New Delhi: Having some money may become a bigger problem than easing the troubles cash-strapped national carrier Air India. Within hours of getting approval for Rs 1,200 crore equity infusion from the Cabinet Committee of Economic Affairs, creditors are eyeing to get their dues.
First off the block was state-owned Airports Authority of India, which claims to have Rs 680 crore as dues from the Maharaja. "AAI chairman V P Agrawal shot off a letter to AI management on Friday morning asking for the long-pending dues to be cleared. Last fiscal, when AI got Rs 800 crore equity infusion, we managed to get Rs 100 crore with great difficulty," said AAI sources.
"Private airlines complain to us that AI has the largest dues but we turn a blind eye to them. Unless our ministry allows us to take strong steps, there's no point in even threatening AI as they will know it has no meaning," AAI sources said.
Recently, oil marketing companies put AI on cashand-carry for the first time.
Friday, December 31, 2010
Oil companies raise ATF rates by about 2%
New Delhi: State-owned oil firms today raised jet fuel prices by almost 2 per cent, the sixth straight increase in rates since October when international crude oil prices started climbing. Prices of aviation turbine fuel, or ATF, in Delhi have been increased by Rs 935 a kilolitre, or 1.99 per cent, to Rs 47,816 per kl with effect from Friday midnight, an official of Indian Oil Corp (IOC), the nation's largest fuel retailer, said.
The latest increase comes on the back of a massive 3.6 per cent hike on December 15. With this raise, IOC and sister public sector retailers Bharat Petroleum and Hindustan Petroleum have raised prices of ATF, on six occasions since October. The ATF price in Delhi on October 1 was Rs 40,728.52 per kl. The rates were raised 17.4 per cent in six tranches since then, in tandem with a surge in global oil prices to the $90-per-barrel mark.
Jet fuel will cost Rs 48,059 per kl in Mumbai, home to the nation’s busiest airport, from tomorrow, as against Rs 47,084.40 per kl currently.
The latest increase comes on the back of a massive 3.6 per cent hike on December 15. With this raise, IOC and sister public sector retailers Bharat Petroleum and Hindustan Petroleum have raised prices of ATF, on six occasions since October. The ATF price in Delhi on October 1 was Rs 40,728.52 per kl. The rates were raised 17.4 per cent in six tranches since then, in tandem with a surge in global oil prices to the $90-per-barrel mark.
Jet fuel will cost Rs 48,059 per kl in Mumbai, home to the nation’s busiest airport, from tomorrow, as against Rs 47,084.40 per kl currently.
Flying in New Year gets costlier
Mumbai: The year 2011 will be bringing in heavier airfares and the first step in that direction has already been taken with fuel surcharge up by Rs 100 to Rs 200 on domestic routes.
"In order to reflect the multiple recent increases in ATF, Kingfisher Airlines has increased the fuel surcharge by Rs 100-200 on domestic flights from today," said a Kingfisher Airlines spokes-person on Friday. The move came soon after state-owned oil firms hiked fuel prices by about 2% on Friday, taking up the cost of aviation turbine fuel in Mumbai to Rs 48,000. On December 15, fuel prices were hiked by 3.6%. On Friday, IndiGo, Go Air, SpiceJet and Air India confirmed that they hadn't increased fuel charge yet. Jet Airways did not comment. As has happened in the past, airlines are expected to follow suit and increase fuel charge on domestic routes.
The travel industry was also abuzz with news that fuel surcharge has been increased by some airlines on the international routes as well. Kingfisher Airlines said it hadn't done so, while the Jet Airways spokesperson refused to comment.
"Airlines have in the past, too increased charges surreptitiously. No one notices when say, the fare on a given international route goes up by a few hundred rupees. This time around, it looks like some airlines have increased fuel charge on international routes by $20," said a travel agent, requesting not to be quoted. He could not confirm on which of the routes had the charge gone up and exactly by how much.
"In order to reflect the multiple recent increases in ATF, Kingfisher Airlines has increased the fuel surcharge by Rs 100-200 on domestic flights from today," said a Kingfisher Airlines spokes-person on Friday. The move came soon after state-owned oil firms hiked fuel prices by about 2% on Friday, taking up the cost of aviation turbine fuel in Mumbai to Rs 48,000. On December 15, fuel prices were hiked by 3.6%. On Friday, IndiGo, Go Air, SpiceJet and Air India confirmed that they hadn't increased fuel charge yet. Jet Airways did not comment. As has happened in the past, airlines are expected to follow suit and increase fuel charge on domestic routes.
The travel industry was also abuzz with news that fuel surcharge has been increased by some airlines on the international routes as well. Kingfisher Airlines said it hadn't done so, while the Jet Airways spokesperson refused to comment.
"Airlines have in the past, too increased charges surreptitiously. No one notices when say, the fare on a given international route goes up by a few hundred rupees. This time around, it looks like some airlines have increased fuel charge on international routes by $20," said a travel agent, requesting not to be quoted. He could not confirm on which of the routes had the charge gone up and exactly by how much.
Security breach at Patna airport
Patna: In a major breach of security at the Jayapraksh Narayan Interna-tional Airport here on Wednesday, one Kishor Paswan (40) came on to the runway when a plane was about to take off. The incident occurred at around 6:45 pm. There were over 150 passengers on board the G8-344 Go Air Patna-Delhi flight.
Passengers virtually screamed when Paswan reportedly waved at them from outside and tried to touch the plane, sources said.
The pilot immediately pressed the panic button as he informed air safety officials about the incident. Central Industrial Security Force (CISF) personnel then rushed in and took the trespasser into custody.
No illegal object was recovered from him so far. Paswan had his voter ID card with him and a towel, sources said.
Paswan's connection with any militant or terrorist organization has not been established so far. The trespasser was reportedly a lunatic.
The man reportedly hails from Begusarai and had boarded a train for Patna on Tuesday. He is said to be a labourer and reportedly alighted at Phulwari Sharif railway station last night. He had sneaked into the airport from Phulwari Sharif railway station at around 5 pm on Wednesday.
Passengers virtually screamed when Paswan reportedly waved at them from outside and tried to touch the plane, sources said.
The pilot immediately pressed the panic button as he informed air safety officials about the incident. Central Industrial Security Force (CISF) personnel then rushed in and took the trespasser into custody.
No illegal object was recovered from him so far. Paswan had his voter ID card with him and a towel, sources said.
Paswan's connection with any militant or terrorist organization has not been established so far. The trespasser was reportedly a lunatic.
The man reportedly hails from Begusarai and had boarded a train for Patna on Tuesday. He is said to be a labourer and reportedly alighted at Phulwari Sharif railway station last night. He had sneaked into the airport from Phulwari Sharif railway station at around 5 pm on Wednesday.
LCCs made skies more democratic & gave wings to middle-class dream
In a country that can perhaps boast of the world’s most fickle and price-sensitive customers, low-cost flying got off to a slightly late start.
Not surprisingly, when Capt GR Gopinath launched his budget airline, Air Deccan, in 2003, he started a revolution of sorts.
The airline's credo—SimplyFly—opened up the floodgates for India's aviation industry. Business travellers, who were by and large using state-owned Indian Airlines and Alliance Air for travelling to tier-II cities, now had an option. People who had never flown before too got to experience the convenience of the world's fastest commercial transport system.
And if they had to pay for food and drinks, some didn’t seem to mind. Others had an ingenious solution. Stories about families merrily settling down to home-cooked meals on Air Deccan flights were quite common—after all many were first-time fliers who were used to doing the same on train journeys.
Air Deccan was soon joined by Spicejet (formerly Modiluft and RoyalAir), Jeh Wadia's GoAir (2005), and Interglobe founder Rahul Bhatia's Indigo (2006). The low-cost carrier (LCC) was now mainstream.
However, unlike other countries where such carriers operate from separate airports and pay lower charges to aviation authorities, Indian LCCs have operated from existing airports, paying similar airport usage fees and ATF costs as full-service carriers (FSCs) like Jet Airways and Kingfisher. That put the business model of the Indian LCC under question.
But working with lower sales costs through Internet bookings, greater number of seats per aircraft, and high seat utilisation factors (a critical factor for profitability), they began to bring in the numbers. FSCs too joined in with their own versions
Not surprisingly, when Capt GR Gopinath launched his budget airline, Air Deccan, in 2003, he started a revolution of sorts.
The airline's credo—SimplyFly—opened up the floodgates for India's aviation industry. Business travellers, who were by and large using state-owned Indian Airlines and Alliance Air for travelling to tier-II cities, now had an option. People who had never flown before too got to experience the convenience of the world's fastest commercial transport system.
And if they had to pay for food and drinks, some didn’t seem to mind. Others had an ingenious solution. Stories about families merrily settling down to home-cooked meals on Air Deccan flights were quite common—after all many were first-time fliers who were used to doing the same on train journeys.
Air Deccan was soon joined by Spicejet (formerly Modiluft and RoyalAir), Jeh Wadia's GoAir (2005), and Interglobe founder Rahul Bhatia's Indigo (2006). The low-cost carrier (LCC) was now mainstream.
However, unlike other countries where such carriers operate from separate airports and pay lower charges to aviation authorities, Indian LCCs have operated from existing airports, paying similar airport usage fees and ATF costs as full-service carriers (FSCs) like Jet Airways and Kingfisher. That put the business model of the Indian LCC under question.
But working with lower sales costs through Internet bookings, greater number of seats per aircraft, and high seat utilisation factors (a critical factor for profitability), they began to bring in the numbers. FSCs too joined in with their own versions
An aviation boom year that was 2010
Mumbai: The total number of passengers carried in 2010 (January-November) was 468.09 lakh compared to 393.53 lakh in the corresponding period last year. Aircraft movement grew 3.4% year on year while cargo movement rose 26.9% year on year.
This growth in passenger traffic has also been reflected in the average passenger load factors this year.
According to data available with Director General of Civil Aviation, passenger load factors for domestic operations in India were 70.1% in 2009 (January-December), which have improved to 76.1% in 2010 (January- November).
Total number of domestic flight departures was around 479,148 in 2010 (January- November) compared with 508,051 in 2009 (January-December). The annualised figure for 2010 works out to 522,706, about 2.88% higher than 2009.
This growth in passenger traffic has also been reflected in the average passenger load factors this year.
According to data available with Director General of Civil Aviation, passenger load factors for domestic operations in India were 70.1% in 2009 (January-December), which have improved to 76.1% in 2010 (January- November).
Total number of domestic flight departures was around 479,148 in 2010 (January- November) compared with 508,051 in 2009 (January-December). The annualised figure for 2010 works out to 522,706, about 2.88% higher than 2009.
India evaluating R&D for indigenous 90-seater civilian aircraft
New Delhi: A grant of Rs 49.56 crore has been made for conducting a feasibility study for an indigenous 90 seater civilian plane to fly on regional and feeder routes, an official said on Thursday. "A feasibility study with a total cost of Rs 49.56 crore with a duration of one year for development of a
National Civil Aircraft for regional connectivity is being conducted," said the spokesperson of the science and technology ministry.
The study has been commissioned by the state run Council for Scientific and Industrial Research under a 15 member committee and will be in a collaboration with the aviation arm of the research institution, National Aerospace Laboratories.
According to officials involved in the project, the design and development of the prototype is estimated to cost around $1 billion (a little over Rs.5,000 crore). The flight trials are expected in 2015-16.
Another mandate given to the expert panel is to explore a public-private partnership right at the beginning. Interested industrial houses will be asked to submit their expression of interest for selection, officials said.
Earlier, a high powered committee (HPC) was constituted under space scientist G. Madhavan Nair to look into the feasibility of the projec
National Civil Aircraft for regional connectivity is being conducted," said the spokesperson of the science and technology ministry.
The study has been commissioned by the state run Council for Scientific and Industrial Research under a 15 member committee and will be in a collaboration with the aviation arm of the research institution, National Aerospace Laboratories.
According to officials involved in the project, the design and development of the prototype is estimated to cost around $1 billion (a little over Rs.5,000 crore). The flight trials are expected in 2015-16.
Another mandate given to the expert panel is to explore a public-private partnership right at the beginning. Interested industrial houses will be asked to submit their expression of interest for selection, officials said.
Earlier, a high powered committee (HPC) was constituted under space scientist G. Madhavan Nair to look into the feasibility of the projec
Ground handling policy delayed at Mumbai airport
Mumbai: The new ground handling policy (GHP) that was to come into existence from January 1, 2011 has again been postponed by 15 days. This is because the Delhi high court (HC) has asked the government to ensure that certain security functions are still handled by them rather than outsourced.
The loss of jobs of 22,000 to 30,000 working with 35 ground handling agencies at Mumbai airport is at least safe for the next 15 days.“According to an interim order of the Delhi HC on December 23, the decision on the new GHP will be taken by January 15, 2011,” says an official from Mumbai International Airport Limited (MIAL).“This is because the HC wants government to take care of 13 security functions and not hand them over to private parties,” he says.
This is for the third time that the new GHP that was to be implemented in 2007 at six metro airports — Delhi, Mumbai, Kolkatta, Chennai, Bangalore and Hyderabad —missed its deadline for the third time.
The loss of jobs of 22,000 to 30,000 working with 35 ground handling agencies at Mumbai airport is at least safe for the next 15 days.“According to an interim order of the Delhi HC on December 23, the decision on the new GHP will be taken by January 15, 2011,” says an official from Mumbai International Airport Limited (MIAL).“This is because the HC wants government to take care of 13 security functions and not hand them over to private parties,” he says.
This is for the third time that the new GHP that was to be implemented in 2007 at six metro airports — Delhi, Mumbai, Kolkatta, Chennai, Bangalore and Hyderabad —missed its deadline for the third time.
'Air India has to approach BRPSE for revival'
New Delhi: Air India seeking Rs 1,200-crore equity infusion from the government not withstanding, the troubled national carrier will approach the PSU revival body in the Department of Public Enterprises for a “package”.
Air India has roped in a private agency for working out financial details of the package, which it will seek from the Board for Reconstruction of Public Sector Enterprises (BRPSE).
"The Department of Public Enterprises and BRPSE are for revival. For revival package, they (Air India) will come to us....” Heavy Industries and Public Enterprises Minister Vilasrao Deshmukh said after Civil Aviation Minister Praful Patel met him here today.
About the meeting, Deshmukh said, “We had a good discussion. We both had some issues which we have settled”. He said there were no differences between the two ministries over revival plan of Air India, which has accumulated losses over Rs 5,500 crore.
Air India has roped in a private agency for working out financial details of the package, which it will seek from the Board for Reconstruction of Public Sector Enterprises (BRPSE).
"The Department of Public Enterprises and BRPSE are for revival. For revival package, they (Air India) will come to us....” Heavy Industries and Public Enterprises Minister Vilasrao Deshmukh said after Civil Aviation Minister Praful Patel met him here today.
About the meeting, Deshmukh said, “We had a good discussion. We both had some issues which we have settled”. He said there were no differences between the two ministries over revival plan of Air India, which has accumulated losses over Rs 5,500 crore.
Want bailout? Trim wages: Cabinet tells national carrier
Mumbai: The government has given a green signal to the Air India management on the sensitive issue of wage rationalisation of its employees.
The cash-strapped carrier has been asked to ‘work towards’ trimming the wage bill — one of the key milestones in the airline’s revival plan. Approving Rs 1,200 crore bailout installment, the cabinet withheld decision on the operationalisation of Strategic Business Units (SBUs). At almost Rs 3,000 crore per annum, Air India’s wage costs comprise 17 per cent of its overall operating costs. The airline had earlier drawn a plan to cut wages by Rs 500 crore but was able to achieve only Rs 100 crore saving on this account. In its proposal, the airline had accepted that it had made little progress in achieving wage rationalisation goals. The Cabinet Committee on Economic Affairs (CCEA) cleared Rs1,200 crore as equity infusion in the loss-making carrier in its meeting on Thursday
The cash-strapped carrier has been asked to ‘work towards’ trimming the wage bill — one of the key milestones in the airline’s revival plan. Approving Rs 1,200 crore bailout installment, the cabinet withheld decision on the operationalisation of Strategic Business Units (SBUs). At almost Rs 3,000 crore per annum, Air India’s wage costs comprise 17 per cent of its overall operating costs. The airline had earlier drawn a plan to cut wages by Rs 500 crore but was able to achieve only Rs 100 crore saving on this account. In its proposal, the airline had accepted that it had made little progress in achieving wage rationalisation goals. The Cabinet Committee on Economic Affairs (CCEA) cleared Rs1,200 crore as equity infusion in the loss-making carrier in its meeting on Thursday
Air India gets Rs 1,200-cr lifeline
New Delhi: The government has approved the infusion of Rs 1200 crore as additional equity in cash-strapped Air India with a condition that its management rationalise the wage structure of over 25,000 employees. “The infusion of enhanced equity fund would give much needed impetus to the Air India for its revival plan,” an official statement said.
The government had released R800 crore in February 2010 as equity induction in the National Aviation Company of India Limited (NACIL), now Air India Limited, for its revival plan.
The government had released R800 crore in February 2010 as equity induction in the National Aviation Company of India Limited (NACIL), now Air India Limited, for its revival plan.
Air India Express to shift base to Kerala
Nedumbassery: The headquarters of Air India Express is set to be shifted from Mumbai to Kerala, with the Chairman and Managing Director of Air India, Arvind Jadhav, issuing the order.
A press release from the airline on Thursday said the headquarters of Air India Charters Ltd., the wholly owned subsidiary of the national carrier that operates the no-frills Air India Express flights, would be shifted to Kerala in pursuance of a decision taken at its board meeting on October 8. While the operational and administrative offices would be in Kochi, the engineering hub would be in Thiruvananthapuram.
The airline officials said the move to Kochi was expected to begin by January 15, while the engineering hub would be shifted when the maintenance hangar became operational in the State capital.
For Air India Express, Kerala is an important market in terms of capacity and air-connectivity. Seventeen of its 21 Boeing 737-800 aircraft operate out of the three airports in the State. The shift will help release spare aircraft fast if any flights encounter snags.
The company is now renovating its office on Durbar Hall Road here to seat nearly 50 employees to be transferred from Mumbai. In the State capital, 200 employees will have to be accommodated.
A press release from the airline on Thursday said the headquarters of Air India Charters Ltd., the wholly owned subsidiary of the national carrier that operates the no-frills Air India Express flights, would be shifted to Kerala in pursuance of a decision taken at its board meeting on October 8. While the operational and administrative offices would be in Kochi, the engineering hub would be in Thiruvananthapuram.
