Sivasankaran buys 50% in Sahara boss' jet

New Delhi: South-based tycoon C Sivasankaran is boarding the private jet of Sahara group patriarch Subroto Roy as a co-owner.
According to sources close to the development, Mr Sivasankaran, who has been in the news for his stake sale in coffee chain Barista and telecom operator, Aircel, will take a 50 % stake in the state-of-the-art Boeing business jet. The Sahara boss, in effect would now have to share his jet with the south-based takeover artist.
Apparently, ever since an ailment a few years back, Mr Roy had limited his travel engagements and therefore, the plane was not used much. The arrangement with Mr Sivasankaran would perhaps lead to an optimum use of the aircraft. Before Mr Roy took over the jet about three years ago, it used to be the private jet of the Boeing chairman.
The business jet, a Boeing 737, is said to be valued at Rs 200 crore and this would mean both Roy and Sivasankaran would effectively have to cough up around Rs 100 crore each for the jet. Sahara insiders say that though the jet was acquired a few years back, it was effectively on lease and it’s only now that it would be purchased from Boeing.
30/09/07 Raja Awasthi & Shubham Mukherjee/Economic Times

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ISRO to set up satellite navigation system

The Indian Space Research Organisation (ISRO) is developing an India-specific navigation system in the lines of the Global Positioning System (GPS) at an investment of about Rs 1,600 crore. The Indian Regional Navigation Satellite System (IRNSS), comprising seven satellites, will be ready in 2011-12, sias ISRO chairman G Madhavan Nair.
The indigenously developed system will serve the country's specific needs, providing infrastructure for generating data on position, navigation and timing. The data can also be used for various other applications such as agriculture, civil aviation and fisheries.
"We have already begun work on the system. It will be totally under our control. As part of the project, three satellites would be placed in the geo-synchronous transfer orbit, while the remaining four would be in geo-stationary orbit," Mr Nair said.
At present, the Global Positioning System (GPS) is controlled by the US defence department.
30/09/07 Economic Times

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NIIT Tech to grow travel vertical

Chennai: NIIT Technologies is scouting to acquire IT or BPO companies currently offering specialised services in the travel, transportation and logistics (TTL) industry.
According to Mahesh Shastry, Global Head, Travel and Transportation vertical, NIIT Technologies, acquisition is one route the company is likely to take to expand it's TTL portfolio, given the strong demand for specialised front-end IT systems, particularly in the airlines sector.
"Earlier the industry deployed 10-12 standard IT applications. Now they want solutions built around the customer such as booking and loyalty programmes," Shastry told Business Line.
With low cost airlines relying heavily on IT to cut costs, older airlines too are now following suit. "Jet airways and Indian Airlines - Air India combined are potential business opportunities for us," he said. It is understood that Air Indian and Indian Airlines have been operating on different IT platforms in the past and their merger is big opportunity for Indian IT companies. Jet Airways having opted for SAP implementation also indicates the need to tap into the ERP space in this industry, Shastry said.
29/09/07 Archana Venkat/Sify

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Sky is the limit for Indian IT, literally

Bangalore: With aviation majors like Boeing and Lockheed Martin looking at setting up captive R&D centres in India, smaller aircraft and business jet manufacturers are likely to follow suit. The other aircraft manufacturers like Bombardier, ATR, EADS Socata, Eurocopter, Hawker, Falcon are very seriously evaluating the option of setting up their R&D centre in India with a third party IT services provider or independently.
This move could mean a billion dollar business opportunity within the ecosystem of the aviation industry in India. These R&D centres would come under the engineering services segment of IT. A study done by NASSCOM and Booz Hamilton estimates that engineering services outsourcing could touch $40 billion by 2020 and the contribution by the aerospace segment is expected to be around 15%.
European Aeronautic Defence and Space (EADS), the parent company of Airbus is setting up a technology centre in Bangalore with investment to the tune of Rs 11,000 crore.
Aiding this momentum is the offset clause of the government which stipulates that 50% of $10 billion order for the purchase of 126 multi-role combat aircraft deal has to be sourced locally.
28/09/07 Thimmaya & Urvashi Jha/Economic Times

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Profits up, but IATA worried about oil

Strong demand for air travel is expected to offset rising fuel prices this year, but the International Air Transport Association has warned the situation may not continue for long.
IATA has increased its 2007 profit estimate for the world's airlines to $US5.6 billion ($6.74 billion), despite forecasts that the average price of oil for the year would rise from $US63 a barrel to $US67 a barrel.
The international airline umbrella group sees clouds gathering on the horizon.
"While we are more optimistic for 2007, the continuing high price of oil combined with turmoil in credit markets is a cause for concern in 2008," IATA director-general Giovanni Bisignani said. "The industry net profit for 2008 is forecast at $US7.8 billion, down from the $US9.6 billion predicted in June.
"The impact of the credit crunch puts some question marks over the industry's performance next year and the continuing high price of fuel will become more difficult to (offset) with efficiency gains."
The regional outlook is mixed, with capacity increases and sluggish cargo growth blamed for poorer yields in the Asia-Pacific and a fall in absolute profits from $US1.2 billion in 2005 to $US700 million in 2007.
28/09/07 Steve Creedy/The Australian, Australia

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Airlines hire expat pilots to fly smaller aircraft

New Delhi: Indian pilots’ penchant for flying bigger aircraft and their disinclination to sit in cockpits of smaller aircraft, such as ATRs (40-70 seats), may force some airlines to rejig the delivery schedules for smaller aircraft into their fleet. Read On >>

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Booming Brics set sights on aerospace industry

Boeing’s announcement last week, that it was raising its forecast of Chinese demand for new aircraft by 21% to a staggering 3,400 over the next 20 years, was just the latest confirmation that the global aerospace industry is reorienting itself towards high-growth emerging markets. But the Chinese, Indian and Russian governments are not satisfied with only being a market (albeit an important one) for passenger aircraft built by Airbus and Boeing. Instead, the three countries are seeking to leverage access to their booming air travel markets to attract the technology transfers needed to create their own, indigenous, aircraft manufacturing industries.
As incomes rise and middle classes expand, emerging markets, and the Bric countries in particular, are driving growth in demand for air travel. Between 2004 and 2005, the Bric countries’ share of annual aircraft orders jumped from just 5% to 35%, according to Airbus. One in every five aircraft deliveries in the next 20 years will go to emerging markets, with the Asia-Pacific accounting for the bulk of new commercial aircraft in service. Asia’s current 19% share of the world’s fleet of 18,000 planes is expected to rise to 28% of the 36,400 aircraft expected to be in operation by 2026, according to Boeing.
India’s market has exploded since aviation deregulation in 2003 and is growing at 9.8% annually. Airbus projects Indian demand for new aircraft will top 900 over the next two decades.
In their aerospace ambitions, China, India and Russia are following the path blazed by Brazil, whose regional jet manufacturer, Embraer, is a well-established brand.
India plans to develop a 70-seat regional jet by 2015. A 14-seat jet is expected to enter commercial production as soon as 2009.
For its part, India may be more successful as an outsourcing hub for aircraft manufacturing than as a manufacturer of indigenous products.
Another potential obstacle is the continued weakness in the regional jet market that Russia, China and India are all using as their entry point.
For now, however, the biggest test is the ability of the Bric countries to woo foreign aircraft manufacturers and encourage them to share technology.
26/09/07 Deepak Gopinath/The Business Magazine, UK

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HAL-CAE pact to set up academy

Bangalore: Hindustan Aeronautics Limited and CAE, a Canadian firm, today signed an agreement here to set up a joint venture company that will open a helicopter simulator training centre in the city. Read On >>

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Passenger safety on legal radar

Mumbai: The Directorate-General of Civil Aviation (DGCA) is working on the finer details of a new set of guidelines that will empower it to levy hefty fines, detain aircraft within Indian territory or impose imprisonment of three years on airline officials who violate aviation safety norms. Till now, all that the agency could do was impose a petty fine or issue a memo to the carrier concerned.
The change is coming in through an amendment to the Indian Aircraft Act, 1934. Expected to come into force in a couple of months from now, it is likely to change the way the Indian aviation industry functions.
The amendment will give DGCA the right to detain planes for violations within Indian airspace and in some cases, if required, call for up to three years of imprisonment for the officials involved. The DGCA till now could only cancel licences of erring pilots, aircraft engineers and cabin crew or dash off a strong note. Even the fines levied are negligible.
The Aircraft (Amendment) Bill, 2006, was tabled by civil aviation minister Praful Patel before Parliament two weeks ago and cleared unanimously.
While it is expected to make airlines more accountable, the amendment will also offer ‘protection’ to the carriers by giving them the right to appeal against a certain decision.
26/09/07 Manju V/Times of India

