Foreign airline FDI still off domestic civil aviation turf

New Delhi: The Government has stuck to its policy of not allowing foreign airlines to acquire a stake either directly or indirectly in Indian passenger airlines, charter airlines or non-scheduled airlines. The only exception is cargo airlines, where foreign airlines may be allowed to pick up a 74 per cent stake through the automatic route.
Domestic aviation players, especially the low cost airlines, and the Planning Commission have been pressing the view that the Government should have a re-look at the policy of barring foreign airline investment in the domestic industry.
“The domestic airline industry is suffering huge losses. There is a need to allow strategic investors and allowing foreign airlines into the domestic sector would have helped,” the Executive Chairman, SpiceJet, Mr Siddhanta Sharma, told Business Line. The Planning Commission had also called for allowing foreign airlines to participate in domestic airlines in an official communication.
The Union Cabinet, in a meeting here on Wednesday, was, however, of the opinion that the FDI in air transport services should continue to be capped at 49 per cent through the automatic route. But non-resident Indians can hold up to 100 per cent in domestic passenger airlines.
31/01/08 Business Line

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New FDI policy for aviation unveiled

The Government today (Jan 30) has approved certain changes in the FDI permitted in civil aviation activities.
· FDI in Air Transport services would continue to be capped at 49% on the automatic route and 100% for Non-resident Indians (NRI), subject to no direct or indirect participation by foreign airlines. This segment would be reclassified as Domestic Scheduled Passenger Airline Sector.
· FDI up to 74% may be permitted on the automatic route for Non Scheduled airlines, Chartered airlines and Cargo airlines. No direct or indirect participation by foreign airlines would be allowed in non-scheduled airlines and chartered airlines. NRI investment would be allowed up to 100% on the automatic route.
· FDI up to 74% may be permitted on the automatic route for Ground handling Services subject to sectoral regulations and security clearance. NRI investment would be allowed up to 100% on the automatic route.
§ FDI up to 100% may be permitted on the automatic route for Maintenance and Repair organizations; flying training institutes; technical training institutions; and helicopter services/seaplane services in the aviation sector requiring DGCA approval.
30/091/08 Press Information Bureau (press release)

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New FDI norms may take aviation to new heights

New Delhi: In a major fillip to the high-growth aviation sector, the government on Wednesday approved an almost complete overhaul of the foreign direct investment (FDI) policy for the sector.
The move will help the sector attract around $50-$70-billion investments over the next few years, which is civil aviation minister Praful Patel’s one of the goals.”FDI percentage will be 26% and the investment component of FIIs at 23%,” information and broadcasting minister PR Dasmunsi said announcing the government’s decision.
The government has capped the FDI in air transport services to 49% on the automatic route and reclassified it as domestic scheduled passenger airline sector. This sector consists of all the domestic airlines that publish fares and transport passengers.
The FDI in non-scheduled airlines, chartered airlines and cargo airlines, has been capped at 74% on the automatic route as long as no foreign airlines are participants. Manav Singh, MD of domestic chartered airline company Club One Air pegs the industry size at around Rs 350 crore and growing at 30 to 40% annually.
The cargo industry is also set for a boost with most existing airlines like Spicejet and the national carrier Air India getting heavily into cargo. The ministry estimates that India will carry around 4 million tonne cargo by 2010. FDI in ground-handling services has been hiked to 74% on the automatic route, subject to sectoral regulations and security clearance.
The FDI norms for scheduled and non-scheduled air services, cargo and ground handling are allows non-resident Indians (NRI) 100% investment.
30/01/08 Financial Express

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Man caught stealing plane spare parts

A thief, who had succeeded in stealing spare parts of a chartered plane from Kalina last month, was caught red-handed by the security guards of the workshop when he made a second attempt on Monday early morning.
On January 28, Dominic Savio Joseph Dias, 19, was caught after he tried to steal plane spare parts from the workshop of Air Works India, a maintenance and overhaul company at Kalina. Around 12.40 am Dias who stays in the slums of Vakola scaled the compound wall of Air Works India at Kalina and entered its premises. He broke open the window of the repair room where the spare parts are kept.
He took brake assembly tool, oxygen regulator, walkie talkie, pressure regulator and other tools, collectively worth Rs1,11,435.
"Two company security heard some noise and went inside the room where they saw Dias hiding underneath a table,” says a senior police official from Santacruz airport police station. “They immediately nabbed him and informed the police,” he adds.
In December, Dias had successfully managed to steal spare parts worth Rs 6 lakh from the same firm.
31/01/08 Naveeta Singh/Daily News & Analysis

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Making IT happen for high fliers

The key areas of management at Heathrow (and at Gatwick, also operated by the same company, BAA) including the complete airport management database, passenger and baggage handling as well as all flight announcements have been entrusted to solutions provided by a niche Indian player in the management of what is known as TTL — Travel, Transportation and Logistics — the Thiruvananthapuram-based IBS Software Services.
“I don’t think any other company offers such a wide range of services and solutions across the spectrum of TTL,” says V.K. Mathews founder-Chairman-CEO of IBS. It is no idle claim, that this MTech in aeronautical engineering from IIT Kanpur makes. Yet so low-key has been the profile of this company that few outside the TTL industry are aware of its name or that this is the international epicentre of an operation that is a decade old and now spans 15 global delivery and support centres.
A lean team totalling less than 2,000, creates and delivers solutions for airports, seaports, airlines, oil and gas companies, tour operators, cruise lines, that have received the highest ISO ratings of the software industry.
Only last week, Air New Zealand, became the third airline to adopt IBS’ cargo management system, iCargo, which supports the complete chain of supply from shipper to consignee harnessing the Web.
31/01/08 Anand Parthasarathy/The Hindu

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Growing traffic between Chennai and Southeast Asia spurs airlines to expand services

Chennai: With significant increases in business and leisure travel between Chennai and Southeast Asia and the Far East in the past year, airlines are looking to expand their services to the region in the coming months. The popular Chennai-Singapore route will be a particular target: there will be an additional 3,700 seats every week on this sector in 2008.
Singapore Airlines is introducing its second day-time flight out of Chennai in April, which will operate four times a week — this will be its 11th weekly flight. “There’s actually enough traffic on this sector for Singapore Airlines to even have three day-time flights every day, but we are constrained by traffic rights,” said Bharath Mahadevan, Manager (Southern India), Singapore Airlines.
The airline had a load factor of around 85 per cent last year on its flights out of Chennai, and traffic increased by around 15 per cent.
Other airlines have enjoyed similar success: Singapore-based low-cost carrier Tiger Airways introduced flights to Chennai last October, and will operate four flights a week in 2008. Jet Airways and Air India Express already operate daily flights, and they are both set to expand their operations this year.
The new services will see the addition of around 3,700 seats every week out of Chennai, increasing current capacities by more than half.
31/01/08 The Hindu

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Chopper flight leads to horse's death

Mumbai: A horse died at the Mahalaxmi race course after a helicopter made an unscheduled and illegal landing on the field on Monday. Golden Glitter, a popular riding mare, got into such a panic when the chopper belonging to Garware Aviation hovered above the riding school that it went berserk and crashed into a barrier, breaking a leg. It had to be put to sleep by veterinarians as the leg, broken in two, was beyond surgical help.
Officials at the Royal Western India Turf Club (RWITC) confirmed to TOI that no permission had been given to the helicopter to land, and that the direction from which the copter had flown in, was also wrong. "Helicopters fly in from the Mahalaxmi end of the race course, but this one came in from the Haji Ali side, over the riding school, and landed in the middle of the field (on the polo ground in the centre of the race course). It had not been given a specified spot to land," said a senior official.
The regular helipad, which has been functioning for over a decade, is situatedin the corner of the third enclosure near the Mahalaxmi bridge. More than 20 choppers land there every day.
30/01/08 Archana Sharma/Times of India

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Rajasthan on a chopper ride

Jaipur: "This charter service, we feel, would give a further boost to tourism in the state," an official of Rajasthan Civil Aviation Corp (RCAC) told IANS.
The RCAC has on offer the services of two chartered aircraft, a Beechcraft King aircraft that can accommodate six passengers and an Augusta helicopter that offers five seats.
"Chartering an aircraft would help tourists explore the state. Tourists who avail the services would also be able to visit the maximum number of places with greater ease and in shorter time," the official.
Apart from the standard packages to the most popular locations, the chartered flights would give tourist the facility to design their own tours, he added.
The Rajasthan government operates 14 airstrips and a large number of helipads in the state.
The charges for hiring the aircraft would be Rs.60,000 an hour. For the helicopter, it would be Rs.125,000 per hour. A minimum of two hours of flying charges would be levied.
28/01/08 IANS/MSN India