The airline officials said the move to Kochi was expected to begin by January 15, while the engineering hub would be shifted when the maintenance hangar became operational in the State capital.
For Air India Express, Kerala is an important market in terms of capacity and air-connectivity. Seventeen of its 21 Boeing 737-800 aircraft operate out of the three airports in the State. The shift will help release spare aircraft fast if any flights encounter snags.
The company is now renovating its office on Durbar Hall Road here to seat nearly 50 employees to be transferred from Mumbai. In the State capital, 200 employees will have to be accommodated.
Flight delays costing airlines Rs. 25-50 crore
New Delhi: Airlines which were ideally expecting to ring in the holiday season with festive flourish may instead have to deal with a rude shock, courtesy the weather.
Dense fog has gripped North and East India and heavy snowfall has crippled international air travel, thus, throwing airline schedules off gear. Airlines are expected to lose Rs. 20-50 crore due to this.
"With weather playing havoc, you have to suffer losses due to delay, re-routing getting to an airport where you don’t have facilities...all this account for losses and Rs. 20-50 crore is an average which airlines lose during the fog period," said Ankur Bhatia, executive director of Bird Group. Long haul international operations too are not faring well. Reeling under intense snow in Europe and US, Indian carriers had to cancel flights as operations are being brought to a standstill. Airlines are providing refunds for the ticket for flights which were cancelled.
Dense fog has gripped North and East India and heavy snowfall has crippled international air travel, thus, throwing airline schedules off gear. Airlines are expected to lose Rs. 20-50 crore due to this.
"With weather playing havoc, you have to suffer losses due to delay, re-routing getting to an airport where you don’t have facilities...all this account for losses and Rs. 20-50 crore is an average which airlines lose during the fog period," said Ankur Bhatia, executive director of Bird Group. Long haul international operations too are not faring well. Reeling under intense snow in Europe and US, Indian carriers had to cancel flights as operations are being brought to a standstill. Airlines are providing refunds for the ticket for flights which were cancelled.
Patel asks Cabinet to take a call on Air India wage cuts
New Delhi: Civil Aviation minister Praful Patel, who held a series of meeting with the government’s senior leadership, to canvas support for Air India, has another hurdle to cross ahead of the Cabinet meeting tomorrow. He is scheduled to meet Heavy Industries and Public Enterprises (HIPE) minister Vilasrao Deshmukh prior to the meeting to seek his ministry’s support.
The Department of Public Enterprises (DPE) has raised an objection to the ministry’s proposal stating the airline has incurred losses for the last three years, and hence qualified to be declared ‘sick’. The HIPE ministry has contended that the company should have informed the Board for Industrial and Financial Reconstruction (BIFR). “Air India has rejected DPE’s contention. National Aviation Company of India Limited (NACIL), formed after merging Air India and Indian Airlines, was registered three years ago. Under the BIFR rules, a company which is filing for a ‘sick’ status, must have been registered for at least five years,”a civil aviation ministry official said.
In its proposal to the Cabinet, the ministry has sought Rs 1,200 crore additional equity support and passed on the onus of taking a decision on wage restructuring to the Cabinet. Accepting that AI had made “little progress” in tweaking wages and allowance “due to the probability of industrial unrest”, it said that the AI management be allowed to renegotiate agreements with unions to ensure the anticipated savings on employees cost.
The Department of Public Enterprises (DPE) has raised an objection to the ministry’s proposal stating the airline has incurred losses for the last three years, and hence qualified to be declared ‘sick’. The HIPE ministry has contended that the company should have informed the Board for Industrial and Financial Reconstruction (BIFR). “Air India has rejected DPE’s contention. National Aviation Company of India Limited (NACIL), formed after merging Air India and Indian Airlines, was registered three years ago. Under the BIFR rules, a company which is filing for a ‘sick’ status, must have been registered for at least five years,”a civil aviation ministry official said.
In its proposal to the Cabinet, the ministry has sought Rs 1,200 crore additional equity support and passed on the onus of taking a decision on wage restructuring to the Cabinet. Accepting that AI had made “little progress” in tweaking wages and allowance “due to the probability of industrial unrest”, it said that the AI management be allowed to renegotiate agreements with unions to ensure the anticipated savings on employees cost.
As economy expands, airlines hope for another year of growth
India’s airlines enter 2011 comforted by double-digit growth in passenger traffic that promises to stretch into a second year as the economy grows at a faster pace, helping support their ambitious expansion plans.
Jet Airways (India) Ltd, Kingfisher Airlines Ltd, IndiGo run by InterGlobe Aviation Ltd, Air India Ltd and smaller airlines have carried a record 50 million passengers in 2010, an increase of 18% over the year-ago period.
And, after posting a combined loss of $2 billion (Rs.9,020 crore today) in each of the previous two years, airlines are set for a profit of $300 million in the fiscal year to March 2011, estimates the consultancy Centre for Asia Pacific Aviation (Capa).
“It’s certainly a year of recovery. Everyone is now at a break-even or profitable,” says Aditya Ghosh, president of budget carrier IndiGo.
India’s airlines have emerged from two years of turbulence during which they were beset by surging costs, excess capacity and intense competition as well as fallout from the global financial crisis that caused passenger traffic to slump.
“Almost all factors that drive airline profitability—passenger demand, load factors, yields and oil prices—have largely been favourable in 2010,” says JPMorgan’s Mumbai-based analyst Princy Singh.
JPMorgan India has started tracking airline stocks that are back in favour with investors who shunned them in the past three years.
Jet Airways shares have risen 29% since the start of 2010 to Rs.715 at the close of trading on Wednesday and SpiceJet Ltd rose 35% to Rs.76.90. But Kingfisher Airlines declined marginally by 1.58% to Rs.62.05. The Bombay Stock Exchange benchmark Sensex rose 16.67% in the same period.
Jet Airways (India) Ltd, Kingfisher Airlines Ltd, IndiGo run by InterGlobe Aviation Ltd, Air India Ltd and smaller airlines have carried a record 50 million passengers in 2010, an increase of 18% over the year-ago period.
And, after posting a combined loss of $2 billion (Rs.9,020 crore today) in each of the previous two years, airlines are set for a profit of $300 million in the fiscal year to March 2011, estimates the consultancy Centre for Asia Pacific Aviation (Capa).
“It’s certainly a year of recovery. Everyone is now at a break-even or profitable,” says Aditya Ghosh, president of budget carrier IndiGo.
India’s airlines have emerged from two years of turbulence during which they were beset by surging costs, excess capacity and intense competition as well as fallout from the global financial crisis that caused passenger traffic to slump.
“Almost all factors that drive airline profitability—passenger demand, load factors, yields and oil prices—have largely been favourable in 2010,” says JPMorgan’s Mumbai-based analyst Princy Singh.
JPMorgan India has started tracking airline stocks that are back in favour with investors who shunned them in the past three years.
Jet Airways shares have risen 29% since the start of 2010 to Rs.715 at the close of trading on Wednesday and SpiceJet Ltd rose 35% to Rs.76.90. But Kingfisher Airlines declined marginally by 1.58% to Rs.62.05. The Bombay Stock Exchange benchmark Sensex rose 16.67% in the same period.
AI to tap biz chambers for turnaround
Ahmedabad: Troubled state-owned airline Air India is reaching out to business chambers in nonmetros with proposals to start intra-state services.
The airline is reeling under Rs 19,000-crore debt and chairman Arvind Jadhav is now tapping business travellers by introducing 40-seater planes on routes within states. The airline could also take in state governments as equity partners for regional services.
"Efficiency and marketing will be key factors for a turnaround," Jadhav told Gujarat Chamber of Commerce & Industry members on Tuesday evening. The chairman viewed Gujarat, Kerala, Tamil Nadu and Punjab as promising states for air-services .
People prefer to drive down in Gujarat known for its expressways, toll roads and infrastructure . However, a Gujarat industrialist told the GCCI meeting that businessmen would prefer to fly from Ahmedabad to Surat instead of covering 250 km by car in four hours.
The Air India chairman has sought four preferred international and domestic routes along with the weekly potential of passenger and cargo load. The airline was keen to inter-connect Ahmedabad, Surat, Jamnagar , Bhavnagar, Rajkot, Surat, Bhuj and Kandla, Jadhav said, adding state governments of Madhya Pradesh and Andhra Pradesh have approached him for intra-state connectivity. He said, he would seek minimum traffic and relief in fuel taxes from interested states.
The Centre infused Rs 800 crore additional equity in Air India in 2009-10 and is expected to get Rs 1,200 crore from the government in this financial year. The civil aviation ministry has recommended Rs 2,000 crore additional equity infusion for the next fiscal.
Air India has a fleet of 160 aircraft and 31,000 employees, a number which Jadhav would like reduce, and lower the present aircraft-to-employees ratio of 1:214 to acceptable levels. The airline lowered its net loss to Rs 5,551 crore from Rs 7,189 crore last year.
The airline is reeling under Rs 19,000-crore debt and chairman Arvind Jadhav is now tapping business travellers by introducing 40-seater planes on routes within states. The airline could also take in state governments as equity partners for regional services.
"Efficiency and marketing will be key factors for a turnaround," Jadhav told Gujarat Chamber of Commerce & Industry members on Tuesday evening. The chairman viewed Gujarat, Kerala, Tamil Nadu and Punjab as promising states for air-services .
People prefer to drive down in Gujarat known for its expressways, toll roads and infrastructure . However, a Gujarat industrialist told the GCCI meeting that businessmen would prefer to fly from Ahmedabad to Surat instead of covering 250 km by car in four hours.
The Air India chairman has sought four preferred international and domestic routes along with the weekly potential of passenger and cargo load. The airline was keen to inter-connect Ahmedabad, Surat, Jamnagar , Bhavnagar, Rajkot, Surat, Bhuj and Kandla, Jadhav said, adding state governments of Madhya Pradesh and Andhra Pradesh have approached him for intra-state connectivity. He said, he would seek minimum traffic and relief in fuel taxes from interested states.
The Centre infused Rs 800 crore additional equity in Air India in 2009-10 and is expected to get Rs 1,200 crore from the government in this financial year. The civil aviation ministry has recommended Rs 2,000 crore additional equity infusion for the next fiscal.
Air India has a fleet of 160 aircraft and 31,000 employees, a number which Jadhav would like reduce, and lower the present aircraft-to-employees ratio of 1:214 to acceptable levels. The airline lowered its net loss to Rs 5,551 crore from Rs 7,189 crore last year.
Feasibility study for 90-seat Indian civilian aircraft
New Delhi: A high-powered committee under space scientist G. Madhavan Nair is conducting a feasibility study for an indigenous 90-seat civilian plane to fly on regional and feeder routes, an official spokesperson said Wednesday.
"The National Civil Aircraft Development Project involves configuration, market survey, development of a joint venture and full-scale engineering development for the ambitious plan," said the spokesperson for the science and technology ministry here.
The project is also expected to draw from the experience of aerospace experts in state-run institutions such as the Defence Research and Development Organisation and Hindustan Aeronautics.
The study has been commissioned by the state-run Council for Scientific and Industrial Research under a 15-member committee and will be in a collaboration with the aviation arm of the research institution, National Aerospace Laboratories .
"The report is expected sometime in the middle of 2011."
The flight trials are expected in 2015-16.
"The National Civil Aircraft Development Project involves configuration, market survey, development of a joint venture and full-scale engineering development for the ambitious plan," said the spokesperson for the science and technology ministry here.
The project is also expected to draw from the experience of aerospace experts in state-run institutions such as the Defence Research and Development Organisation and Hindustan Aeronautics.
The study has been commissioned by the state-run Council for Scientific and Industrial Research under a 15-member committee and will be in a collaboration with the aviation arm of the research institution, National Aerospace Laboratories .
"The report is expected sometime in the middle of 2011."
The flight trials are expected in 2015-16.
Airfares remain on erratic flight path
Mumbai: The recent reduction in airfares may be giving flyers a reason to smile, but their joy may just be short-lived. Though the skyrocketing airfares seem to have been reined in at the moment, prices are unlikely to remain stable at current figures for long, say industry experts.
Air Passengers Association of India (APAI) President Sudhakar Reddy said, "The fares have come down for now but airlines are eminently capable of increasing fares at the last minute.
We need to continue our push for a stronger regulatory body to supervise the process of deciding airfares. While fares are expected to climb down further in mid-January, a long-term solution to the problem will only be found when the regulatory body is put in place."
While admitting that airfares on the four busiest sectors from Mumbai Delhi, Kolkata, Bangalore and Goa have become cheaper, travel agents expressed doubts about current levels being sustained.
"The fares are relatively cheaper now than they were during Diwali, but tickets which used to cost Rs 3,500 on the Delhi sector before Diwali now cost Rs 5,500 and more. A further hike is expected around March-end," said Devang Sanghvi of Venus Holidays.
"Fares are cheaper compared to the period during and after Diwali, but stability is lacking. Fares can double or triple within hours," pointed out ticketing agent Vikash Kumar.
"I booked a ticket to Goa for the New Year and my ticket from Mumbai cost me Rs 3,500, but the return ticket is costing me Rs 13,000. I fail to understand why I am being charged so much," said bewildered frequent flyer and Borivli resident D Srinivasan.
Air Passengers Association of India (APAI) President Sudhakar Reddy said, "The fares have come down for now but airlines are eminently capable of increasing fares at the last minute.
We need to continue our push for a stronger regulatory body to supervise the process of deciding airfares. While fares are expected to climb down further in mid-January, a long-term solution to the problem will only be found when the regulatory body is put in place."
While admitting that airfares on the four busiest sectors from Mumbai Delhi, Kolkata, Bangalore and Goa have become cheaper, travel agents expressed doubts about current levels being sustained.
"The fares are relatively cheaper now than they were during Diwali, but tickets which used to cost Rs 3,500 on the Delhi sector before Diwali now cost Rs 5,500 and more. A further hike is expected around March-end," said Devang Sanghvi of Venus Holidays.
"Fares are cheaper compared to the period during and after Diwali, but stability is lacking. Fares can double or triple within hours," pointed out ticketing agent Vikash Kumar.
"I booked a ticket to Goa for the New Year and my ticket from Mumbai cost me Rs 3,500, but the return ticket is costing me Rs 13,000. I fail to understand why I am being charged so much," said bewildered frequent flyer and Borivli resident D Srinivasan.
Salaries, incentives of AI, IA staff to be harmonised
New Delhi: After having shelved its wage cut plan, the national carrier Air India (AI) has decided to opt for salary and performance incentive harmonisation for employees of Air India and erstwhile Indian Airlines.
The two state owned carriers were merged in 2007 and the merged entity was named National Aviation Company of India (Nacil).
Nacil has already sent notices to eight employee unions on its plans to integrate payments and rankings of the two merged carriers. When implemented, the harmonisation of salaries may mean either the lower-paid employees at one particular level would be brought at par with higher-paid ones or vice versa.
An airline official said the company would appoint experts from outside to take the final call on how to go about the process. “There are three areas of integration on agenda. First will be the harmonisation of compensation. Second would be harmonisation in the ranks of the officials and third would be uniformity in grade and key responsibilities. In terms of hiking or not hiking of salaries, a decision is yet to be taken,” said the official who declined to be named.
Employees of erstwhile AI and IA have been at loggerheads since the merger over disparity between salaries. While, at a manager or officer level, IA employees are paid more than those in AI, at the general manager level and above, AI officials earn more.
The two state owned carriers were merged in 2007 and the merged entity was named National Aviation Company of India (Nacil).
Nacil has already sent notices to eight employee unions on its plans to integrate payments and rankings of the two merged carriers. When implemented, the harmonisation of salaries may mean either the lower-paid employees at one particular level would be brought at par with higher-paid ones or vice versa.
An airline official said the company would appoint experts from outside to take the final call on how to go about the process. “There are three areas of integration on agenda. First will be the harmonisation of compensation. Second would be harmonisation in the ranks of the officials and third would be uniformity in grade and key responsibilities. In terms of hiking or not hiking of salaries, a decision is yet to be taken,” said the official who declined to be named.
Employees of erstwhile AI and IA have been at loggerheads since the merger over disparity between salaries. While, at a manager or officer level, IA employees are paid more than those in AI, at the general manager level and above, AI officials earn more.
Salaries, incentives of AI, IA staff to be harmonised
New Delhi: After having shelved its wage cut plan, the national carrier Air India (AI) has decided to opt for salary and performance incentive harmonisation for employees of Air India and erstwhile Indian Airlines.
The two state owned carriers were merged in 2007 and the merged entity was named National Aviation Company of India (Nacil).
Nacil has already sent notices to eight employee unions on its plans to integrate payments and rankings of the two merged carriers. When implemented, the harmonisation of salaries may mean either the lower-paid employees at one particular level would be brought at par with higher-paid ones or vice versa.
An airline official said the company would appoint experts from outside to take the final call on how to go about the process. “There are three areas of integration on agenda. First will be the harmonisation of compensation. Second would be harmonisation in the ranks of the officials and third would be uniformity in grade and key responsibilities. In terms of hiking or not hiking of salaries, a decision is yet to be taken,” said the official who declined to be named.
Employees of erstwhile AI and IA have been at loggerheads since the merger over disparity between salaries. While, at a manager or officer level, IA employees are paid more than those in AI, at the general manager level and above, AI officials earn more.
The two state owned carriers were merged in 2007 and the merged entity was named National Aviation Company of India (Nacil).
Nacil has already sent notices to eight employee unions on its plans to integrate payments and rankings of the two merged carriers. When implemented, the harmonisation of salaries may mean either the lower-paid employees at one particular level would be brought at par with higher-paid ones or vice versa.
An airline official said the company would appoint experts from outside to take the final call on how to go about the process. “There are three areas of integration on agenda. First will be the harmonisation of compensation. Second would be harmonisation in the ranks of the officials and third would be uniformity in grade and key responsibilities. In terms of hiking or not hiking of salaries, a decision is yet to be taken,” said the official who declined to be named.
Employees of erstwhile AI and IA have been at loggerheads since the merger over disparity between salaries. While, at a manager or officer level, IA employees are paid more than those in AI, at the general manager level and above, AI officials earn more.
Hotels expect full house during Aero India
Bangalore: With the eighth edition of Aero India drawing nearer, room occupancy at most hotels in the City during the weeklong event - from February 9 to 13, 2011 - is expected to be 100 per cent.