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India re-elected to ICAO

India got re-elected to the International Civil Aviation Organization (ICAO) Council on 23rd September 2007 during the 36th ICAO Assembly session being held at Montreal. India has been elected consistently to the ICAO Council since its inception and the elections are held once in three years. The 36th Assembly commenced on 18th September 2007 and will conclude on 28th September 2007. An Indian delegation headed by Shri Ashok Chawla, Secretary, Ministry of Civil Aviation and including the Director General of Civil Aviation, Shri K. Gohain, Chairman, Airport Authority of India, Shri K. Ramalingam and the Joint Secretary, Ministry of Civil Aviation, Shri R.K. Singh participation in the session. Dr. Naseem Zaidi is India’s representative in the ICAO.
The ICAO Assembly is assisted by four Commissions set up under the Assembly. These are the Technical, Economic, Legal and the Administrative Commissions. This year Shri R.K. Singh, Joint Secretary, Ministry of Civil Aviation has been elected the Chairman of the Economic Commission.
It may be noted that the International Civil Aviation Organization (ICAO), an agency of the United Nations codifies the principles and techniques of international air navigation and fosters the planning and development of international air transport to ensure safe and orderly growth. Its headquarters are located in the Quartier International of Montreal, Canada. Presently there are 190 ICAO Contracting States and India is one of them.
25/09/07 Press Information Bureau (press release)

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Russian-Indian aviation pact in October

Moscow: An agreement to jointly develop a Russian-Indian multi-role transport aircraft (MTA) will be signed in October, Russia's aircraft building company Ilyushin has announced.
The firm has also invited Ukraine to take part in the project, the Russian news agency RIA Novosti said.
An inter-governmental cooperation agreement between Russia and India is to be signed by the end of October, said Viktor Livanov, general director of Ilyushin.
The MTA is expected to be configured around the Russian Il-214 project. The new prototype is to replace the veteran An-12 Cub, An-26 Curl and An-32 Cline transport planes in Russia and India.
24/09/07 IANS/Economic Times

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Taneja Aerospace launches TAAL Technologies Pvt Ltd

Taneja Aerospace and Aviation Ltd. (TAAL) has launched a new company TAAL Technologies Pvt. Ltd. This company will provide design, engineering, validation and embedded electronics solutions to aerospace and defence sectors.
Mr. Prakash Saralaya, Chief Executive Officer of TAAL Technologies said that this company would focus on American, European and Indian markets.
Taneja Aerospace, which has significant presence in aviation and aeronautical industries, is currently setting up aircraft maintenance facility for Airbus A320 / Boeing 737 class of aircraft and a significant upgrading its manufacturing facilities.
24/09/07 Moneycontrol.com

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Duty-free shops fly on aviation boom

New Delhi: It seems that the current boom in the aviation sector has transpired across all the segments closely or remotely related to the industry. After ancillary services, its now the duty-free industry, which plans to ride on this success wave. The latest quest is to make India a duty-free haven on the lines of Dubai, Singapore and Bangkok.
Experts believe that if the Indian aviation sector continues to maintain this current growth rate, India may soon emerge as a transit hub for all passengers from south Asia namely Kabul, Lahore, Karachi, Kathmandu, Bhutan, Dhaka, Colombo and Maldives.
“With India’s own international pax growth of over 18% CAGR, more & more terminating flights being introduced and the existing ones increasing their frequencies, for duty-free shopping to gain is axiomatic,” feels Paul Topping, MD Asia, Alpha Airports Group.
According to Generation group, the global duty-free and travel retail industry is forecast to reach $45 billion in retail sales in 2012. The main engines for this growth, in terms of markets, will be Asia and the Middle East. As per rough estimates, the duty-free industry in India is pegged at around Rs 300 crore.
Duty-free players in India believe that with the upgradation of infrastructure at Delhi and Mumbai Airport and new airports coming up in other major cities such as Hyderabad and Bangalore, it will provide the much required impetus to the duty-free industry.
23/09/07 Aman Dhall & Dheeraj Tiwari/Economic Times

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Hawker 4000 Super-Midsize Jet tours India

Hawker Beechcraft Corporation (HBC) has brought its newest aircraft, the composite-fuselage, super-midsize Hawker 4000 to India for customer demonstrations as part of a six-month world demonstration tour. The aircraft will spend time in Mumbai Sept. 19-20, 2007 and New Delhi Sept. 21-22, 2007 flying key customers as well as being available for viewing on static display. The airplane has already been on a demonstration tour in Australia, Austria, Brazil, Canada, China, Egypt, France, Germany, Hong Kong, Ireland, Israel, Italy, Malaysia, Philippines, Portugal, Russia, Switzerland, Singapore, Spain, Taiwan, Thailand, the United Kingdom, and the United States. Three of the new Hawker 4000s will be delivered to customers in India in 2008.
HBC enjoys a long history of selling aircraft into India. Of the approximately 122 business, turbine-powered aircraft in India today, 73 are Hawker or Beechcraft products.
The Hawker 4000 carries six passengers over 3,000 nautical miles at a Mach 0.82 cruise speed and four passengers can be carried over 3,300 nautical miles at a cruise speed of Mach 0.75. These ranges give passengers flying from Mumbai the capability of reaching Cairo, Moscow, Shanghai, or Jakarta non-stop.
21/09/07 Moneycontrol.com

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‘Infrastructure gaps cost airlines $80 m a year’

Mumbai: The already bleeding Indian airline industry suffers further due to the lack of infrastructure at airports.
The Executive Director of Jet Airways, Mr Saroj Datta, said, “Gaps in infrastructure lead to 5-10 per cent more flying time for aircraft which means a cost of $80 million per annum to the airlines.”
For Jet Airways alone, the cost is close to $25 million per annum, he added.
Mr Datta was speaking at a function to mark the 103rd birth anniversary of J.R.D. Tata, India’s pioneer industrialist often referred to as the father of Indian aviation.
Referring to a report from the Centre for Asia Pacific Aviation (CAPA), Mr Datta said losses for the industry in fiscal 2007 were in the range of $500 million and the trend is likely to continue in the 2008 fiscal as well.
Among other costs burdening Indian carriers, aviation turbine fuel (ATF) has a major impact. ATF charges, comprising 35-40 per cent of the operating cost for airlines, are much higher when compared to other countries, he said.
22/09/07 Business Line

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World airport passenger traffic grow by 4.9%

World airport passenger traffic posted a fourth consecutive year of growth in 2006, reaching a total of 4.4 billion passengers, 4.9% higher than in 2005. "The growth rate is slightly slowing down compared to 2005-04 and 2004-03 when global airport passenger traffic recorded increases of 6.2% and 10.5% respectively," says Laurent Delarue, senior manager at Arthur D. Little, which conducted a comprehensive analysis of world airport traffic and is presenting it in cooperation with ATW.
Annual passenger growth differed from region to region, with Eastern Europe, Russia and the CIS posting the highest gain of 11.2%. Asian airports came in second with a lofty growth rate of 9.7%. Growth in the Middle East was still at top level with plus 9.1%, while Western European airports' traffic rose 6.1% as the group benefited from several major events including the Winter Olympic Games in Italy and the FIFA World Cup in Germany. European and Asian airports accounted for 75% of the global growth. Oceania, defined as Australia, New Zealand and the Pacific Islands, posted a below-average growth of 4.1%. The only geographical area really lagging behind was North America with only a 0.7-point increase compared to 2005.As a matter of fact, most of the fastest-growing Intercontinental Hubs and biggest contributors to traffic growth are located in Asia.
Airport traffic in ACI's ASP area grew 8.9%. India and China accounted for 55% of the traffic volume increase in this region and about a quarter of the world's growth in passenger numbers; New Zealand experienced a traffic loss. "Without China and India, traffic growth in the region would be even lower than in Europe," remarks ADL Manager Mathieu Blondel, who notes that data for both countries do not include small and medium-sized airports. "Actual growth is probably even higher than reported growth."
"Both in India and in China the growth in domestic traffic has been the main driver of passenger air traffic since 2004, contributing to over 85% of the added capacity," Blondel confirms.
In contrast to China, India's national carriers Air India and Indian Airlines had a minimal impact on passenger growth at the country's main airports. The privately held LCCs, such as Air Sahara (now called Jet Lite following its acquisition by Jet Airways), Air Deccan, SpiceJet and Kingfisher, represented 90% of the increase in seat capacity on offer between 2004 and 2007. Not surprisingly, six of the 10 fastest-developing regional airports in the Asia/Pacific region last year were in India. Hyderabad, which will be replaced by a new airport next year, boosted passenger throughput 50% in 2006 and is the region's fastest-growing Regional Platform.
Asian countries benefited from more traffic rights, India was boosted by deregulation of the domestic market and China authorized private airlines to take off. The effect of LCCs on Asian airports is weaker than in Europe and less discriminating, as LCCs tend to serve most of the airports. The Asian Regional Platforms that host based LCCs grew 9.8% whereas the ones without grew 9.2%. Continental Hubs in Asia/Oceania grew by 6.5%, reflecting 7% growth for the Asia group and 4.4% for Oceania hubs.
22/09/07 Air Transport World/ATWOnline, US

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On a business jet plane...Indians flying high in style

