraft are used for firefighting, disaster prevention, emergency medical transport and rescue missions. Including this contract, Eurocopter Japan has booked four orders this year for Dauphin family helicopters – involving the AS365 and EC155 versions. Nagoya’s contract follows orders received so far in 2013 from Hyogo Prefecture, Hiroshima Prefecture and the Metropolitan Police Department. “We are greatly honoured to have signed another contract with city of Nagoya, with which we have a long-standing relationship that spans more than 40 years,” said Stephane Ginoux, the President and CEO of Eurocopter Japan. “This fourth Dauphin family order in 2013 demonstrates a strong endorsement for our services in Japan. We are committed to offering INDIAN AVIATION

the best and most comprehensive support and service to meet our customers’ needs,” he added. The 4.5-ton class AS365 N3+ is part of Eurocopter’s Dauphin family, and is a highly popular helicopter type for firefighting services, disaster relief organizations, police agencies as well as news media in Japan and around the world. Currently, more than 50 AS365s are operated in Japan. Eurocopter leads the Japanese firefighting segment with a 60 per cent market share, thanks to its wide range of products, in-country support and services network. Popular models used for firefighting and disaster relief missions in Japan include the AS365, the Super Puma family, and the BK117 – which is a light twinengine helicopter developed jointly with Japan’s Kawasaki Heavy Industries.

Dassault Aviation recently achieved a venerable milestone when the 500th Falcon 2000 was delivered into service from the Little Rock Completion Center. The aircraft, a Falcon 2000S, will be operated by a customer based in the UK. The Falcon 2000 fleet has accumulated nearly 2 million flight hours to date, reflecting its huge popularity among business jet operators. The Falcon 2000 first flew 20 years ago, in March 1993 and was the first business jet in the world to be designed using a fully digital mockup. Originally conceived for the United States coast to coast market, the Falcon 2000 family has since grown to include six additional versions responding to Falcon operator needs of the time. The current production versions of the Falcon 2000, the 2000LXS and 2000S, were certified by the EASA and the FAA earlier this year.

Russian Helicopters recognized for transparency Russian Helicopters, a subsidiary of Oboronprom, part of Rostec State Corporation, has won a Leadership in Competitive Procurement (LCP) award recognizing the transparency of its corporate procurement processes. “Transparency is an important principle for Russian Helicopters, and one that makes our

“Through years of technological improvements, the Falcon 2000 continues to set the business aviation standard in performance, efficiency and reliability,” said Eric Trappier, Chairman and CEO of Dassault Aviation. “This milestone confirmed the Falcon 2000 as one of the most popular and widely used business jet in operation. Sept-Oct 2013

GLOBAL NEWS AJW Aviation signs MRO contract with Allegiant Air AJW Aviation has signed a three-year repair management power-by-the-hour agreement with Las Vegas based airline, Allegiant Air. The comprehensive support contract is for Allegiant’s new fleet of A320 family aircraft, three of which have already been delivered. Significant fleet growth is planned as this highly successful, low-cost airline increases routes and frequencies across the United States. Coming only six months after the launch of AJW’s new repair facility in Montreal, the company said, this agreement highlights the speed with which AJW Technique is delivering on its promise to become a world-class MRO. “Allegiant Air will benefit from AJW Technique’s prime North American proximity, state of-theart infrastructure, access to AJW Aviation’s strategic Airbus spares inventory located at hubs in Miami, Los Angeles and Montreal, and its team of highly skilled engineers,” it added. In another development, AJW Aviation signed the consignment agreement for a B767-200 aircraft from Aviation Capital Group (ACG) for part out. The teardown process took place in Victorville, CA with the part-out starting on the 9th September and parts subsequently made available from mid-October 2013. A provisional fit list has already been compiled with parts available for lease, exchange and sale, including two CF680C2-B6 engines which AJW will have exclusive management responsibility to lease. After lease, the engines will be torn down to harvest parts for pool access by the AJW Engines division. The aircraft, owned by ACG, will replenish AJW’s strategic aircraft spares stock held at operational centres in London, Singapore, Dubai, Montreal and Miami, as well as locations across Europe and North America. AJW Technique, the group’s comprehensive component repair facility in Montreal, will be used to repair many of the offcoming units before putting them into stock.

Basel Aero launches VIP Terminal in Sochi Airport Basel Aero, a part of Russia’s industrial diversified group Basic Element, announces a soft opening of the VIP Terminal in the Sochi International Airport. The terminal will be fully operational in late October 2013. A 4,000-sq.m VIP Terminal with the handling capacity of 80 passengers per hour, will serve its first guests, the participants of the upcoming XII International Investment Forum Sochi-2013. INDIAN AVIATION

The terminal’s VIP lounge boasts five conference rooms and a workroom, equipped with desktops connected to Internet and a printer. The VIP Terminal also has a 56-seat common area with catering service provided by The Grand Hotel and Rodina SPA. The terminal meets the requirements for serving disabled passengers and passengers with reduced mobility. All the preflight procedures are available in the VIP Terminal, including a check-in and security control. Transfer to the aircraft will be provided by Mercedes official distributor in Russia, Mercedes-Benz RUS, which dispatched ten vehicles for the Sochi International Airport. The VIP Terminal also comprises a parking lot with 36 parking spaces, a dedicated entrance/exit road and a site for motorcades. The terminal’s façade was built using environmentally-friendly materials and technologies including energy efficient panoramic windows that help to save energy while using natural light. The interior works were carried out using high-quality materials. Leonid Sergeev, Basel Aero CEO, said: “A terminal for the most demanding passengers of the Sochi Airport will be fully operational starting from late October, three months before the Olympic Games. It will allow us to brush up all the processes before the Games. We’ll adhere to the international standards of serving VIP passengers and use the best practices of our colleagues from the Changi Airport.”

Over 29,000 new aircraft required in the next 20 years As aviation becomes increasingly accessible in all parts of the world, future Journeys will increasingly be made by air particularly to and from emerging markets. According to Airbus’ latest Global Market Forecast (GMF) in the next 20 years (2013-2032), air traffic will grow at 4.7 per cent annually requiring over 29,220 new passenger and freighter aircraft valued at nearly US$4.4 trillion. Some 28,350 of these are passenger aircraft valued at US$4.1 trillion. Of these, some 10,400 will replace existing aircraft with more efficient ones. With today’s fleet of 17,740 aircraft, it means that by 2032, the worldwide fleet will double to nearly 36,560 aircraft. Economic growth, growing middle classes, affordability, ease of travel, urbanisation, tourism, and migration are some factors increasing connectivity between people and regions and how often they travel. Increasing urbanisation will lead to a doubling of mega cities from 42 today to 89 by 2032, and 99 per cent of the world’s long-haul traffic will be

between or through these. Traffic growth has led to average aircraft size ‘growing’ by 25 per cent with airlines selecting larger aircraft or up-sizing existing backlogs. Larger aircraft like the A380 combined with higher load factors make the most efficient use of limited slots and contribute to rising passenger numbers without additional flights as announced by London’s Heathrow Airport. A focus on sustainable growth enabled fuel burn and noise reductions of at least 70 per cent in the last 40 years and this trend continues with innovations like the A320neo, the A320 Sharklet, the A380 and the A350 XWB. “By 2032, Asia-Pacific will lead the world in traffic overtaking Europe and North America. Today on average, a fifth of the population of the emerging markets take a flight annually and by 2032, this will swell to two thirds. The attraction of air travel means that passenger numbers will more than double from today’s 2.9 billion, to 6.7 billion by 2032, clearly demonstrating aviation’s essential role in economic growth,” said John Leahy, Chief Operating Officer – Customers, Airbus. Domestic flows are also set to rise strongly with domestic India growing at the fastest rate (nearly 10 per cent), followed by China and Brazil (seven per cent). Overall, with an above world average traffic growth rate of 5.5 per cent, Asia-Pacific will account for 36 per cent of all new passenger aircraft demand, followed by Europe (20 per cent) and North America (19 per cent).