Room tariffs during the same period are also expected to double.
The 8th International Aerospace and Defence Exhibition will be organised by the Ministry of Defence (MoD) in association with the Confederation of Indian Industry (CII).
The biennial event, dedicated to global aerospace and aviation business activity, has hotels across segments, from budget to premium, receiving queries from international delegates/visitors who are expected to make a beeline to the Air Force Station in Yelahanka in February. Delegates have started making queries and booking rooms well in advance, said managers of room reservations at most seven, five and three star hotels.
Budget hotels too are expected to cash in on the number of national and international visitors expected to arrive for the event in February. The show would have official delegations comprising defence ministers, air chiefs, minister's and representatives from over 55 countries taking part.
The last edition - Aero India 2009 - had a whopping 592 exhibitors, including 303 overseas companies.
For those looking at discounted room tariffs, the organisers of the Aero India 2011 International Seminar and Air Show have partnered with select hotels and serviced apartments across the city to offer room tariffs at discounted rates.
Room tariffs during the same period are also expected to double.
The 8th International Aerospace and Defence Exhibition will be organised by the Ministry of Defence (MoD) in association with the Confederation of Indian Industry (CII).
The biennial event, dedicated to global aerospace and aviation business activity, has hotels across segments, from budget to premium, receiving queries from international delegates/visitors who are expected to make a beeline to the Air Force Station in Yelahanka in February. Delegates have started making queries and booking rooms well in advance, said managers of room reservations at most seven, five and three star hotels.
Budget hotels too are expected to cash in on the number of national and international visitors expected to arrive for the event in February. The show would have official delegations comprising defence ministers, air chiefs, minister's and representatives from over 55 countries taking part.
The last edition - Aero India 2009 - had a whopping 592 exhibitors, including 303 overseas companies.
For those looking at discounted room tariffs, the organisers of the Aero India 2011 International Seminar and Air Show have partnered with select hotels and serviced apartments across the city to offer room tariffs at discounted rates.
Delhi Duty Free Services pitch call for advertising and creative duties
After offering customers a shopping extravaganza for six months at Terminal 3 (T3) of Delhi’s IGI Airport, Delhi Duty Free Services Pvt Ltd, India’s largest duty free retail operator at T3, has called for a pitch for its advertising and creative duties. The sixth largest airport in the world, T3 has the handling capacity of 34 million passengers.
The multi-agency advertising pitch seeks to identify a partner who will assist in building brand image, educating and increasing brand awareness, promoting offers and wide range of product availability at India’s largest duty free retail. Delhi Duty Free Services intends to have an agency on board by the last week of January 2011. The retail operator is aggressively looking at reaching out to frequent international travelers from North India and other in bound travelers as well. It is looking at a two-agency set-up – one for its creative duties and the other for visual merchandising.
The multi-agency advertising pitch seeks to identify a partner who will assist in building brand image, educating and increasing brand awareness, promoting offers and wide range of product availability at India’s largest duty free retail. Delhi Duty Free Services intends to have an agency on board by the last week of January 2011. The retail operator is aggressively looking at reaching out to frequent international travelers from North India and other in bound travelers as well. It is looking at a two-agency set-up – one for its creative duties and the other for visual merchandising.
Patel reviews Deloitte's plan for Air India
New Delhi: Civil Aviation Minister Praful Patel held another round of meeting with top officials of Air India in Mumbai on Tuesday to review the financial performance of the government carrier.
In the three-hour meeting with Civil Aviation Secretary Naseem Zaidi, Joint Secretary Prashant Sukul and Air India Chairman Arvind Jadhav, the minister discussed the financial plan made by advisory firm Deloitte.
Representatives of Deloitte, which had vetted the financial plan of the national carrier, were also present in the meeting. Sources said matter such as number of aircraft to be acquired on lease and funds arrangement were also discussed. “The meeting discussed ways to increase the domestic market, by providing more flights, and creating a market in the smaller cities, by introducing flights with smaller aircraft,” said a source who did not want to be identified.
The airline management insisted on getting Cabinet clearances to form a strategic business unit and permission to reopen the wage agreements.
In the report, Air India has asked for an equity infusion of Rs 2,000 crore more from the government in the current financial year. This demand is over and above the Rs 1,200 crore the airline is likely to receive soon.
Patel had earlier said the government would release this Rs 2,000 crore for the beleaguered airline.
In the three-hour meeting with Civil Aviation Secretary Naseem Zaidi, Joint Secretary Prashant Sukul and Air India Chairman Arvind Jadhav, the minister discussed the financial plan made by advisory firm Deloitte.
Representatives of Deloitte, which had vetted the financial plan of the national carrier, were also present in the meeting. Sources said matter such as number of aircraft to be acquired on lease and funds arrangement were also discussed. “The meeting discussed ways to increase the domestic market, by providing more flights, and creating a market in the smaller cities, by introducing flights with smaller aircraft,” said a source who did not want to be identified.
The airline management insisted on getting Cabinet clearances to form a strategic business unit and permission to reopen the wage agreements.
In the report, Air India has asked for an equity infusion of Rs 2,000 crore more from the government in the current financial year. This demand is over and above the Rs 1,200 crore the airline is likely to receive soon.
Patel had earlier said the government would release this Rs 2,000 crore for the beleaguered airline.
Most pilots not trained to land in foggy weather
Hyderabad: Of the 4,000 pilots registered in India, only 2,100 are trained to land aircraft in such foggy conditions. Indian Airlines has the highest number of pilots specially trained to land under dense fog.
A pilot needs special Category-III training to be able to land aircraft when visibility is limited. Airports which regularly face foggy conditions are classified as Category-III airports. Those with less fog fall under Category-II and Category-I. Delhi is Category-III while Hyderabad is classified as Category-I, as fog is not a problem here. Of the 410 aircraft registered with the DGCA, 300 are equipped with Category-III facilities and can land at an airport covered in fog.
Delhi is the only airport that has a CAT-III Instrument Landing System, which makes landing in foggy conditions possible. Aviation experts say many more CAT-III trained pilots are required.
A pilot needs special Category-III training to be able to land aircraft when visibility is limited. Airports which regularly face foggy conditions are classified as Category-III airports. Those with less fog fall under Category-II and Category-I. Delhi is Category-III while Hyderabad is classified as Category-I, as fog is not a problem here. Of the 410 aircraft registered with the DGCA, 300 are equipped with Category-III facilities and can land at an airport covered in fog.
Delhi is the only airport that has a CAT-III Instrument Landing System, which makes landing in foggy conditions possible. Aviation experts say many more CAT-III trained pilots are required.
JetLite passenger dies, Govt tells airline to pay kin Rs 12 lakh
New Delhi: In a first, the Ministry of Civil Aviation, at a public hearing, has asked JetLite to pay up to Rs 12 lakh as compensation for the death of a passenger whose family has alleged negligence by the airline.
In June this year, Deepika Chohan, a resident of Mumbai, wrote to the Ministry that on May 27, soon after takeoff from Lucknow, her 76-year-old father, Lt Col Sudhir Kumar, complained of uneasiness. “The crew would have within 15-20 minutes of takeoff from Lucknow realised that he was serious. Why did they not make an emergency landing back at Lucknow?” Chohan said in her complaint. She claimed that her father passed away on board. JetLite, however, says the passenger did not die on board.
On receipt of Chohan’s complaint, Pragya Richa Srivastava, director in the Ministry, called both sides for a hearing on August 17. JetLite’s Senior Vice President (Operations) A K Oswal represented the airline, while Chohan and her daughter represented the deceased’s family. According to the minutes of the meeting, a copy of which was sent to Jet on August 23, the Ministry called JetLite “callous” and “negligent” and asked it to compensate the family with up to Rs 12 lakh.
In June this year, Deepika Chohan, a resident of Mumbai, wrote to the Ministry that on May 27, soon after takeoff from Lucknow, her 76-year-old father, Lt Col Sudhir Kumar, complained of uneasiness. “The crew would have within 15-20 minutes of takeoff from Lucknow realised that he was serious. Why did they not make an emergency landing back at Lucknow?” Chohan said in her complaint. She claimed that her father passed away on board. JetLite, however, says the passenger did not die on board.
On receipt of Chohan’s complaint, Pragya Richa Srivastava, director in the Ministry, called both sides for a hearing on August 17. JetLite’s Senior Vice President (Operations) A K Oswal represented the airline, while Chohan and her daughter represented the deceased’s family. According to the minutes of the meeting, a copy of which was sent to Jet on August 23, the Ministry called JetLite “callous” and “negligent” and asked it to compensate the family with up to Rs 12 lakh.
Friday, December 10, 2010
Bharat Bhushan appointed DGCA
New Delhi: E K Bharat Bhushan, additional secretary and financial advisor in the civil aviation ministry, took over as Director General of Civil Aviation.
Bhushan, an IAS officer of the 1979 batch from Kerala cadre, took over from Syed Nasim Ahmad Zaidi, who is now the Civil Aviation Secretary.
In April last year, he was given the additional charge of Air India as an interim CMD in place of Raghu Menon.
Bhushan, an IAS officer of the 1979 batch from Kerala cadre, took over from Syed Nasim Ahmad Zaidi, who is now the Civil Aviation Secretary.
In April last year, he was given the additional charge of Air India as an interim CMD in place of Raghu Menon.
The Debt Burden Gets Heavier
According to senior government sources, the State Bank of India, IDBI and Bank of India (Air India has taken loans from most nationalised banks) backed by the Reserve Bank of India are unwilling to recast the Air India's debt (unlike for Jet Airways and Kingfisher Airlines where the recast is under works) unless the shareholder — in this case the government — hikes its equity in the carrier to at least Rs 5,000 crore from Rs 945-odd crore currently. If the last equity infusion of Rs 1,200 crore cleared by the Cabinet comes in as promised, the government holding in the company would rise to nearly Rs 2,500 crore — the government will have to infuse Rs 2,500 crore more to reach the Rs 5,000 crore level.
Air India’s debt stands at around Rs 40,000 crore. “In such a case, only government intervention can make a difference,” says an official.
The group of ministers (GoM), which will meet on 6 December, will be informed that the airline has reached “the end of the road” and that it cannot survive unless its debt is recast. A debt recast will help the carrier reduce the interest rate on its working capital loans. Air India’s current net worth is in the range of minus Rs 15,000-17,000 crore. “That’s what it is worth if you decide to sell it today,” says a consultant who has worked closely with the airline. He says every rupee that the airline is spending today is borrowed money.
What makes matters worse is the fact that most of the airline’s senior management is busy with internal politics. Many within argue that the hiring of chief operating officer Gustav Bauldoff at an exorbitant pay packet can make very little material difference to an airline that is sinking fast.
Air India’s debt stands at around Rs 40,000 crore. “In such a case, only government intervention can make a difference,” says an official.
The group of ministers (GoM), which will meet on 6 December, will be informed that the airline has reached “the end of the road” and that it cannot survive unless its debt is recast. A debt recast will help the carrier reduce the interest rate on its working capital loans. Air India’s current net worth is in the range of minus Rs 15,000-17,000 crore. “That’s what it is worth if you decide to sell it today,” says a consultant who has worked closely with the airline. He says every rupee that the airline is spending today is borrowed money.
What makes matters worse is the fact that most of the airline’s senior management is busy with internal politics. Many within argue that the hiring of chief operating officer Gustav Bauldoff at an exorbitant pay packet can make very little material difference to an airline that is sinking fast.
Did Boeing set the terms for Air India Express' dry lease tender?
New Delhi: Air India Express, the low-cost arm of the national carrier Air India, has tendered for the dry lease of four Boeing 737-800 aircraft.
Nothing unusual except that the author of the online tender document is shown to be one Michael R. Sessions of Boeing Company.
Generally, when Air India issues a tender, it is the user department concerned that provides details for the tender to be uploaded on the airline's Web site.
But is this a case of a vendor helping the airline put up a tender for which it or one of its affiliates could be in the race?
Sources in Air India indicated that some help might have been sought from Boeing for the tender as the aircraft being leased are brand new. “The specifications for new aircraft keep changing. So, the airline might have sought help,” sources indicated, pointing out that the word documents sent to assist the Maharaja might have been inadvertently put up on the Web site.
When contacted about this issue, a Boeing spokesman said, “This is something that needs to be checked from Air India.”
Meanwhile, doubts are also being raised on whether the leasing proposal has been cleared by the Air India board. Sources indicated that at the last board meeting, there was opposition to leasing more aircraft.
However, the board, while not rejecting the proposal to lease more aircraft, called for a detailed report on how these planes would be utilized.
Nothing unusual except that the author of the online tender document is shown to be one Michael R. Sessions of Boeing Company.
Generally, when Air India issues a tender, it is the user department concerned that provides details for the tender to be uploaded on the airline's Web site.
But is this a case of a vendor helping the airline put up a tender for which it or one of its affiliates could be in the race?
Sources in Air India indicated that some help might have been sought from Boeing for the tender as the aircraft being leased are brand new. “The specifications for new aircraft keep changing. So, the airline might have sought help,” sources indicated, pointing out that the word documents sent to assist the Maharaja might have been inadvertently put up on the Web site.
When contacted about this issue, a Boeing spokesman said, “This is something that needs to be checked from Air India.”
Meanwhile, doubts are also being raised on whether the leasing proposal has been cleared by the Air India board. Sources indicated that at the last board meeting, there was opposition to leasing more aircraft.
However, the board, while not rejecting the proposal to lease more aircraft, called for a detailed report on how these planes would be utilized.
Book ticket early, online and fly cheap
Mumbai: Believe it or not. Today, when the airline industry is under fire for soaring fares, a one-way air ticket from Mumbai to Jaipur for March 3, 2011, is currently available at a base price of Rs 125. Though with taxes and other charges, the total fare comes to Rs 2,281 on low-fare carrier GoAir’s website. Similarly, a Mumbai-Delhi flight on Jet Airways website displays Rs 3,333 as fare (all inclusive) on March 3, 2011.
Airlines want the directorate general of civil aviation (DGCA) to take note of low fares available on airline websites if the passengers book in advance. “Airlines have a secret pricing formula for seats offered at different times for the same flight and destinations,” said an official of a full-service carrier.
Though airlines do not announce discount schemes, travellers can get base fares of as low as Rs 500 if they book in advance.
“The aviation industry is cyclical. Profitability in a good year has been low, in the range of 8-10% profit after interest and tax. Also, the industry has not recovered the cost of capital deployed while expanding operations,” the official added.
Earlier this week, airlines had proposed Rs 10,500 as fare for distances less that 750 km (eg Delhi-Chandigarh, Chennai-Coimbatore), Rs 14,550-19,500 for 750-1,000 km, Rs 17,000-25,000 for 1,000-1,400 km and Rs 22,000-40,000 for flights exceeding 1,400 km (eg Delhi-Bangalore, Delhi-Kolkata). This formula was rejected by the civil aviation ministry.
Airlines want the directorate general of civil aviation (DGCA) to take note of low fares available on airline websites if the passengers book in advance. “Airlines have a secret pricing formula for seats offered at different times for the same flight and destinations,” said an official of a full-service carrier.
Though airlines do not announce discount schemes, travellers can get base fares of as low as Rs 500 if they book in advance.
“The aviation industry is cyclical. Profitability in a good year has been low, in the range of 8-10% profit after interest and tax. Also, the industry has not recovered the cost of capital deployed while expanding operations,” the official added.
Earlier this week, airlines had proposed Rs 10,500 as fare for distances less that 750 km (eg Delhi-Chandigarh, Chennai-Coimbatore), Rs 14,550-19,500 for 750-1,000 km, Rs 17,000-25,000 for 1,000-1,400 km and Rs 22,000-40,000 for flights exceeding 1,400 km (eg Delhi-Bangalore, Delhi-Kolkata). This formula was rejected by the civil aviation ministry.
Commissioning of the airport: Tharoor not keen
Thiruvananthapuram: After the Sate Government expressing its reservations in a pre-inaugural commissioning of the new terminal of the Thiruvananthapuram Airport, Thiruvananthapuram MP Shashi Tharoor has also expressed concern over the move to commission the airport on December 12.
Tharoor said that it was unfair to collect user fee from passengers while the matter is still pending final decision. He also said that since the facilities for cargo are not in place, it may affect the exports from the state.
Addressing reporters here on Sunday, Tharoor said that user fee should be levied only after the Airports Economic Regulatory Authority Appellate Tribunal takes a decision on the matter. The tribunal is scheduled to hold a sitting here on January 12. Passengers of budget airlines should at least be exempted from user fee, he said.
The Airports Economic Regulatory Authority had earlier issued orders to collect user fee of Rs 750 from each embarking passenger at the new terminal from the date of commissioning of the new terminal.
Tharoor also said that facilities for cargo movement from the new terminal were not in place. It may take more than one month for the works on strengthening the perimetre road to be complete
Tharoor said that it was unfair to collect user fee from passengers while the matter is still pending final decision. He also said that since the facilities for cargo are not in place, it may affect the exports from the state.
Addressing reporters here on Sunday, Tharoor said that user fee should be levied only after the Airports Economic Regulatory Authority Appellate Tribunal takes a decision on the matter. The tribunal is scheduled to hold a sitting here on January 12. Passengers of budget airlines should at least be exempted from user fee, he said.
The Airports Economic Regulatory Authority had earlier issued orders to collect user fee of Rs 750 from each embarking passenger at the new terminal from the date of commissioning of the new terminal.
Tharoor also said that facilities for cargo movement from the new terminal were not in place. It may take more than one month for the works on strengthening the perimetre road to be complete
KLM Airlines fined for hassling passenger
New Delhi: The apex consumer forum has ordered a Dutch airliner to pay Rs 50,000 to a senior Indian citizen for putting him to "a series of hassles" during his flight to Seattle from Delhi in 2006.
While flying with KLM Airlines, D K Kapur had to stay in a Delhi hotel during delayed hours of flight. Then his baggage was misplaced at Detroit and later he was put in a low-cost airliner for onward journey from there.
The National Consumer Dispute Redressal Grievance Commission (NCDRC) ordered payment of compensation to Kapur, finding the airlines guilty of rendering deficient service and putting him to physical and mental strain.
The NCDRC gave the ruling upholding two concurrent rulings by two lower fora holding the Dutch airlines guilty of rendering deficient service.
While flying with KLM Airlines, D K Kapur had to stay in a Delhi hotel during delayed hours of flight. Then his baggage was misplaced at Detroit and later he was put in a low-cost airliner for onward journey from there.