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Centre may partner states in ATF relief

New Delhi: The Centre is working out a compensation package for states to reduce sales tax on aviation turbine fuel (ATF) to 10% or 15%, which will help domestic carriers like Air India and Jet Airways bring down their operating cost.
The finance ministry is considering compensating states for their revenue loss until jet fuel comes under the VAT regime. As of now, many states levy VAT of more than 20% on jet fuel.
The move may not result in lower fares for passengers as airlines are keen to improve their bottom line. Jet fuel accounts for about 40% of the operating costs of airlines.
“States will suffer a revenue loss if jet fuel is given ‘declared goods’ status, thereby attracting a uniform 4% sales tax across the country. We have hence proposed to levy an intermediate sales tax rate ranging between 10% and 15%. This will serve twin purposes of minimising revenue losses incurred by states and help airlines reduce operating cost,” a civil aviation ministry official told ET.
“The finance ministry may consider compensating the states for their losses for at least the next two years, after which the new VAT regime will replace the existing system,” he added.
29/01/08 Nirbhay Kumar/Economic Times

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Holiday season fails to lift aviation cos

This was supposed to be the quarter when the aviation industry made its money. But this does not seem to be the case. Although SpiceJet did record marginal profits, industry leader Jet Airways lost more than Rs 90 crore as compared to a profit of close to Rs 40 crore in the corresponding quarter last fiscal. Analysts do not expecting Deccan, whose results are due in two days, to come out in the green either.
Aviation is a highly cyclical business and traditionally the third quarter gives the best results for an airline, as a result of the increase in travel during the holiday season across the globe.
However, the benefits arising from consolidation in the Indian skies, especially those due to better priced tickets, seem to have been not enough to clear the red in the books.
For Jet what seems to have hurt the most is the expenditure to get its international routes going. Along with such start-up costs, high fuel prices are eating into airline numbers. This despite fuel surcharges resulting in more revenue flowing into airline coffers. The growth in other income, primarily due to forex gains, seems to have masked some of the losses.
29/01/08 Nirmal John/DNA Money/Sify

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Small airlines make big jump in market share

New Delhi: Independent small carriers IndiGo, SpiceJet and GoAir have collectively been able to gain a greater share of the airline passenger market despite the consolidation and merger of the bigger airlines.
Figures released by the Directorate General of Civil Aviation (DGCA) for last year show that the consolidated share of the three independent carriers went up 10 percentage points to 22 per cent from 12 in 2006.
The smaller airlines appear to have gained at the expense of the bigger airlines that spent most of the year in mega-mergers and acquisitions.
Industry experts said while most full-service carriers concentrated on point-to-point services, the three smaller carriers put 25 to 30 per cent of their flights on hopper flights (that is, flights that touch down in more than two cities).
By doing so they were able to improve both passenger load factor and yield per seat.
SpiceJet, for instance, has indirect flights from Delhi to Coimbatore via Hyderabad.
IndiGo is choosing cities that have been under-served by other carriers and lack connections to other cities.
IndiGo’s strategy has also been to connect apparently unviable sectors, like the north-east, far in excess of the aviation dispersal route guidelines, which require airlines to ply some unviable routes to qualify to fly to big cities.
However, GoAir, which has not been able to expand significantly yet (it connects just 11 cities), has stressed lower fares to garner maximum load factors.
28/01/08 Anirban Chowdhury/Business Standard

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Varman plans engine overhaul unit

Chennai/Bangalore: Bangalore-based Varman Aviation is planning to set up an overhaul facility in the city to cater to the requirements of Rolls-Royce 250 series engines, Bell Helicopters as well as Islanders of Indian Navy by in the next 12 months.
The facility would cater to the requirements by Pratt & Whitney 100 series turbo-prop engines for ATR 42ô72 aircraft in operation in India with major airlines from next year, company’s President & CEO M M Varman said.
Varman Aviation has already established an aero gas turbine engine (Pratt & Whitney) overhaul facility in Bangalore.
The facility is capable of overhauling the Pratt & Whitney PT6A-21 and 42 engines. The first overhauled Pratt & Whitney PT6A engine was handed over to the Bihar government at a function here.
To start with, Varman Aviation expects to overhaul 10 engines every year, which can be scaled up to 35 engines per annum in the next three years time, said Varman Aviation chairman C R Ramanuja Char.
28/01/08 Business Standard

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Domestic airlines queue up to fly lucrative international routes

New Delhi: Despite the government restricting access to international routes, Indian airlines are queuing up to fly them attracted by higher profit margins, a 20% growth in passenger traffic every year, lower operating costs and cheaper jet fuel.
Kingfisher Airlines Ltd, SpiceJet Ltd and Paramount Airways Pvt. Ltd are gearing up to go global. Air India and Jet Airways (India) Ltd are currently the only airlines flying international destinations. India only allows carriers with five years’ experience on domestic routes to fly overseas.
The goverment is willing to relax the current guidelines but a group of ministers, responsible for finalizing the new aviation policy, has not been able to reach a consensus.
According to an analyst with a leading domestic brokerage, the size of international market for flights into and out of India is about Rs30,000-35,000 crore. Out of this, the West Asian market accounts for 25% and the South-East Asian and European market account for 15% each. Other key markets include the US.
27/01/08 P.R. Sanjai/Livemint

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Israel's Bedek in talks with HAL for Bangalore facility

Mumabi: Bedek Aviation Group, part of the Israel Aerospace Industries (IAI), is in talks with Hindustan Aeronautics (HAL) to set up an aircraft conversion site in Bangalore.
The facility will be dedicated to the conversion of 737 passenger aircraft to cargo freighters. "We are in talks with HAL and are actively pursuing this project," said Dany Kleiman, vice-president and general manager, Bedek Aviation. The company is one of Israel's largest aerospace conglomerates with an aircraft maintenance and conversion division.
The move is significant as this will be the first passenger aircraft conversion facility to be set up in India. Companies who currently want to avail of this service have to send their aircraft abroad.
While Mr Kleiman believes that the Indian air cargo sector is a key market for the Bedek Aviation Group, he refused to share more details about the project. "The discussions are in the very early stages," said Mr Kleiman on the sidelines of the Air Cargo India 2008 summit held in Mumbai.
25/01/08 Economic Times/McClatchy-Tribune Information Services via COMTEX/Trading Markets (press release), USA

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Airlines bank on rising traffic to the United States

Chennai: India’s air carriers are set to launch an all-out offensive to tap the growing traffic to the United States this coming year, and passengers can expect more travel options and lower fares as competition on U.S. routes will become more intense than ever before.
On August 27, Kingfisher Airlines will launch a non-stop service from Bangalore to San Francisco. It will likely introduce non-stop flights from Bangalore, Mumbai and New Delhi to New York as well as a Chennai-San Francisco service by September or October. The year 2007 saw Jet Airways end Air India’s monopoly among Indian carriers on U.S. routes, and Kingfisher’s entry is set to reduce their margins further.
Jet Airways and Air India enjoyed considerable success in their New York sectors last year: Jet’s load factors were close to the 90 per cent mark and Air India’s, at 80-85 per cent.
According to the latest forecast of the International Air Transport Association (IATA), the significant growth in international travel that India saw last year is likely to continue in 2008, although at slightly lower rates. International travel increased by 10.8 per cent in 2007, and the IATA forecasts that it will grow by 9.6 per cent next year.
25/01/08 Ananth Krishnan/The Hindu

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HPTDC keen to start heli-taxis in the state

New Delhi: The Himachal Pradesh Tourism Development Corporation (HPTDC) is planning to introduce the concept of heli-taxis in the state. The sate has a total of 57 helipads which can be used to develop and promote this new concept. Talking with TravelBiz Monitor, Manisha Nanda, Secretary Tourism, Himachal Pradesh, said, "The government will present its scheme of heli-taxis under the Government of India economic schemes and will require an assistance of Rs ten crore from the central government for three years." The Himachal Pradesh government is eager to start operations of heli-taxis as soon as possible.
With the recent shift of power in the state, the newly appointed government has come up with a Rural Tourism policy, which lays emphasis on developing tourism in the religious sector. Himachal Pradesh has a lot of potential in this sector. In rural tourism sector, the government plans to come up with a Home Stay policy. This policy will initially be launched on a pilot basis at few select places. The government will then decide on the feasibility of home stay scheme after gauging the response to the pilot project.
24/01/08 Arti Saggi/TravelBizMonitor

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Patel for more carriers to fly abroad

Davos: Civil aviation minister Praful Patel has said the government is seeking to position Indian carriers to fly several more international routes that are not serviced by Indian airlines currently. This would allow Indian carriers compete further with the global carriers. The government will also take the final decision on allowing higher foreign direct investments (FDI) in a slew of activities in the aviation sector.
Patel said Air India was set to open a major hub in Munich. AI had recently joined the Star Alliance of airlines.
In an informal chat with a section of the Indian media on the sidelines of the World Economic Forum Annual Meeting 2008 in Davos, Patel, who is part of the Indian ministerial delegation, said there are a vast number of routes where Indian carriers are not operating, but which are being operated in by foreign airlines flying to and from India.
On freeing up FDI in aviation activities further, Patel said while there was 100% FDI in greenfield airports, his ministry and the commerce ministry were moving quickly to free up FDI in other allied activities.
23/01/08 Sourav Majumdar/Financial Express

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Faster and cheaper air travel soon!