In the very large aircraft market, dominated by the A380, there is a requirement for 1,334 passenger aircraft valued at US$519 billion. Of these, 47 per cent will be needed in the AsiaPacific region, followed by the Middle East (26 per cent) and then Europe (16 per cent). Asia-Pacific’s requirement for the A380 is demonstrated by the region’s growth in middle classes which is set to quadruple in Asia-Pacific in 20 years. In the twin aisle market, covered by amongst others the A350 XWB and the A330, the requirement is for 6,779 aircraft valued at US$1.82 trillion. Of these, 48 per cent of deliveries will be in Asia Pacific, followed by Europe (15 per cent) and the Middle East (13 per cent). Sept-Oct 2013

GLOBAL NEWS SITA and Thales stream in-flight entertainment

US F-35 jet plagued by shoddy quality control: Audit

Thales and SITA have reported on the success of pairing Thales’ GateSync with SITA’s e-Aircraft Connectivity Services to enable inflight entertainment on demand to passengers’ smartphones, tablets and other devices. Currently on trial with LAN Airlines, at Santiago Airport, it provides passengers with on-demand rich content straight to their own devices. This includes music, movies, news, TV series, PC games, interactive shopping, destination and flight information, all streamed within the cabin. SITA provides connectivity for aircraft on the ground via Wi-Max, Wi-Fi, or cellular service and, through its subsidiary OnAir, in-flight connectivity through satellite-based broadband services. By using SITA’s network to deliver its in-flight entertainment (IFE), Thales avoids shipping hard drives and the need for manpower to upload content, while allowing frequent updates. SITA’s delivery of information is fast, secure and cost-effective, and it can handle other airline data, such as non-safety-critical operational aircraft communications, as well as the IFE content. Stuart Dunleavy, Vice President of Media & Connectivity of Thales’ In Flight Entertainment Systems business, said: “Thales is committed to delivering high performance digital media distribution. The combination of Thales’ expertise in the development of in-flight entertainment and passenger connectivity solutions, with SITA’s recognized specialization in air transport communications and IT solutions is central to the success of this initiative. Each party is bringing its strengths to this project.” Sebastien Fabre, Vice President, Integrated Networks, SITA, said: “SITA and Thales are unlocking the maximum benefits achievable from e-connected aircraft. This technology is not just for IFE, but can be for all data. Passengers get on-demand IFE, while time-sensitive data such as passenger manifests, daily news, meal inventories, surveys, crew logs and system performance data can also be securely transmitted to the airline’s operational systems. “SITA is currently experiencing data volume growth on new generation aircraft (A380 and B787) approaching 100 per cent compared to older generation aircraft. This demonstrates that the development of aircraft-centric IP service management is essential to meet the needs of airlines.”

The US military’s bureaucratic watchdog accused companies building the F-35 fighter of shoddy management that could jeopardize the reliability, performance and cost of the aircraft. The Pentagon inspector general cited 363 problems in the design and manufacture of the costly Joint Strike Fighter, the hi-tech warplane that is supposed to serve as the backbone of the future American fleet. For the United States and eight other countries backing the project, the report raises fresh questions about the technology and ultimate price tag of the F-35, which has struggled with production delays and cost overruns. The office that oversees the fighter project, the aircraft’s primary manufacturer Lockheed Martin and five subcontractors failed to carry out rigorous “quality assurance” practices, the report said.

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The failures “could adversely affect aircraft performance, reliability, maintainability, and ultimately program cost,” according to the inspector general office’s report. A number of the shortcomings — including how software is managed — could possibly put safety at risk, it warned. “Without adequate product evaluation of mission system software, Lockheed Martin cannot ensure aircraft safety requirements are met,” it said. Designed to replace fighters in the US Air Force, Navy and Marines and supported by a consortium of eight countries, the program is already the most expensive in US military history with a price tag of $395.7 billion. Recent independent reviews have found the program has managed to rein in costs but the inspector general’s findings suggested flawed production and design work could break the aircraft’s budget in the future. Officials have acknowledged the original concept for the F-35 was overly optimistic, as it called for starting production long before thorough flight tests were completed. But the subcontractors, Northrop Grumman, BAE, L-3 Communications, United Technologies Corp and Honeywell, also came in for criticism.

The inspector general’s office faulted Honeywell for how it oversees the aircraft’s life support oxygen system. Honeywell’s training efforts for employees working on the system were inadequate and changes were made to control software without checks by engineering and management departments, according to the report. The F-35 program office called the inspector general’s report “thorough” and “useful,” but played down the findings. In a statement, the office said most of the problems cited had already been identified by managers and that the report did not present “new or critical issues that affect the health of the program.” Out of 343 corrective actions recommended in the report, 269 had been carried out while a remaining 74 were underway, according to the program office.

Japan plans AWCS upgrade The US Defense Security Cooperation Agency notified Congress of a possible Foreign Military Sale to Japan of an E-767 Airborne Warning and Control System (AWACS) Mission Computing Upgrade (MCU) and associated equipment, parts, training and logistical support for an estimated cost of US$950 million. The Government of Japan has requested a possible sale of an E-767 Airborne Warning and Control System (AWACS) Mission Computing Upgrade (MCU) that includes 4 Electronic Support Measure (ESM) Systems, 8 AN/UPX-40 Next Generation Identify Friend or Foe (NGIFF), 8 AN/APX-119 IFF Transponder, and 4 KIV-77 Cryptographic Computers.

Also included are design and kit production, support and test equipment, provisioning, spare and repair parts, personnel training and training equipment, publications and technical documentation, US Government and contractor engineering and technical support, installation and checkout, and other related elements of program support. The estimated cost is US$950 million. This proposed sale will contribute to the foreign policy and national security of the United States. Japan is one of the major political and economic powers in East Asia and the Western Pacific and a key ally of the United States in ensuring the peace and stability of this region. Sept-Oct 2013

SPECIAL FEATURE

IAF celebrates its 81st anniversary Celebrated as “IAF Awareness Day”, the objective of this year’s activities is to enhance people’s awareness about the IAF and its various operations, and to apprise youth of the various career opportunities in the IAF

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he Indian Air Force (IAF) celebrated its 81st anniversary on October 8, 2013 at various Air Force Bases across the country. The IAF was formed on October 8, 1932 as an auxiliary Air Force of the British Indian Empire and the prefix Royal was added in 1945 in recognition of its services during the World War II. Since independence, the IAF has participated in three wars with Pakistan as well as the Kargil conflict and one with China. Other major operations undertaken by the IAF include Operation Vijay - the invasion of Goa, Operation Meghdoot and Operation Cactus. Apart from these conflicts, the IAF has been an active participant in United Nations peacekeeping missions in Congo and several other places around the globe. The Chief of Air Staff, Air Chief Air Marshal NAK Browne, said, “Having grown steadily in strength and stature, the IAF is passing through a transition stage for transforming itself into a full spectrum strategic

Sept-Oct 2013

SPECIAL FEATURE

The Chief of Air Staff, Air Chief Marshal N.A.K. Browne during the Air Force Day function 2013, at Air Force Station Hindan force. During this phase, we are witnessing acquisition of cutting edge technology, force restructuring and development of new conops.” He said that recent induction of C-17 globe master III is an important milestone in this journey and highlights the full spectrum augmentation envisioned by IAF. “With the C-17 in our inventory, the strategic airlift capability has seen a quantum leap forward and will change the way we conduct air transport operations in the future,” he added. The Defence Minister AK Antony, said, “The courageous men and women of IAF have always done the nation proud and have always risen to the occasion. IAF has guarded our skies, rendering critical assistance during times of natural calamities. Place on record my appreciation for the bravery and selfless devotion of air warriors involved in the task of saving human lives in Uttarakhand and Himachal Pradesh.” Heralding a new phase at our flying training establishments, Air Marshal Browne said, the induction of PC-7 MK II as IAF’s basic trainer aircraft brings with it a much needed capacity addition for high quality flying training. The landing of C-130J aircraft at DBO demonstrated IAF’s indomitable spirit and exhibited solid resolve to conquer seemingly insurmountable challenges. “IAF’s ability to employ these newly acquired capabilities hinges entirely on the high calibre and exceptional aptitude of its men and women. It is therefore incumbent upon us to harness our collective strengths and focus on maximising IAF’s combat potential,” he said. IAF’s squadrons, units and combat crews worked tirelessly to sustain high levels of combat potential. While IAF’s flying effort of 2,30,200 hours in Fy 2012-13 was greater than the previous two years, It also recorded a sharp reduction in the number of aircraft accidents. “The accident rate of 0.22 is indicative of a very encouraging trend and clearly amplifies the remarkable operational benefits when aerospace safety is embedded as a key component of mission accomplishment,” he added. INDIAN AVIATION