New Delhi: Speaking at the second and concluding day of Gold Souk The Economic Times Dialogue on Luxury conference in New Delhi on Friday Eurocopter South Asia sales director Ludovic Boistot said: “Indians with their changing lifestyle are now increasingly opting for business jets. The demand is definitely growing.” The co-sponsors of the conference were Gitanjali Lifestyle and ITC Hotel The Maurya New Delhi, and partner was Dia Jewellery.
According to Club One Air promoter & MD Manav Singh, “Currently, in India people buy private jets so that they can visit their factories and offices in remote areas, not for a trip to Vaishno Devi, though the potential for religious tourism is there.”
While globally, many airports are destinations in themselves complete with spas, retail outlets and casinos, generating around 60-70% of its revenue from non-aeronautical sources, in India that is yet to happen. Non-aeronautical sources, on an average contribute to only 30% revenue for any Indian airport currently.
22/09/07 Economic Times

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In-flight shopping in local flights to take off

New Delhi: In-flight shopping is all set to take-off on domestic flights. Domestic carriers such as Jet Lite, SpiceJet and Indigo are all gearing up to join Air Deccan and GoAir for the next generation of in-flight retail.
The airlines are being helped right now by AVA Merchandising but other retail players such as Alpha group are also expected to enter the space soon. AVA, which has a tie up with Air Deccan and GoAir for onboard shopping, has now tied up with Jet Lite. Jet Lite will be offering onboard shopping from mid-October.
AVA has also got permission from Airport Authority of India to set up outlets at 26 airports across the country.
According to SpiceJet officials, they too will be joining the in-flight retail bandwagon soon. It is partnering with a global in-flight retail player, which will mark its entry in the Indian market. Similarly, IndiGo is also exploring the opportunity and will be introducing onboard shopping in the next 4-6 weeks.
21/09/07 Vishakha Talreja/Economic Times

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Airlines set to fly out of the red

New Delhi: After reeling under heavy losses for two years, the aviation industry is finally headed towards better days. With capacity expansion slowing substantially in FY 08, and effects of consolidation beginning to show up, industry players expect profits by the second or, at most, third quarter of the next fiscal.
In addition to the more rational approach to capacity addition by the players, more restrictive policies on handing out licences by the government have helped ameliorate the situation.
There has also been a visible economy in terms of doling out infrastructure at Delhi and Mumbai (till the modernisation is through), ensuring that the existing players look at other routes than just metros to compete with each other.
A study of low-cost carrier fares across routes on their websites reveals that there is a difference of just Rs 100-150 among airlines on the same routes, with the same fares quoted quite often.
Industry players say that the market’s appetite to absorb slightly higher fares has improved and around Diwali and between December 15 and January 15 (traditionally peak periods), the fares will be above costs. They opined that the fare war was over and the extent of bleeding of individual players had come down. Many players now say there is no fare war – quite different from their refrain at the beginning of this year.
21/09/07 Anjuli Bhargava/Business Standard

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The house that Jack built

If a fan blade of an aircraft engine breaks off in the course of a flight and shoots out of the engine casing, it might penetrate the aircraft’s fuel tank, which is something you wouldn’t want. So one of the most important tasks in the design of aircraft engines is to ensure that broken fan blades stay embedded within the engine casing and don’t fly out.
In the case of the powerful GE90-115 B engines that go into the Boeing 777, this vital piece of design was entrusted to the engineers at GE’s John F Welch Technology Centre (JFWTC) in Bangalore.
Jet engines are but one product the scientists at JFWTC are working on.
Originally conceived as a laboratory for basic research in plastics — an area close to the then chairman John F Welch’s heart — JFWTC’s mandate was expanded to cover research work required for all of GE’s businesses. This is, after all, the only research centre to which the chairman chose to lend his name — the one in Shanghai, set up two years later, is simply called the China Technology Centre and the one in Munich, set up the year after that, is called GE Global Research - Europe.
These research institutions are cost centres, spending $4 billion — around 2.5% of GE’s $163 billion annual revenues — every year. The Bangalore centre is providing GE a bigger bang for its R&D buck than centres elsewhere.
JFWTC currently has 3,000 engineers and scientists and plans are now on to expand the campus to make room for another 2,000.
21/09/07 Dibeyendu Ganguly/Economic times

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Air traffic to double in five years: Assocham

New Delhi: The air passenger traffic in the country is poised to double in five years with more disposable income and growing consumerism of the Indian middle class, industry body Assocham said today.
Passenger traffic in India is projected to double in five years and triple in nine years from now. The growth in the domestic and international cargo traffic is also estimated to reach 4.5 per cent and 12 per cent over next 10 years.
Disposable income in India has gone up by five times in past two decades and the expenditure on transportation has risen from six per cent to 14 per cent in the same period, the chamber said.
The drop in fares and conversion of premium rail travellers, the addressable population for the airlines industry is likely to grow by 10 per cent year on year in the next three years.
The Indian aviation sector has impressive growth in both passenger and cargo traffic after the arrival of several low cost carrier since 2003.
20/09/07 PTI/The Hindu

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Leaders in Aviation Attracts Regional Delegation

Singapore: The much awaited inaugural Leaders in Aviation 2007 is set to take off in October. Held strategically in Indonesia, where the much publicized sector has been taking a beating, the conference is specially dedicated to the recognition of joint efforts between the civil aviation and airline industry to ensure the smooth, uninterrupted development of civil aviation in the Asia Pacific.
The first ever international aviation conference to be held in Jakarta has already attracted some 80 over senior executives from the region's best airlines.
Organised by Singapore-based All Events Group, this conference will provide the platform for the sharing of global best practices, experiences, insights and solutions to boost the aviation industry with a tight focus on some of the most pressing concerns and issues in the industry today.
It will boast speakers from the Civil Aviation Authority of Indonesia, Garuda Indonesia, Mandala Airlines, SpiceJet and Jet Airways just to name a few.
A special segment of the conference will also examine the growth of Indonesia as an aviation centre and reaffirm their commitment and plans to improve their infrastructure and facilities in the years to come.
19/09/07 Xinhua/PR Newswire (press release), US

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Sky Airways flies into Orissa's mining belt

Bhubaneswar: Sky Airways, a non-scheduled passenger operator, introduced a service for those interested in flying to Orissa's mining belt of Keonjhar.
On Monday, an eight-seater Islander aircraft carrying seven persons including three passengers flew for the first time from Biju Patnaik International Airport at Bhubaneswar at 7.30 am and reached Tonto in Joda city of Keonjhar district at 9.15 am, a company official told reporters.
Keonjhar is about 250 km from Bhubaneswar. It is one of the main mineral producing districts in Orissa where several companies are setting up steel plants.
The flight returned to Bhubaneswar carrying four passengers, said Dibyajyoti Biswal, Sky Airways customer relations officer.
Sky Airways is promoted by the ML Agarwal group, which has business interests in Orissa's mining and steel sectors.
18/09/07 IANS/Economic Times

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Look who’s flying your plane

Mumbai: A huge shortage of pilots for flying commercial planes may have caused private airlines and the government to lower standards for recruitment, veteran pilots and industry watchers feared, a trend that is potentially dangerous. Read On >>

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Business, first class fliers to pay service tax on fuel surcharge

Business and first class travel on international flights out of India will cost Rs800 to Rs1,200 more from Tuesday for a round trip.
This follows a circular issued by the finance ministriy to airlines operating international flights out of India to levy 12.36% service tax on the fuel surcharge they impose on every business class and first class ticket.
The circular does not say anything about levying service tax on fuel surcharge on economy class tickets.
The fuel surcharge, which passes on the burden of any increase in the price of aviation turbine fuel, or ATF, on to the passenger, was previously not under the ambit of service tax. However, basic fares already come under the ambit of service tax.
With companies usually passing on service tax to the user, a Mumbai-London-Mumbai trip on business class on British Airways or Jet Airways will cost Rs800 more as the fuel surcharge is around Rs6,000. And a business-class passenger on the Mumbai-New York-Mumbai sector will have to shell out an additional Rs1,200 as the fuel cess on such tickets is around Rs10,000.
International airlines have already started sending instructions to travel agents on the increased fares.
A senior Air India executive, who did not want to be named, confirmed thedevelopment.
18/09/07 P.R. Sanjai/Livemint

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IATA Lowers 2008 Airline Profit Forecast

New York: Worldwide airline industry profits are forecast to rise a weaker-than-expected 39 percent in 2008 due to rising oil prices and slower economic growth, a trade group said Monday.
The International Air Transport Association said it expects airlines to earn $7.8 billion profit in 2008. That is down from the group's June estimate of $9.6 billion.
Underlying the reduced forecast was a prediction that oil prices would average $67 a barrel throughout 2007 and $66 a barrel in 2008.
But the news was not all bad. IATA, which represents more than 240 airlines, now expects its members to post a 2007 profit of $5.6 billion, up from a previous estimate of $5.1 billion as increased demand more than offsets rising fuel prices.
Since 2001, Asia-Pacific carriers have added 42 percent to their capacity in preparation for the growing markets in China and India. That growth combined with a sluggish cargo market is expected to drop their profit by $100 million to $700 million this year, before it rebounds to $2 billion in 2008.
17/09/07 Associated Press/CNNMoney.com