The National Consumer Dispute Redressal Grievance Commission (NCDRC) ordered payment of compensation to Kapur, finding the airlines guilty of rendering deficient service and putting him to physical and mental strain.
The NCDRC gave the ruling upholding two concurrent rulings by two lower fora holding the Dutch airlines guilty of rendering deficient service.
Govt should reduce tax on ATF, not control airfare: Mallya
In light of the Aviation Ministry’s intrusion into controlling airfares; Vijay Mallya, Chairman of Kingfisher Airlines said he sees no case for tapping airfares in the upper or lower band. People pay somewhere in the middle of the fare band, Mallya confirmed. He asked the government to reduce taxation on aviation turbine fuel (ATF) instead so that this savings on taxation could be passed off to consumers.
Mallya said that fares were a function of demand and supply and that it was a fundamental mistake to compare high fares. The media is sensationalising the fare issue, he rues.
Mallya said that fares were a function of demand and supply and that it was a fundamental mistake to compare high fares. The media is sensationalising the fare issue, he rues.
We need alternative airports in big cities: Capt. Gopinath
Bengaluru: Only good, healthy and vibrant competition can bring about a solution to this issue. It is the basic demand and supply scenario which has led to this. It is true not just in airlines, but across sectors, that when monopolies are done away with and there are more players, leading to healthy competition, the pricing issue remains balanced.
It is good intention on the government's part to warn airlines, but that will only give transparency; it will not rein in the airlines. What we have to do is to strengthen the Competition Commission with punitive powers to bring both criminal and civil charges to prevent cartelisation and price fixing.
We have big, world class airports, but not enough flights and capacity increase. High fares are also because infrastructure providers like airports have become monopolies. We have an airport regulator. But regulators, to be really effective, are meant to actually regulate competition and not monopolies. Airport monopolies are also responsible for high fares. We need to have alternative airports in large cities so that they can compete and prices can come down. We need to have privatisation without cartelisation, either in airports or airlines. We need policies that ensure that there is enough capacity and competition always.
It is good intention on the government's part to warn airlines, but that will only give transparency; it will not rein in the airlines. What we have to do is to strengthen the Competition Commission with punitive powers to bring both criminal and civil charges to prevent cartelisation and price fixing.
We have big, world class airports, but not enough flights and capacity increase. High fares are also because infrastructure providers like airports have become monopolies. We have an airport regulator. But regulators, to be really effective, are meant to actually regulate competition and not monopolies. Airport monopolies are also responsible for high fares. We need to have alternative airports in large cities so that they can compete and prices can come down. We need to have privatisation without cartelisation, either in airports or airlines. We need policies that ensure that there is enough capacity and competition always.
Separate terminal for low-cost airlines
New Delhi: In another first after the mega terminal 3, the capital could soon get an integrated domestic-cum-international terminal complex exclusively for low-cost carriers (LCCs) by next year, like London's Stanstead.
The Delhi International Airport Pvt Ltd (DIAL) is planning to operationalize the now mothballed terminal 1A and link it to terminals 1D and 1C that are used by Indi-Go , SpiceJet and Go for departures and arrivals, respectively , for this purpose. These LCCs are learnt to be strongly in favour of such a move.
Terminal 1A was used for erstwhile Indian Airlines and Kingfisher departures till their domestic operations shifted to T3 last month. The combined capacity of terminals 1A, C and D (the 1930-era 1B has been demolished) will be 18 million per annum — nine million for arrivals and departure each.
This will be almost half the capacity of T3s 34-million per annum capacity.
"There are two options before us: shift everything to T3 or have a big LCC complex in terminal 1 for both domestic and international operations . We will take a final decision by next February. If we go in for a dedicated LCC area in terminal 1, the infrastructure like linking the terminals , providing customs and immigration counters, would be put in place by next winter," said a top DIAL official
The Delhi International Airport Pvt Ltd (DIAL) is planning to operationalize the now mothballed terminal 1A and link it to terminals 1D and 1C that are used by Indi-Go , SpiceJet and Go for departures and arrivals, respectively , for this purpose. These LCCs are learnt to be strongly in favour of such a move.
Terminal 1A was used for erstwhile Indian Airlines and Kingfisher departures till their domestic operations shifted to T3 last month. The combined capacity of terminals 1A, C and D (the 1930-era 1B has been demolished) will be 18 million per annum — nine million for arrivals and departure each.
This will be almost half the capacity of T3s 34-million per annum capacity.
"There are two options before us: shift everything to T3 or have a big LCC complex in terminal 1 for both domestic and international operations . We will take a final decision by next February. If we go in for a dedicated LCC area in terminal 1, the infrastructure like linking the terminals , providing customs and immigration counters, would be put in place by next winter," said a top DIAL official
Air India to seek $840 m from Boeing for 787 delay
Mumbai: National carrier Air India will send a $840-million compensation claim to US aircraft maker Boeing for the inordinate delay in delivery of Boeing 787 Dreamliners. The compensation package would be a mix of both discount in services and cash.
“The package is being finalised... the compensation is a mix of different services discount and money,” Air India chief operating officer, Captain Gustav Baldauf, said. Earlier, Air India chairman and managing director Arvind Jadhav confirmed that the airline had sought $840 million from Boeing for the delay. Air India had ordered 27 Dreamliners, but Boeing failed to supply the planes as per schedule. Air India had placed orders for 111 aircraft at an investment of over $13 billion with Airbus and Boeing in 2006 to replace its ageing fleet and leased planes.
The supply of Dreamliners was a part of these orders. As per the original delivery schedule, Boeing was to start deliveries of these planes from September 2008.
“The package is being finalised... the compensation is a mix of different services discount and money,” Air India chief operating officer, Captain Gustav Baldauf, said. Earlier, Air India chairman and managing director Arvind Jadhav confirmed that the airline had sought $840 million from Boeing for the delay. Air India had ordered 27 Dreamliners, but Boeing failed to supply the planes as per schedule. Air India had placed orders for 111 aircraft at an investment of over $13 billion with Airbus and Boeing in 2006 to replace its ageing fleet and leased planes.
The supply of Dreamliners was a part of these orders. As per the original delivery schedule, Boeing was to start deliveries of these planes from September 2008.
Poor’ Air India made 10 pilots super rich in 6 months
New Delhi: Debt-ridden Air India (AI), which is seeking a bailout package from the Union government, paid significant amounts to pilots who hardly flew.
DNA has in its possession confidential internal audit documents of the national carrier which reveal that 10 pilots of sister concern Alliance Air were paid on an average Rs88,000 per flying hour for six months beginning January 2010 — total Rs2.87 crore.
The office of R Dayal, executive director (internal audit), examined the payment.
A pilot has to fly a minimum of 80 hours per month, but these 10 hardly flew. Taking advantage of a dubious contract, some of them flew two hours in six months, some 11, while others flew 12 hours.
The contract extraordinarily hikes the allowance
per hour from Rs4,750 to Rs9,150 without valid giving any reason. Besides, it fixes an amount of Rs2,200 per night stop.
The most glaring example is that of Captain Satbir Singh who flew only two hours in six months but was paid in excess of Rs20 lakh, making him perhaps the costliest pilot in India with an average asking rate of Rs10 lakh per hour.
The audit notes that the 80-hours-per-month limit in itself is way beyond the average flying hours clocked by Air India pilots
DNA has in its possession confidential internal audit documents of the national carrier which reveal that 10 pilots of sister concern Alliance Air were paid on an average Rs88,000 per flying hour for six months beginning January 2010 — total Rs2.87 crore.
The office of R Dayal, executive director (internal audit), examined the payment.
A pilot has to fly a minimum of 80 hours per month, but these 10 hardly flew. Taking advantage of a dubious contract, some of them flew two hours in six months, some 11, while others flew 12 hours.
The contract extraordinarily hikes the allowance
per hour from Rs4,750 to Rs9,150 without valid giving any reason. Besides, it fixes an amount of Rs2,200 per night stop.
The most glaring example is that of Captain Satbir Singh who flew only two hours in six months but was paid in excess of Rs20 lakh, making him perhaps the costliest pilot in India with an average asking rate of Rs10 lakh per hour.
The audit notes that the 80-hours-per-month limit in itself is way beyond the average flying hours clocked by Air India pilots
JetAir will link more European destinations
New Delhi: Riding a turnaround in Indian aviation, Jet Airways — the country’s largest airline by market share — plans to expand to other European destinations, after launching its daily Delhi-Milan direct flight on Sunday.
“Our mature international routes are doing very well and have an average load factor of 82%. We do have plans to expand to all primary gateways in European gateways,” Jet Airways chief commercial officer Sudheer Raghavan said. The Naresh Goyal-controlled airline already operates flights to London and Brussels.
Asked why Milan was chosen over Rome, Raghavan said apart from being a major business centre with a large Indian diaspora, the route utilisation worked out better for Milan. “Rome is definitely an option and we will fly there too. It is just a question of time,” he said.
The company sees the Delhi-Milan route becoming profitable much before the 18 to 24 months it takes a new international flights to become profitable. The Mumbai-based airline operates to 24 international and 47 domestic destinations and has a fleet size of 80 aircraft.
Jet Airways CEO Nikos Kardassis said the airline would soon work out a code-share agreement with Italy for Milan as well as other routes
“Our mature international routes are doing very well and have an average load factor of 82%. We do have plans to expand to all primary gateways in European gateways,” Jet Airways chief commercial officer Sudheer Raghavan said. The Naresh Goyal-controlled airline already operates flights to London and Brussels.
Asked why Milan was chosen over Rome, Raghavan said apart from being a major business centre with a large Indian diaspora, the route utilisation worked out better for Milan. “Rome is definitely an option and we will fly there too. It is just a question of time,” he said.
The company sees the Delhi-Milan route becoming profitable much before the 18 to 24 months it takes a new international flights to become profitable. The Mumbai-based airline operates to 24 international and 47 domestic destinations and has a fleet size of 80 aircraft.
Jet Airways CEO Nikos Kardassis said the airline would soon work out a code-share agreement with Italy for Milan as well as other routes
Air India, Jet, Seek Airbus Planes Through Lease
Airbus SAS signed lease contracts worth a combined 2.8 billion euros ($3.7 billion) with Jet Airways (India) Ltd. and state-owned Air India, a French government official, who can’t be named according to government rules, said in New Delhi today.
Both airlines are looking to add Airbus planes through leases and neither has yet sealed contracts as they are still choosing lessors, Airbus spokesman Justin Dubon said in a telephone interview today. Jet Airways is looking at leasing 10 A330s and A320s and Jet is considering A330s, he said.
Both airlines are looking to add Airbus planes through leases and neither has yet sealed contracts as they are still choosing lessors, Airbus spokesman Justin Dubon said in a telephone interview today. Jet Airways is looking at leasing 10 A330s and A320s and Jet is considering A330s, he said.
AAI tries again for Rs 5,000-crore bonds to modernise airports
New Delhi: The Airports Authority of India (AAI), according to a senior civil aviation ministry official, has again sought permission from the finance ministry to raise Rs 5,000 crore through tax-free infrastructure bonds.
The money is for modernisation of airports.
This is the second time the state-run airport operator has approached the government with such a proposal.
The earlier proposal was turned down on the reasoning that buyers for these bonds were limited and allowing AAI would affect the plans of other government agencies.
So far, the National Highways Authority of India (NHAI) and Rural Electrification Corporation of India (REC) are the only two government agencies allowed to issue such tax-free bonds, known as 54EC bonds (after Section 54EC of the Income Tax Act, 1961). These are short-term bonds with a three-year maturity.
Under the income-tax law, one can save on payment of capital gains tax if the amount is used for repurchase of property within a 12-month period. Alternatively, capital gains tax can be avoided by investing in bonds issued by NHAI and REC.
A senior AAI official said that in the new proposal, they had requested the government to give a go-ahead, as they would be raising the money only once, not annually like NHAI and REC.
In the current financial year, AAI plans to invest Rs 4,500 crore on modernisation of the various airports run by it. In contrast, it has received only Rs 85 crore for plan expenditure for the year from the government. However, it gets special funds to build airports in the northeastern part of the country.
The money is for modernisation of airports.
This is the second time the state-run airport operator has approached the government with such a proposal.
The earlier proposal was turned down on the reasoning that buyers for these bonds were limited and allowing AAI would affect the plans of other government agencies.
So far, the National Highways Authority of India (NHAI) and Rural Electrification Corporation of India (REC) are the only two government agencies allowed to issue such tax-free bonds, known as 54EC bonds (after Section 54EC of the Income Tax Act, 1961). These are short-term bonds with a three-year maturity.
Under the income-tax law, one can save on payment of capital gains tax if the amount is used for repurchase of property within a 12-month period. Alternatively, capital gains tax can be avoided by investing in bonds issued by NHAI and REC.
A senior AAI official said that in the new proposal, they had requested the government to give a go-ahead, as they would be raising the money only once, not annually like NHAI and REC.
In the current financial year, AAI plans to invest Rs 4,500 crore on modernisation of the various airports run by it. In contrast, it has received only Rs 85 crore for plan expenditure for the year from the government. However, it gets special funds to build airports in the northeastern part of the country.
Chandigarh airport to get jet-age look
Chandigarh: For all who've felt a tinge of disappointment at touching down at the 'just-about-average' building of Chandigarh domestic airport, good news is about to fly in from the skies. Come February, authorities would unveil the the new terminal building of the airport that would also operate international flights. The new avatar would be swanky and modern, complete with all amenities and glitzy infrastructure.
The much-talked about facility assumes greater significance as the proposed international airport at Mohali is expected to take some time before it starts out.
Spread over 12,150 square metre area, the new terminal building of Chandigarh airport would have state-of-the-art facilities and become operational by February. However, the Airport Authority of India (AAI) has set a deadline of December 31 for completion of the building.
Equipped to manage international flights, the building would extend an impressive array of services. For the jet setters, business facilities, rest and relaxation options, a sparkling shopping arcade, entertainment picks, apart from snacks and drinks would be on offe
The much-talked about facility assumes greater significance as the proposed international airport at Mohali is expected to take some time before it starts out.
Spread over 12,150 square metre area, the new terminal building of Chandigarh airport would have state-of-the-art facilities and become operational by February. However, the Airport Authority of India (AAI) has set a deadline of December 31 for completion of the building.
Equipped to manage international flights, the building would extend an impressive array of services. For the jet setters, business facilities, rest and relaxation options, a sparkling shopping arcade, entertainment picks, apart from snacks and drinks would be on offe
Fogged out? AI won’t divert, will return to airport of origin
New Delhi: If fog shuts out Delhi airport this winter, Air India pilots will not be allowed to divert flights to the closest, and most preferred, domestic destinations — Jaipur and Lucknow. The national carrier has clarified that an in-principle decision has been taken by the airline to return flights to the airports of their origin in such a situation. This, officials say, is part of the airline’s preparedness to deal with fog this season.
International flights bound for Delhi will be diverted to Mumbai if the situation arises.
“In case of an emergency, Jaipur and Lucknow happen to be the closest airports where Delhi-bound flights get diverted. But now we are not allowed to divert to Jaipur,” a senior Air India pilot said.
An airline official, however, said that at times of fog-related congestion in Delhi, diverting flights to other domestic destinations has not been helping matters. “During fog-related congestion, Delhi air traffic control can handle only 22 flight arrivals per hour. So if a Delhi-bound flight is diverted to Jaipur or Lucknow, the problem of transporting these passengers back to Delhi becomes an issue. These airports are also very small as compared to Delhi, and cannot handle more than four aircraft at a time. There are infrastructure-related constraints,” the official said
International flights bound for Delhi will be diverted to Mumbai if the situation arises.
“In case of an emergency, Jaipur and Lucknow happen to be the closest airports where Delhi-bound flights get diverted. But now we are not allowed to divert to Jaipur,” a senior Air India pilot said.
An airline official, however, said that at times of fog-related congestion in Delhi, diverting flights to other domestic destinations has not been helping matters. “During fog-related congestion, Delhi air traffic control can handle only 22 flight arrivals per hour. So if a Delhi-bound flight is diverted to Jaipur or Lucknow, the problem of transporting these passengers back to Delhi becomes an issue. These airports are also very small as compared to Delhi, and cannot handle more than four aircraft at a time. There are infrastructure-related constraints,” the official said
Temple towns of Dwarka and Ambaji to get airports soon
Ahmedabad: Gujarat government is planning to develop airports at temple towns of Dwarka and Ambaji over the next couple of years. "The proposal for air strips in temple towns of Ambaji and Dwarka are at an advance stage," State Secretary for Tourism and Civil Aviation, Vipul Mitra told reporters.
Kolkata based SREI Infrastructure would invest in developing airstrip at Dwarka and the work may take around one and half years. It would require around Rs 500 crore to develop an air strip and supporting infrastructure there, Mitra said.
As regards Ambaki, the government has acquired land for developing an airport and is now scouting for a private developer.
"Land has been acquired for developing an airport at Ambaji and now we are looking for a private developer for it," Mitra said.
According to state government, MoU's worth Rs 20,000 crore are expected to be signed during the forthcoming Vibrant Gujarat Summit(VGS)-2011 beginning January 12, in the civil aviation sector
Kolkata based SREI Infrastructure would invest in developing airstrip at Dwarka and the work may take around one and half years. It would require around Rs 500 crore to develop an air strip and supporting infrastructure there, Mitra said.
As regards Ambaki, the government has acquired land for developing an airport and is now scouting for a private developer.
"Land has been acquired for developing an airport at Ambaji and now we are looking for a private developer for it," Mitra said.
According to state government, MoU's worth Rs 20,000 crore are expected to be signed during the forthcoming Vibrant Gujarat Summit(VGS)-2011 beginning January 12, in the civil aviation sector
CVC probes Airbus for unfair business practices
New Delhi: India's topmost anti-corruption body, the Central Vigilance Commission has begun a probe against European aviation giant Airbus for indulging in alleged unfair business practices.
The CVC has registered a complaint it received from Hyderabad based Flyington Freighters that charged EADS Airbus with non delivery of aircraft resulting in loss of business to the company. The firm has been demanding action against the aviation firm under the Competition Act.
It charges Airbus for using its order for 12 A-330-200 cargo aircraft to pitch for the USAF tanker contract and then delay its deliveries by three years.
EADS North America first bagged the contract in early 2008 proposing a tanker variant of the A-330. The orders were cancelled that year and fresh tenders were floated.