Sept-Oct 2013

COVER STORY

Gaining momentum

With more number of talks are being held with key policy makers, MRO industry hopes to see some solution to its long-pending issues

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Sept-Oct 2013

COVER STORY

File photo: (L to R) DGCA Arun Mirshra and \ Secretary, MoCA KM Srivastava addressing the meeting

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Sept-Oct 2013

COVER STORY As the Indian MRO industry continues to face multiple policy level hurdles besides the infrastructural issues, the MRO Association of India had recently called for an all-skate holder meeting with Secretary, MoCA in New Delhi.

esponding to the call of MRO Association of India, K. M. Srivastava, Secretary of Ministry of Civil Aviation convened a meeting on September 18 to discuss major issues relating to taxes and charges applicable to MRO industry. Since many of these issues come under different government agencies, it was pertinent to involve representatives from Central Board of Excise and Customs (CBEC), Tax Research Unit (TRU), Finance Ministry and Airports Authority of India. The MoCA team included, Arun Mishra, Director General of Civil Aviation; G. Asok Kumar, Joint Secretary, MoCA; S. Suresh, Member Finance, AAI; Ravi Sahi, Consultant, MoCA. Special invitees from CBEC and Indian Customs included J. M. Kennedy, Director Service Tax and Santosh, Director Customs. Members of the MRO Association of India, domestic airlines, OEMs and aviation consultants also participated. Some of the major issues raised and discussed at the meeting were relating to VAT on aircraft

license, besides others. Asok Kumar, Joint Secretary, MoCA started the meeting by giving a brief presentation on the applicable tax structure and the efforts undertaken by MoCA to get some of the stringent conditions relaxed by the Finance Ministry since the last budget.

VAT on aircraft parts One of the biggest issues that MROs companies in India face today is relating to 12.5 per cent sales tax that they have to pay on parts installed in aircraft. Ironically, MROs in India have to pay that sales tax not on the cost price but the selling price. This causes an increase of more than 20 per cent in the price, if import cost is also added. On the other hand, airlines importing their own spares do not have to pay any taxes or duties. “This causes a serious fiscal imbalance in favour of the foreign service providers. Apparently, this

“This [VAT on aircraft parts] causes a serious fiscal imbalance in favour of the foreign service providers. Apparently, this policy incentivises MRO companies to operate from outside of India.” – Bharat Malkani, Treasurer, MRO Association of India parts, service tax on aircraft maintenance organizations, cumbersome documents required by customs departments, royalty charged by airport operators and recognition of Indian AME INDIAN AVIATION

policy incentivises MRO companies to operate from outside of India,” said Bharat Malkani, Treasurer MRO Association of India. For this reason, he said, MROs cannot stock and sell

spares which are ordered and provided by airlines. “Procurement and custom clearance are time consuming processes which delay the turn-around time of the aircraft from the MRO facility, making the MRO maintenance in India the non-preferred choice for airlines,” added Malkani who is also the Chairman of Max Aerospace. CS Tomar, Vice President, Engineering & Maintenance, Jet Airways stated that warehouse companies are not interested in stocking parts as they are required to re-export the parts in one year or pay duty. “Purchasing parts from stockists attracts VAT which is not the case while purchasing same parts from stockists in countries like Singapore,” he said. Palash Roy Chowdhury, Managing Director (India), Pratt & Whitney stated that some companies started stocking spare parts for their aircraft in India but they could not function. Amber Dubey, a Partner and Head of Aviation at KPMG expressed his opinion that if stocks are to be stored in India for easy availability, they must be free from VAT and one year bond period. On being enquired of possible benefits, the states could get if sales tax on parts is exempted by states, the industry representatives explained that this would create employment for about 100,000 persons in Mumbai and Delhi, and, also in some other states. The states providing facilities could become MRO hubs and will contribute in progress, and saving in foreign exchange.

Cumbersome documents asked by Customs The first issue affecting MROs was the requirement of a certificate from the airlines for custom department for the clearance of spares imported by MROs. This is causing a serious problem for all MROs, and the airlines are not in a position to offer such letters for import of spares on a regular basis. Sept-Oct 2013

COVER STORY Babu Peter, Executive Vice President Engineering of Go Air suggested that submitting a copy of the relevant pages of Aircraft Manuals viz Illustrated Parts Catalogue-IPC/AMM/CMM/SRM), which is specific of each aircraft and is provided by manufacturer, indicating that the component is a part of the aircraft, should be accepted as standard procedure, as was being done for many decades earlier. Other airlines present it the meeting also supported this procedure. Giving update on this, Asok Kumar informed that MoCA had written a letter to Joint Secretary (TRU) requesting simplification of procedures as the intent of liberalization is being lost by stringent requirement of documents for each import. He said that aircraft parts are high value items specific to each type of aircraft, and chances of misuse were nil. SN Dwivedi, DAW DGCA Hqs, stated that customs authorities in different states have different requirements of documents to be submitted. Industry participants stated that custom authorities at Sahar Airport, Mumbai demanded individual agreements with airlines for which parts were being imported in each case. It was decided in the meeting that since MROs would not need to produce such letters from airlines for the Customs Department and that they would attach the copy of the CMM, IPL, AMM, SRM identifying those spares as aircraft parts. Customs Department would give a clarification notification to this effect. Santosh, Director Customs Dept. explained that the Condition No. 73 of the Customs Notification on import of parts states that the parts have to be kept in bond and must be used within one year, and the records are to be kept to the satisfaction of the Commissioner of Customs, failing which the applicable duties will be levied. He said in

“MROs are being treated as Ground Handling Agencies. As a result their employees are not given airport passes for other airports. Government should clearly declare MRO by definition as a separate entity to remove the confusion of security and airport authorities.” – Ravi Menon, Vice President, MRO Association of India INDIAN AVIATION

order to satisfy themselves, the regional offices have put in place procedures for their satisfaction in their own way. He said comments had been invited from Commissioner on this aspect. He added that the bond time has been increased from three months to one year this year for the benefit of the industry. After detailed deliberations, the Secretary stated that it maybe too early to ask for increasing the period of bond upward from one year. However, he suggested giving a draft amendment of Condition No. 73 of the Customs Notification for consideration by Finance Ministry. “A volume of US$ 600 million can increase if friendly conditions are created, and the whole issue needs to be looked into with alacrity,” he said. He asked Amber Dubey to draft a paper on the subject quickly. Sept-Oct 2013

COVER STORY

Delay in Custom clearance of parts Airlines and MRO representatives stated that though parts arrive in India from Singapore or Dubai in a few hours, it takes a long time, sometimes a few days, to have the parts cleared by customs. Apart from requirement of documentation explained above, the customs department have a fixed working hours. In case of Aircraft-on-Ground (AOG) situation, the aircraft parts are needed immediately. The industry requested that the custom officers could have a 24x7 window for aircraft parts at least at five major airports. The Secretary stated that for air cargo, customs have a 24x7 facility, which could be extended for aircraft parts. He assured that the request of the industry will be considered and appropriate recommendation will be made to Customs Department.