New Delhi : Air travel in India would be faster, and possibly cheaper, as soon as the civil aviation and defence ministries work out ways for civilian aircraft to fly over the country's restricted airspace.
Aircraft would then be able to fly at higher altitudes, resulting in faster travel and lower fuel consumption. Air is thinner at higher altitudes, offering lower resistance to a plane's passage, thus increasing its speed.
"We have already initiated a pilot project in southern India called the Chennai Flights Information Region. We will soon extend this project in other regions. Once complete, we can fly civilian aircraft at higher altitudes," civil aviation secretary Ashok Chawla told IANS.
The civil aviation and defence ministries are working on ways to jointly manage airspace in the country.
23/01/08 Sanjay Singh/IANS/Indian Muslims, US

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Win some, lose some

While the more established players are aggressively looking at the international skies, the relatively younger carriers have had some reason to cheer in the domestic market. According to the latest figures by the Directorate General of Civil Aviation (DGCA), domestic low-cost carriers such as Spicejet, Paramount, GoAir and Indigo have gained at the expense of full-service operators such as Jet and Indian.
Kingfisher has been relatively lucky, seeing a marked appreciation in market share on the back of a differentiated product offering. Jet Airways’ market share came down from 31.2% at the end of 2006 to touch 22.6% at the end of 2007. Indian, on the other hand, saw its market share fall from 21.5% at the end of 2006 to 19% at the end of 2007. Incidentally Indigo, which started operations in the third quarter of 2006 saw its market share go from 6.3% to 7.6% for 2007.
Spicejet, Paramount and Indigo, in contrast, grew by 1.9%, 0.6% and 1.3% respectively.
24/01/08 Shauvik Ghosh/Financial Express

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Decision on foreign airlines soon: Ahamed

Kozhikode: The Centre will take a decision on granting permission to more foreign airlines to operate from the airport here in the next two to three months, Union Minister of State for External Affairs, E Ahamed said on Wednesday.
"Civil Aviation Ministry is in the process of working out the feasibility and a final decision on allowing foreign airlines to operate from here will be taken in two to three months," he said.
Ahamed was talking to reporters after inaugurating Jet Airways' maiden flight from here to Muscat.
Jet Airways was given the nod to commence services in the Gulf sector from this month as the airline had completed five years of operations in the domestic circuit, he said.
Earlier, Jet Airways flight 9W 538 took off at 0930 hrs with 77 passengers onboard. The private airline will also maintain daily flights to Doha from here at 2000 hrs.
23/01/08 PTI/The Hindu

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Fares to the Gulf to get dirt cheap

Mumabi: Passengers flying to West Asia can soon see fares going down by 10 to 30 per cent as Indian domestic operators such as Jet, its low-cost carrier (LCC) Jet Lite and Air Deccan are all set to fly to this market.
“There is a sizeable number interested getting from point to point for the bare minimum fare. This is the reason why we are flying an all-economy class configuration, in the cheapest way possible,” said Gary Kingshott, CEO, JetLite.
That is why JetLite will fly routes such as Calicut to Sharjah, where passengers are not looking at premium service, but cheap price.
Air India Express, which has dominated the lower-end of the West Asian market with 47 flights per week, says it is prepared to take on the challenge.
“If they fly cheap, we will fly cheaper. We have enough margins and can sustain the cost war,” said Jitendra Bhargava, executive director, corporate communications, Air India.
Air Deccan, which planning its Gulf operations from August, meanwhile refused to talk about its strategy. Even foreign LCCs are bracing up to handle the glut in services.
22/01/08 Manisha Singhal/Business Standard

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Civil aviation boom to continue

Bangalore: The “golden era” of Indian civil aviation is likely to continue during the Eleventh Plan period also. Joint Director General of Civil Aviation R.P. Sahi said the growth in air passenger traffic is likely to be around 22 per cent during the next couple of years.
Speaking to presspersons here on Monday, Mr. Sahi said India witnessed a growth rate between 46 per cent and 49 per cent during the last two years and this golden era is expected to continue for the next couple of years. “Though the growth rate would flatten to be around 22 per cent, it will be a positive growth,” he added.
He said that the 14 scheduled airlines in the country have placed orders for around 300 aircraft while several companies have evinced interest in setting up maintenance, repair and overhaul (MRO) facilities in the country. “India also has 60 non-scheduled operators, which shows healthy trend in aviation sector,” he added.
22/01/08 The Hindu

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MRPL, Shell form JV to supply ATF

New Delhi: Mangalore Refinery and Petrochemicals Ltd, a unit of state-run Oil and Natural Gas Corp, on Monday entered into an agreement with Shell Aviation to supply aviation turbine fuel (ATF) at Bangalore and Hyderabad airports.
The MRPL-Shell joint venture will later market and supply aviation turbine fuel (ATF) at other Indian airports, a MRPL press release said here.
"The companies will provide complimentary services and strengths to the joint venture; MRPL will bring its expertise and supply of high quality products, and Shell Aviation will bring its global brand, network and customer base in addition to stringent q uality control procedures," it said.
Together, the companies will offer a compelling co-branded global refueling offer to both Indian and international airlines. The agreement will become effect early in 2008.
21/01/08 Business Line

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Listed airlines expect to report operating profits in Dec quarter

New Delhi/Mumbai: The country’s three listed airline companies, Jet Airways (India) Ltd, SpiceJet Ltd and Deccan Aviation Ltd, could report operating profits for the December quarter compared with losses in the year-ago period, helped by strong passenger growth and imposition of addition fuel surcharge, according to analysts tracking the aviation sector in India.
The last quarter of the year is generally the peak season for airlines across India. This year, the carriers were able to hike airfares by Rs400-500 on an average, resulting in higher yields and consequently better revenues, apart from Rs300 extra per ticket as fuel surcharge.
A leading foreign brokerage pointed out that Jet Airways will post a net loss of over Rs100 crore as there was no sale and leaseback deal during the reporting quarter and there Jet Airways’ margin had been under pressure because of international operations.
22/01/08 Tarun Shukla and P.R.Sanjai/Livemint

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Domestic Carriers may need equity refuelling to stay in air

New Delhi: Domestic carriers will be required to continuously top up their paid-up equity capital or face grounding. The government is planning to review the financial strength of airlines at regular intervals.
The review will be done by an independent regulator, who will prescribe and revise minimum equity capital requirements at frequent intervals.
“It will not be enough for an aviation player to meet a one-time entry norm and continue to expand its operations without having the corresponding financial strength (minimum paid-up capital and reserves)..,” an official involved in reshaping the aviation policy said.
Today, an aspiring company is required to have Rs 12-50 crore paid-up equity capital (depending on type of operation) to launch scheduled flights.
The proposal comes at a time when more players are planning to launch regional airlines. With increasing liberalisation of entry conditions, the number of regional and national airlines is expected to jump significantly. It is also feared the aviation infrastructure will not be able to sustain such growth.
21/01/08 Nirbhay Kumar & Rajeev Jayaswal/Economic Times

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Airlines back with discounts; but profitability under pressure

New Delhi: It's raining discounts from the sky, amid a cut-throat competition to grab a larger pie of market share, airlines are offering fares of as low as Rs 500, even though analysts are warning about an adverse impact on bottomlines, already burdened under high fuel prices.
While budget airlines such as Air Deccan, Jetlite and IndiGo are doling out tickets for Rs 500 on various sectors, full-service carriers like Air India are also offering fares as low as Rs 999 for a one-way journey.
Not to be left behind, carriers flying on international routes are giving out discounts up to Rs 5,000 on a ticket, besides offers like free hotel stay and 50-100 per cent waiver on companions' fare being announced by both domestic and international fliers for bulk bookings.
However, at the consumers' end, it is not as rosy as it appears on the ground. The discounted fares of Rs 500 and Rs 999, as being offered by the carriers, do not include taxes, transaction fees, fuel surcharges and other additional costs.
20/01/08 PTI/Economic Times