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MRPL awaiting clearance for direct supply of ATF

Mangalore: Mangalore Refinery and Petrochemicals Ltd (MRPL) is awaiting clearance from the Airports Authority of India (AAI) to supply aviation turbine fuel (ATF) directly to aircraft operating to and from the Bajpe airport here from its refinery, MRPL Managing Director R Rajamani has said. At present, Indian Oil Corporation is meeting the ATF needs of aircraft from its terminal on the airport premises, he said.
Addressing presspersons after the 19th annual general meeting of MRPL here on Friday, he said in order to earn better margins, the company had decided to market ATF directly to airlines and agreements were expected to be signed shortly. MRPL, with approval from the Ministry of Petroleum and Natural Gas, had placed orders for ATF bowsers and was expecting them by end of next month, he said.
Stating that MRPL was in touch with airport authorities in Bangalore, Goa, and Kozhikode, to supply ATF to aircraft there, Rajamani said there were a few technical and administrative issues to be sorted out in this regard. MRPL was also in touch with authorities of the international airports in Bangalore and Hyderabad and expected the agreements for supply of ATF to materialise during the next fiscal, Rajamani said.
17/09/07 Udayavani

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Aviation sector needs $120 bn investment: Praful Patel

Mumbai: Indian aviation sector needs an investment of over $120 billion by FY 17, Civil Aviation Minister Praful Patel said.
"India's aviation sector will be the sunrise industry and it will require an investment of over $120 billion over the next 10 years," he said after inauguration of new terminal at Chhatrapati Shivaji International Airport (CSIA) here today.
"Of this amount, two-thirds is likely to be absorbed by aircraft purchases, and the remaining by infrastructure. The number of civilian aircraft in the country is also estimated to swell from 350 to 1,000 by 2020," Patel said.
The number of domestic passengers would rise to 182 million per year by 2020 from 30 million now.
Inaugurating new arrival terminal 1B at CSIA, Patel said "We have set the wheels in motion for upgrading airport infrastructure in India. The new terminal 1B has resulted in expansion of capacity to meet the growing domestic traffic.
"This would go long way in benefiting both passengers and airlines and is welcome improvement in city's infrastructure."
The Mumbai airport is close to Dubai and Singapore airports in terms of handling of air traffic.
16/09/07 PTI/Economic Times

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Cabin crew schools eye IPOs, PE deals

Mumbai: Three firms that train cabin crew and other staff for India’s booming aviation sector are looking to sell shares as part of an initial public offering (IPO) next year to raise money to fund their expansion plans. Read On >>

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Gulf fares set to fall from Jan

New Delhi: Flyers on the Indo-Gulf sector could not have asked for a better bargain.
It is estimated that fares on the Indo-Gulf routes would come down by 10% in view of the extra capacity that would be inducted by the Naresh Goyal-owned airline when it launches services to the Gulf next January. Till now, bilateral rights for the lucrative Gulf sector was reserved for Air India.
The highly profitable Dubai, Abu Dhabi and Saudi Arabia routes still continue to remain reserved for Air India, at least for now.
The decision to allow Jet to fly to the Gulf comes at a time when the government is considering a proposal to allow all airlines, including start-ups, to fly on overseas routes if they fulfil minimum capitalisation and fleet size criteria. Private sector players like Air Deccan and Kingfisher are pushing for early opening up of overseas routes, but Jet is said to be wary of increasing competition.
Considering the high demand in the Gulf routes, most analysts expect fares to stabilise in the long run after a drop.
In the Gulf sector, the stakes are high for national carrier Air India which, along with Air India Express, commands almost 45% of the Indo-Gulf market, accounting for up to 50% of the company’s cash flow. The remaining part of the Gulf pie is shared by the Gulf-based airlines.
“The entry of Jet would have an impact on our profitability,” conceded a senior Air India official. To protect its turf, the flag carrier now wants to deploy additional capacity on the Gulf routes in sectors such as Dubai, Abu Dhabi and some destinations in Saudi Arabia. The pressure on fares would be more if Jet decides to deploy its value-carrier JetLite (the re-incarnation of Air Sahara) in this segment.
15/09/07 Economic Times

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Experience clause to fly abroad may get relaxed

New Delhi: The government may relax the experience clause Indian airlines need to fulfil before being allowed to fly abroad.
Airlines with at least five years of experience, a minimum of 20 aircraft and a paid- up capital of Rs 100 crore can fly abroad now.
The civil aviation ministry wants to do away with the five-year experience. However, other ministries favour a minimum experience of three years.
“No one is now opposed to relaxing the norms for flying abroad,” officials said.
With Jet being allowed to fly to the Gulf, pressure from rivals such as Kingfisher and SpiceJet has also increased.
The civil aviation ministry wants international routes to be opened up based on airlines’ technical and financial capabilities.The civil aviation ministry wants all applications for international routes to be cleared on a case-to-case basis.
However, other ministries feel a clear-cut formula should be followed. The group of ministers on civil aviation is expected to meet later this month.
14/09/07 Jayanta Roy Chowdhury/The Telegraph

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High tax on ATF cuts into profitablity of domestic carriers

New Delhi: Industry body Assocham today asked the government to reduce sales tax on jet fuel to enable the aviation industry save resources for investment in infrastructure.
Observing that high incidence of taxation on Aviation Turbine Fuel (ATF) was eroding the profitability of domestic carriers, Assocham President Venugopal Dhoot said if the sales tax was slashed by about ten per cent and customs duty by 4-5 per cent, the domestic aviation industry can save about Rs 5,000 crore of annual revenue on it.
This amount could be utilised to build airport infrastructure, he said.
The high tax on ATF for domestic carriers like sales tax, central excise, import duty and education cess works out to be 66 per cent as against eight per cent for overseas airlines, the chamber said in a study.
This adversely affected the profitability of full service carrier by about 10.5 per cent and low cost carriers by around 15 per cent.
14/09/07 PTI/Economic Times

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MRPL Awaiting Clearance for Direct Supply of ATF

Mangalore: Mangalore Refinery and Petrochemicals Ltd. (MRPL) is awaiting clearance from the Airports Authority of India (AAI) to supply aviation turbine fuel (ATF) directly to aircraft operating to and from the Bajpe airport here from its refinery, MRPL Managing Director R Rajamani has said. At present, Indian Oil Corporation is meeting the ATF needs of aircraft from its terminal on the airport premises, he said.
Addressing presspersons after the 19th annual general meeting of MRPL here on Friday September 14, he said in order to earn better margins, the company had decided to market ATF directly to airlines and agreements were expected to be signed shortly. MRPL, with approval from the Ministry of Petroleum and Natural Gas, had placed orders for ATF bowsers and was expecting them by end of next month, he said.
Stating that MRPL was in touch with airport authorities in Bangalore, Goa, and Kozhikode, to supply ATF to aircraft there, Rajamani said there were a few technical and administrative issues to be sorted out in this regard.
15/09/07 The Hindu/Daijiworld.com

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HAL sets up JV for aero engine designs

India’s state-run defence aircraft maker Hindustan Aeronautics Ltd (HAL) has set up a new 50:50 joint venture (JV) with Hyderabad-based Infotech Enterprises Ltd (IEL), which will focus on offering design and validation services for aero engines.
Infotech HAL Ltd, the new JV will have an initial equity of Rs28 crore and will have delivery centres in Bangalore and Hyderabad.
The JV company expects global aircraft engine makers such as Rolls Royce and CFM International, jointly owned by General Electric Co. of the US and Snecma of France, to outsource work on improving design and thrust of aircraft engines, and also conversion of aircraft engines to marine and industrial gas turbines.
HAL says the JV is an attempt to tap a larger share of offset contracts from foreign aircraft and engine makers.
Rajeev Lal, president (strategic and new business initiatives) at IEL, says that the JV will have revenues of around $70 million and would employ 2,000 people by 2012.
However, he clarified that IEL will not move work from its existing clients to the new entity. IEL’s biggest client in the aerospace segment is United Technologies Ltd, a US firm that owns aircraft engine maker Pratt & Whitney and owns a 15% stake in the company.
14/09/07 K.Raghu/Livemint

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ATF 8 times costlier for domestic carriers: Assocham