Service Tax on MRO The industry representatives stated that Service Tax of 12.36 per cent is charged on Indian MROs, which makes them non-competitive as competing countries do not charge ST on MRO

work. The Secretary observed that the quantum of service tax is small compared to service tax charged by the airlines, which can be adjusted. Vipin Kumar Sharma, Ex Director of Engineering of Air India stated that only about 70 per cent is recovered. Indigo airlines representative observed that when combined with VAT, the incidence of tax is too much, and therefore MRO services should be included in services where Service Tax is not charged. The Director General Arun Mishra stated that the bottom-line is that the total cost of maintenance work goes up which affects the business of MROs. MROs also observed that shipping industry is exempted from service tax if they perform work on government aircraft. The Secretary invited comments from J. M. Kennedy, Director in Service Tax Division in CBEC on the pleas of the industry. He stated that MRO work becomes a work contract service, which attracts service tax of 12.36 per cent on 70 per cent of the value of work which

becomes 8.65 per cent on total value. MROs are allowed offsets against the work they do. He added that replies have been given on earlier representations. Vipin Sharma stated that exemption as admitted to Shipping industry should be made available which will help MROs who are maintaining Government aircraft e.g., BSF aircraft. Malkani stated that Sri Lanka is making a separate MRO airport to do work on aircraft from countries like India. He also advocated for a level playing field for MROs vis-a vis airlines, whose imports are 100 percent duty free without conditions like bonded stores to be consumed within one year. Amber Dubey also agreed that it will be a boom time for MRO industry if fiscal imbalance is removed. Uday Naidu, Chief Operating Officer of MAS-GMR MRO informed the Secretary that in the big picture the amount of Service Tax collected from the MRO Industry is a very small percentage of the total Service

“Warehouse companies are not interested in stocking parts as they are required to re-export the parts in one year or pay duty. Purchasing parts from stockists attracts VAT which is not the case while purchasing same parts from stockists in countries like Singapore.” – CS Tomar, Vice President, Engineering & Maintenance, Jet Airways INDIAN AVIATION

Sept-Oct 2013

COVER STORY Tax collected. But due to this cost advantage, whatever the Indian MROs are bringing is being negated hence the Government should consider waiving it off. This will allow the domestic industry to grow, rather than letting the MROs in the nearby countries prosper. The Secretary opined that this can be passed through by the Airlines to the consumers and can set it off. Asok Kumar suggested that a service tax holiday of 5-10 years should be considered by Finance Ministry. Kennedy stated that the suggestion could be considered if a representation was made in this regard. JS also suggested that we should explore the possibility of declaring MRO services and aircraft parts as declared goods. The Secretary directed that a paper should be prepared after consultation with the industry bringing out all aspects. He hoped that if in the ultimate analysis it is beneficial for the country, consultations with states may not be required and the Government can take a decision.

Checks at FAA/EASA approved MROs Airline and MRO representatives stated that lessors insist that the aircraft re-delivery checks should be done at MROs approved by FAA/EASA. They stated that the lease agreements are unilateral in nature and the lessees are made to sign on dotted lines as they are in no position to choose lessors. If these checks could be done at Indian MROs, it will immensely help Indian industry. They proposed a reciprocal bilateral with other countries on MROs. The Secretary informed the industry representatives that this aspect of reciprocal acceptance of MRO can be introduced in the bilateral talks. He stated that India has come a long way where ICAO concerns have been withdrawn. He stated that in meetings with lessors, the Ministry has assured them to have faith in Indian leasing system. He emphasised that we are committed to honouring Cape Town Convention which will assure them of safeguarding of their interests. He cautioned that the airlines also have to be assertive and not to agree with such imposing conditions from lessors. The airlines and MROs insisted that the issue can be resolved only through bilateral talks. Naidu stated on the Lessor’s insistence that the end of Lease checks be performed outside India, even though the outside MRO’s are unable to give EASA release. “This is an opportunity which can be used, INDIAN AVIATION

provided that we are able to convince the Lessor community that our DGCA regulations are on par with the EASA rules. For this, harmonization of our rules to the EASA rules is essential,” he said. Secretary had consented to this and said that he will advise DGCA to work in this direction. Naidu also pointed out that CAR states that component repair work needs to done by local MROs rather than foreign MROs if facilities are available in India. A copy of the Malaysian DCA letter on similar lines had been given to Secretary for complete aircraft as well. Secretary stressed upon airlines to consider giving more work to the local MRO before giving to the overseas MRO’s, which was agreed upon by the present airlines in the meeting. The Secretary advised that a discussion paper should be prepared and sent to the US side for discussion in the forthcoming Indo-US Summit in Washington in end October.

MROs being clubbed with GHAs Ravi Menon, Vice President, MRO Association and Director of Air Works India reiterated the issue of MROs being treated as Ground Handling Agencies. As a result their employees are not given airport passes for other airports. He stated that Government should clearly declare MRO by definition as a separate entity to remove the confusion of security and airport authorities. The Secretary stated that the Aircraft Act is to be amended and presently is under consideration of Law Ministry. An amendment in certain rules may be required in Aircraft Rules, 1937. He invited a proposal in this regard from the MRO Association.

MROs charged 13 per cent Royalty Menon also requested that the 13 per cent Royalty charged to MROs should be abolished as they were paying rent for the accommodation leased by them from the airport operators. Asok Kumar informed that the matter has been taken up with AAI and a response is expected soon.

Payment of with holding tax Malkani stated that Indian companies have to pay a withholding tax of 20 per cent on international transactions, as our PAN is not recognized. S. Suresh, Member Finance AAI clarified that rates charged are different,

List of Participants • • • • • • • • • • • • • • • • • • • • • •

KN Shrivastava, Secretary Civil Aviation, in Chair Arun Mishra, DGCA G Asok Kumar, JS, MoCA S Santosh, Director Customs S Suresh, Member Finance, AAI JM Kennedy, Director Service Tax, CBEC SN Dwivedi, DAW, DGCA RP Sahi, Consultant, MoCA Ravi Menon, Vice President MRO Association of India & Airworks India, Bangaluru Bharat Malkani, Treasurer, MRO Association of India & Max Aerospace, Mumbai Pulak Sen, Secretary General, MRO Association of India Air Cmde. RP Kashyap, Member MRO Association of India, Horizon Aerospace (India), New Delhi RN Johri, Member, MRO Association of India, Aman Aviation, Mumbai Uday Naidu, Member MRO Association of India, MAS-GMR MRO, Hyderabad Sandeep Saraf, Shaurya Aeronautics & Member MRO Association of India, New Delhi Vipin Kumar Sharma, Air India Dr. SK Bansal, Indigo Airlines Vikram Chona, Indigo Airlines CS Tomar, Jet Airways Harris Ansari, Jet Airways Babu Peter, Go Air Palash Roy Chowdhury, Pratt & Whitney, United Technologies Group • Amber Dubey, KPMG • Col. Rajiv Bhargava, Indian School of Business, Mohali and for PAN holders, the withholding tax is exempted. He informed that AAI is including this tax in their cost. The Secretary directed that MOCA will take up the matter at Government level.

Recognition of Indian AME License Tomar said that AME licenses are not being recognized by other countries and engineers are losing out as against maintenance engineers from countries like Indonesia etc. This was because we have not yet introduced international standards in AME licensing. The Secretary advised DGCA to look into this matter. Sept-Oct 2013

COVER STORY Air Marshal P Kanakaraj AVSM, VSM Air Officer Commanding-in-Chief, Maintenance Command, Indian Air Force, Nagpur

Civil MROs could contribute in many areas of our repair depots In an exclusive interview with Indian Aviation, Air Marshal P Kanakaraj, AVSM, VSM, Air Officer Commanding-in-Chief, Maintenance Command, Indian Air Force, Nagpur, who is also the chief guest for the MRO India 2013, shares his thoughts about Indian MRO industry and the role his department can play to ensure growth of the sector Indian Aviation (IA): Indian Air Force is one of the worldâ&#x20AC;&#x2122;s largest Air Forces with an estimated 1,370 aircraft in active service during 2012-13, consisting of front line fighters, deep penetration aircraft, transport aircraft, helicopters for various use, trainers, UAVs, etc. With such a varied type of inventory, what are the challenges being faced by IAFâ&#x20AC;&#x2122;s Maintenance Command?

standardised philosophy across all fleets. That I believe is the first challenge. The second challenge is to absorb the technology. Our Air Warriors are fully competent to handle the most sophisticated technology, however, the challenge is to identify the gaps and to ensure continuity of proficiency over the life time of the equipment. Thirdly, we have observed that most OEMs are conservative in specifying the life time capability that can be extracted from a system. It becomes our prerogative to dwell deep into each system and undertake studies to enhance life of the equipment and exploit technology to reclaim / refurbish a damaged component without compromising on safety.