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MoCA, MoD in talks for joint management of air space

New Delhi: Ministry of Civil Aviation (MoCA) has sent across a proposal to the Ministry of Defence (MoD) for joint management of air space in the country. Air space in India has been divided into six zones and around 50 per cent of it is currently under the control of MoD and restricted to civilian air traffic. As per the proposal Air Traffic Control Officers (ATCOs) of both civil aviation and defence would jointly manage the Flight Information Region (FIR). In the Southern zone, at Chennai, the joint management has already been put into practice with both, the civil and defence ATCOs managing the FIR.
Speaking to TravelBiz Monitor, Maushami Chakravarty, Director Media and Communication, Ministry of Civil Aviation, said, "This joint management of air space in the Southern Zone will be improvised upon and will be taken forward with other zones in the country." Deliberations have been going on for sometime between MoCA and MoD for the use of restricted air space under the control of MoD for civilian air traffic.
21/01/08 Arti Saggi/TravelBizMonitor

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Indian states not ready to comply and cut air fuel taxes

New Delhi: Ambiguity over who - the centre or the states - will take the call to cut air fuel taxes seems to have largely defeated the whole purpose of organising the first ever National Civil Aviation Conference in the capital.
While none of the state governments is willing to reduce taxes on air fuel, the central government too is not in favour of granting tax exemption by listing it as declared goods, under which the central sales tax would come down.
The states feel that if they agree on reducing the sales tax on air fuel to four percent - as demanded by union Civil Aviation Minister Praful Patel - they would lose badly on the revenue front.
According to Uttar Pradesh Chief Secretary P.K Mishra, if his state cuts air fuel tax from 20 percent to four percent, it would lose about Rs.7.50 billion every year.
Sanjay Ubale, secretary (aviation department) of Maharashtra, the home state of the civil aviation minister, told IANS that the central government can at any point of time do away with exorbitant air fuel taxes by giving it the status of declared goods.
20/01/08 Sanjay Singh/Khabrein.info

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Share intelligence on aviation security: Centre to states

New Delhi: With an all India civil aviation programme in place, the Centre has asked state governments to share 'real time' intelligence on threat perceptions to prevent and deal with aviation emergencies.
As security arrangements at airports and surrounding areas, including their city-side, were being carried out by state police along with the CISF, the Centre has asked state governments to ensure that only police personnel with good performance standards, unblemished background and antecedents should be deployed, official sources said.
The detailed methodology to react to aviation emergencies have been put in place in the National Civil Aviation Security Programme as well as the updated Aviation Security Manual, after drawing lessons from the 1999 hijack of IC-814, the Indian Airlines plane to Kandahar.
20/01/08 PTI/Economic Times

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Airlines threaten fare hike in states with high levies

New Delhi: Airlines, which already levy a hefty fuel surcharge of Rs 1,650 on all tickets, are now threatening to hike levies for flights operating in states that charge higher tax rates on ATF (aviation turbine fuel).
"At a time when fuel surcharge is rising and hurting growth, some airlines are indeed considering imposing differential surcharge for different states. This structure will help lower fares for low tax states and increase fares for passengers embarking from high tax states," V Thulasidas, chairman of the Federation of Indian Airlines (FIA), said in a presentation at the first-ever national conference on civil aviation here on Friday. The sales tax rate in states varies in the range of 20% and 33%.
FIA is an industry body representing almost all Indian carriers, including Jet, Kingfisher, Air India and SpiceJet.
The indication came as aviation minister Praful Patel told representatives from all states to not look at "aviation as a milch cow" and that "all airlines are losing money because of high taxes". He specifically mentioned Delhi, Maharashtra, West Bengal, Tamil Nadu, Kerala, Andhra Pradesh and Goa for their very high sales tax rates.
19/01/08 Saurabh Sinha/Times of India

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Cut taxes for aviation sector growth, Centre tells states

New Delhi: The Centre on Friday asked state governments to review and rationalise their taxation policy on jet fuel and land acquisition practices to encourage the expansion of civil aviation sector so that they could themselves reap the benefits of its unprecedented growth.
"States must not look at aviation as a milching cow. There is cut-throat competition in this sector. Airlines are losing money, mainly because of competition and high taxes," Civil Aviation Minister Praful Patel said at the first-ever National Civil Aviation Conference, involving state governments, here.
He said if the taxes, particularly state sales tax, were rationalised, then it would encourage more airlines to fly into a state, leading to creation of aviation as well as tourism infrastructure that would in turn create jobs and income through a multiplier effect.
18/01/08 PTI/The Hindu

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Sigma Group MD arrested for evading customs duty

Hyderabad: Sleuths of Directorate of Revenue Intelligence (DRI) today arrested the Managing Director of New York-based company — Sigma Resource Group — for allegedly evading customs duty.
The accused is Captain Venugopal Jambavath, a relative of the Executive Director of Flytech Aviation Academy, whose corporate office is located at Begumpet and airfield at Nadargul.
This academy provides commercial pilot training and Venugopal is also said to be heading it.
According to DRI officials, Venugopal was allegedly importing spurious and damaged aircraft spare parts for Flytech.
Venugopal was sourcing the spares from a junk yard in the USA and said to be over-invoicing Flytech for the same through his US-based company.
Further, Venugopal imported five LCD video display boards worth Rs 10 crore in 2006. However, he reportedly under-invoiced the same and showed them as worth only Rs 7 lakh.
Venugopal is also believed to have supplied helium balloons from United Kingdom to Flytech and under-invoiced the stock worth Rs 15 crore by declaring its value as only Rs 4 lakh.
Venugopal was remanded to judicial custody later in the day.
18/01/08 Siasat Daily

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Govt puts off decision on raising FDI cap in civil aviation

New Delhi: The Union Cabinet on Thursday deferred a decision on raising the cap on foreign direct investment in the civil aviation sector."The issue has been deferred," Mr P R Dasmunsi, Information and Broadcasting Minister said when asked whether the Cabinet had considered the proposal by the Civil Aviation Ministry.
The Cabinet was to take a policy decision on the Civil Aviation Ministry's proposals to enhance the 49 per cent limit in non-scheduled airlines, chartered and cargo carriers to 74 per cent, without any direct or indirect participation of any foreign airl ine.
The ministry has also proposed to raise the FDI cap for ground handling services to 74 per cent through the automatic route and to 100 per cent via same route for setting up of maintenance, repair and overhaul (MRO) facilities and flying and technical tr aining institutions, besides in helicopter and sea-plane services.
Mr Praful Patel, Civil Aviation Minister has been vocal in his support to launch seaplane operations in the country, which has a vast coastal belt.
He has also been supportive of expanding helicopter operations, not just to connect far-flung and hilly areas, but also for purposes such as medical emergencies.
17/01/08 Business Line

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Airlines may do terminal-side ground handling

Mumbai: The civil aviation ministry might reconsider its earlier decision of disallowing airlines to undertake their own ground-handling services and directing them to outsource it to Air India or the Airports Authority of India (AAI) or a third party chosen by the airport operator.
Under a compromise formula that is being considered, the airlines might be allowed to manage the terminal side of the ground-handling services.
The back-end work in ground-handling would then be undertaken by Air India or AAI or by a third party. Ground-handling at the back-end involves handling of the aircraft and requires specialised equipment, while the terminal side includes passenger and baggage handling.
The airlines have already petitioned the government to remove the restriction imposed on them as they feel this could impact the quality of their service.
18/01/08 Manisha Singhal/Business Standard

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Cabinet may hike FDI limit in aviation

New Delhi: A policy decision to raise the cap on FDI in setting up cargo carriers, operation of sea-planes and establishing a maintenance, repair and overhaul facility for aircraft and engines is likely to be taken by the Union Cabinet tomorrow.
The Cabinet is also expected to approve a development project for the international airport and a national cargo hub at Nagpur and a modernisation project for the Kannur airport at the meeting, informed sources said.
The Civil Aviation Ministry is understood to have proposed allowing of 100 per cent FDI in sea-planes and helicopter operations, as also in MRO facilities.
As per the proposal, the prevailing limit of 49 per cent FDI in cargo airlines is likely to be raised to 74 per cent, with foreign airlines being allowed to pick stake in these subject to a maximum of 49 per cent, under the overall 74 per cent cap.
17/01/08 Press Trust Of India/Business Standard