New Delhi: Domestic aircraft operators pay over eight times higher taxes on Aviation Turbine Fuel (ATF) as these are charged with various tax levies, totaling 66% against 8% on international airlines that fill-in ATF in India and thus erode their annual profitability by 10.5% to 15%, according to a Paper brought out by Assocham on ‘Implications of Higher Tax Incidences on ATF for Domestic Flyers’.
Aircraft traffic in top tier cities in India has grown by 33% in 2005-06 and 14% in 2004-05. Most airports have recorded a growth of over 30% YoY in fiscal 2005-06. Modernization and expansion of the major airports of Delhi, Bombay, Chennai, Kolkata, Hyderabad and Bangalore are expected to facilitate further growth in traffic
“As a result of higher tax incidences on ATF for domestic carriers like sales tax, central excise, import duty and education cess which works out to be 66% as against 8% for overseas airlines, their adverse effect on profitability of full service carrier is estimated at 10.5%. However, on low cost carriers, ATF taxes burden on profitability is assessed around 15%”.
If the government reduces sales tax on ATF by about 10% and customs by 4-5% respectively, the domestic aircraft industry can save about Rs5000 crore of annual revenue on it and suitable utilise the amount for building airport infrastructure.
13/09/07 Livemint.com

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State govts lining up sops to attract airlines

At least a dozen Indian states are offering financial concessions and infrastructural facilities to airlines to step up air connectivity in their cities.
These states are considering reduction in sales taxes and offering soft loans to airlines as compensation for servicing far-flung areas that were previously not part of air networks. Linking small cities is often financially unviable for a scheduled carrier. Some of the states are also upgrading airstrips to potentially handle small planes.
Consulting firms such as Infrastructure Leasing & Financial Services Ltd (IL&FS), Infrastructure Development Finance Co. Ltd (IDFC) and Feedback Ventures Pvt. Ltd are assisting some of the state governments in wooing airlines as well as in upgrading airports.
The Uttarakhand government, for instance, has invited expression of interest from airline operators having valid licences for operating commercial flights in the state.
IL&FS is also currently working on similar projects for Rajasthan and Gujarat.
Feedback Ventures had earlier assisted the Karnataka government to develop airports at various places including Hassan, Shimoga, Bijapur, Raichur and Gulbarga, as a preliminary step to boost air connectivity.
The Kerala government is also formulating concessions for airlines to increase the connectivity within the state as well as flights to other states.
The north-eastern states of Meghalaya, Assam, Tripura, Mizoram, Manipur, Nagaland and Arunachal Pradesh have also invited airline operators to increase routes in their states.
14/09/07 P.R. Sanjai/Livemint

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Pawan Hans plans to start scheduled airline soon

New Delhi: Pawan Hans, the leader in off-shore helicopter operations in India would soon start schedule airline services.
The company plans to acquire six 18-24 seater small aircraft with an investment of Rs 450 crore to operate on non-metro routes such as Andaman and Nicobar, Uttrakhand, North-East states and other far-off sectors.
The new airline likely to be branded Pawan Hans will start operations sometime next year. The government-owned company has already been granted a no objection certificate (NOC) by the ministry of civil aviation to start airlines services. It is awaiting a final nod from the directorate general of civil aviation to start commercial airline services.
Pawan Hans plans to invest Rs 1,000 crore for expanding its operations. This will be raised through debt and internal accruals. It also plans to purchase 22 new choppers to take its total fleet to 57 helicopters.
13/09/07 Chanchal Pal Chauhan & Nirbhay Kumar/Economic Times

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Govt to offer more sops to improve air connectivity

New Delhi: The government may offer more incentives to regional airlines for providing air connectivity to smaller cities. The proposals under consideration include exempting regional operators from night landing charges, terminal navigational landing charges (TNLC) and route navigation facility charges (RNFC).
Smaller aircraft already enjoy exemption from landing charges. As per the existing guidelines aircraft with a take-off mass of less than 40,000 kg are not required to pay landing charges.
“Regional airlines operating with smaller aircraft with the take-off mass less than 40,000 kg may be exempted from paying night landing charges once the non-metro airports are equipped with night landing facilities. At a later stage, they may not be required to pay RNFC and TNLC too,” a civil aviation ministry official told ET. Regional airlines operating with comparatively bigger aircraft would, however, be charged for all the services provided by the airport operator and the air traffic controllers (ATCs).
Three airlines — Air Dravida, Star Aviation and Emric Air — are in the queue to take off as regional airlines in the south India. Others such as Bird group and Megha Airways are also readying their plans to fly as regional airlines.
13/09/07 Nirbhay Kumar/Economic Times

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India can become an MRO hub

India could soon emerge the civil aviation maintenance, repair and operations (MRO) hub for Asia-Pacific. With the Indian market growing at around 8% annually, the civil aviation ministry is expected to actively pursue foreign investment in MROs, so large deals and joint ventures with global aviation majors may be expected soon.
The entire Asia-Pacific aircraft and engine MRO market totalled $ 8.71 billion in 2005 and is estimated to touch $12.90 billion in 2011. Many foreign as well as Indian companies are looking to set up MROs in India. In recent months, three different joint ventures between Indian companies and foreign companies like Airbus, Boeing and SIA Engineering have embarked upon setting up MROs. It is learnt that Global Vectra, the second largest helicopter operator in India, plans to set up an MRO facility in Mumbai.
The government will consider the allocation of land for hangars, reasonable and realistic lease rentals, long-term lease periods, and revoking royalty on aviation activities to encourage the creation of MRO hubs in the country. It would also consider outsourcing line maintenance by domestic and international airlines to MROs. Greenfield and modernisation projects of existing airports will also have provision for hangars and space for MROs.
12/09/07 Oineetom Ojah/Financial Express

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Frequent flyers get special privileges

New Delhi: Jet Airways has over 1 million members under its frequent flyer programme. Similarly, Kingfisher Airlines offers a host of privileges under its frequent flyer programme King Club. The King Club membership comprises three Royal tiers - Red, Silver and Gold.
To retain the tier status, one needs to fly the required number of times per year. One can earn miles by not just flying but also by booking online as well as through web and kiosk check-in .
"The privilege of getting free tickets for a holiday trip with family is the biggest attraction of the loyalty programme. Sales and marketing professionals, consulting agents and project managers are the ones who travel the most and earn enough miles to take an overseas vacation trip," says Kingfisher Airlines, GM (sales), Manoj Chacko.
Jet Airways also offers the privilege of buying miles if you fall short of a few points on a particular route. The airlines also allow members to redeem points on partner airlines like KLM, Air France, North West Airlines, Qatar Airways and more.
11/09/07 Urvashi Jha/Economic Times

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Certification for UAVs under consideration

Bangalore: In a recent decision, the Centre for Military Airworthiness and Certification (CEMILAC) has recommended that all future unmanned aerial vehicles (UAVs) be cleared for airworthiness.
Sources told The Hindu that the recommendation has been made in a report of a team from the centre to the Defence Ministry. “It is currently under consideration.” Almost all the 41 countries currently operating UAVs are debating certification is sues.
In India, design, manufacture, operation, maintenance, safety and liability of UAVs are not assessed by any independent regulatory authority. Neither are potential failures anticipated, deviations in design and manufacture assessed, operational demands simulated and evaluated or designs certified. Such tasks with regard to manned military aircraft are performed by the CEMILAC. (The air worthiness of civilian aircraft is governed by the Directorate General of Civil Aviation.)
If the CEMILAC’s insistence on airworthiness certification for UAVs is accepted, norms/procedures would have to be laid down. However, questions will first have to be answered on how much of certification — vis-À-vis conventional, piloted aircraft — is required and the procedures to be applied for these unmanned craft. “The crucial question is what constitutes airworthiness for an UAV,” an official said.
The Defence Research and Development Laboratory, Aeronautical Development Establishment, which has designed and developed India’s two most prominent UAVs — the surface/ship-launched high subsonic reusable aerial target system Lakshya and the intelligence-gathering Nishant — have their in-house audits for critical design and flight. The ADE is also developing Lakshya II and a number of newer UAVs, including the Medium Altitude Long Endurance (MALE) UAV Rustam.
12/09/07 Ravi Sharma/The Hindu

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Bill to amend Aircraft Act cleared

New Delhi: The Lok Sabha today passed a Bill to amend the Aircraft Act of 1934. A new clause has been sought to be incorporated in the Act to exercise regulatory control on foreign aircraft registered in India. The original Act does not have an explicit provision regarding its applicability to foreign registered aircraft.
This would help the government to increase safety and security control on the standards of airports and Air Traffic Management and exercise regulatory control over foreign registered aircraft.
The Bill seeks to confer on the Central government powers to make rules on licensing of personnel engaged in air traffic control, certification, inspection and regulation of the communication, navigation and surveillance (CNS) and air traffic management (ANS) facilities, besides safeguarding civil aviation against acts of unlawful interference and ensuring civil aviation security.
10/09/07 The Statesman

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DRDO eyes pvt power for high-tech aircraft