Air Marshal (AM): As you have rightly brought out, it is challenging to handle a wide variety of inventory. Every OEM defines its own maintenance philosophy, however, as an organisation, we have to draw up a INDIAN AVIATION

Sept-Oct 2013

COVER STORY “The IAF personnel are well trained, experienced and exhibit high sense of discipline which is a huge potential for the Civil MRO industry. These personnel after completion of their prescribed period of engagement with IAF would undoubtedly be an asset to the civil MRO industry.” Air Marshal P Kanakaraj

IA: Indian Air Force has a number of BRDs under it to serve the emergency frontline and daily maintenance requirement of the vast inventory. Can you explain their role in keeping the Air Force flying?

Air Marshal P Kanakaraj AVSM VSM assumed the responsibilities of Air Officer Commandingin-Chief, Maintenance Command, Nagpur on July 1, 2013. He was commissioned in the Aeronautical Engineer (Mechanical) Branch of the Indian Air Force on July 25, 1977. He is a Graduate Engineer (Mechanical) from Regional Engineering College, Trichy with post-graduation in Propulsion from IIT Madras. Prior to his present assignment, he was the Air Officerin-Charge Maintenance at Air HQs. He has held various field and staff appointments which include the Director General (Aircraft) and Director General (Systems) Air HQs. He has been the Senior Maintenance Staff Officer of Western Air Command, Commandant Air Force Technical College, Principal Director at Air HQs, Commanding Officer at Air Armament Inspection Wing (AAIW) Khamaria and Chief Engineering Officer at Air Force Station Jodhpur. Air Marshal Kanakaraj was conferred the Presidential awards of ‘Ati Vishist Seva Medal’ on January 26 2012 and ‘Vishisht Seva Medal’ on January 26 2009 for his distinguished service of a high order.

AM: The aircraft BRDs essentially undertake ROH of specific aircraft fleets. In addition, the depots also cater for repairs and servicing beyond the capability of the operating units. This is achieved through specific qualified and trained teams deputed to the operating units called ‘SARATHI’ which undertake highly specialised tasks in the field. IA: Sometimes ago there was a move in IAF to indigenize the engineering requirements of the force. Can you tell us about this move? Has the IAF developed suppliers to serve this requirement? AM: The requirement of indigenisation is perennial considering factors such as responsiveness of the OEMs to supply spares, high cost and thrust towards self-reliance. The depots have developed adequate suppliers to provide indigenous products enabling them to meet production targets. There is always scope for further growth in vendor base especially of reputed players. IA: India has a number of civil MROs in the country with specialization in various areas. Do you feel their capabilities could be of use to IAF? AM: Yes, there are many areas where civil MROs could contribute to our repair depots. The areas could be outsourcing of specific overhauling tasks, life extension studies, repair and refurbishment activity, supply chain management, packing technology, warehousing, annual maintenance activity, etc,. IA: Do you think that it would be a good idea to form a body with officers from IAF’s Maintenance Command and civil MROs to identify and execute work from both sides? AM: There can be no formalised body as per the DPM/DPP. However, as and when the need arises, there is enough scope for an interactive/ participation with various agencies, within the framework of the existing guidelines of the DPM and FRs.

AM: The IAF personnel are well trained, experienced and exhibit high sense of discipline which is a huge potential for the Civil MRO industry. These personnel after completion of their prescribed period of engagement with IAF would undoubtedly be an asset to the civil MRO industry. In most developed nations, there is a seamless integration of the technical manpower from the Armed Forces to the production industry. There is a potential for such a process in our country as well.

IA: Indian Air Force’s Maintenance Command is a huge repository of trained engineers and technicians in the aerospace field. Do you think that civil MROs in the country could take advantage of the assets? INDIAN AVIATION

Sept-Oct 2013

India’s 07-09 November, 2013

One & Only International

Networking Conference & Exhibition On Maintenance, Repair & Overhaul

MRO INDIA 2013 CONFERENCE SHCEDULE Impetus required towards making India a Global MRO Destination TIME

Program - Day 1 – November 07, 2013 (Thursday)

0900 0930-1000 1000-1010 1010-1015 1015-1035 1035-1055 1055-1115 1115-1145 1145-1155 1155-1200 1200-1220 1220-1240 1240 – 1300 1300 – 1400

Registration Opens Arrival of Chief Guest, Introduction, Inauguration of Exhibition and Coffee with the Organising Committee Inauguration of Conference & Lighting of Lamp Welcome Address By Pulak Sen Founder Secretary-General MRO Association of India & Editor-in-Chief, Indian Aviation Inaugural Keynote Address By Air Marshal P. Kanakaraj, AVSM, VSM Air Officer C-in-C, Maintenance Command, Indian Air Force, Nagpur. Keynote Address 2 The Civil Aviation Ministry’s initiative for mitigating the challenges to MRO sector By G. Asok Kumar, IAS, Joint Secretary, Ministry of Civil Aviation Keynote Address 3 AIESL’s challenges as a new entity in the MRO sphere By K M Unni, Chief, Executive Officer Air India Engineering Services Ltd & Board Member, Air India PANEL DISCUSSION ON CIVIL & MILITARY CO-OPERATION Panelist: Air Marshal Kanakraj, Asok Kumar, R.P.Sahi, Consultant, MoCA, Air Cmde Suresh Singh, Com. Eng. Off., MC Moderator: Capt U.Gelli, Chairman, MRO Association of India. Presentation of mementos By Hirak Sen, Director MRO India Vote of Thanks By Capt Uday Gelli, Chairman MRO Association of India Release of WHITE PAPER on MRO in India By Amber Dubey, Partner and Aviation Head KPMG Tea/Coffee Break Presentation- Air India MRO capability By A. K. Datta, GM, Engg. & Rajiv Dandona, Dy Chief Aircraft Engr, Air India Engineering Services Ltd. Presentation : MAS GMR by Udya Naidu, COO-MGAE Lunch at Exhibition Hall Day-1 Second Half

1400 - 1500 1500-1520 1520 – 1550

Detailed Discussion on White Paper On MRO in India presented by KPMG Panelist: Members of MRO Association of India & KPMG Capt Uday Gelli, Uday Naidu, Bharat Malkani, Ravi Menon, R N Johri, Air Cmde R P Kashyap, Sandeep Saraf, M. M. Varman, N. Nandakumar, (GM-Engg AIESL), Amber Dubey, Partner and Aviation Head KPMG Presentation by Bharat Malkani – on behalf of MRO Association of India: Creating Policies and Environment conducive for growth of MRO industries in Aerospace sector in India. Panel Discussion: G. Asok Kumar, R.P. Sahi, Addl. Commissioner, Customs, Rep from VAT dept, AAI-RED, R. K. Khanna, Dy. DGCA, C.S. Tomar, Jet Airways, Babu Peter, GoAir, Dr. S.K. Bansal, Indigo Airlines, A. K. Mathew, ED, Engg, Air India.