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Airlines ground Bengal birds

Rampurhat: Bird flu has brought bad news for passengers from Calcutta who enjoy the chicken on their on-flight menu.
A number of airlines have decided to withdraw chicken meals from their platter from tomorrow to avoid “any risk” for passengers.
“No chicken will be served on board from tomorrow in all 22 flights taking off from Calcutta,” an Air India spokesperson said in Calcutta.
Jet Airways today decided not to load chicken meals on its flights from Calcutta.
Kingfisher has also decided to serve vegetarian meals on board.
“We are keeping a watch,” a British Airways spokesperson said from Delhi.
Singapore Airlines assured its passengers there was no need to worry about its chicken meals.
16/01/08 Sanjay Mandal/The Telegraph

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Patel asks FM to rationalise taxes on ATF

New Delhi: Civil aviation Minister, Mr Praful Patel on Wednesday asked the finance minister to rationalise the tax structure in the aviation industry including levies on aviation turbine fuel in the Budget for 2008-09.
In a pre-Budget meeting with Finance Minister, Mr P Chidambaram here, Mr Patel also sought extension of tax rebate given to the newly merged Air India to help it in its consolidation process.
The Civil Aviation Minister also sought withdrawal of service tax on First Class and Business Class air tickets saying this was putting domestic airlines in a disadvantageous position vis-a-vis foreign airlines on whom this tax was not applicable.
Pointing out that civil aviation is a sunrise sector, he said it needs little bit of facilitation and support. Mr Patel quoted finance minister as saying that the Government will have to understand the problems faced by the civil aviation industry due t o the high prices of ATF.
16/01/08 Business Line

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Air traffic increases 33% in 2007

New Delhi: Indians are flying like never before within the country. In 2007, 432.89 lakh people took to the skies, registering a 32.51% growth from the figure of 326.68 lakh in 2006, according to data from The Directorate General of Civil Aviation (DGCA).
All airlines except Jet, showed a growth ranging from 11-149% in passenger traffic in 2007, over the previous year. IndiGo recorded a growth of 686%, thanks to the induction of fleet last year, which now stands at 16. GoAir also nearly doubled its passenger intake, again for the same reason. Kingfisher recorded an 87% growth.
The Naresh Goyal-owned company, however, had a 3.5% negative growth in passenger traffic.Jet carried 96.75 lakh passengers in 2007, while the figure was 100.28 lakh in the previous year. Its market share also fell to 29.9% in 2007 from 31.2% in the previous year.
16/01/08 Saurabh Sinha/Economic Times

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New airlines fly high in 2007

New Delhi: In a young India it's the young airlines that's flying high. The year 2007 saw comparatively new airlines such as Kingfisher Airlines, SpiceJet, IndiGo and GoAir closing in on established carriers like Jet Airways, Air Deccan, JetLite (formerly Air Sahara) and Air India (erstwhile Indian), according to the market share figures released by the Director general of Civil Aviation.
Going by the number of passengers, however, it was only the market leader Jet Airways that saw a dip in 2007 by carrying 9.7 million travellers against 10 million in 2006. Analysts attribute it to the airline's focus on international expansion.
16/01/08 Nirbhay Kumar/Economic Times

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GoM on Aviation yet to finalise civil aviation policy

The GoM on Aviation is yet to finalise the much-touted civil aviation policy. Though differences within the GoM on the key issue of relaxing the 5-year criterion for allowing domestic airline companies to fly abroad remain, CNBC-TV 18?s Abhijit Neogy has learnt that there are other areas in the policy where serious differences have now come up between the Planning Commission and the Ministry of Civil Aviation.
This may not be good news for all those states who plan to start their own airline companies for intra state travel. CNBC TV18 has learnt that the Deputy Chairman of the Planning Commission is a key member of the GoM on aviation has opposed giving fiscal incentives to promote regional airlines. Civil Aviation Minister, Praful Patel has been active in encouraging regional airlines but Montek Singh says that such airlines should be promoted by providing better infrastructure and further simplification of entry norms for regional airline companies.
15/01/08 Moneycontrol.com

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The time to fly on a budget

Chennai: The lean season for air travel has begun, and early indications are that a global lull in traffic is likely to hit airlines hard. Passengers, of course, can expect cheaper fares and a range of concessions as airline operators try to stimulate travel.
The period from February to early April is traditionally a testing time for airlines, but signs are that the lean season has set in early this year.
With aviation turbine fuel prices on the rise, industry experts say passengers cannot expect the kind of price reductions seen in previous years. While fares are still expected to drop in coming weeks, passengers also should not expect “across-the-board” reductions.
Passengers also have good news regarding the surcharges payable. Currently, airlines in India charge fixed rates of fuel and congestion charges, but they are expected to introduce a system that makes surcharges commensurate with the distance travelled.
15/01/08 Ananth Krishnan/The Hindu

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Cheaper airfares are back, for now

Mumbai: Faced with a lean season when occupancies drop 15 to 20 per cent, airlines are trying to lure fliers with cheaper fares. If you time your travel well (midweek, off-peak hours), you can still fly many sectors in the country for Rs 2,525.
For instance, you can fly Mumbai-Delhi on January 16 (Tuesday) at that fare on budget carriers like GoAir, Spicejet or Simplifly Deccan if you don't mind reaching your destination at 12 pm, starting at 5 am, or taking a flight in the afternoon.
Even if you are taking a flight at peak hours (7 to 9 a m, and 5 to 7 p m), you could buy a seat for Rs 2,700 to Rs 3,000 on some of these budget carriers, many of whom have been running promotional schemes to drive occupancies.
GoAir has been selling tickets for Rs 500, minus taxes, under a festive offer. Indigo, which offers a wider network, has come up with a similar promotional offer. Of course, these offers are available for a limited period on select routes.
Deccan has teamed up with SBI credit card holders can buy tickets for Rs 500 plus surcharges on most sectors serviced by Deccan, barring flights to Port Blair from Kolkata and Chennai.
Full-service airlines are still drawing up their strategy for the lean season, and you can expect more airlines to come up with cheaper fares.If you had planned your trip in advance, you could have availed of promotional fares from these airlines.
14/01/08 Ranju Sarkar/Business Standard/Rediff.com

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HAL may fly into stock market

The last unlisted navratna, $2-billion Hindustan Aeronautics (HAL), may enter the capital market. The apex committee on navratna PSU, chaired by the Cabinet secretary, has proposed HAL’s listing.
The apex committee has advised “the department of defence production to explore the possibility of listing HAL”, an official said, adding that the move is on Prime Minister Manmohan Singh’s suggestion.
HAL has collaboration with major aviation companies such as Boeing and Eurocopter, and is in the process of developing more advanced aircraft. In a recent move, Boeing agreed in principle to outsource $1 billion in aerospace manufacturing work to HAL over 10 years.
Besides manufacturing aircraft with in-house R&D, HAL also produces aircraft under license. The Bangalore-based company has 16 production units and nine R&D centres. It has participated in the country’s space programmes by manufacturing structures for satellite vehicles such as PSLV and GSLV. HAL recorded a PAT of Rs 1,149 crore in 2006-07, a growth of 49.03% over the previous year. During the period, the company registered sales of Rs 7,783 crore.
14/01/08 Niranjan Bharati & Nirbhay Kumar/Economic Times

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MRPL forays into fuel retail, to enter ATF marketing

Bangalore: Mangalore Refinery and Petrochemicals Ltd has forayed into the fuel retailing business and said it would enter the aviation turbine fuel (ATF) segment shortly.
The subsidiary of Oil and Natural Gas Corporation opened its first outlet in the country at Maddur in the neighbouring Mandya district on the Bangalore-Mysore highway on Saturday evening.
Rajamani said MRPL would foray into the ATF marketing space.
"We are presently talking to two airlines. Hopefully, in one or two months, well will conclude the agreement.
Draft agreements are being exchanged", he said. "We are going to supply (ATF) in BIAL (Bangalore International Airport Limited) and Hyderabad airport".
Rajamani also said MRPL has submitted bids to supply ATF at some of the 8-9 airports for which Air India-Indian had floated a tender.
13/01/08 PTI/Economic Times

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Jharkhand government has no chopper now