Flyington says Airbus was depending on its proposed production line in Mobile, Alabama to supply aircraft to the Hyderbad firm. The new production facility however did not materialize owing to the restarting of the USAF deal.
The CVC has registered a complaint it received from Hyderabad based Flyington Freighters that charged EADS Airbus with non delivery of aircraft resulting in loss of business to the company. The firm has been demanding action against the aviation firm under the Competition Act.
It charges Airbus for using its order for 12 A-330-200 cargo aircraft to pitch for the USAF tanker contract and then delay its deliveries by three years.
EADS North America first bagged the contract in early 2008 proposing a tanker variant of the A-330. The orders were cancelled that year and fresh tenders were floated.
Flyington says Airbus was depending on its proposed production line in Mobile, Alabama to supply aircraft to the Hyderbad firm. The new production facility however did not materialize owing to the restarting of the USAF deal.
DGCA tells airlines to post fare details on websites
New Delhi: Passengers will soon learn more about the various fares available on any route, thanks to a directive from the Directorate General of Civil Aviation (DGCA) today. It has asked all airlines to post various fare categories route-wise and date-wise on their websites by December 8.
Airlines say they have accepted the directive, though many feel this would give away competitive information on the number of seats at each price point, which could have an adverse impact on business.
An Air India spokesperson confirmed that the airline would make public the fare details as directed. “We will publish the fare details as asked by DGCA; we are a service for the aam admi,” said the spokesperson.
DGCA had earlier rejected fares furnished by the airlines based on distance. Those fares had come under fire because on many routes like Delhi-Mumbai, the maximum one-way fare declared by some airlines was as high as Rs 30,000. These fares were rejected by DGCA.
“All the airlines have agreed to upload route-wise fares across the network in various fare categories commensurate with date of purchase on their websites by 1700 hours (5 pm) on December 8,” stated a release from the civil aviation ministry.
In mid-November, the Delhi-Mumbai sector saw a 200-300 per cent jump in fares, attributed to a number of factors. In the same period, airfares across the domestic network were also 15-25 per cent higher.
Airlines say they have accepted the directive, though many feel this would give away competitive information on the number of seats at each price point, which could have an adverse impact on business.
An Air India spokesperson confirmed that the airline would make public the fare details as directed. “We will publish the fare details as asked by DGCA; we are a service for the aam admi,” said the spokesperson.
DGCA had earlier rejected fares furnished by the airlines based on distance. Those fares had come under fire because on many routes like Delhi-Mumbai, the maximum one-way fare declared by some airlines was as high as Rs 30,000. These fares were rejected by DGCA.
“All the airlines have agreed to upload route-wise fares across the network in various fare categories commensurate with date of purchase on their websites by 1700 hours (5 pm) on December 8,” stated a release from the civil aviation ministry.
In mid-November, the Delhi-Mumbai sector saw a 200-300 per cent jump in fares, attributed to a number of factors. In the same period, airfares across the domestic network were also 15-25 per cent higher.
Touts don ‘uniform’ to beat airport security’s tall claims
Mumbai: Time and again, the Central Industrial Security Force (CISF), responsible for Mumbai airport’s security, has proclaimed that it has reduced touting at the airport. Besides, the Mumbai police too has expressed its heartfelt desire to make the airport a tout-free zone. However, DNA caught on camera touts doing brisk business at the Chhatrapati Shivaji International Airport (CSIA), right under the nose of the two law enforcement agencies.
Dressed in crisp white shirt and navy blue trousers, the touts have an identity card hanging from their neck. Seen from a distance, they look like the airport staff, always ready to help you find a hotel room or a rental car. But mind you, this is all a well-planned illusion.
These touts operate at the CSIA even as the business is illegal in India. On July 2010, the CISF started a drive to remove these touts from the airport. In fact, this drive was planned after passengers complained of touts harassing them and overcharging them for hotel and transport.
But DNA’s test drive, on the night of December 6, showed that the ‘drive’ has been unsuccessful as CSIA’s arrival terminal 2A, Sahar, is infested with these touts.
Whenever passengers come out of the terminal, these touts rush to them asking if they require a hotel room or a car. Surprisingly, this business thrives in front of the tourism police van, stationed right in front of the arrival gate.
Dressed in crisp white shirt and navy blue trousers, the touts have an identity card hanging from their neck. Seen from a distance, they look like the airport staff, always ready to help you find a hotel room or a rental car. But mind you, this is all a well-planned illusion.
These touts operate at the CSIA even as the business is illegal in India. On July 2010, the CISF started a drive to remove these touts from the airport. In fact, this drive was planned after passengers complained of touts harassing them and overcharging them for hotel and transport.
But DNA’s test drive, on the night of December 6, showed that the ‘drive’ has been unsuccessful as CSIA’s arrival terminal 2A, Sahar, is infested with these touts.
Whenever passengers come out of the terminal, these touts rush to them asking if they require a hotel room or a car. Surprisingly, this business thrives in front of the tourism police van, stationed right in front of the arrival gate.
Govt to infuse Rs.1,200 cr into AI next week
The government will finally infuse Rs.1,200 crore equity into cash-strapped Air India Ltd next week even though the national carrier had not achieved some key targets set by the government, according to two civil aviation ministry officials who did not want to be identified.
The infusion, the next instalment of a Rs.5,000 crore government bailout, has been on the cards for several months, although the Cabinet Committee of Economic Affairs said in October that it wouldn’t happen because the airline had not met its targets.
Mint reported an unnamed government official as saying, in a story published 28 October, that the committee had said it couldn’t approve the release of funds until a group of ministers(GoM) that had set the original targets signed off on the airline’s failure to meet some of them.
Mint couldn’t immediately ascertain whether the GoM has approved the exception.
One of the targets that has not been met by Air India is rationalisation of wages.
Air India spent at least Rs.3,000 crore on paying salaries of 33,000 employees in 2009-10.
The infusion, the next instalment of a Rs.5,000 crore government bailout, has been on the cards for several months, although the Cabinet Committee of Economic Affairs said in October that it wouldn’t happen because the airline had not met its targets.
Mint reported an unnamed government official as saying, in a story published 28 October, that the committee had said it couldn’t approve the release of funds until a group of ministers(GoM) that had set the original targets signed off on the airline’s failure to meet some of them.
Mint couldn’t immediately ascertain whether the GoM has approved the exception.
One of the targets that has not been met by Air India is rationalisation of wages.
Air India spent at least Rs.3,000 crore on paying salaries of 33,000 employees in 2009-10.
Airlines hide ‘consumer friendly’ info
New Delhi: A day ahead of the Directorate General of Civil Aviation’s (DGCA) Wednesday deadline requiring all domestic airlines to make fares across different sectors public, all domestic airlines, except for state-owned Air India, posted tariff data sheets on their websites. But, for a routine traveler, all of this read more like unprocessed data, and less of information.
In providing a break-up of tariffs on route basis, most airlines have omitted some or the other detail. For instance, on the IndiGo website, the Mumbai-Delhi fare sheet has 14 columns, first column specifying the distance between the two cities, the last column stating the surcharge being charged and the dozen columns in between representing as many fare levels. These dozen columns represent nine regular fare levels and three AP (advance purchase) fare levels. These are basically different fare buckets in the economy class with each bucket holding a specified number of seats. Also, the fine print states that these do not include passenger service fee, user development fee, transaction fee and service tax. Similarly, a quick look at country’s leading carrier Jet Airways’ fare sheet reveals that the carrier has forgotten to mention fares on one of the busiest sector, Delhi-Mumbai.
In providing a break-up of tariffs on route basis, most airlines have omitted some or the other detail. For instance, on the IndiGo website, the Mumbai-Delhi fare sheet has 14 columns, first column specifying the distance between the two cities, the last column stating the surcharge being charged and the dozen columns in between representing as many fare levels. These dozen columns represent nine regular fare levels and three AP (advance purchase) fare levels. These are basically different fare buckets in the economy class with each bucket holding a specified number of seats. Also, the fine print states that these do not include passenger service fee, user development fee, transaction fee and service tax. Similarly, a quick look at country’s leading carrier Jet Airways’ fare sheet reveals that the carrier has forgotten to mention fares on one of the busiest sector, Delhi-Mumbai.
Fare cut or not, airline profits will fly this quarter
Mumbai: Any action by the civil aviation ministry to bring down air fares will hurt full-service carriers such as Kingfisher and Air India more than their low-cost peers, though overall, this would be the best quarter for airlines in the country, even if price cuts are effected, goes the view on the Street.
“The high fares being talked about are those applicable on bookings that happen in the last ten days or the last three days. Full-cost carriers like Kingfisher Airlines and Air India are the ones that see a sizeable number of seats booked during this period due to their corporate and premium clientele. Thus, a comparatively greater effect would be noticed on their toplines,” said an analyst at a domestic brokerage firm, requesting anonymity.
According to him, the proportion of bookings within 10 days of the date of travel is around 30% for the full-service carriers compared with 10-15% for low-cost carriers such as Spicejet and JetLite.
Jet Airways, another full-service operator, also sees around 30% of bookings in the last ten days, but not much in the last three days, the analyst said. Besides, its low-cost brand, JetLite, helps reduce the overall effect on the topline.
Anoop Kanuga, managing director, Bhatija Travels, however said Jet Airways too sees major bookings in the last three days.
A spokesperson for Air India said bookings in the last 10 days or so are mainly for sectors like Mumbai-Delhi, while those for tourism-oriented sectors vary.
“The high fares being talked about are those applicable on bookings that happen in the last ten days or the last three days. Full-cost carriers like Kingfisher Airlines and Air India are the ones that see a sizeable number of seats booked during this period due to their corporate and premium clientele. Thus, a comparatively greater effect would be noticed on their toplines,” said an analyst at a domestic brokerage firm, requesting anonymity.
According to him, the proportion of bookings within 10 days of the date of travel is around 30% for the full-service carriers compared with 10-15% for low-cost carriers such as Spicejet and JetLite.
Jet Airways, another full-service operator, also sees around 30% of bookings in the last ten days, but not much in the last three days, the analyst said. Besides, its low-cost brand, JetLite, helps reduce the overall effect on the topline.
Anoop Kanuga, managing director, Bhatija Travels, however said Jet Airways too sees major bookings in the last three days.
A spokesperson for Air India said bookings in the last 10 days or so are mainly for sectors like Mumbai-Delhi, while those for tourism-oriented sectors vary.
Wednesday, December 1, 2010
Madhavan Nambiar Hands Over Charge as Civil Aviation Secretary to Nasim Zaidi
M. Madhavan Nambiar, on his superannuation, today handed over the charge of the office of Secretary, Ministry of Civil Aviation to Syed Nasim Ahmad Zaidi. Nambiar, IAS had joined as Secretary, Civil Aviation on 17 September, 2008. During his tenure he contributed immensely to the growth of the Civil Aviation Sector. Dr. N. Zaidi, IAS is presently the Director General of Civil Aviation (DGCA). He joined as the Director General of Civil Aviation in November, 2008. Prior to this assignment, Dr. Zaidi served as the Permanent Representative of India to the Council of ICAO since 2005. Before that he was Joint Secretary in the Ministry of Civil Aviation
Foreign carriers scaling up India ops as growth takes off
Mumbai: It’s not just the domestic air carriers that are riding the aviation boom. In the past few months a number of foreign carriers have either resumed or increased services to the Indian destinations. They are looking at adding new destinations and providing value added services to lure travellers in the one of the world’s largest markets.
“The growth of the Indian economy has resulted in the growth of the masses. India has a 300 million strong middle class who can afford outbound travel,” said Olan Bundhuratana, general manager- India, Thai Airways International.
Thai Airways is not the only one looking at the India story. Lufthansa, Air Asia and Air Arabia are some of the players which have either introduced new flights, increased frequencies or lined up value-adds.
Within India, Mumbai and Delhi seem to be the first priority to increase frequencies. Recently, Thai Airlines announced three flights between Mumbai and Bangkok, taking the total number of weekly flights to ten. It plans go double daily on this route by April with 14 weekly flights. Austrian Airlines, which had suspended Mumbai flights around a year-and-a-half back, has also resumed five flights on the Mumbai-Vienna route.
Some of these airlines are also looking at other Indian cities. Lufthansa is also keen on increasing its exposure here and along with Mumbai is looking to increase frequencies in Pune. Air Arabia is also seeking to ramp up operations.
“The growth of the Indian economy has resulted in the growth of the masses. India has a 300 million strong middle class who can afford outbound travel,” said Olan Bundhuratana, general manager- India, Thai Airways International.
Thai Airways is not the only one looking at the India story. Lufthansa, Air Asia and Air Arabia are some of the players which have either introduced new flights, increased frequencies or lined up value-adds.
Within India, Mumbai and Delhi seem to be the first priority to increase frequencies. Recently, Thai Airlines announced three flights between Mumbai and Bangkok, taking the total number of weekly flights to ten. It plans go double daily on this route by April with 14 weekly flights. Austrian Airlines, which had suspended Mumbai flights around a year-and-a-half back, has also resumed five flights on the Mumbai-Vienna route.
Some of these airlines are also looking at other Indian cities. Lufthansa is also keen on increasing its exposure here and along with Mumbai is looking to increase frequencies in Pune. Air Arabia is also seeking to ramp up operations.
Air India hires yet another consultant
Air India, seemingly ever willing to take advice where it can get it, has appointed yet another consultant. The move comes as the airline struggles to cope with losses and accumulated debt in the midst of a government bailout. Besides this, some recent senior appointments have come under a cloud and the shifting of domestic services to Delhi’s new Terminal 3 in November was marked by chaos.
The latest adviser to have been hired is Deloitte Consulting India Pvt. Ltd, which beat five other contenders—KPMG, McKinsey and Co., Booz and Co. Inc., Bain and Co. and the Boston Consulting Group. It will advise the airline on macro issues and review the turnaround programme.
Under the contract, Deloitte will present a report within two months, suggesting ways of reviving Air India.
Since the government merged Air India and Indian Airlines in 2006, the merged entity has engaged a clutch of consultants.
The latest adviser to have been hired is Deloitte Consulting India Pvt. Ltd, which beat five other contenders—KPMG, McKinsey and Co., Booz and Co. Inc., Bain and Co. and the Boston Consulting Group. It will advise the airline on macro issues and review the turnaround programme.
Under the contract, Deloitte will present a report within two months, suggesting ways of reviving Air India.
Since the government merged Air India and Indian Airlines in 2006, the merged entity has engaged a clutch of consultants.
AI training chief Sukumar likely to escape the Axe
New Delhi: Stefan Sukumar is likely to survive the axe and retain his job as the Chief of Training at Air India (AI). The AI board had formed a two-member committee when it last met on November 18 to look into the "process of recruitment" that was followed to appoint Sukumar and submit a report within a fortnight. On the same day, the board had sacked Pawan Arora as the chief operating officer of AI Express.
Hired at an annual package of Rs 1.2 crore, Sukumar’s appointment had run into trouble after the revelation that AI had not even advertised for the post. The committee had detailed discussions with Sukumar and AI officials.
"Sukumar had offers from two international airlines for the same post and AI needed to decide quickly as he would have otherwise taken up some other offer. Also, he was considered the ideal candidate at a time when AI is all set to join the Star Alliance grouping of airlines," said an official. "Sukumar has worked with Lufthansa’s flight training department and knows the requirements for Star Alliance," the official added
Hired at an annual package of Rs 1.2 crore, Sukumar’s appointment had run into trouble after the revelation that AI had not even advertised for the post. The committee had detailed discussions with Sukumar and AI officials.
"Sukumar had offers from two international airlines for the same post and AI needed to decide quickly as he would have otherwise taken up some other offer. Also, he was considered the ideal candidate at a time when AI is all set to join the Star Alliance grouping of airlines," said an official. "Sukumar has worked with Lufthansa’s flight training department and knows the requirements for Star Alliance," the official added
DGCA to monitor routewise tariffs
New Delhi: Following recent instances of airlines hiking fares by 300% on some routes to exploit a massive demand-supply crunch, the Directorate General of Civil Aviation (DGCA) has set up a dedicated ''tariff analysis unit'' to monitor routewise tariffs across their networks on regular basis. Airlines had already been asked to give a monthly range of tariffs for all their routes and not charge more than the highest limit. Any change would have to be notified to the DGCA and on websites within 24 hours.
DGCA chief Nasim Zaidi, who introduced these changes and on Tuesday took over as the aviation secretary, said after assuming the new charge: ''We are adopting a twin-pronged approach to fares. One will be asking airlines to give a price band and also give routewise tariffs. We will see airlines don't breach these things.'' While the ministry says it will not interfere in setting fares, it wants to ensure that airlines don't cross their highest published fares in crunch situations.
DGCA chief Nasim Zaidi, who introduced these changes and on Tuesday took over as the aviation secretary, said after assuming the new charge: ''We are adopting a twin-pronged approach to fares. One will be asking airlines to give a price band and also give routewise tariffs. We will see airlines don't breach these things.'' While the ministry says it will not interfere in setting fares, it wants to ensure that airlines don't cross their highest published fares in crunch situations.
Monday, November 15, 2010
Paramount to restart ops, target tier II & III cities
Chennai: After hitting an air pocket over leasing problems resulting in suspension of flight services over the last few months, Paramount Airways is again set to take wing in the next one month. The company will restore services to all 17 destinations. “All issues, including those related to leasing, have been settled. We hope to commence operations in December and restore connectivity to all 17 destinations where we were operating by March,” said Paramount Airways managing director M Thiagarajan.
The company is buying eight A-320s and six Embraer Q400s. “In addition, we will lease a few Airbus 320s along with crews,” Thiagarajan said.
The company has been facing problems related to maintenance reimbursement with leasing companies such as Gecas and ECC. The company will target tier II and tier III cities in its quest to become a pan-India player.
Paramount held 27% market share in the southern region.
The company is buying eight A-320s and six Embraer Q400s. “In addition, we will lease a few Airbus 320s along with crews,” Thiagarajan said.
The company has been facing problems related to maintenance reimbursement with leasing companies such as Gecas and ECC. The company will target tier II and tier III cities in its quest to become a pan-India player.
Paramount held 27% market share in the southern region.