INDIAN AVIATION

Sept-Oct 2013

India’s 07-09 November, 2013 1550-1610 1610 – 1630 1630 - 1730 1730 1900-2200

One & Only International

Networking Conference & Exhibition On Maintenance, Repair & Overhaul

Moderator: Ravi Menon, Vice President, MRO Association of India Presentation- Capt.Ajay Chauhan CEO - GUJSAIL & Director Of Civil Aviation, Govt.of Gujarat Presentation by C.M. Bhatia, Sr. Aviation Consultant - Problems Faced by Aircrat Leasing Companies -Tea/Coffee Break in Conference PANEL DISCUSSION: Future Prospects for growth of MRO in India - The lessor-lessee-MRO triangle. Panelist: G. Asok Kumar, R.P. Sahi, Tomar, Babu Peter, Dr. S.K. Bansal, Uday Naidu, HR Jagannath (ED-Engg), Bharat Malkani, Ravi Menon, R N Johri, Air Cmde R P Kashyap Moderator : Capt U. Gelli. Chairman MRO Association of India. Onwards Tea/Coffee break in the Exhibition Hall Close of First Day Business Sessions Presentation of Awards, cultural program along with cocktail and networking dinner. By invitation only. Program -Day-2 November 08 (Friday)

0900 0930 1000-1030 1030-1100 1100-1130 1130 -1150 1150-1200 1200-1220 1220-1240 1240 – 1300 1300 – 1400

Registration Opens Exhibition Hall Opens Presentation- by Deepak Sharma, Technical Director- AJ W Group Presentation- Altug Sokeli, Marketing Director- Critical consideration in Negotiating and outsourcing contracts. Presentation by Hindustan Aeronautics Limited By M.M. Tapase, GM, Projects Presentation by LP Swamy, Deputy General Manager, TÜV SÜD Tea/Coffee break in the Exhibition Hall Presentation - Air India Engineering Service Ltd. Anil Gupta, GM, Eng. AIESL Presentation- K N Ramakrishnan, Consultant, Tech Mahindra - Potential of Indian MRO to be Globally competitive by leveraging the indigenous Aerospace Industry. Presentation- Gujarat Aviation- By Capt. Ajay Chauhan - CEO, GUJSAIL Lunch at Exhibition Hall Day -2 Second Half

1400-1430 1420-1440 1440-1500 1500-1530 1530-1550 1550-1620 1800

Presentation - Air India Engineering Service Ltd. By N.Nandakumar, (GM-Engg AIESL) Introduction of ICAO Safety Management System and consequent changes in Indian Aviation safety doctrinechallenges and solutions By Ashwani Sharma, VP Enng. Air Costa Presentation by Dr. S. D. Sharma, Airport Director, Surat AirportOpportunities in Surat: A friendly airport in the close vicinity of Mumbai. Presentation by Prakash Sahasrabuddhe, GM-Engg, AIESL Tea/Coffee break in the Exhibition Hall Presentation by Avinash Chintawar, COO CAV Aviation- Fleet Technical Management- A new Approach Close for the day

0900 0930 1000-1030 1030-1100 1100-1130 1130 -1150 1130-1200 1200-1220 1220

Program - Day 3 – November 09 (Saturday) Registration Opens Exhibition Hall Opens Presentation- By Pravin Gupte, Pawan Hans Ltd, Challenges in Structural Repair on Metal & Composites. Presentation- Rahul Shah, AAR CORP Presentation: Aman Aviation on Carbon Foot Print & how to be Carbon Neutral Presentation by Laxmanan, Director MIHIR: Challenges in the Maintenance of the Amphibian Airplanes in Indian Environment Tea/Coffee break in the Exhibition Hall Concluding Remarks by Pulak Sen Close of MRO EXHIBITION *Programme subject to Change

INDIAN AVIATION

Sept-Oct 2013

SPECIAL REPORT

The SITA-CAPA white paper was released by Kapil Kaul, CAPA and Maneesh Jaikrishna, SITA along with other dignitaries on Sept 26, 2013.

Transforming the passenger experience Information Technology in the Air Transport Industry (ATI) in India is preparing to transition from an activity that is focused on operations to one that transforms the passenger experience, says CAPA-SITA White Paper

APA and SITA have jointly conducted a study on the prospects for transformation of the airline and airport passenger experience in India by 2015. This study combines CAPA’s extensive ongoing research and analysis of the Indian aviation sector with SITA’s IT domain expertise and a customised survey programme involving primary interviews with key stakeholders amongst airlines, airports, INDIAN AVIATION

and ground handlers along with those involved in air traffic management, customs and immigration. This is the third joint White Paper prepared by CAPA and SITA on the Indian market. The first White Paper in 2010 presented an overview of the state of IT deployment in Indian aviation. “At that time there appeared to be an emerging recognition that technology can play a much more positive role in terms

of increasing efficiencies, generating new commercial opportunities and improving the passenger experience,” the report said. Two years later the report measured the level of progress against what had been expected in 2010 and the results were not encouraging, it said. This partly reflected the financial difficulties being faced by the industry, but the study found that despite the potential observed in 2010, IT had not yet achieved the level of Sept-Oct 2013

SPECIAL REPORT India’s aviation market is three times larger today than it was ten years ago and traffic is expected to triple again over the next decade. It is in such dynamic environments that thoughtful and innovative deployment of technology solutions can drive the greatest value. Airports and airlines are increasingly mindful of the fact that in order to increase the value of each passenger, it is necessary to redefine the customer experience. Nevertheless, with IT being viewed as a cost centre at most airlines and airports, and given the recent downturn in the Indian aviation sector, both public and private operators are facing some challenges at present with striking a balance between investing in technology projects which will deliver returns down the track, and the more short‐term pressures to reduce costs and increase revenue today.

Passenger experience

strategic importance within organisations that was expected. “Instead it was viewed as an operational issue rather than forming an integral component of the company’s key objectives. Regulatory issues also posed some challenges to the implementation of seamless coordination between stakeholders,” the report added. In this 2013 study, it was found that while progress in terms of the deployment of new technologies has remained slow due to the challenging financial environment, there do appear to be signs of a renewed importance attached to IT. This is partly due to the increasing recognition of the potential to driver revenue by better understanding and leveraging customer profiles. “Transformational changes are not expected in the very short term, however, adopting a 2015 horizon provides some grounds for optimism that Indian airline and airport passengers will by then enjoy an enhanced travel experience, and airlines and airports in turn will be generating increased revenue from them,” the report said. INDIAN AVIATION

IT in air transport Information Technology in the Air Transport Industry (ATI) in India is preparing to transition from an activity that is focused on operations to one that transforms the passenger experience.

The survey report found that airline‐airport relationship is yet to reach a level of engagement which delivers a seamless travel experience to passengers and leverages the convergence of airline, airport and passenger technologies. This causes some frustration for passengers, particularly those that have experience travelling in other markets. Check‐in and bag‐drop for example was identified as the most stressful part of air travel by 34.1 per cent of passengers. “Due to the lack of coordination between stakeholders, airlines and airports have hesitated to promote new technologies such as mobile platforms and self‐service, and as a result passengers have not been encouraged to use them,” the report found. In many cases, it said, the nextgen traveller prefers technology over human interface and is more confident and self‐reliant than ever before. Nevertheless, it should be noted that

Sept-Oct 2013

SPECIAL REPORT

Key Findings: • Approximately US$10 billion was invested in airport modernization between 2005 and 2012. In early 2013 new airport terminals were completed at Chennai and Kolkata Airports, while Mumbai is expected to open T2 to domestic traffic in late 2013. As a result, by the end of the year new terminals will have been inaugurated at all six metro airports representing a significant milestone in the airport modernization programme. • With almost 82% of passengers surveyed carrying a smart phone, the Indian traveller is able and keen to utilise mobile platforms. However, to date the extension of core services such as reservations and check-in through a dedicated mobile application or even a mobile‐optimized interface is still at a nascent stage. • The airline-airport relationship is yet to reach a level of engagement which delivers a seamless travel experience to passengers through the convergence of airline, airport and passenger technologies. The next‐gen traveller prefers technology over human interface and is more confident and self‐reliant than ever before. • For the majority of travellers (52%), check‐in, baggage drop‐off and security and border control procedures were the most stressful points in the entire journey. Experienced passengers that have travelled overseas expressed frustration at the fact that the airport experience in India is not as seamless as in other parts of the world • 80% of travellers surveyed stated that they would be open to using self‐service facilities if they it would speed up their passage through the airport, yet only 33% were aware of the availability of check‐in kiosks. • Airlines are reluctant to aggressively promote self‐service check-in because the product is only available at a limited number of airports. They claim that infrastructure constraints and variations in pricing models also hamper take‐up. • Social media activity is currently largely limited to information rather than engagement. Younger travellers stated that they would be interested in receiving personalized promotions and exclusive offers through social media platforms. • New technologies which passengers believe would enhance their travel experience include Wi-Fi on board, live streaming of in‐flight entertainment and the ability to engage with an airline by posting real‐time feedback through an app. INDIAN AVIATION