Ranchi: Jharkhand's chief minister and the governor will have to take the roads to travel in the state, as the lone chopper, which the government had hired on contract from a private firm has been withdrawn on charges of misuse.
The five-seater aircraft was hired by the Jharkhand government from Asian Aviation to ferry VIPs like Chief Minister Madhu Koda and Governor Syed Sibte Razi. The company was charging Rs.75,000 per hour.
A Brazilian pilot assigned to fly the aircraft was reportedly unhappy over the misuse of the chopper. It was reportedly used for surveillance purposes in anti-Maoist operations.
"the pilot has left the state with the chopper," an official of the state civil aviation department told IANS.
Last year, the government purchased a Dhruv helicopter from Hindustan Aeronautics Ltd at a cost of Rs.320 million, but the chopper stays on the ground because there is no one to fly it.
12/01/08 IANS/Khabrein.info

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“Take States on board to partner civil aviation growth”

New Delhi: Even as the civil aviation sector continues to record impressive growth year on year, Civil Aviation Minister Praful Patel on Friday said development of airports, multimodal transport connectivity, cargo, and repair and training facilities would have to be speeded up.
He also stressed the need for taking all States on board to partner growth in the sector. “States have to be catalysts for growth and they can have reasonable taxation which will drive more volumes and spur growth.”
A conference of Chief Ministers would be held later this month to apprise them of infrastructure development in the sector, a key component in boosting trade and commerce.
The Airports Authority of India planned to invest about $1.2 billion in modernising 35 non-metro airports. About 80 airports would be upgraded with better infrastructure.
The MRO (Maintenance-Repair-Overhaul) business was also set to gain momentum, and domestic and international cargo traffic was also estimated to grow by 4.5 and 12 per cent over the next decade.
12/01/08 The Hindu

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Aviation plans to spread wings in metros, tier-II cities

New Delhi: The aviation sector is pushing for market expansion in mini metros and tier-II cities, following the footsteps of real estate industry, automobiles and organised retail sectors.
The announcement by low-cost carrier GoAir’s offer of a flat fare of Rs 1,075 for passengers flying from New Delhi to Jaipur, inclusive all taxes and surcharges, has set the aviation industry abuzz. The fare is lower than even the taxes and surcharges offered by airlines along with the fare.
At present, domestic airlines are charging around Rs 1,600 as fuel surcharge with Rs 150 congestion surcharge, and Rs 225 passenger service fees (which goes to government coffers) per ticket.
GoAir’s move may lead to a price war as it may prompt other carriers to reduce surcharges or offer flat fares. The normal fares charged by low-cost carriers on the 40-minute Delhi-Jaipur route is nearly Rs 2,750 (including surcharges and taxes) while a full-service carrier charges Rs 6,310.The airline industry posted around Rs 2,000 crore losses last fiscal year.
11/01/08 Shauvik Ghosh/Financial Express

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New year rings in fare war in the skies

New Delhi: The new year is seeing its first fare war in the skies. Following GoAir’s flat fare of Rs 1,075 (including taxes and surcharge) on the Delhi-Jaipur route, another budget carrier SpiceJet is planning to slash fares to match the competition.
IndiGo has already launched a promotional airfare of Rs 500 plus taxes across all sectors, albeit for a limited period.
“We are already offering Rs 500 basic fare on various sectors. Keeping in mind the ongoing lean season, we may further slash it but no decision has so far been taken on this,” SpiceJet chairman Siddhanta Sharma said.
The airlines’ move is largely being attributed to overcapacity built up by them and people avoiding air travel due to fog-related delays.
On account of the fare war, largely initiated by the country’s largest budget carrier Air Deccan for grabbing market share, domestic carriers lost about Rs 2,000 crore in 2006-07. With consolidation taking place in the domestic skies, airfares have recently moved up.
12/01/08 Nirbhay Kumar/Economic Times

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Praful to talk ATF duties with FM

New Delhi: Civil aviation minister Praful Patel will meet finance minister P Chidambaram next week to discuss the various customs and excise duties applicable on different components of air travel. Patel, who has the soaring ATF prices on top of his agenda, is also expected to discuss a ‘declared goods’ status for the fuel so that a uniform 4% sales tax could be levied on it across the country. The ministers will also discuss the sales tax that passengers have to pay while travelling overseas. Interestingly, a passenger flying on an international carrier does not pay the 12% sales tax on his ticket, which he has to pay while traveling on an Indian carrier.
The minister had met petroleum minister Murli Deora to discuss the ATF prices late last month, but nothing came out of the meeting. “I will also seek to get the service tax abolished on first class and business class air travel in domestic carriers to make them competitive vis-à-vis international airlines,” Patel said on the sidelines of India Aviation 2008, an event being organised jointly by the ministry, Airports Authority of India, Pawan Hans and Air India from October 15 to 18.
11/01/08 Financial Express

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Ex-BPL chief's company buys 60% stake in Axis IT&T

Bangalore: Rajeev Chandrasekhar-controlled Tayana Software Solutions (TSSL), a wholly-owned subsidiary of Bangalore-based Jupiter Strategic Technologies, has acquired 60% stake in Axis IT&T (AXIT), a Delhi-based listed engineering services company, for an undisclosed amount.
TSSL will make the mandatory open offer (as per Sebi norms) to acquire an additional 20% in Axis IT&T. The open offer is expected to commence next Monday.
Axis IT&T suffered a loss of Rs 1.9 crore on a turnover of Rs 5.53 crore for fiscal 2007. The combined entity, which will be under Jupiter Strategic Technologies banner, an aerospace technology company, will operate integrated aerospace solutions development centres in Bangalore, Delhi and overseas locations at Leictershire, the UK and Chicago in the US. The entity is expected to have a head count of about 400 to begin with, which is expected to grow up to 600 by 2008-end.
12/01/08 Economic Times

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All roads lead to the US

New Delhi: The rising rupee is helping a growing number of Indians travel to the US
With outbound travel showing strong growth over the past two years, the number of Indians who have booked themselves for organised tours to the US has also gone up by 40 per cent compared to last year. The trend will get stronger this year too.
The number of B1/B2 (business/tourism) visas has gone up by 79 per cent. According to information provided by the US Consulate, during October 2006 to September 07, the country issued 322,000 visas as compared with 180,000 visas in the same period in the past year.
The factors that have fuelled the growth and allowed tour operators to be bullish on the US sector are speedy issuance of the visas by the US, firming of the rupee vis-a-vis the dollar (firmed up by 15 per cent in the last two years) and an increase in passenger capacity on the sector by the national as well as international carriers.
Though some of the travellers to the US are first time holidaymakers, majority are evolved travellers who have visited Europe, South East Asia and Australia.
10/01/08 Manisha Singhal/Business Standard

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Airlines reduce business seats on non-metro routes

New Delhi/Mumbai: Though the economy is booming and airlines have robust passenger growth, full-service carriers are finding it hard to fill their business class cabins across their networks.
Both Kingfisher Airlines and Jet Airways are now inducting aircraft with fewer business class seats than before. The new planes that have more economy class seats are being deployed on non-metro routes where business class traffic is low.
Kingfisher will reduce the number of business class seats on its A321 aircraft from 32 to 20, while Jet Airways already has aircraft with only economy seating.
The number of economy class seats on the Kingfisher planes will go up to 154 from 114 now.
Meanwhile, the third full-service carrier Air India (formerly Indian) operates with fewer business class seats, than the other two airlines.
08/01/08 Nirbhay Kumar & Cuckoo Paul/Economic Times

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Dubai, India Vie For Maintenance Work; Some Warn of Bubble

Dubai: A race to build jetliner-maintenance facilities here and in India shows how the aviation boom is lifting local industries world-wide -- but some warn of an investment bubble.
Dubai, which has used its oil wealth to create a giant carrier, Emirates Airline, and a major aircraft-leasing company, DAE Capital, now plans to become a player in the $41 billion global aircraft-maintenance industry.
Dubai, which is emerging as a hub for global air traffic, aims to tap demand for aircraft maintenance across the Middle East. The MRO market is set to grow by almost 9% annually over the next five years, analysts predict.
A key secondary market for Dubai's operation will be India, less than a three-hour flight away, where deregulation has sparked an air-travel boom. Industry officials estimate Indian airlines will add almost 2,000 aircraft to their fleet by 2025.
The hitch is that India itself now bubbles with plans for at least nine new maintenance facilities backed by titans Boeing Co., Airbus parent European Aeronautic Defence & Space Co. and Lufthansa Technik AG, the maintenance wing of Germany's Deutsche Lufthansa AG. The Confederation of Indian Industry predicts the country's MRO market will generate revenue of $4 billion annually by 2012.
Lufthansa Technik last year linked with Indian infrastructure firm GMR Group to invest $23 million in a maintenance center at Hyderabad International Airport, which is planned to open soon. Boeing will open a $100 million facility with Air India in Nagpur in 2009. Indian carriers Jet Airways (India) Ltd., Kingfisher Airlines Ltd. and Go Airlines also have announced plans to start maintenance centers.
India's maintenance centers are expected to have a home-field advantage because roughly 350 aging passenger planes now fly in India and need prompt attention.
But the competition for customers also hinges on who wins the battle for skilled technicians. Dubai has been hiring maintenance engineers from around the world. India must fill its aircraft-maintenance classrooms quickly to ensure it can both run its new facilities and replace veterans defecting to the Middle East.
07/01/08 Stefania Bianchi/Wall Street Journal