SpiceJet set to name Maran as chairman
New Delhi: Low-cost airline SpiceJet is headed for a complete overhaul of its board with Sun Network chairman Kalanithi Maran taking over as chairman of the carrier following acquisition of over 66% stake in the in the company through off-market transaction and open offer. The proposal to this effect is expected to come up for approval in the board meeting slated for Monday. “Maran would formally take over as airline chairman on Monday. Six new directors are also proposed to be inducted with some stepping down,” industry sources said.
Maran had in June announced to acquire 37.7% in the airline by buying out Wilbur Ross and Bhupendra Kansagara’s holding for about Rs 750 crore. Following the open offer Maran and his Kal Airways hold now about 66% in the budget carrier.
Maran had in June announced to acquire 37.7% in the airline by buying out Wilbur Ross and Bhupendra Kansagara’s holding for about Rs 750 crore. Following the open offer Maran and his Kal Airways hold now about 66% in the budget carrier.
Terminal trouble on but 2 airlines to move in today
New Delhi: Saturday: 54 departures, 14 delays of an hour or more and about six cancellations. This is how Air India's official record from Delhi stood a day before Jet Airways and Kingfisher Airlines are scheduled to move their domestic operations into terminal 3 of IGI airport. While airline officials said the situation had improved considerably and there were fewer delays, passengers who got stuck at the airport due to flights delayed by 3-5 hours were not so upbeat.
"Our flight IC 464 from Dehradun was scheduled to depart for Delhi at 11.10am but we finally left at 5pm. We had a connecting Spicejet flight to Varanasi at 2.20pm but now that we have missed it, we will have to stay the night in Delhi and book another ticket on Sunday. If only AI had told us of this delay we could have taken a taxi to Delhi. Now we have lost Rs 13,000 in the cancelled Spicejet tickets and would be spending more on an overnight stay here," said professors B Mishra and Sanjay Singh from BHU.
Passengers of a Dehradun flight and a Srinagar flight were also reportedly upset with the airline and created quite a scene at the airport. The Dehradun flight, scheduled to depart at 9.30am, finally left at 3pm while the Srinagar flight departed at 4pm against 11.30am.
According to sources, between 1am and 9am, AI operated 34 flights of which 12 arrivals and 13 departures were delayed by more than an hour. Less than 20% of their flights in this duration operated with a delay of less than an hour.
Jet Airways and Kingfisher Airlines will also be moving bag and baggage into the terminal on Sunday. Jet Airways' first departure from the terminal would be 9W 2637 to Lucknow at 5.20am while the first Jetlite flight would be S2 791 to Indore at 5.35am.
"Our flight IC 464 from Dehradun was scheduled to depart for Delhi at 11.10am but we finally left at 5pm. We had a connecting Spicejet flight to Varanasi at 2.20pm but now that we have missed it, we will have to stay the night in Delhi and book another ticket on Sunday. If only AI had told us of this delay we could have taken a taxi to Delhi. Now we have lost Rs 13,000 in the cancelled Spicejet tickets and would be spending more on an overnight stay here," said professors B Mishra and Sanjay Singh from BHU.
Passengers of a Dehradun flight and a Srinagar flight were also reportedly upset with the airline and created quite a scene at the airport. The Dehradun flight, scheduled to depart at 9.30am, finally left at 3pm while the Srinagar flight departed at 4pm against 11.30am.
According to sources, between 1am and 9am, AI operated 34 flights of which 12 arrivals and 13 departures were delayed by more than an hour. Less than 20% of their flights in this duration operated with a delay of less than an hour.
Jet Airways and Kingfisher Airlines will also be moving bag and baggage into the terminal on Sunday. Jet Airways' first departure from the terminal would be 9W 2637 to Lucknow at 5.20am while the first Jetlite flight would be S2 791 to Indore at 5.35am.
Kingfisher Airlines Q2 EBITDA profit at Rs550mn
Kingfisher Airlines has reported results for the second quarter ended 30th September, 2010.
On an overall basis, the Company has made an EBITDA profit of Rs. 550mn in Q2 FY 11 vs. a loss of Rs. 2.81bn during the same period of the previous year an improvement of Rs. 3.36bn
The Company posted a positive 20% EBITDAR margin of Rs. 3.08bn as against a loss of Rs. 0.8 Crore in the corresponding quarter of the previous financial year- an improvement of Rs. 309 Crores
EBITDA profit of Rs. 108 Crores (despite accounting for Rs. 73 Crores of costs in respect of grounded aircraft) for its domestic operations, compared to a loss of Rs. 147 Crores in the same period of the previous year - an improvement of Rs. 2.55bn. The domestic EBITDA margin also improved from -13.98% to +9.21%
This performance was despite a 18% reduction in domestic capacity in terms of seats offered, due to the unplanned grounding of Airbus aircraft.
Kingfisher Airlines continues to remain “India’s favorite airline” and the only five star rated airline in India (as per Skytrax) and the single largest carrier in the domestic industry with a market share of 20% in Q2 FY 2011.
On an overall basis, the Company has made an EBITDA profit of Rs. 550mn in Q2 FY 11 vs. a loss of Rs. 2.81bn during the same period of the previous year an improvement of Rs. 3.36bn
The Company posted a positive 20% EBITDAR margin of Rs. 3.08bn as against a loss of Rs. 0.8 Crore in the corresponding quarter of the previous financial year- an improvement of Rs. 309 Crores
EBITDA profit of Rs. 108 Crores (despite accounting for Rs. 73 Crores of costs in respect of grounded aircraft) for its domestic operations, compared to a loss of Rs. 147 Crores in the same period of the previous year - an improvement of Rs. 2.55bn. The domestic EBITDA margin also improved from -13.98% to +9.21%
This performance was despite a 18% reduction in domestic capacity in terms of seats offered, due to the unplanned grounding of Airbus aircraft.
Kingfisher Airlines continues to remain “India’s favorite airline” and the only five star rated airline in India (as per Skytrax) and the single largest carrier in the domestic industry with a market share of 20% in Q2 FY 2011.
Coimbatore will get an intl airport by 2014
Coimbatore: Coimbatore will have its own international airport on the lines of the Devanahalli airport in Bangalore by July 2014. After months of protests by local villagers, the decks have been cleared for acquiring lands for the expansion of its existing airport.
The Tamil Nadu government has given an assurance to Airports Authority of India (AAI) that the acquisition of around 612.97 acres of land required for the expansion works would be completed by next June. And the AAI can start construction works from next July.
"The works would begin in a time-bound manner as soon as the acquisition process gets over. We need just three more years to finish the construction work. And on completion, it would be an all-new international airport, comparable only with the recently constructed international airports like Bangalore and Hyderabad," Airport Director Peter K Abraham told The Times of India.
With an extended runway of 12,000 ft (it is 9,900 ft at present), it can facilitate landing and takeoff of wide-bodied and fat-bellied international flights. "What we are visualizing is not just a cosmetic expansion and renovation. It would be a total revamp keeping in view of the city's needs for another 30 years," said Peter
The Tamil Nadu government has given an assurance to Airports Authority of India (AAI) that the acquisition of around 612.97 acres of land required for the expansion works would be completed by next June. And the AAI can start construction works from next July.
"The works would begin in a time-bound manner as soon as the acquisition process gets over. We need just three more years to finish the construction work. And on completion, it would be an all-new international airport, comparable only with the recently constructed international airports like Bangalore and Hyderabad," Airport Director Peter K Abraham told The Times of India.
With an extended runway of 12,000 ft (it is 9,900 ft at present), it can facilitate landing and takeoff of wide-bodied and fat-bellied international flights. "What we are visualizing is not just a cosmetic expansion and renovation. It would be a total revamp keeping in view of the city's needs for another 30 years," said Peter
Tuesday, October 5, 2010
Air India Star Alliance Membership Delayed
It has been a long road for Star Alliance and its future member Air India, whose entry into Star has been delayed by information technology issues. The carrier will now join the world’s largest alliance next summer (instead of March), Star Alliance CEO Jaan Albrecht told The DAILY in Addis Ababa following an announcement that Ethiopian Airlines would join the alliance within 12-18 months.
An Air India spokesman, while unable to confirm a date for completion of the $190-million SITA migration for the Passenger Services System, said, We are targeting the first quarter of 2011. All systems are in place, but the problem is integrating the two codes of Indian Airlines (domestic) and Air India (international), as they are on two parallel tracks.” The two airlines are now part of the holding company National Aviation Company of India Ltd. (NACIL).
While the contract was to be completed within 300 days, an official told The DAILY in April, when the contract was signed, that this was a mammoth task and would take a year
An Air India spokesman, while unable to confirm a date for completion of the $190-million SITA migration for the Passenger Services System, said, We are targeting the first quarter of 2011. All systems are in place, but the problem is integrating the two codes of Indian Airlines (domestic) and Air India (international), as they are on two parallel tracks.” The two airlines are now part of the holding company National Aviation Company of India Ltd. (NACIL).
While the contract was to be completed within 300 days, an official told The DAILY in April, when the contract was signed, that this was a mammoth task and would take a year
Investments in AI Express need to be nurtured, says new COO
Mumbai: Even as the Air India Express Board will meet later this week to formulate the budget for the national air-carrier's low-cost arm, its newly-appointed COO described his task of growing the airline as a "challenging" one.
"I am taking over as COO of the airline only tomorrow. It is a challenging task that I have been assigned but I am looking forward to it," Air India Express' COO-designate Pawan Arora told PTI here today.
"Investments made in Air India Express need to be nurtured," he said, adding that he was confident that the airline would grow on the right lines. AI Express mainly operates across the Gulf and south-east Asia sectors.
"So far I have known the airline only as an outsider. It will not be wise for me to make any further comments at this stage," Arora, who joins the state-run carrier from IndiGo where he was the fleet commander, said.
"I am taking over as COO of the airline only tomorrow. It is a challenging task that I have been assigned but I am looking forward to it," Air India Express' COO-designate Pawan Arora told PTI here today.
"Investments made in Air India Express need to be nurtured," he said, adding that he was confident that the airline would grow on the right lines. AI Express mainly operates across the Gulf and south-east Asia sectors.
"So far I have known the airline only as an outsider. It will not be wise for me to make any further comments at this stage," Arora, who joins the state-run carrier from IndiGo where he was the fleet commander, said.
IndiGo’s big IPO may lead to re-rating of airline stocks
Mumbai: India’s leading low-fare carrier IndiGo, run by InterGlobe Aviation Pvt. Ltd, is planning to raise $500 million (Rs2,215 crore) through its initial public offering (IPO), the highest ever for an Indian airline, and this may lead to a re-rating of airline stocks, said sector analysts.
Shares of Jet Airways (India) Ltd, Kingfisher Airlines Ltd and SpiceJet Ltd are traded on Indian exchanges.
The IPO is scheduled for the last quarter of the current fiscal ending March 2011, said two persons close to the development. One of them is an airline executive and the other is an investment banker.
IndiGo has hired five investment bankers, including JM Financial Ltd, Credit Suisse Group AG, Citigroup Inc., UBS AG and Morgan Stanley for the proposed IPO.
Ahead of the IPO, IndiGo is looking at an equity placement that could result in dilution of promoters’ stake of as much as 25%. Last week, the company conducted investor roadshows in Hong Kong and Singapore for the equity placement.
Shares of Jet Airways (India) Ltd, Kingfisher Airlines Ltd and SpiceJet Ltd are traded on Indian exchanges.
The IPO is scheduled for the last quarter of the current fiscal ending March 2011, said two persons close to the development. One of them is an airline executive and the other is an investment banker.
IndiGo has hired five investment bankers, including JM Financial Ltd, Credit Suisse Group AG, Citigroup Inc., UBS AG and Morgan Stanley for the proposed IPO.
Ahead of the IPO, IndiGo is looking at an equity placement that could result in dilution of promoters’ stake of as much as 25%. Last week, the company conducted investor roadshows in Hong Kong and Singapore for the equity placement.
Flight 3 hours in air despite bomb alert
Kolkata: A Singapore Airlines flight with 225 passengers and 39 crew on board was forced to remain airborne for three hours after the captain was alerted of a bomb threat on Sunday evening.
The pilot of flight SQ 61, Johny Alberto, was somewhere over Amritsar when he received the LASP (land as soon as possible) message from Moscow air traffic control. His first option was to touch down at Delhi, the nearest airport for the wide-bodied Boeing 777-300 ER. But as the Commonwealth Games (CWG) opening ceremony was in progress, permission was denied and the aircraft directed to Kolkata nearly three hours away.
"Had there been a bomb on board the plane and had it exploded before reaching Kolkata, the authorities in Delhi would have had a lot to answer for. Though a Notice To Airmen (NOTAM) had been issued in view of the high security and restrictions for the CWG opening ceremony, an emergency landing should have been allowed," said an experienced captain.
According to former director general of DGCA Kanu Gohain, an emergency situation like this requires the pilot to land as soon as possible at the nearest available airport at which a safe approach and landing is assured.
On Sunday, the flight on the Houston-Moscow-Singapore sector departed on its last leg on time. Shortly thereafter, the customs office at Moscow airport received a call that claimed there was a bomb on board the plane. The message was immediately relayed to the Singapore Airlines headquarters. The latter alerted the pilots over the AirCraft Analytical System ( ACAS) on the aircraft.
The pilot of flight SQ 61, Johny Alberto, was somewhere over Amritsar when he received the LASP (land as soon as possible) message from Moscow air traffic control. His first option was to touch down at Delhi, the nearest airport for the wide-bodied Boeing 777-300 ER. But as the Commonwealth Games (CWG) opening ceremony was in progress, permission was denied and the aircraft directed to Kolkata nearly three hours away.
"Had there been a bomb on board the plane and had it exploded before reaching Kolkata, the authorities in Delhi would have had a lot to answer for. Though a Notice To Airmen (NOTAM) had been issued in view of the high security and restrictions for the CWG opening ceremony, an emergency landing should have been allowed," said an experienced captain.
According to former director general of DGCA Kanu Gohain, an emergency situation like this requires the pilot to land as soon as possible at the nearest available airport at which a safe approach and landing is assured.
On Sunday, the flight on the Houston-Moscow-Singapore sector departed on its last leg on time. Shortly thereafter, the customs office at Moscow airport received a call that claimed there was a bomb on board the plane. The message was immediately relayed to the Singapore Airlines headquarters. The latter alerted the pilots over the AirCraft Analytical System ( ACAS) on the aircraft.
Sunday, October 3, 2010
Construction of Boeing’s MRO depot in Nagpur set to begin
Nagpur: Work for the construction of the Boeing Maintenance, Repair and Overhaul (MRO) depot in Nagpur’s MIHAN (Multimodal International Hub Airport at Nagpur) SEZ area is expected to start within two months.
“Finally, Air India and Boeing have got down to designing the MRO. The work for its construction is most likely to start in the next one or two months,” managing director of Maharashtra Airport Development Company (MADC), the nodal agency developing MIHAN, R C Sinha, told The Indian Express. Boeing had announced, amid much fanfare in Nagpur about four years ago, that the Rs 500-crore project would set up the MRO as part of India’s deal for purchase of a fleet of aircraft from the aviation giant. The project, envisaged to bring many ancillaries and business opportunities to Nagpur, however, made little headway, leading to media speculation that Boeing was dragging its feet or was planning to pull out of Nagpur. Boeing (India) Chairman Dinesh Keskar, however, had, all through, been refuting the reports and reaffirming his company’s commitment to set up the project at Nagpur. Sources, however, always maintained that uncertainty about handing over of the Nagpur airport to MADC and public spats between Nagpur MP Vilas Muttemwar and Civil Aviation Minister Praful Patel had made Boeing nervous about Nagpur as venue
“Finally, Air India and Boeing have got down to designing the MRO. The work for its construction is most likely to start in the next one or two months,” managing director of Maharashtra Airport Development Company (MADC), the nodal agency developing MIHAN, R C Sinha, told The Indian Express. Boeing had announced, amid much fanfare in Nagpur about four years ago, that the Rs 500-crore project would set up the MRO as part of India’s deal for purchase of a fleet of aircraft from the aviation giant. The project, envisaged to bring many ancillaries and business opportunities to Nagpur, however, made little headway, leading to media speculation that Boeing was dragging its feet or was planning to pull out of Nagpur. Boeing (India) Chairman Dinesh Keskar, however, had, all through, been refuting the reports and reaffirming his company’s commitment to set up the project at Nagpur. Sources, however, always maintained that uncertainty about handing over of the Nagpur airport to MADC and public spats between Nagpur MP Vilas Muttemwar and Civil Aviation Minister Praful Patel had made Boeing nervous about Nagpur as venue
Wednesday, September 22, 2010
Maiden aviation policy ignores travellers’ grouses
Mumbai: More than one fifth of air passenger complaints last month were of lost baggage followed by rude airline staff, according to data released by the civil aviation ministry. But these two issues are not addressed in the new passenger rights policy. While 22 per cent of 1078 complaints were of lost baggage, 11 per cent was of misbehaved staff.
But the ministry’s maiden policy on passenger rights that came into effect on August 15 has no provisions to protect for such travellers. The rule only helps passengers stranded because of denied boarding, flight delays and last-minute cancellations. Last month, airlines compensated 52,000 such travellers with full refunds against the ticket, cash compensation, hotel accommodation or by putting them in alternative flights.
The Air Passenger Association of India (APAI), a body formed by air travellers had pointed out these gaps when the policy was at a draft stage but the aviation regulator ignored it. “Baggage loss is the most common problem. How can the regulator ignore it,” said Sudhakar Reddy, national president, APAI
But the ministry’s maiden policy on passenger rights that came into effect on August 15 has no provisions to protect for such travellers. The rule only helps passengers stranded because of denied boarding, flight delays and last-minute cancellations. Last month, airlines compensated 52,000 such travellers with full refunds against the ticket, cash compensation, hotel accommodation or by putting them in alternative flights.
The Air Passenger Association of India (APAI), a body formed by air travellers had pointed out these gaps when the policy was at a draft stage but the aviation regulator ignored it. “Baggage loss is the most common problem. How can the regulator ignore it,” said Sudhakar Reddy, national president, APAI
Lost baggage tops flier complaints
Mumbai: More than a fifth of air passenger complaints last month were of lost baggage, followed by airline staff being rude, according to nation-wide data released by the civil aviation ministry on Friday. This is the first time that the ministry has taken stock of passenger grievances. Of the 1,078 complaints recorded, 22 per cent were from passengers who had lost their baggage during transit. The next common complaint, accounting for 11 per cent of grievances, was of airline staff — both crew and ground — being uncooperative.