Mumbai: It has been reliably learnt that the Defence Research and Development Organisation (DRDO) is planning to develop unmanned aerial vehicles (UAVs) — Lakshya and Nishant — through joint ventures with private companies — Tata Power and Larsen and Toubro.
The state agency has initiated talks with both the companies for the design and development project, estimated to cost around Rs 1,000 crore, said company officials. DRDO is looking for private participation in the maintenance of the airborne early warning and control system projects.
The strategic electronics division of Tata Power and the heavy engineering division of L&T have shown interest in this project which is worth around Rs 1,200 crore. State-owned Bharat Electronics is also believed to be in the race for this project.
DRDO is also considering a tie-up with state-run Hindustan Aeronautics for developing the components for UAVs. The Centre for Airborne Systems in Bangalore (CABS) is developing the airborne early warning system which involves a flying platform and mounted sensors like radars to provide battle-management functions.
CABS is also planning to build a radar system on an imported Embraer executive jet. The government has already sent out a request for proposal to Brazilian aircraft manufacturer Embraer.
11/09/07 Nevin John/Economic Times

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Airlines back DGCA in dispute with engineers

New Delhi: Airlines now want to bat for the regulator — Directorate General of Civil Aviation (DGCA) — whose decision to allow pilots to undertake transit checks of aircraft has been challenged in court by the Aircraft Maintenance Engineers (AME) associations. Read On >>

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IBS Completes 10 Years

Trivandrum: The IBS Software Services, a leading provider of new-generation IT solutions to the global Travel, Transportation and Logistics (TTL) industry, celebrated its 10th anniversary yesterday. In a short span of ten years, the Company has scripted a remarkable story of growth. Starting from humble beginnings at the Technopark campus here, IBS has grown to a multinational today, doing business from 11 global centers around the world. What is significant is that the Company offers a range of as many as 15 software products and other customized solutions that manage the mission-critical operations of airlines, airports, cruise lines, oil & gas companies, leisure resorts and seaports across the globe. IBS' customer list of over 70 active customers includes the world's best airlines, the busiest international airports, the best cruise lines and the top oil & gas companies.
Steady and sustained growth based on a clear vision have ensured that IBS has posted a CAGR of 47.5% in the last ten years, resulting in a 700 fold increase on capital invested in 1997, as against a 30 fold increase in staff strength over the same period. Three strategic acquisitions have helped IBS become a veritable one-stop shop for new-generation solutions that address the complete requirements of all types of airlines and cruise lines. Recently, General Atlantic LLC invested US Dollars 60 million (Rupees 242 Crores) in the company. Being a global growth investor in the technology sector, General Atlantic will provide the strategic assistance to propel IBS to the next phase of its aggressive growth strategy.
Focus on the niche Travel, Transportation and Logistics industry segments and commitment to developing new-generation technology solutions have been the underlying factors in IBS’ growth.
10/09/07 India PRwire (Press Release)

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Airline catering major to make India a major hub

Bangkok: The world's largest airline catering and in-flight solutions provider LSG Sky Chefs has decided to make India its major hub and is planning to open four new facilities in the country next year.
"To meet growing demands of India's booming aviation sector, we are planning new facilities at Hyderabad, Bangalore, Chennai and Kolkata," Chief Operating Officer, Asia-Pacific, H K Cheung said.
LSG Sky Chefs is the sole independent international airline caterer in India and has a presence at the old airports of Hyderabad and Bangalore. It is building facilities at Hyderabad and Bangalore to replace the existing ones.
"We see India as a major market where there is a strong demand for top-quality in-flight catering services," Cheung said. The market size is around $100 million and growing, Cheung, who was in the Thai capital to attend the International Travel Catering Association (ITCA) Asia-Pacific conference, said.
09/09/07 PTI/Economic Times

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How short is “skimpy”?

Calcutta/San Diego: Kyla Ebbert, 23, was ordered off an American plane because the airline thought her skirt too short.
Just as she had settled down in her seat, a Southwest Airlines employee asked her to leave the plane, Ebbert told NBC’s Today show yesterday.
“You’re dressed inappropriately. This is a family airline. You’re too provocative to fly on this plane,” she quoted the employee as saying.
Ebbert, a student headed from San Diego city to Tucson in Arizona for a doctor’s appointment, was allowed back on the plane after she offered to adjust her sweater. But she felt humiliated and embarrassed.
Airline operators in India said they had no passenger dress codes but would not allow anyone to board in “skimpy” dresses.
“The co-passengers may raise objections,” a Jet Airways official explained. But how short is “skimpy”?
“Usually, airline staff at the airport decide if anyone’s dress is improper,” he replied.
Officials of national carrier Indian (now Air India) and British Airways agreed. “We would go by the reaction of the other passengers,” a BA spokesperson said.
An official of a private Indian airline said a flier could be offloaded if he wore a sleeveless shirt that showed rashes or festering wounds on his arm.
The director-general of civil aviation, Kanu Gohen, confirmed there were no written dress codes for passengers, but added: “Indians don’t wear indecent clothes, especially while travelling on a plane.”
Airline sources said some passengers do wear short T-shirts or shorts on Mumbai-Goa flights “but they are not so bad that the passengers need to be offloaded”.
However, Kingfisher airhostesses, who work in skirts, “can’t wear short skirts, T-shirts, shorts or other revealing dresses” while flying on free passes on vacation.
09/09/07 Sanjay Mandal/AP/The Telegraph

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Aviation industry flays govt policy

New Delhi: The aviation industry is unhappy with the government’s proposal that it would examine applications for overseas service on a case-to-case basis instead of going by the uniform five years domestic flying experience.
The Union civil aviation minister, Mr Praful Patel, has stated that he wants the Indian airline industry to reach parity with foreign airlines flying to India and urged national carriers to start considering new international routes for service.
However, most private airliners are fuming at the new proposal as they feel the government’s approach is to benefit only a few big private airlines and deprive other competitors. A civil aviation ministry official also admitted that it is meant to facilitate some private airliners who have been in the flying business for less than three years.
Kingfisher Airlines is less than three years old, but is the key contender for flying West. This was made clear when Kingfisher displayed the A-380 airbus, the largest aircraft in the world on 7 May. Kingfisher has said it would fly this plane only on international routes.
Perhaps coincidentally, several Indian carriers have made new foreign route announcements.
07/09/07 Sanjay Singh/The Statesman

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Domestic air fares set for hike

New Delhi: Domestic air travel will cost more in the coming days.
Jet Airways in a statement to travel agents said that domestic fares were being revised, effective from September 6. An airline spokesperson said that the average increase would work out to around Rs 200 per sector.
The increase in fares of Indian would range from Rs 45 to Rs 400.
A Kingfisher Airlines spokesman, however, said that the airline was not raising fares.
SpiceJet, while refusing to term the increase as a fare hike, said that it follows a dynamic pricing policy that automatically helps the airline adjust fares when demand is high. IndiGo, would take a decision on fares after evaluating demand on individual routes.
The rising cost of aviation turbine fuel, which accounts for between 30 and 35 per cent of the operating cost, is the primary reason for the fare increase, airline officials said.
07/09/07 Business Line

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Minister on road, plane in the sky

Calcutta: Indian aviation has broken free of the Maharajah mindset, at least for a day.
A Jet Airways flight scheduled to ferry civil aviation minister Praful Patel to Calcutta left Delhi without him today as he was late in reaching the airport.
Patel was booked on the Delhi-Calcutta Jet Airways flight, 9W 922, scheduled to take off at 9.45am.
“The minister started for the airport on time. But he was stuck in a traffic jam caused by a college event and knew he would not make it in time for the Jet flight. So he had to change to an Air Deccan flight that left shortly after Jet,” a civil aviation ministry official in Delhi told The Telegraph.
A Jet Airways official said the airline got in touch with the minister when it became apparent that he would be late. “Since he was stuck in traffic, we decided to take off after informing him,” the official said in Calcutta. “The minister appreciated this (the airline’s punctuality record) and took it in good spirit.”
The flight took off on time and reached Calcutta at noon. Patel took the Air Deccan flight, DN 702, and landed soon after.
07/09/07 Sanjay Mandal/The Telegraph

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Industry strife to benefit foreign airlines

New Delhi: The current impasse over relaxation of rules for more Indian carriers to fly abroad may eventually benefit foreign carriers flying in and out of India. The rivalry between private carriers — namely Jet Airways and the Kingfisher-Air Deccan combo — may give national carrier Air India a fresh lease of life in the lucrative Middle East market. As a result, the share of private Indian carriers in the out-of-India market — currently pegged at just around 30% — may not grow on anticipated lines.
It is still early days for the group of ministers (GoM) set up to deliberate on the pros and cons of the policy guideline that mandates private carriers to operate in domestic routes for five years before allowing them to fly abroad.
Corporate rivalries have reached such a level in the airline industry that the Kingfisher-Air Deccan camp is pushing government not to relax the Gulf route till the time a call is taken by GoM on the issue of the five-year norm. The idea is not to give Jet Airways undue advantage. Jet Airways, on the other hand, is wooing Air India for an alliance on the international routes.
This, in effect, means that foreign carriers would continue to call shots for some more time in the fast-growing market of international routes, even as the government and domestic carriers try to untangle the mess they have created for themselves.
07/09/07 Sudipto Dey/Economic Times

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Aviation sector to generate three million jobs in 10 years: Patel