India will also see large numbers of first time travellers entering the market every year which will necessitate that human touch points remain available. With 82 per cent of passengers surveyed carrying a smart phone, the Indian traveller is able and keen to utilise mobile platforms. However, to date the extension of core services such as reservations and check‐in through a dedicated mobile application or even a mobile‐optimized interface is still at a nascent stage. And more sophisticated and contextualised services are at least a couple of years away. According to the survey, passengers, particularly younger ones, expressed interest in using social media to engage more closely with airlines and airports. “Social media has the power to both positively and negatively influence a brand depending on how well it is managed. As a result the aviation industry has to date been cautious with respect to their presence on such platforms, however data shows that many are trialling or intending to use it,” the report said. Other new technologies which passengers believe would enhance their travel experience include Wi‐Fi on board and live streaming of in‐flight entertainment to their mobile devices. The aviation industry is increasingly becoming a retail distribution channel for all manner of goods and services. Creating technology touch points to facilitate this is potentially lucrative for both airports and airlines. “The relationship with passengers is expected to shift to a new level by the end of FY15 as a result of the introduction of cutting‐edge business intelligence systems, and competition between airports and airlines to ‘own’ the customer and drive ancillary revenues through direct or indirect engagement. “The focus of IT heads is now shifting from core operational automation to deployment of intelligent systems that deliver better customer engagement, improved distribution and yield management, route and network planning and increased asset utilization. By the end of FY15 the focus is expected to shift increasingly towards driving revenue,” it said. The provision of services by airlines to passengers on mobile devices is expected to be the next major development in the Indian airline industry as a result of the growing penetration of smart phones carried by passengers. This will also drive increasing engagement through social media. Both mobile and social media adoption today is limited. The report found that airlines continue to believe in the value that self‐service technologies can deliver and several are pursuing initiatives such as automated boarding, self‐bag drop and flight transfer kiosks over the next three years. Sept-Oct 2013

SPECIAL REPORT “However there is a need for closer coordination with airport operators to improve the physical layout and promotion of kiosks at the airport, to make them more widely available and to establish consistent pricing models that will incentivize all parties to move in the right direction,” it said. Despite encouraging aspirations to embrace new technologies, the airlines’ precarious financial condition means that availability of budget is the biggest challenge to IT implementation. Other significant challenges include the unstable regulatory outlook; identifying the IT priorities and securing support from key business stakeholders.

Airports shifting IT Productivity and airport safety were central to IT department mandates in 2012, however the focus is shifting towards cost reduction and commercialization of non‐aeronautical opportunities. Airports are also under pressure to keep pace with the growing technical sophistication of passengers and to increase the level of engagement with them. Leveraging mobile phones as a medium of engagement with passengers, and investing in the infrastructure that will enable increased use of self‐service touch‐points are high on the current agenda of private airports operators. Kiosks have generated limited traction in India to date and encouraging use of self‐service technologies by passengers will be one of the challenges for IT heads. Many of the challenges faced by airports are similar to those of their airline counterparts and include: budget availability; securing buy‐in from

INDIAN AVIATION

senior management; lack of clarity on regulatory standards; and choosing the highest impact technology solutions for passengers and airport operations. Despite the fact that airlines and airports have been developing their IT strategies relatively independently, our study highlights that both sets of stakeholders are heading in a similar direction. Both parties see the importance of improving the passenger experience through technology. There is also increasing recognition of the fact that this can drive not only cost reduction through greater efficiency, but can generate new revenue streams that deliver to the bottom line. Increased adoption of mobile platforms, self‐service and social media were identified as priorities for both airlines and airports. This is encouraging as it indicates significant common ground which should increase the prospects for collaboration. While there are certainly challenges ahead, the increased use role of technology to deliver revenue growth and operational efficiency in tomorrow’s highly competitive aviation market will be critical.

Key recommendations The white paper recommends that airlines, airports and government agencies need to develop a much more collaborative approach if they are to extract real value from technology. The business models of tomorrow involve leveraging greater value from each passenger as they pass through the travel process, from the time of booking to arrival at their destination. A variety of stakeholders contribute to the passenger experience across

multiple touch points which are increasingly inter‐connected. Collaboration is essential to develop robust solutions that recognise these inter‐dependencies. “Airlines, airports and passengers can all benefit more and more from self‐service solutions. This enables airports to use their real estate more effectively, airlines to reduce labour costs and passengers to spend less time queuing. Yet despite this convergence of interests the uptake of such technology in India has been limited because all parties have pursued such initiatives independently. A coordinated strategy with a clear plan will deliver better outcomes than an ad hoc approach. From the passenger perspective, usability and consistency are key to the adoption of new technologies,” it said. Airlines can generate competitive differentiation and new revenue from using technology to enhance the in‐flight experience. The Indian business traveller increasingly looks forward to the day that they can access Wi‐fi on board. And younger passengers are keen to be able to have live streaming of in‐flight entertainment to their mobile devices. “Airlines should focus on how they can turn such features not simply into a point of competitive differentiation but to generate ancillary revenue,” it recommended. Airlines and airports alike should leverage mobile technologies to introduce step changes in customer service and to generate new revenue streams. As a result of the growing penetration of smart phones carried by passengers mobile platforms represent an opportunity to deliver a wide range of passenger services. This will also drive increasing engagement through social media. Social media is a must, particularly for interacting with younger passengers. Airlines and airports cannot ignore the social media phenomenon and must start to develop an engagement strategy or risk being left behind. Social media initiatives must be backed up by a clear strategy, protocols and resources. Airlines in particular should better exploit the goldmine of data that their passenger profiles represent. Strategic deployment of technology to collect and mine passenger data to drive retail opportunities represents one of the greatest prospects to enhance the viability of the Indian aviation industry. But the management of this data itself needs to be in line with best practices and governmental privacy laws. Border protection agencies should increase their focus on initiatives in the field of biometrics and electronic passports. Technology initiatives in visa and immigration processing have the potential not only to increase the efficiency of passenger facilitation but to strengthen national security. Sept-Oct 2013

INTERVIEW

Gp. Capt. RK Bali Secretary, Business Aircraft Operators Association (BAOA)

‘Business Aviation is not a rich man’s toys’ In an exclusive interview with Indian Aviation, Gp. Capt. RK Bali, Secretary, Business Aircraft Operators Association (BAOA) shares the potential of Business Aviation in India and the challenges it faces today What is the current scenario of Business Aviation in India? India started seeing growth of Business Aviation in the beginning of the year 2000, attributed to the economic reforms that cracked up in 90’s. The economy started growing which also helped the sector to spread its wings wider. The existing infrastructure at that time was able to absorb this growth. However, over the years, the existing mindset that ‘Business Aviation is a rich man’s toys’ has somewhere curtailed the growth of the sector. It is visible from the fact that while the growth peaked at 26 per cent in 2006, there was a sudden slump after unexplained taxes on the purchase of aircraft were imposed in 2007. As a matter of fact, we were ahead of China in terms of the number of aircraft until 2006, lost out drastically in the following years. The situation got worst as the infrastructure support was not coming, and there was no visionary approach which raised a lot of operational challenges for the sector. The growth last year was negative. We were close INDIAN AVIATION

to 290 helicopters at one point, but are down to about 270 helicopters today. One needs to understand that Business Aviation is an enabler and not just a fancy entertainment. Operators across the country will tell you aircraft are being used because of the lack of regional connectivity.

What is the size of the market in terms of number of aircraft? Today, we have about 750 General Aviation aircraft that would include all the non-scheduled aircraft employed in charter operations. Business Aircraft, the private ones are about 150. When we speak of Business Aviation in India we are talking about people who are using the aircraft for business purposes, this could be by chartering or by owning the aircraft. So we are talking both of charter operations, business aviation and other people owing the aircraft for the movement of their company people and executive to places where they have set up their factories.