Almost 40 lakh people flew domestic airlines last month. Baggage loss is one of the greatest passenger inconveniences, with 25 million bags being lost across the globe during transit last year, according to the International Air Transport Association. Though the most common passenger problem, compensation for lost baggage is not part of the government’s new policy on passenger rights.
The Air Passenger Association of India had pointed out these gaps when the policy was being drafted. “Baggage loss is the most common problem. How can the regulator ignore it,” the president Sudhakar Reddy asked.
Almost 40 lakh people flew domestic airlines last month. Baggage loss is one of the greatest passenger inconveniences, with 25 million bags being lost across the globe during transit last year, according to the International Air Transport Association. Though the most common passenger problem, compensation for lost baggage is not part of the government’s new policy on passenger rights.
The Air Passenger Association of India had pointed out these gaps when the policy was being drafted. “Baggage loss is the most common problem. How can the regulator ignore it,” the president Sudhakar Reddy asked.
Smaller airports' city side to get private facelift
New Delhi: India’s rapidly increasing air travellers will in a few years have better facilities and flying experience even at the smaller airports as the government has approved cityside development of non-metro airports through private participation, which will help raise funds for their modernisation.
The Airports Authority of India, or AAI, will lease out land around the airports for 30 years, extendable by another 30 years, for some upfront payment and yearly rentals.
“The ministry will issue formal orders to the authority next week and city-side development of 10 airports in Phase-I will be undertaken, to begin with,” a ministry official told ET.
These airports include Ahmadabad, Jaipur, Lucknow, Amritsar, Indore, Vishakhapatnam, Guwahati and Bhubaneshwar.
The ministry has, however, clarified that maintenance of the terminal building will not be included in the scope of city-side development of the airports, clearly indicating that the intent is not to privatise these airports on the lines of those in Delhi and Mumbai.
The Airports Authority of India, or AAI, will lease out land around the airports for 30 years, extendable by another 30 years, for some upfront payment and yearly rentals.
“The ministry will issue formal orders to the authority next week and city-side development of 10 airports in Phase-I will be undertaken, to begin with,” a ministry official told ET.
These airports include Ahmadabad, Jaipur, Lucknow, Amritsar, Indore, Vishakhapatnam, Guwahati and Bhubaneshwar.
The ministry has, however, clarified that maintenance of the terminal building will not be included in the scope of city-side development of the airports, clearly indicating that the intent is not to privatise these airports on the lines of those in Delhi and Mumbai.
AI pilots say training facilities 'pathetic’
New Delhi: Pilots of Air India have raised serious doubts about the airline’s flight safety. The 700-member strong ICPA (Indian Commercial Pilots Association) — the biggest AI pilot association — has written to the management complaining about the
“pathetic state” of training facilities at the airline’s Central Training Establishment (CTE), Hyderabad.
Sent on September 13, the confidential ICPA mail points out that “more than half of the 522 fatalities in airline accidents in the US since 2000 have been linked to problems with simulators”.
The association has said the Airbus A320 simulators at the training centre were more than two decades old.
While “in other airlines the simulators are maintained in a ‘top-class’ condition”, says the pilots’ mail, the ones in the CTE are “in a pathetic state”.
Trainee pilots, the ICPA said, were unable to get a feel of more than half of the emergency situations that can arise while flying an aircraft “as the state of simulators does not permit their simulation
“pathetic state” of training facilities at the airline’s Central Training Establishment (CTE), Hyderabad.
Sent on September 13, the confidential ICPA mail points out that “more than half of the 522 fatalities in airline accidents in the US since 2000 have been linked to problems with simulators”.
The association has said the Airbus A320 simulators at the training centre were more than two decades old.
While “in other airlines the simulators are maintained in a ‘top-class’ condition”, says the pilots’ mail, the ones in the CTE are “in a pathetic state”.
Trainee pilots, the ICPA said, were unable to get a feel of more than half of the emergency situations that can arise while flying an aircraft “as the state of simulators does not permit their simulation
Pilots have a nip, then nap in airborne planes
Chennai: With a recent court of inquiry revealing that the pilot of the Air India aircraft that crashed at the Mangalore airport had dozed off for over 90 minutes, air passengers are raising concerns over the safety and security norms in the civil aviation sector. DGCA officials maintain that there is no proper system to monitor “controlled naps” inside the cockpit.
“Though some airliners have certain measures to monitor ‘controlled naps’ inside the cockpit, India’s aviation industry is yet to frame rules and guidelines to address this issue,” said a senior official of Airports Authority of India (AAI). “Though a maximum of 30 minutes’ controlled nap is allowed, none of the airliners has ever taken action on its violation,” Capt. M. Ranganathan, an aviation expert and veteran pilot, told this newspaper.
Another cause of concern is that about 200 pilots have failed breath analyser tests for alcohol before takeoff in the last two years. “Both airlines and the Aviation ministry are ignoring the safety concerns of air passengers....” said Mr D. Sudhakara Reddy, founder president of Air Passengers’ Association of India (APAI).
While addressing a seminar on the rights and responsibilities of air passengers, Mr Reddy also alleged that authorities were ignoring the serious issue that over 40 airports in the country were running without proper safety norms
“Though some airliners have certain measures to monitor ‘controlled naps’ inside the cockpit, India’s aviation industry is yet to frame rules and guidelines to address this issue,” said a senior official of Airports Authority of India (AAI). “Though a maximum of 30 minutes’ controlled nap is allowed, none of the airliners has ever taken action on its violation,” Capt. M. Ranganathan, an aviation expert and veteran pilot, told this newspaper.
Another cause of concern is that about 200 pilots have failed breath analyser tests for alcohol before takeoff in the last two years. “Both airlines and the Aviation ministry are ignoring the safety concerns of air passengers....” said Mr D. Sudhakara Reddy, founder president of Air Passengers’ Association of India (APAI).
While addressing a seminar on the rights and responsibilities of air passengers, Mr Reddy also alleged that authorities were ignoring the serious issue that over 40 airports in the country were running without proper safety norms
Jet Airways bags 'Best Full Service Airline- International (Indian)' and 'Best Full Service Airline- Domestic' awards
Mumbai: Jet Airways, India’s premier international airline, has been conferred with the prestigious 'Best Full Service Airline- International (Indian)' and 'Best Full Service Airline- Domestic' awards for 2009 by the Air Passengers Association of India (APAI).
Mr. Saroj Datta, Executive Director- Jet Airways, received the award on behalf of the airline, at a seminar on the Responsibility & Rights of Airline Passengers, jointly organised by CAI (Consumer Association of India) and APAI on September 18, 2010 at Chennai, attended by several luminaries from the trade and travel industry, and members of the media. The awards were given out by Sri K Shanmugam, IAS , Secretary, Finance & former Secretary, Dept. of Consumer Affairs and Food, Govt. of Tamil Nadu.
Receiving the awards, Mr. Datta said, “On behalf of Jet Airways, I would like to thank the APAI for this distinct recognition and honour. Importantly, these awards holds special significance as they are a recognition of our renowned service by none other than our guests. Jet Airways is committed to delivering truly world class service and has worked to continually enhance the excellent in-flight product and service on all our flights. These awards stand testimony to our commitment to continually focus on the needs of our guests, thus offering them a truly world-class travel experience."
The largest private airline operator in the country (with its all-economy subsidiary JetLite), Jet Airways currently flies to 23 international destinations across North America, Europe, Asia, Africa and the Gulf, including New York (both JFK and Newark), Toronto, Brussels, London (Heathrow), Johannesburg, Hong Kong, Singapore, Kuala Lumpur, Colombo, Bangkok, Kathmandu, Dhaka, Kuwait, Bahrain, Muscat, Doha, Abu Dhabi, Dubai, Jeddah, Sharjah, Dammam and Riyadh.
Jet Airways was previously honoured by the APAI as the 'Best Full Service Airline-India' in 2007, and as the ‘Best Full Service Airline in India’ in 2008.
The Air Passengers Association of India (APAI) is India’s only national, non-profit organization totally dedicated to the welfare of the air passenger
Mr. Saroj Datta, Executive Director- Jet Airways, received the award on behalf of the airline, at a seminar on the Responsibility & Rights of Airline Passengers, jointly organised by CAI (Consumer Association of India) and APAI on September 18, 2010 at Chennai, attended by several luminaries from the trade and travel industry, and members of the media. The awards were given out by Sri K Shanmugam, IAS , Secretary, Finance & former Secretary, Dept. of Consumer Affairs and Food, Govt. of Tamil Nadu.
Receiving the awards, Mr. Datta said, “On behalf of Jet Airways, I would like to thank the APAI for this distinct recognition and honour. Importantly, these awards holds special significance as they are a recognition of our renowned service by none other than our guests. Jet Airways is committed to delivering truly world class service and has worked to continually enhance the excellent in-flight product and service on all our flights. These awards stand testimony to our commitment to continually focus on the needs of our guests, thus offering them a truly world-class travel experience."
The largest private airline operator in the country (with its all-economy subsidiary JetLite), Jet Airways currently flies to 23 international destinations across North America, Europe, Asia, Africa and the Gulf, including New York (both JFK and Newark), Toronto, Brussels, London (Heathrow), Johannesburg, Hong Kong, Singapore, Kuala Lumpur, Colombo, Bangkok, Kathmandu, Dhaka, Kuwait, Bahrain, Muscat, Doha, Abu Dhabi, Dubai, Jeddah, Sharjah, Dammam and Riyadh.
Jet Airways was previously honoured by the APAI as the 'Best Full Service Airline-India' in 2007, and as the ‘Best Full Service Airline in India’ in 2008.
The Air Passengers Association of India (APAI) is India’s only national, non-profit organization totally dedicated to the welfare of the air passenger
M'lore air crash: Kerala CM resents delay in solatium payment
Thiruvananthapuram: Kerala Chief Minister VS Achuthanandan on Tuesday urged the Centre to take urgent steps to provide compensation at the international standard to the families of those killed in air crash at Mangalore airport on May 22, which included 54 Keralaites. In a letter to Prime Minister Manmohan Singh,
Achuthanandan said as per the Montreal Convention,the families of the victims were entitiled to Rs 70 lakh each.
Though the Centre had initially promised that the bereaved families would be adequately compensated, what could be learned later was that Air India was trying to go back on this and work out the solatium by factoring in the income profile of each of the victims.
Achuthanandan said as per the Montreal Convention,the families of the victims were entitiled to Rs 70 lakh each.
Though the Centre had initially promised that the bereaved families would be adequately compensated, what could be learned later was that Air India was trying to go back on this and work out the solatium by factoring in the income profile of each of the victims.
14 yrs on, India yet to act on air safety proposals
Mumbai: Whether any lessons are learnt from the Mangalore air tragedy remains to be seen. But some vital air safety recommendations following the 1996 Charkhi Dadri mid-air collision, which killed 349 passengers, have not yet been implemented.
Justice R C Lahoti in his inquiry report on the Charkhi Dadri crash had recommended the formation of an independent air traffic control. Most countries such as Australia, the US, UK, France, Spain have autonomous ATC organisations. Fourteen years later though, the country still to act on Lahoti's air safety recommendation.
While the plans to corporatise air traffic control (ATC) got going last year — the corporatised entity is likey to be called Air Navigation Services Corporation (ANSC) — recent developments indicate that air traffic control may not be made into an independent body as recommended by Lahoti report
Justice R C Lahoti in his inquiry report on the Charkhi Dadri crash had recommended the formation of an independent air traffic control. Most countries such as Australia, the US, UK, France, Spain have autonomous ATC organisations. Fourteen years later though, the country still to act on Lahoti's air safety recommendation.
While the plans to corporatise air traffic control (ATC) got going last year — the corporatised entity is likey to be called Air Navigation Services Corporation (ANSC) — recent developments indicate that air traffic control may not be made into an independent body as recommended by Lahoti report
Air India plans to dry-lease 4 Airbus A-330 aircraft
Mumbai: Air India is planning to dry-lease four Airbus A-330 aircraft to service some of its medium-haul international routes, airline sources said on Monday.
"The purpose of taking A-330 aircraft is to deploy them on medium-haul routes or on sectors which have 7-8 hours of flying, like Hong Kong," the sources said, adding "though we are leasing only four aircraft now, our actual requirement is that of ten of these planes."
Currently, the national carrier has two of these wide-body planes in its fleet which are operating on the Jeddah and Shanghai sectors.
The leasing period of the A-330s would be one-and-a-half year to two years, the sources said. Under the dry-lease arrangement, the lessor provides an aircraft without crew, insurance, ground staff, supporting equipment and maintenance, all of which has to be taken care of by the lessee.
The routes on which these A-330 aircraft would be deployed are being finalised, the sources said, adding that the delivery of these leased planes would have to be made between October 2010 and September 2011.
"The purpose of taking A-330 aircraft is to deploy them on medium-haul routes or on sectors which have 7-8 hours of flying, like Hong Kong," the sources said, adding "though we are leasing only four aircraft now, our actual requirement is that of ten of these planes."
Currently, the national carrier has two of these wide-body planes in its fleet which are operating on the Jeddah and Shanghai sectors.
The leasing period of the A-330s would be one-and-a-half year to two years, the sources said. Under the dry-lease arrangement, the lessor provides an aircraft without crew, insurance, ground staff, supporting equipment and maintenance, all of which has to be taken care of by the lessee.
The routes on which these A-330 aircraft would be deployed are being finalised, the sources said, adding that the delivery of these leased planes would have to be made between October 2010 and September 2011.
Dublin Airport woos AI to make it its European hub
Dublin Airport Authority (DAA) is in talks with Air India to woo it to use the Irish airport as its European hub by promising an estimated annual savings of Euro 14 million and immigration and customs clearance for its passengers transiting to the U.S.
The talks have been going on for the past several months since the national carrier started looking for another hub in Europe after Frankfurt.
Air India, which operates three flights out of India and two from the US to its Frankfurt hub, has been considering shifting out of the German city and was looking for another European airport as a hub. However, no firm decision has yet been taken.
With a high-level Air India team visiting Dublin Airport a few months ago, DAA Chief Executive Declan Collier is now here to take the discussions with Air India further.
DAA was also looking at Kingfisher as a potential customer which can make the Irish airport its hub. Jet Airways already has Brussels as its operational hub in Europe.
The talks have been going on for the past several months since the national carrier started looking for another hub in Europe after Frankfurt.
Air India, which operates three flights out of India and two from the US to its Frankfurt hub, has been considering shifting out of the German city and was looking for another European airport as a hub. However, no firm decision has yet been taken.
With a high-level Air India team visiting Dublin Airport a few months ago, DAA Chief Executive Declan Collier is now here to take the discussions with Air India further.
DAA was also looking at Kingfisher as a potential customer which can make the Irish airport its hub. Jet Airways already has Brussels as its operational hub in Europe.
Airlines may get to borrow overseas
The government will selectively allow local airlines to borrow money from abroad to repay debt taken in India, civil aviation minister Praful Patel said.
The move is part of several measures the government is adopting to help debt-ridden carriers. Funds raised via external commercial borrowings, or ECBs, cannot be used to repay Indian rupee debt.
Jet Airways (India) Ltd, the country’s largest airline by passengers carried, sought a relaxation from the Reserve Bank of India (RBI) for raising around Rs.3,000 crore through ECBs to repay its high-cost domestic debt.
“Some of it will be allowed,” Patel said on Monday on allowing Jet’s request. He did not specify the quantum or time frame for such a move. “Ultimately, it’s not a question of good or bad, right or wrong, if the sector is in (a) problem... It’s been done for cement, steel and many other sectors in the past. Why not for aviation?”
He pointed out that RBI has already granted airlines partial relief on restructuring their loans. Some of their debt will be converted into term loans or have moratoriums of two-three years, reducing the pressure on cash flows, he said.
The move is part of several measures the government is adopting to help debt-ridden carriers. Funds raised via external commercial borrowings, or ECBs, cannot be used to repay Indian rupee debt.
Jet Airways (India) Ltd, the country’s largest airline by passengers carried, sought a relaxation from the Reserve Bank of India (RBI) for raising around Rs.3,000 crore through ECBs to repay its high-cost domestic debt.
“Some of it will be allowed,” Patel said on Monday on allowing Jet’s request. He did not specify the quantum or time frame for such a move. “Ultimately, it’s not a question of good or bad, right or wrong, if the sector is in (a) problem... It’s been done for cement, steel and many other sectors in the past. Why not for aviation?”
He pointed out that RBI has already granted airlines partial relief on restructuring their loans. Some of their debt will be converted into term loans or have moratoriums of two-three years, reducing the pressure on cash flows, he said.
Qantas passengers to sue Airbus over plunge terror
Sydney: Dozens of Qantas passengers and crew are launching a multi-million dollar case against Airbus and a component-maker over a terrifying mid-air plunge which left scores injured, a lawyer said on Monday.
Attorney Floyd Wisner said he was representing 76 passengers and crew who were on the 2008 flight which dived steeply twice, tossing people around the cabin and forcing an emergency landing at a remote Australian air force base.
Wisner refused to put a figure on the compensation sought in US courts from Europe's Airbus and American firm Northrop Grumman, which made a data unit on the plane, but said it would be in the millions of dollars.
Among the mostly Australian group he is representing, which also includes passengers from Britain, Sri Lanka, India and Singapore, are the three Qantas pilots who were on the flight, he said.
The Airbus A330-300 was flying at 37,000 feet from Singapore to Perth in October 2008 when the autopilot disengaged and the plane nose-dived, plunging 650 feet (200 metres) and throwing passengers and loose items around the cabin.
After the pilots brought it back to altitude, the plane went into another plunge and dropped another 400 feet. More than 100 people were injured.
Many passengers travelling that day were so traumatised by the incident they are no longer able to fly, he added.
He said he believed the captain of the flight, a former "top gun pilot from the US Navy", had not flown since.
Wisner, whose practice is devoted to aviation cases, said he had been contacted by Australian lawyers to work on the compensation claims before the statute of limitations expires on October 7 this year.
He said if the claims were not settled, he expected the case to go to trial in the US within two years.
Qantas, which prides itself on its safety record, said the incident was an "exceptionally rare event", noting that the Australian Transport Safety Bureau was yet to release its final report into the cause of the plunges.
Attorney Floyd Wisner said he was representing 76 passengers and crew who were on the 2008 flight which dived steeply twice, tossing people around the cabin and forcing an emergency landing at a remote Australian air force base.