Calcutta: The Indian civil aviation sector is growing rapidly and can generate three million jobs in 10 years, Union civil aviation minister Praful Patel said at the 34th national management convention of the All India Management Association (AIMA) and the Asian Association of Management Organisations (AAMO). Read On >>

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“I’m on the plane”

“I’m on the train” became the phrase that summed up inflicting banal cell phone conversations on fellow passengers. Now, if some airlines have their way, “I’m on the plane” will follow. Kingfisher Airlines, an Indian low-cost carrier, yesterday became the latest operator to say it will introduce in-flight cellphone use.
The traveller who currently enjoys the enforced unavailability that comes with flying will not be grateful for the removal of this haven from the telephonic demands of work or family or both.
And for every passenger who relishes the chance to make a call, there will be several others who resent having to listen to irritating ringtones and personal details within the cramped confines of the aircraft cabin.
Of course, some of these points can be addressed. Passengers could be asked to put their phones to vibrate so they do not disturb neighbours when receiving a call or text. Pilots will control the service and are likely to switch to “silent mode” during night flying to minimise nuisance to those who want to sleep. In response to social concerns, airlines might segregate the cabin, creating “cellphone use” and “quiet” areas.
Fortunately, the desire to chat on the phone to family, friends and colleagues at 35000ft has its limits. Using handsets fixed in the cabin has not caught on as expected, because it is so expensive.
07/09/07 Business Day, South Africa

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Three new airlines to take off in south

New Delhi: Despite the consolidation mood in the airline industry, three new airlines—all looking at regional connectivity in the South—are set for take off.
The ministry of civil aviation is likely to grant permission to Air Dravida, Star Aviation and Emric Air to fly as regional airlines.
All the three fliers are eyeing the booming business in southern metros like Hyderabad, Bangalore and Chennai, besides other cities like Thiruvananthapuram, Kochi, Vishakhapattnam, Bhopal and Pune. While Air Dravida and Star Aviation would have their base in Chennai, Emric Air would operate from Kochi. Air Dravida is expected to operate with Bombardier aircraft. Star Aviation, on the other hand, plans to deploy turbo-props.
According to government policy on regional airlines, all the three carriers would have to acquire three aircraft within one year and five at the end of two years. Regional carriers are allowed to start operations with a single aircraft.
The start-up capital of regional carriers with three aircraft having take-off mass above 40,000 kg is Rs 30 crore. As per the existing guidelines aircraft with a take-off mass of less than 40,000 kg are not required to pay landing charges to the airports.
07/09/07 Nirbhay Kumar/Economic Times

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M&A wind lifts aviation sector

New Delhi: The aviation sector is seeing rapid consolidation, with the emphasis shifting from private equity to mergers and acquisitions.
The total value of the two M&A deals in 2007 in the aviation space is pegged at around $465.12 million. In comparison, the value of 14-odd PE deals between 2005 and 2007 had brought in $142.46 million. The average transaction value to sales ratio has been 1.63.
The ratio was higher for the PE deals compared to the recent strategic M&A deals. This means that the strategic acquisitions deals of Jet-Sahara and Kingfisher-Air Deccan, have been struck at lower transaction value to sales ratio than private equity(PE) deals struck in 2005 and 2006, according to advisory firm Grant Thornton. The sales referred to here are the company’s sales.
The difference in deal valuations come at a time when the industry is going through a consolidation phase. The majority of equity deals struck this year has been strategic in nature, either an acquisition or a merger, as in the case of Air India-Indian Airlines. There has been just a single PE deal in aviation this year compared to five in 2005 and eight in 2006.
07/09/07 Sudipto Dey & Vivek Sinha/Economic Times

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Bill to monitor airport performance introduced

New Delhi: The Bill for setting up the Airport Economic Regulatory Authority (AERA), a body to regulate the country's airports, was introduced in the Lok Sabha today by Minister for Civil Aviation Praful Patel.
The authority, expected to come up early next year, will determine airport tariffs and charges and will also have an appellate tribunal to settle disputes between stakeholders like airport developers, consumers and service providers.
The act covers all airports including public, private and leased, greenfield airports and civil enclaves. However, airports maintained by the armed forces are not a part of the this act.
Both the regulatory authority and the tribunal will have a chairman and two members selected by the central government. Later, the body will appoint officers, employees and experts to discharge its functions.
The body will also set certain standards of performance for airports on the basis of criteria set by global aviation bodies like the Airports Council International (ACI), International Civil Aviation Organisation (ICAO) and International Air Transport Association (IATA).
06/09/06 Business Standard

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India's airlines seek to expand

Air India, the state-owned airline created through the merger of Indian and Air-India, could scale up fleet size to nearly 200 by 2011 against the anticipated 125-130.
Other carriers have similar expansion plans — Jet Airways has a fleet target of 110 by the same year against 62 at the end of June 2007. The obvious question at this stage, with most airline companies in the red, is whether this expansion is justified.
Undoubtedly, there is demand for aviation services, as evident in the 30%-plus growth in passenger numbers. The issue is that this demand is available at a price that does not appear to be viable, largely because of policy-induced high cost structure of domestic aviation.
Aviation fuel, the single biggest item of expenditure for an airline, continues to be unduly expensive in India because of high duties imposed by states. For instance, 38% of Jet Airways’ operating expenditure was on fuel in April-June 2007 quarter.
The international norm for a similar-sized airline, even at a time of high crude price times, would be about 25%-30%. Together with high explicit and implicit costs of infrastructure, this makes domestic operations unviable, and hence the clamour for permission to fly overseas.
06/09/07 Economic Times

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Govt rules out settlement with Bell Helicopters

New Delhi: Government on Wednesday ruled out the possibility of reaching any "settlement" with the US aviation company, Bell Helicopters, on reopening of $800 million deal for purchase of 197 light choppers for the army.
"No settlement has either been reached or proposed with the firm," Defence Minister A K Antony said in Lok Sabha today.
He told the House in a written reply that the helicopter offer by the US company was not found technically qualified as per general staff evaluation made by the army on the basis of field trials.
The European Consortium, EADS, was the other contender for the deal in which India proposes to purchase 60 helicopters off the shelf and assemble the rest 137 at HAL Bangalore under transfer of technology.
05/09/07 PTI/Economic Times

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Potential for growth in business aviation in India

Engine orders from airlines within the Asia-Pacific region are likely to reflect a small slow-down in 2007-08 compared with the previous two years, according to GE’s Chaker Chahrour, the Singapore-based regional general manager of commercial operations and sales for the American engine builder.
Chahrour says there is definitely no downturn in the industry - just not the fantastic 20% year-on-year growth that was experienced in 2005-06.
He also sees potential for growth in business aviation in both China and India, with aircraft like the HondaJet and the Spectrum Freedom, both powered by the 2,000lb-thrust GE Honda HF120 turbofan, likely to prove popular, especially in the sub-continent. This new engine is the result of a JV between GE and the Japanese auto maker and it’s scheduled for certification and EIS in 2010.
06/09/07 Flight Daily News/Flight International

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Gear up to fly to new destinations, Patel tells airlines

New Delhi: Civil Aviation Minister Praful Patel today asked airlines to gear up to fly to destinations other than the US, Britain or Singapore sectors.
"There are so many airlines who fly in and out of the country but none of the designated airlines from India is flying there (new destinations)," Patel told reporters at a function to mark Jet Airways's inaugural flight to Toronto.
This does not mean that airlines should give up their traditional routes, he pointed out.
To a question whether the five-year limit would be decreased to allow more airlines to operate on international routes, Patel said there was a guideline as of now and all airlines would have to adhere to it.
04/09/07 PTI/The Hindu

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Asian Aviation to Grow More Influential: Cathay Pacific

The Asia aviation sector will continue to grow in influence in the coming years, Cathay Pacific Airways Chief Executive Tony Tyler said Monday.
Speaking at the Asian Aerospace International Expo and Congress 2007 which opened Monday, Tyler said, spurred by fast-rising demand in burgeoning markets such as the Chinese mainland and India, the Asia aviation sector will continue to grow in influence in the coming years.
Asia's carriers are "the best carriers in the world", Tyler said, "but we are also on the way to becoming the biggest airlines in the world. The reason this is happening, apart from growth in the region generally, is the enormous growth in India and China. This is happening fast and it will continue to drive the increasingly important influence of Asian aviation."
Tyler outlined Cathay Pacific's strategy, including the integration of Dragonair with its extensive Chinese mainland network and the equity relationship the airline now enjoys with Air China, for developing twin hubs in Hong Kong and Beijing. "Hubbing is what it's all about and Cathay Pacific is now truly a network carrier with over 50 percent of our passengers making connections through Hong Kong," Tyler said.
Tyler also pointed to three key challenges Asian carriers will face: the growing environmental debate, airspace congestion and ever-increasing competition.
04/09/07 Xinhua News Agency/China Internet Information Center|, China

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Home ministry leash on airline FDI