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Civil aviation market expects $5.6 bn growth

It is one of the fastest growing sectors at a rate of 18% annually, the Indian civil aviation market holds out great promise for potential investors.
The International Air Transport Association (IATA) in its latest estimates this year reckons India to be a driving force behind the world’s civil aviation business that is globally expected to grow from $5.1 billion to $5.6 billion this year.
The government is planning to re-develop 45 big and small airports around the country. For greenfield airports, foreign equity up to 100% is permitted through automatic approvals. For existing airports, foreign equity up to 74% is permitted through automatic approvals and up to 100% through special permission (from FIPB).
The Centre for Asia Pacific Aviation (CAPA) predicts that domestic traffic will grow at 25% to 30% a year until 2010 and international traffic growth by 15%, taking the overall market to more than 100 million passengers by the end of the decade. Indian carriers have 480 aircraft on order for delivery by 2012, which compares with a fleet size of 310 aircraft operating in the country today.
06/01/08 Raja Awasthi/Economic Times

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As crude rises, airlines unlikely to cut fuel surcharge

The upward movement in global prices of oil could see the domestic airline industry do a rethink on the earlier proposal to lower the fuel surcharge following a reduction in aviation turbine fuel prices. Earlier this month, Indian Oil Corporation (IOC) had lowered the price of ATF at the four metros by about 4 per cent as compared to the previous month and this had led to the possibility of some airlines reducing the fuel surcharge.
On January 1, IOC announced that an airline refuelling in Delhi would be charged Rs 45,495.82 per kilolitre (down from Rs 47,444.14 in the previous month), while in Chennai it would pay Rs 49,372.63 per kilolitre (Rs 51,425.19 .
However, after IOC reduced ATF prices, the global price of crude crossed $ 100 a barrel mark before coming back marginally to $ 99 a barrel.
At the moment, most airlines impose a surcharge of Rs 2,025 to offset the increase in fuel prices as ATF accounts for 30-35 per cent of their operating costs. During 2007 itself, the airline industry increased the fuel surcharge four times.
04/01/08 Business Line/Moneycontrol.com

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Airlines mulling over optimising fuel efficiency

New Delhi: With fuel comprising 40% of costs, all airlines, especially the low cost carriers (LCCs) are getting more stringent with their measures to optimise fuel efficiency.
Though with a 4% relief coming their way on aviation turbine fuel (ATF), airlines are now more than happy to save some extra money.
As per International Air Transport Association (IATA), modern aircraft achieve fuel efficiencies of 3.5 litres per 100 passenger km. It simply means seat carried for a mile. For example, a Delhi to Mumbai bound flight requires 2,300 kl of fuel per block hour.
According to aviation experts this consumption depends on the aircraft type and its age. The Airbus 380 and Boeing 787 are aiming for three litres per 100 passenger km, which is better than a compact car. And globally, all airlines are aiming for a further 25% fuel efficiency improvement by 2020.
“We follow a strict regime of regular aircraft maintenance which includes complete aircraft wash, as dust and dirt in the aircraft can cause a drag and excess weight resulting in high fuel consumption,” says GoAir managing director Jeh Wadia.
Other carriers such as SpiceJet and Indigo are also adopting various operational techniques to increase fuel efficiency besides going for fuel hedging through various banks.
SpiceJet, is not only in talks with various banks for financing its fuel hedging but is also adopting various innovative techniques in day-to-day operations.
05/01/08 Dheeraj Tiwari & Vishakha Talreja/Economic Times

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Cleartrip now lets you combine flights and hotels instantly

New Delhi: Cleartrip has introduced the ‘Flights + Hotel Search’ for its customers. The new ‘Flights + Hotel Search’ will give customers the flexibility to choose the airline and hotel of their choice in a snap. This is a customized product, which provides customers the ability to search, & book roundtrip flights and hotel stay while monitoring their overall budget.
The new ‘Flights + Hotel Search’ ‘comes with many unique features that benefit the customer. A rich client interface allows the user to instantly sort & filter results based on his preferences. The combo enables hotels to be filtered based on star rating, area, chain, price and amenities. Flights can be filtered on airlines, price, time, number of stops and ticket type. The price is also instantly update based on the selection.
04/01/08 India PRwire

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GoM meet on civil aviation inconclusive

New Delhi: The Group of Ministers (GoM) meeting failed to arrive at a consensus on the decision to liberalize international flying routes for domestic carriers, restructure the Airports Authority of India and set the road map for reforms for civil aviation sector that has witnessed boom during last few years.
"The meeting remained inconclusive", Civil Aviation Minister Praful Patel told reporters emerging out of the 45-minute GoM meeting chaired by External Affairs Minister Pranab Mukherjee at South Block on Wednesday evening.
According to sources, the meeting was also to decide on authorising the Civil Aviation Ministry to become the nodal agency to decide on which airline to be allowed to fly abroad on a case-to-case basis.
Currently only 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. At the Tuesday meeting Lalu Prasad demanded a clear cut formula to be kept ready so that no airline can claim it has been discriminated against.
According industry analysts, Deccan Aviation-Kingfisher Airlines are lobbying hard with the government to secure a favourable outcome on international flying licences.
04/01/08 K S Narayanan/Newindpress

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Advance flier info system from April

New Delhi: India will have an advance passenger information service (APIS), on the lines of the system in use in US, which will provide information such as passport and travel details about incoming passengers allowing immigration authorities at six Indian airports to scan the manifests for likely terror threats.
The advanced technical system will be operational at Delhi, Mumbai, Bangalore, Hyderabad, Chennai and Cochin airports from April 1. After running a pilot project for Air India, all international airlines will now have to provide information about passengers and crew within 15 minutes of taking off on flights bound for India. At present, besides the US, APIS is operational in nine countries: Canada, Australia, New Zealand, Bahrain, South Korea, China, Mexico, South Africa and Japan.
The system has been criticized as a form of profiling where mere nationality or ethnicity can be a reason for questioning, but security agencies feel that it gives them valuable lead time. It is also felt that immigration clearance could become easier for those who don't fall in suspect categories.
04/01/08 Vishwa Mohan/Times of India

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Price of aviation fuel, surcharge may rise

New Delhi: Air fares in the country are expected to go up again, with airlines planning a sharp hike in the fuel surcharge (at present Rs 1,650 per ticket). They are fearing a hike in price of aviation turbine fuel (ATF), after global crude hitting the $100 mark.
Airlines, which are already making huge losses, say they will not be able to absorb any increase in input cost, which means costlier flying. At this stage, no airline was able to give a figure on fare hike as oil PSUs determine ATF prices based on the prices of crude.
What’s more, “the increasingly difficult financial position that some airlines will get into because of rising fuel cost could pave way for more consolidation in the industry in the next 18 to 24 months,” said an industry insider. In the last financial year, airlines reported a collective loss of $500 million and the current one (2007-08) could be even worse.
04/01/08 Saurabh Sinha/Times of India

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AAI foresees more mid-air mess

New Delhi: India's already congested airports could get choked — at least till they are upgraded. Instead of handling 120 million passengers by the end of 2011-12, Indian airports — which are operating at more than full capacity — could have to grapple with 256.5 million air travellers by the end of March 2012, according to new statistics put together by Airports Authority of India.
But that's not the only change. Mumbai, the busiest airport in India, would soon be overtaken by Delhi. Once IGI gets a new runway and terminal this summer, more flights would come to Delhi as the Mumbai airport is now choking. GMR and GVK, the two groups modernizing the existing airports in Delhi and Mumbai, expect the aviation map to be redrawn by 2010.
AAI data also showed that domestic air travel is expected to see a higher growth of around 24%.
The other trend that emerged was a slower growth in aircraft movement — which is the number of landings and take-offs — than in passenger volumes handled. Aircraft movement is projected to rise nearly 17% between now and 2011-12, which pointed towards airlines seeing higher capacity utilization, estimated at less than 70%.
Alternatively, it could mean that airlines fly bigger aircraft to accommodate more passengers, while their load factors remained around the same level.
03/01/08 Saurabh Sinha/Times of India