What are the challenges besides the taxation

that business aviation sector faces today in India? The industry has to carry out certain volumes of operation to ensure that they are managing the aviation companies in a profitable manner. One of the challenges is that the small companies which have one or two aircraft are finding difficult to make the business profitable because the overheads are too much. We have recommended solutions like setting up of aviation management companies which would help pool in the resources, reducing the establishment cost of these companies. This is the type of consolidation required to make the sector profitable. The utilization has to be optimal for you to be profitable. For example, a pilot flying with a commercial airliner flies about 100 hours a month and is being paid about Rs3 to 5 lakh, while a business jet operators will have to pay the same amount but just avails 20 to 30 hours of his service. The aviation management companies can help utilise people and resources optimally. BAOA Sept-Oct 2013

INTERVIEW and the operators are asking the DGCA to approve such management companies so that the establishment costs, the overhead costs go down.

So as of now there are no management companies in India? No, as of now there are no management companies in India. These companies are present in the Europe and USA and hence we are asking the regulatory authorities to set-up such companies in India as well so that the establishment costs come down and the sector becomes much more profitable.

In that case what would be the role of these management companies? These companies will provide trained people who are on their pay role for flying the aircraft as per the requirement. This will help in reducing the overall operational and establishment costs of small business entrepreneurs owning a private jet.

Do you think for growth, we should do the integration of the sector with the regional airlines for better connectivity? Yes, and I think that is already being planned by the ministry where there may be some codesharing in times to come. It is essential as this will be an ideal model for regional connectivity to be optimized. Though this has not yet implemented but the ministry is scheduling it as a part of their plan for the growth of regional connectivity in India.

What is the scenario of MRO and FBO operations in India in regards to business aviation? Are you finding difficulties there as well? Earlier, MRO had issues of importing spares but has been resolved in the last budget. Currently MRO has a great potential to grow keeping in mind the geographical advantage we enjoy. India can be developed as an MRO hub and the government is paying much more attention and resolving the issues and ensuring gradual improvement in the sector. With regards to the FBO, I don’t think there will be growth for FBOs for next 10 years at least because the government has not really thought of FBOs and are presently giving their priority to the regional connectivity.

What is the scenario for MRO facility availability in India? Do we have enough MRO facilities for business aircraft? INDIAN AVIATION

BAOA’s recommendations to the Government ●● Firstly, to provide the required infrastructure for business and general aviation to grow ●● The taxation policies on purchase of aircraft should be reconsidered and should be significantly brought down ●● Requirements of NSOPs, which is much different from the commercial airliners; should be understood and considered While framing policies ●● We are asking the regulatory authorities and DGCA to give approval to International Standard for Business Operations (ISBO) which is a document advised by the International Business Aircraft Council, matching the ICAO requirements for operations of business aircrafts ●● Issues of Bureau of Civil Aviation Securities have been taken up regarding requirement for crew training ●● The Operational Management Development Agreement (OMDA) Which was fined with Delhi and Mumbai in 2006 needs to be relooked for the other airports which are coming up. Unless you include these specific requirements of Business & General Aviation, these airports will not become regional hubs for providing the regional connectivity

While facilities for first, second lines are there for the MROs, we need to grow our services in engine overhaul and other major works. Overhaul and repair facilities are very limited. The airlines have it, but services for non-schedule are not as widely available. The engines have to go abroad for overhaul; therefore I think we should come up with these facilities in India as it has a lot of potential for growth.

Most of the reports suggest that India is going to be the number one Business Aviation country and the number of aircraft in India will increase with billionaires coming up. Despite all the difficulties the sector faced, do you still think India have great potential and will see more number of business aircraft in near future? The growth potential is definitely there considering the huge population India has, but we need to ensure that policies are matched to the potential for full optimization. It is not just

the increasing billionaire number that will propel the growth but the advancement in regional connectivity will also play a big role. Business aviation would help in providing 60-70 per cent regional connectivity through code-sharing which we are already negotiating with the ministry. The potential is definitely there but it remains on paper unless you are very determined to make sure that you will do everything possible to optimize that potential and that determination has to be show by the government and the policymakers.

How many aircraft would be added in next five years? By 2020, we are looking at close to 2000 aircraft from the current 750. A yearly growth of 12-15 per cent will easily achieve the number irrespective of the factors which may affect or dampen the growth.

What is the global and domestic trend in this sector? Are there any changes in clientele and patterns of aircraft usage? Last two years have been a little stagnant and negative but again it is gradually picking up and all the OEMS all over the world are very optimistic about India’s business aviation growing. We are given lot of importance in the international forums. The growth is going to take place and we are very optimistic about it.

What is the main role of Business Aircraft Operator’s Association (BAOA)? When did you establish? Any major achievement so far? Our association is a not for profit organization, we work for the cause of business and general aviation industry in India. The industry includes NSOP’s, helicopter operators, and the business operators and we formulate a voice for them. Our task has been to change the mindset and make the regulatory authorities realise the requirement of business aviation to grow for growing India. We were formed two year ago, and our major achievement has been to bring about the change in perception that ‘business aircraft is a rich man’s toy’. We have been projecting the case of business aviation as a serious business to the regulatory authorities in various forums and conferences. There have been a lot of regulatory issues which we have been successful in handling to a large extent. Today we are working as a team with Director General Civil Aviation to help the sector grow and make it a profitable business. Sept-Oct 2013

SPECIAL REPORT

Baron Eagle launches India’s first Global Jet Card A

n option to substitute high value private jet ownership finally gets addressed with the launch of Baron Eagle, India’s first “Global Jet Card”. Baron Eagle is a solution for all those who wish to own an aircraft for their utility and business applications, now without the cost of aircraft ownership and without the hassles of the management, maintenance and compliance obligations that comes along with the ownership. Internationally, Jet cards provide guaranteed access to business jets at reasonable hourly rates. Jet cards are prepaid cards where a set amount is deposited against a specified number of flying hours based on various aircraft requirements. The balances are adjusted based on the usage over a period of time. “By launching India’s first Global Jet Card, we aim to redefine ownership of a private aircraft. With the dollar value touching all-time high it may not be the appropriate time to buy an aircraft. However, Baron Eagle Membership provides an ideal choice for customers to avail all the benefits of owning an aircraft at a fraction of ownership cost” said Rajeev Wadhwa, Chairman & CEO, Baron Luxury and Lifestyles Pvt. Ltd. Baron Eagle provides all the benefits of a jet card but has added unique functionality whereby it provides the most flexible program across various aircraft types including rotary and fixed wing aircraft. “The program enables its members assured availability even when they travel abroad and will take care of their private flying needs internationally. Further, the card has been designed with flexibility of transferability, is refundable and can be used as corporate/individual gift for business and personal needs,” the company said. Baron Eagle membership is available in three categories, namely Baron INDIAN AVIATION

The membership program will offer individuals and corporates all the benefits of owning a large fleet of aircraft at a fraction of the ownership cost and will allow its members to fly private to most international destinations

Platinum Membership, Baron Gold Membershipand Baron Silver Membership. “The philosophy of personalization, prioritization and customization is based on providing to the customers a world class experience unique to the individual members’ tastes. We have invested heavily in designing world class processes and are investing heavily in training to ensure strict execution of these deliverables which will set a new standard in the industry” added Rajeev Wadhwa. Baron Luxury and Lifestyles Private is focused on the luxury and lifestyle businesses with its headquarters in Mumbai. The company’s business division “Baron Aviation” boasts of one of the strongest and most experienced teams in the General Aviation industry in India and has one of the largest fleet of aircraft to offer with plans to fly 5,000 hours for the year 2013-14. Baron aims to corporatize General Aviation market in India by consolidating the aircraft inventory, aggregating customers and professionalizing the approach towards quality of services to match with the global standards. With an expected demand for 450 new aircraft over the next few years, General Aviation market in India in expected to grow by ~10 per cent per annum for the next four years. Baron aims to tap into this demand and plans to have over 500 members in next three years with its customer focus on Corporates, celebrities and Ultra HNIs and expects to fly over 25,000 hours by 2016-17. Baron fleet comprises of single and twin engine helicopters, cost effective and efficient turboprops as well as mid-size and large executive jets.

Sept-Oct 2013