New Delhi: The home ministry wants the management of domestic airlines to be “retained by the government or in Indian hands”.
In a note to the group of ministers, which will soon finalise the civil aviation policy, the ministry stated that it had no objections to current or proposed FDI ceilings. However, management control should be with local entities or the government.
Officials said the ministry was aware that even with a 49 per cent stake, a foreign investor could be the largest shareholder, giving it control.
There is also no objection to stakes by foreign airlines in domestic companies.
However, the ministry wants its civil aviation counterpart to accept its suggestions on “security aspects” of the proposal.
The finance ministry would like to allow foreign airlines a 26 per cent stake within the 49 per cent FDI cap in domestic carriers. However, the civil aviation ministry is against such a step as this will allow foreign carriers to use domestic airlines as feeders for international operations, which will harm the prospects of state-run Air India.
The home ministry note has also opposed private ground handling companies, because of security reasons.
03/09/07 Jayanta Roy Chowdhury/The Telegraph

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Airbus looks to Asia for sales of A380

Hong Kong: Airbus expects Chinese airlines to order 113 A380s over the next 20 years, and an average of 100 to 150 Airbus aircraft each year in the next five years.
In an effort to drum up sales in Asia for the A380, the world's largest passenger jet, one of them cruised past Hong Kong's skyline twice Monday.
Asia and China are a pivotal battleground between Airbus and its rival, Boeing, both of which are battling to sell jetliners to the country's three leading carriers: China Southern Air, China Eastern and Air China.
"Over the next year we will see incremental orders from China for A380," John Leahy, Airbus's chief operating officer for customers, said on the first day of the Asian Aerospace forum. "The demand in the Chinese market will see, for us, around 100 to 150 aircraft each year for the foreseeable future, which is one of the reasons that we decided to put our own assembly line in China."
In 2005, Airbus predicted that China would need 200 jumbo jets like the A380 over the next 20 years. Last month, China adopted a series of measures aimed at reining in rapid growth in air traffic that has begun to raise concerns about safety.
Applications to start new airlines will be suspended until 2010, and the growth of existing airlines will be subject to government controls, the General Administration of Civil Aviation of China said on its Web site on Aug. 15.
03/09/07 Reuters/The Associated Press/International Herald Tribune

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India to claim civil aviation top spot by 2025

India will overtake North America and China as the world’s single largest passenger and freight aviation market by 2025, Asian Aerospace Congress delegates were told.
Dr CG Krishnadas Nair, president of Society of Indian Aerospace Technologies and Industries (SIATI), says: “Economic success is boosting aviation growth. Passenger traffic in 2006-07 was 100 million and in the next decade or so will double. Cargo is moving at a similar pace.”
India would account for of 10% of the world aerospace industry by 2020 through a combined process of international joint ventures through a government offset clause, market liberalisation and economic growth. Currently Indian aerospace accounts for just 2% of the total world share.
India is now in its seventh decade of being involved in aerospace and our capabilities of software applications, research and in civil transport alongside our market size makes it a tremendous opportunity for foreign investment and co-operation,” says Nair.
Nair says a middle class appetite for air travel means airlines will require at least 230 aircraft with more than 100 seats over the next five years – an investment worth approximately $260 billion.
Nair adds that SIATI is keen to talk to potential partners in the training and MRO sectors and he and his government colleagues are at the show to do business.
04/09/07 Flight Daily News/Flight International

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Foreign flight hope rises for new airlines

New Delhi: The civil aviation ministry feels airlines that want to fly abroad should not find their ambitions thwarted by current regulations that insist on five years’ experience.
The ministry wants to clear such proposals on the basis of an airline’s technical and financial strengths.
The ministry will ask the group of ministers (GoM) on civil aviation to give it the power to do so at the next meeting later this month.
Airlines are allowed to fly overseas if they have an experience of five years, a minimum of 20 aircraft and a paid-up capital of Rs 100 crore.
Several inter-ministerial meetings in the recent past have discussed the possibility of relaxing the criterion to three years. This would have made Air Deccan eligible to fly abroad, but not Kingfisher Airlines which has a controlling stake in it.
The new rule will benefit Vijay Mallya’s Kingfisher Airlines, which has been asking for rights to fly abroad. Naresh Goyal-led Jet Airways has, however, been lobbying to retain the rule.
All applications will be cleared on a case-by-case basis.
02/09/07 Jayanta Roy Chowdhury/The Telegraph

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US issues alert after China Boeing fire

Following last month's incident of a China Airlines Boeing 737 catching fire in Japan, the US department of transport's Federal Aviation Administration (FAA) has directed all carriers to get the wings of these planes checked. India has also got this directive and the Directorate General of Civil Aviation (DGCA) has issued a mandatory order to all airlines using the Boeing 737-700, -800 and -900 series to complete this check in 10 days. However, this check won't require grounding of aircraft.
A suspect malfunction of hardware in a wing of the China Airlines Boeing 737 is believed to have caused fuel leak that led to a major fire in the left engine soon after the plane landed in the Japanese island of Okinawa late August. All 165 people on board the aircraft had a miraculous escape as the explosion happened just after they evacuated using the emergency chutes.
The FAA's emergency airworthiness directive requires "repetitive detailed inspections" to verify that proper hardware is installed and calls for taking corrective actions.
Indian authorities insist that wing checks are done routinely by airlines and the DGCA order comes on the basis of the FAA directive.
02/09/07 Saurabh Sinha/Times of India

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Amend aircraft victims compensation law: Experts

New Delhi: If an Indian and a foreigner die together in an air crash, the kin of the latter may get 17 times more compensation than that of the former.
The reason for such a glaring discrimination is that India is yet to ratify an international treaty called Montreal Convention, 1999, which ensures higher compensation to the air passengers in case of an accident.
"India is a signatory to it (Montreal Convention) but is yet to ratify it... Thus, regrettably, our own laws have discriminated against our own citizens. This situation must be rectified," Sanat Kaul, a former Joint Secretary in the Civil Aviation Ministry, has said.
Under the convention, "approximately Rs 70 lakh (or 1,00,000 Special Drawing Rights (SDRs)) is payable by the airline on death irrespective of the its fault."
Above that, the compensation may also include "payments based on the 'presumption of fault' of the carrier" . Signed by 78 countries, the Montreal Convention, 1999, is regarded as the most effective compensation mechanism for the air-crash victims till date. It unifies most of the international regulations regarding compensation.
02/09/07 PTI/Economic Times

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Boeing slats leave carriers in a flap

New Delhi: One week ago, a Boeing 737-800 aircraft of the Taiwanese airliner, China Airlines, exploded after it caught fire on landing in Japan. The US Federal Aviation Administration ordered inspection of wing slats on all newer Boeing 737 planes because the mishap occurred when a bolt that had come loose from the wing slat pierced a fuel tank. Yesterday, Japanese inspectors found a key part of the wing slat missing from a Boeing 737-700 aircraft of Air Nippon. More than 90 new Boeing 737 (600 to 900 series) aircraft are at present flying in India’s air space. But only some Indian airlines are aware of the problem.
Are the aircraft - in use by Jet Airways, Jet Lite and Spice Jet - safe? Are Indian airlines aware of the FAA inspection?
SpiceJet, which has an all Boeing-737 fleet, has sent the aircraft for major inspection.
The Jet Airways spokesperson, Mr AK Sivanandan, expressed ignorance about the FAA’s Emergency Airworthiness Directive which was issued on Saturday to owners and operators of 783 US-registered airplanes.
Air India director and spokesperson, Mr DS Koli, said they had received FAA’s Emergency Airworthiness Directive. “We have 14 brand new Boeing 737-800 aircraft, which would now go for scheduled checks. If required we would take assistance from Boeing also...” said the AI spokesperson.
31/08/07 The Statesman

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Airlines may not pass on benefit of fuel price cut to passengers

Airfares are not likely to come down despite a drop in jet fuel prices —the first time in the past two months—as a majority of India’s domestic airlines are consolidating their operations and looking to raise more money to support an aircraft acquisition spree, say analysts.
State-owned IndianOil Corp., the largest supplier of jet fuel in the country, reduced oil prices by about 2.3% on Friday, breaking a cycle of sustained increases mirroring a worldwide spike in crude oil prices. The prices, that are set on a monthly basis, were reduced to Rs38,163.23 per kilolitre from Rs39,059.45 per kilolitre last month, in Delhi.
“For the moment, there is some sanity in the (airline) market and we are not in favour of reducing prices,” said Ajay Singh, director of the low-fare airline SpiceJet Ltd, referring to a slowing of price wars between competing airlines. With Jet Airways Ltd taking over Air Sahara (now JetLite) and UB Holdings, which runs Kingfisher Airlines, buying a majority stake in the country’s largest low-cost carrier, Air Deccan, two of the most aggressive price cutters are now in larger airline companies that don’t necessary resort to price wars.
Kingfisher Airlines and Jet Airways also said they were yet to make a call on reducing prices.
31/08/07 Tarun Shukla/Livemint

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