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Panel to review overseas flying rules

New Delhi: The group of ministers on the civil aviation policy is likely to take a call tomorrow on relaxing the experience required for Indian airlines to fly abroad.
Top civil aviation ministry officials, however, said if the ministers were not able to resolve their differences on this issue, the GoM may choose to go ahead with the aviation policy, while reserving this issue for further consultations.
The civil aviation policy is a set of guidelines that will govern the industry in the years ahead.
Railway minister Lalu Prasad had objected to norms being relaxed for airlines wishing to fly abroad at a meeting of the GoM held last month. Civil aviation minister Praful Patel wants to do away with the experience-based eligibility norm altogether. He wants to bring in a set of guidelines for case to case clearances of plans to fly abroad.
The civil aviation ministry wants the requirements for flying on international routes to be based on technical and financial parameters. At present, only 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.
02/01/08 The Telegraph

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Bigger aircraft to fly on domestic routes in 2008

Mumbai: Indian airliner companies will fly bigger (wide-bodies) aircraft on the domestic circuits in 2008, to counter the competition in the fast-consolidating Indian aviation industry. Captain Manoj Bhambhani, Chief Pilot - Training & Standards, Jet Airways, says, "The Boeing 737-900 ER series aircraft carries more passengers and it will also further economise domestic fares, since the cost per average seat-kilometre will come down. The resultant price-war will help frequent flyers."
Commenting on the trend, Wolfgang Prock-Schauer, Chief Executive Officer (CEO), Jet Airways, adds, "...The new aircraft leaves us with 50 extra seats in comparison to an average aircraft. We have placed an order for ten such aircraft to operator on the domestic routes by mid-2008."
SpiceJet will also be inducting four Boeing 737-900 ER series aircraft to its fleet in 2008, while GoAir has already inducted one A-320 aircraft and plans are afoot to place an order for another five such planes. "
02/01/08 Mayuresh Pawar/TravelBizMonitor

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Air passengers complain about hidden charges

Chennai: Air travellers are getting increasingly frustrated by airlines’ advertising tactics, claiming that airlines are misleading them about the costs of flying by imposing hidden charges on tickets.
While it has now become commonplace for airlines to advertise fares as low as Rs.50 in the face of increasing competition, in reality, passengers discover that they have to end up paying as much as Rs.2,000 as a result of a number of surcharges and taxes that are imposed just before they book their tickets.
Passengers say that this form of advertising is misleading. It also makes it harder for them to compare fares across different airlines as surcharges can vary in how they are listed. “What airlines do is include a number of additional charges in the fine print,” says D. Sudhakara Reddy, President, Air Passengers’ Association of India.
Last week, the Directorate-General of Civil Aviation (DGCA) hauled up two national carriers for misleadingly categorising fuel and congestion charges as taxes.
02/01/08 Ananth Krishnan/The Hindu

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DGCA extends approval to AI

New Delhi: Air India, today said the aviation regulatory authority, Directorate General of Civil Aviation (DGCA), has extended approval to maintain and repair the airline’s aircraft (and other aircraft) for both Air India and erstwhile Indian till 31 March.
Reacting to the reports appearing in a section of the media, which stated Air India may lose its maintenance licence today, an Air India spokesperson, in a statement here, described the news as “unwarranted”.
“The two carriers have been in communication with DGCA and made known of their plans of submitting the Maintenance Organisation Exposition (MOE) for the National Aviation Corporation of India Limited (NACIL),” the spokesperson said.
01/01/08 The Statesman

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ATF price cut to reduce fares on only short routes

New Delhi/Mumbai: Low-cost carriers are planning to reduce air fares by Rs 100 to Rs 150 only on shorter routes as a result of the 4 per cent reduction in the cost of aviation turbine fuel (ATF) announced today. Full-service carriers like Jet Airways have ruled out such a possibility.
This is the fourth time oil companies have reduced prices of ATF this year, though they have raised prices eight times.
The largest increase (14 per cent) was in December and led to a Rs 300 rise in fuel surcharge that the passengers pay.
Said Samyukt Sridharan, chief commercial officer of SpiceJet, a low-cost carrier. "We still under-recover costs on longer routes, but margins on shorter routes will allow us to cut the fuel surcharge by up to Rs 150."
Echoed Air Deccan CEO Ramky Sundaram, "We have been looking at a decrease in fuel surcharge for a long time on shorter routes and this recent development will only be an addition to it."
Go Air executives said they could announce a fare reduction on shorter routes.
01/01/08 Business Standard

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Air fares set to rise in 2008

Airfares are set to go up further in 2008 due to consolidation as well as rationalisation in capacity addition in the sector.
In the next 3-4 months, which is considered to be a lean period in the industry, fares could stabilise even though oil prices are expected to come down. Airline officials, however, feel that fares would start moving up by 5-7 per cent around April and May putting pressure on fliers.
The fuel surcharge that is now being charged as a tax would be included in the fare and the pressure on all airlines to improve their yields would prevent them from offering huge discounts on fares.
Now that Kingfisher Airlines and Jet Airways have acquired Deccan and Air Sahara respectively, there would be a constant endeavor by both airlines to harden fares to arrest losses. The exiting low cost carriers would also want make money and come out of losses as soon as possible.
The fall out of the consolidation process has already begun with most airline operators hiking their fares from August onwards.
01/01/08 Lalatendu Mishra/Hindustan Times

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Will airlines pass on gains from lower fuel prices?

New Delhi: Domestic flights could cost less in the New Year. With aviation turbine fuel costing 4 per cent less in January vis-a-vis the previous month, domestic airlines indicated on Monday that they could look at reducing the fuel surcharge on some routes.
“The surcharge is likely to come down. It would be difficult to quantify the decline since on long haul flights most airlines recover their costs while this is not the case on flights which are of less than 90 minutes duration,” the Executive Chairman of low cost airline SpiceJet, Mr. Siddhanta Sharma, said. At the moment, most airlines impose a surcharge of Rs 2,025 to offset the increasing ATF prices.
A spokesperson for Air Deccan said a decision on whether the surcharge should be lowered was likely to be taken by Wednesday (January 2).
The Managing Director, Paramount Airways, Mr M. Thiagarajan, however said that the airline had no immediate plans of lowering the surcharge as ATF prices were “fluctuating a lot.”
The decision by some airlines to re-visit the surcharge follows Indian Oil lowering ATF prices.
31/12/07 Business Line

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Cheaper plane fare in the air

New Delhi: Air tickets may cost slightly less, if airlines pass on a cut in jet fuel prices to passengers.
Oil companies today reduced aviation turbine fuel prices by 4 per cent, or about Rs 2,000 per kilolitre, for domestic airlines and $30 for international carriers. The new prices will be effective from Tuesday.
“Budget carriers are unlikely to cut their prices as they are operating on thin margins,” said R. Pathak, former director of Indian Airlines and an aviation analyst.
Air India officials said they could take a call on a price reduction in the domestic sector in the coming days. Sources, however, said since this was the peak season, the national carrier would rather wait and watch the trend before taking a decision.
A top Jet Airways official said, “We are assessing (the situation) but it will be difficult to cut fares as all airlines are facing a cost push. Prices of everything in the aviation industry from pilot’s wages to landing fees to spares have gone up considerably over the last year.”
31/12/07 The Telegraph

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Expect airlines to fly back into profit

Mumbai: Rising ticket prices, high seat occupancy rates and slower induction of planes into fleets may help India’s domestic airlines—competing tooth-and-nail in the past few years to grab shares in a market that is almost doubling every two years—record a small profit for the just ended fiscal third quarter.
Industry executives and analysts admit the results of the quarter ended 31 December, traditionally the busy season because passenger traffic climbs sharply over the holidays, may not be sustainable. But rising ticket prices, a result of consolidation in the industry, is likely to help these airlines, even in the long term, to post profits.
And, late Monday, in a move that will also help airlines’ bottom lines, India’s public sector oil firms, the major suppliers of ATF, or aviation turbine fuel, cut prices by 4%, the first reduction since September and in line with global trends. Fuel alone accounts for 40% of the airlines’ operating costs.
Kingfisher Airlines Ltd and its affiliate Deccan Aviation Ltd, which runs Simplifly Deccan, are both likely to fly back into the black, said a senior executive of the UB Group, which owns Kingfisher through a set of subsidiaries.
31/12/07 Livemint

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