Wisner refused to put a figure on the compensation sought in US courts from Europe's Airbus and American firm Northrop Grumman, which made a data unit on the plane, but said it would be in the millions of dollars.
Among the mostly Australian group he is representing, which also includes passengers from Britain, Sri Lanka, India and Singapore, are the three Qantas pilots who were on the flight, he said.
The Airbus A330-300 was flying at 37,000 feet from Singapore to Perth in October 2008 when the autopilot disengaged and the plane nose-dived, plunging 650 feet (200 metres) and throwing passengers and loose items around the cabin.
After the pilots brought it back to altitude, the plane went into another plunge and dropped another 400 feet. More than 100 people were injured.
Many passengers travelling that day were so traumatised by the incident they are no longer able to fly, he added.
He said he believed the captain of the flight, a former "top gun pilot from the US Navy", had not flown since.
Wisner, whose practice is devoted to aviation cases, said he had been contacted by Australian lawyers to work on the compensation claims before the statute of limitations expires on October 7 this year.
He said if the claims were not settled, he expected the case to go to trial in the US within two years.
Qantas, which prides itself on its safety record, said the incident was an "exceptionally rare event", noting that the Australian Transport Safety Bureau was yet to release its final report into the cause of the plunges.
Breath tests must for crew of all Indian flights
New Delhi: After recommending permanent suspension of pilots' licences for flying or even trying to fly an aircraft in an inebriated state, the Directorate General of Civil Aviation has upped the ante for keeping passengers safe from tipsy crew. DGCA chief Nasim Zaidi has proposed 100% pre-flight breath analyser tests for the entire crew — pilots and cabin crew — of all scheduled domestic and international flights operated by Indian carriers.
At present, only random checks take place that are intensified during festive seasons and New Year's Eve. Scheduled airlines are expected to do 60% crew's pre-flight testing on a random basis.
At present, only random checks take place that are intensified during festive seasons and New Year's Eve. Scheduled airlines are expected to do 60% crew's pre-flight testing on a random basis.
Dreamliner delay forces AI plan tweak
New Delhi: The Air India board is likely to hire four Airbus 330s for the South East Asian and West Asian routes till its Dreamliner jets arrive. The board will also decide on key appointments at its board meeting later this week.
Air India may rent the Airbuses for a year to fly to places taking six hours to eight hours. The airline, which has run up losses of over Rs 7,200 crore, is likely to get its first Dreamliner early next year and possibly four to five more in the same year as well as a hefty compensation for a two-year delay in the delivery of the wide-bodied planes built of carbon fibre reinforced plastic.
However, sources said, the loss-laden airline urgently needs medium haul planes on heavy traffic routes to South East Asia and West Asia, where AI is facing stiff competition from new entrants such as Air Arabia and Air Asia as well as older players who are improving their products while cutting prices.
Air India may rent the Airbuses for a year to fly to places taking six hours to eight hours. The airline, which has run up losses of over Rs 7,200 crore, is likely to get its first Dreamliner early next year and possibly four to five more in the same year as well as a hefty compensation for a two-year delay in the delivery of the wide-bodied planes built of carbon fibre reinforced plastic.
However, sources said, the loss-laden airline urgently needs medium haul planes on heavy traffic routes to South East Asia and West Asia, where AI is facing stiff competition from new entrants such as Air Arabia and Air Asia as well as older players who are improving their products while cutting prices.
Embraer plans to sell 50 planes in India over 10 yrs
New Delhi: Embraer, one of the world’s largest aerospace companies and leader in the category of commercial jets with up to 120 seats, is in talks with various airline companies and plans to sell over 50 aircraft in India over the next 10 years. “We plan to deliver 55 airplanes by 2019,” Alex Glock, vice-president, Embraer Asia Pacific told HT.
Glock said the Indian commercial aviation market was one of the most exciting in the world with significant domestic passenger demand remaining to be tapped by local airlines.
“The total annual domestic passenger traffic in India is around 44 million. Sixty one per cent of this, that is 27 million, is witnessed in category II and III cities, for which the Embraer commercial jets are best suited,” Glock said.
He said the kind of traffic that was being seen in secondary Indian cities was, in some cases, more than the entire domestic traffic of some European countries.
Of the 337 jet-powered airplanes in operation today by Indian carriers, only 20 seat fewer than 120 passengers. The backlog of aircraft currently on firm order and to be delivered to scheduled Indian airlines includes 295 aircraft with an average seating capacity of 185 passengers.
New Delhi: Embraer, one of the world’s largest aerospace companies and leader in the category of commercial jets with up to 120 seats, is in talks with various airline companies and plans to sell over 50 aircraft in India over the next 10 years. “We plan to deliver 55 airplanes by 2019,” Alex Glock, vice-president, Embraer Asia Pacific told HT.
Glock said the Indian commercial aviation market was one of the most exciting in the world with significant domestic passenger demand remaining to be tapped by local airlines.
“The total annual domestic passenger traffic in India is around 44 million. Sixty one per cent of this, that is 27 million, is witnessed in category II and III cities, for which the Embraer commercial jets are best suited,” Glock said.
He said the kind of traffic that was being seen in secondary Indian cities was, in some cases, more than the entire domestic traffic of some European countries.
Of the 337 jet-powered airplanes in operation today by Indian carriers, only 20 seat fewer than 120 passengers. The backlog of aircraft currently on firm order and to be delivered to scheduled Indian airlines includes 295 aircraft with an average seating capacity of 185 passengers.
IBM signs 10-year outsourcing deal with Jet Airways
IBM, the global information technology solutions major, has won a 10-year, $62-million (Rs 285 crore) IT outsourcing deal from Jet Airways. It is the first "total outsourcing deal" in Indian aviation, says IBM.
IBM will provide technology solutions to transform the airline's business areas such as airport operations, direct distribution and frequent flier programmes. "This will enable us to focus on our core business and improve our operational efficiencies, besides delivering a seamless customer experience," said Nikos Kardassis, chief executive officer, Jet Airways (India).
IBM will provide technology solutions to transform the airline's business areas such as airport operations, direct distribution and frequent flier programmes. "This will enable us to focus on our core business and improve our operational efficiencies, besides delivering a seamless customer experience," said Nikos Kardassis, chief executive officer, Jet Airways (India).
Shelved ATC revamp makes modernisation plan comeback
Calcutta: A safety project that was grounded midway is set to take wing again at Calcutta airport, compensating for a delayed flight to modernisation.
The announcement came even as a reality check by the Airports Authority of India confirmed what Metro had reported on August 9 — that the modernisation project would miss its August 2011 deadline.
The chairman of the Airports Authority of India, V.P. Agrawal, fixed October 2011 as the new deadline for the modernisation project. “We have reviewed the progress and the project will be completed by October 2011,” he said on Tuesday.
There was some good news too. “We are planning to spend Rs 250 crore in excess of the modernisation budget to upgrade the ATC (air traffic control) and build a new tower in around one-and-a-half-year’s time,” Agrawal said.
Of the estimated additional cost of Rs 250 crore, around Rs 100 crore is to be spent on equipment meant to increase flight safety in an airport with a history of close calls.
Calcutta: A safety project that was grounded midway is set to take wing again at Calcutta airport, compensating for a delayed flight to modernisation.
The announcement came even as a reality check by the Airports Authority of India confirmed what Metro had reported on August 9 — that the modernisation project would miss its August 2011 deadline.
The chairman of the Airports Authority of India, V.P. Agrawal, fixed October 2011 as the new deadline for the modernisation project. “We have reviewed the progress and the project will be completed by October 2011,” he said on Tuesday.
There was some good news too. “We are planning to spend Rs 250 crore in excess of the modernisation budget to upgrade the ATC (air traffic control) and build a new tower in around one-and-a-half-year’s time,” Agrawal said.
Of the estimated additional cost of Rs 250 crore, around Rs 100 crore is to be spent on equipment meant to increase flight safety in an airport with a history of close calls.
Debt-ridden airlines get relief from RBI
New Delhi: Finally, airlines have some relief from the Reserve Bank of India (RBI). The central bank has said that restructured loans of airlines will no longer be treated as non-performing assets.
Most of the airlines are on the verge of default in repaying loans to banks. In case of defaults, airlines will not be able to raise money from the markets. Together the big three of Indian skies - Air India, Jet and Kingfisher - have debts to the tune of Rs 60,000 crore, which they were finding hard to repay due to the recent downturn in the global aviation industry. "So, the RBI's decision has given a fresh lease of life to the domestic carriers," said a senior aviation ministry official.
With RBI allowing banks to restructure airline debts on a case-to-case basis, the sector is expected to get several benefits. "Airlines can get a moratorium on repaying loans without being labelled NPAs. Such a move will also ease off pressure on banks from spoiling their balance sheets due to the huge exposure to airlines, while giving them relief for repayment," said the official.
AI has loans of about Rs 40,000 crore (for aircraft purchase and working capital) and Jet-Kingfisher between them owe about Rs 20,000 crore. While Bank of India's exposure to aviation sector is Rs 4,000 crore, SBI has lent about Rs 3,000 crore. Airlines like AI have taken working capital loans on which hefty interest is paid every quarter. AI has never defaulted on interest payment while Kingfisher has sought a moratorium for two to three years. AI has said that the interest payment is proving to be its biggest cash outflow the biggest challenge.
Most of the airlines are on the verge of default in repaying loans to banks. In case of defaults, airlines will not be able to raise money from the markets. Together the big three of Indian skies - Air India, Jet and Kingfisher - have debts to the tune of Rs 60,000 crore, which they were finding hard to repay due to the recent downturn in the global aviation industry. "So, the RBI's decision has given a fresh lease of life to the domestic carriers," said a senior aviation ministry official.
With RBI allowing banks to restructure airline debts on a case-to-case basis, the sector is expected to get several benefits. "Airlines can get a moratorium on repaying loans without being labelled NPAs. Such a move will also ease off pressure on banks from spoiling their balance sheets due to the huge exposure to airlines, while giving them relief for repayment," said the official.
AI has loans of about Rs 40,000 crore (for aircraft purchase and working capital) and Jet-Kingfisher between them owe about Rs 20,000 crore. While Bank of India's exposure to aviation sector is Rs 4,000 crore, SBI has lent about Rs 3,000 crore. Airlines like AI have taken working capital loans on which hefty interest is paid every quarter. AI has never defaulted on interest payment while Kingfisher has sought a moratorium for two to three years. AI has said that the interest payment is proving to be its biggest cash outflow the biggest challenge.
Airline yields finally set to take off
Bangalore: Last fiscal, even when the demand was rising and airlines were registering high load factors, stiff competition in the sector had kept the average fares or airline yields — net revenue per passenger — low.
One of the reasons for the fare war was that full service carriers (FSCs) like Kingfisher Airlines, Jet Airways and state-owned Air India were migrating a lot of their seat capacity to low fares.
The market was suddenly flooded with low-fare seats, which pushed down the average fare earned by airlines from passengers. This, pretty much, remained the trend for the entire last fiscal and the first quarter of fiscal 2011.
That, however, is changing now. Airline experts and analysts believe with the sustained robust demand and lower fare rivalry, yields could inch up a little this year.
“For long, we have been waiting for the right opportunity to improve our yields but despite climbing demand and capacity rationalisation, we were not able to do it till now. Though, we will be able to firm it up by 8-10% (Rs250-300 per passenger) in the next one year,” said a senior airline executive, who did not want to be named.
He said higher yields will help air carriers to shore up revenues and eventually expand profitability if costs remain reined in.
Rakesh Shah, analyst with ICICI Securities, in his report brought out on Monday also expects airline average yields to improve 7-10% for local airline operators during the next two years.
One of the reasons for the fare war was that full service carriers (FSCs) like Kingfisher Airlines, Jet Airways and state-owned Air India were migrating a lot of their seat capacity to low fares.
The market was suddenly flooded with low-fare seats, which pushed down the average fare earned by airlines from passengers. This, pretty much, remained the trend for the entire last fiscal and the first quarter of fiscal 2011.
That, however, is changing now. Airline experts and analysts believe with the sustained robust demand and lower fare rivalry, yields could inch up a little this year.
“For long, we have been waiting for the right opportunity to improve our yields but despite climbing demand and capacity rationalisation, we were not able to do it till now. Though, we will be able to firm it up by 8-10% (Rs250-300 per passenger) in the next one year,” said a senior airline executive, who did not want to be named.
He said higher yields will help air carriers to shore up revenues and eventually expand profitability if costs remain reined in.
Rakesh Shah, analyst with ICICI Securities, in his report brought out on Monday also expects airline average yields to improve 7-10% for local airline operators during the next two years.
Saturday, September 11, 2010
Aviation loan revamp: RBI gives three options to banks
Mumbai: The Reserve Bank of India (RBI) has given three options, including a reduction in interest rates and conversion of loan into equity, to banks while dealing with the issue of restructuring of bad debts in the aviation sector. Some of the aviation loans have already become NPAs, bankers said here.
SBI chairman OP Bhatt said the first option is to maintain the status quo for the sector — which was prevailing during the last financial year ended March, 2010. The second one is to allow banks reduce interest rates while the third option is to convert some loans of the aviation sector into equities. “The restructuring of the aviation sector may be a combination of these three options. All the possibilities are there in the guidelines sent by the RBI,” Bhatt said. The banking system was allowed to restructure the loans to several sectors like steel and textiles seven years ago to tide over recession and project implementation woes.
RM Malla, CMD, IDBI Bank, said the banks have formed a consortium, which will soon meet to decide about the options to be exercised while restructuring the bad debts of aviation sector.
The entire banking industry’s exposure to the sector is at around Rs 55,000 crore out of which majority is lent to NACIL. SBI Capital has made its draft ready in the case of Kingfisher Airlines.
SBI chairman OP Bhatt said the first option is to maintain the status quo for the sector — which was prevailing during the last financial year ended March, 2010. The second one is to allow banks reduce interest rates while the third option is to convert some loans of the aviation sector into equities. “The restructuring of the aviation sector may be a combination of these three options. All the possibilities are there in the guidelines sent by the RBI,” Bhatt said. The banking system was allowed to restructure the loans to several sectors like steel and textiles seven years ago to tide over recession and project implementation woes.
RM Malla, CMD, IDBI Bank, said the banks have formed a consortium, which will soon meet to decide about the options to be exercised while restructuring the bad debts of aviation sector.
The entire banking industry’s exposure to the sector is at around Rs 55,000 crore out of which majority is lent to NACIL. SBI Capital has made its draft ready in the case of Kingfisher Airlines.
SpiceJet's ex-CEO in Esop row with new owners
Mumbai: Sanjay Aggarwal, the former SpiceJet CEO, is slugging it out with the new owners of the Gurgaon-based low-cost carrier for his ESOP money.
The new SpiceJet management, led by the Southern media tycoon Kalanithi Maran, has put a question mark on the employee stock ownership plan (ESOP) that was approved by the earlier board, controlled by the Kansagras — the promoter family — and US billionare Wilbur Ross. Both of whom, sold their holdings to Mr Maran.
“According to Mr Aggarwal he should be receiving at least 75 lakh shares, currently valued at `59 crore. But the new SpiceJet management thinks that he should get not a share more than 17 lakh shares, which at current market value comes to `13 crore,” said a person privy to the discussions.
According to the agreement, Mr Aggarwal would have been entitled to 3% of the company’s stocks after four years of service. However, he quit in little over a year, soon after the company changed hands.
The current SpiceJet management is sticking to the argument that Mr Aggarwal never completed the four-year term, the latter thinks that the changes brought in by the new management forced him to resign. Industry circles think that the company may reach some settlement with Mr Aggarwal later this year.
The new SpiceJet management, led by the Southern media tycoon Kalanithi Maran, has put a question mark on the employee stock ownership plan (ESOP) that was approved by the earlier board, controlled by the Kansagras — the promoter family — and US billionare Wilbur Ross. Both of whom, sold their holdings to Mr Maran.
“According to Mr Aggarwal he should be receiving at least 75 lakh shares, currently valued at `59 crore. But the new SpiceJet management thinks that he should get not a share more than 17 lakh shares, which at current market value comes to `13 crore,” said a person privy to the discussions.
According to the agreement, Mr Aggarwal would have been entitled to 3% of the company’s stocks after four years of service. However, he quit in little over a year, soon after the company changed hands.
The current SpiceJet management is sticking to the argument that Mr Aggarwal never completed the four-year term, the latter thinks that the changes brought in by the new management forced him to resign. Industry circles think that the company may reach some settlement with Mr Aggarwal later this year.
Monday, September 6, 2010
Flight ticket not confirmed, Rosaiah faces 'aam aadmi' plight
Hyderabad: Andhra Pradesh Chief Minister K Rosaiah on Sunday faced a common man's woes after he was stranded for a while at the Tirupati airport in Renigunta as his ticket to the state capital was not confirmed.
His Principal Secretary B Sam Bob and the head of Chief Minister's Security Group (CMSG) Sashidhar Reddy were also supposed to accompany Rosaiah on the flight but all the three were kept on the wait list by Kingfisher airlines. "The Kingfisher Airlines staff refused to let the Chief Minister and his aides take the flight without confirmed tickets, official sources in the Chief Minister's Office said.
This left the Chittoor district officials as well as the CMSG personnel in a tizzy. Interestingly, Union Minister for Urban Development S Jaipal Reddy, his deputy Kumari Selja, several state ministers, a few MPs and their personal staff were also on the same flight.
They all were returning to Hyderabad after attending the marriage of Tirupati MP Chinta Mohan's daughter. "Luckily, two personal staff members of the political leaders were on the same flight. They agreed to cancel their journey and let the Chief Minister fly back to Hyderabad," the official told PTI.
His Principal Secretary B Sam Bob and the head of Chief Minister's Security Group (CMSG) Sashidhar Reddy were also supposed to accompany Rosaiah on the flight but all the three were kept on the wait list by Kingfisher airlines. "The Kingfisher Airlines staff refused to let the Chief Minister and his aides take the flight without confirmed tickets, official sources in the Chief Minister's Office said.
This left the Chittoor district officials as well as the CMSG personnel in a tizzy. Interestingly, Union Minister for Urban Development S Jaipal Reddy, his deputy Kumari Selja, several state ministers, a few MPs and their personal staff were also on the same flight.
They all were returning to Hyderabad after attending the marriage of Tirupati MP Chinta Mohan's daughter. "Luckily, two personal staff members of the political leaders were on the same flight. They agreed to cancel their journey and let the Chief Minister fly back to Hyderabad," the official told PTI.
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