DGCA safety audit slams Pawan Hans

http://indiatoday.intoday.in/site/story/dgca-safety-audit-indicts-pawan-hans/1/140900.html

New Delhi: India's aviation regulator Director General Civil Aviation (DGCA) has indicted national helicopter company Pawan Hans for not operating single engine choppers for VIPs under the Instrument Flight Rules (IFR) which makes it easier for pilots to negotiate bad weather.

The embarrassment comes about a month after a Pawan Hans chopper crashed killing Arunachal Pradesh chief minister Dorjee Khandu and four others.

That helicopter too was powered by a single engine and did not have IFR through which pilots are in touch with Air Traffic Control for safe flight path.

The DGCA's safety audit, conducted last month, laments that the operator had not complied with sections 2.2 (d) and 4.2 of CAR, mandatory for aircraft owned by government and public sector units (PSUs).

The CAR section 2.2 (d) states that the operator should have "at least two sets of appropriately licensed crew." While 4.2 section states that multi- engine fixed wing aircraft and single turbine or multi- turbine engine helicopters should have good operational capability under IFR. The DGCA audit stated that Pawan Hans Helicopters Limited (PHHL) is operating flights under Rule 160 of the Aircraft Rules, 1937, and pilots are ' inappropriately licensed.' It is a non- compliance of the CAR's section 2.2, issued in June 2010, stated the report.

PHHL, by invoking an exemption clause- Rule 160 has permitted more than fifty per cent of its pilots, with defence background, to fly without licences.

Section 160 says, the Centre may exempt any aircraft or any person from adhering to these rules, either wholly or partially.

Aviation experts, however, feel that Rule 160 should be invoked in extreme circumstances.

09/06/11 Ajmer Singh/India Today

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HAL plans MRO at old Bangalore airport with Rs 120 crore

Bangalore: Hindustan Aeronautics (HAL) is looking at setting up a maintenance, repair and overhaul (MRO) facility to leverage its Bangalore airport asset, which is now closed to commercial aircraft.
Along with the MRO plan, HAL is also combing across its business segments to expand revenue to make up for the loss in earnings from airport operations. The airport revenue, in the region of Rs 250 crore, is not a significant portion of the over Rs 8,500-crore entity, but it is by no means small enough to be glossed over.
HAL director (planning) M Fakruddin said the profitability from the airport business was very healthy. “We will look at expanding revenues from our existing line of businesses,” he told ET . HAL is in advanced stages of finalising a joint venture partner who will bring the licence for civil aircraft maintenance. Budgeting an investment of Rs 120 crore, the scalable model will start with two hangars with a capacity to handle 50 aircraft per annum.
HAL is also advancing on its plans to create a civil aircraft that is in the 100-seater configuration.
In fact, it is collaborating with National Aerospace Labs on the concept for design and manufacture of a regional jet. The Rs 2,000-crore plan will pit HAL against global aircraft manufacturers such as ATR, Embraer and Bombardier.
31/07/08 J Padmapriya/Economic Times

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Students catch eye of travel agents, airlines

Mumbai: Students travelling abroad for studies are fast catching the interest of airlines and tour operators alike. Extra baggage allowance, discounted fares, commission waiver on foreign exchange, insurance covers and a bouquet of other goodies are coming their way.
According to Thomas Cook India, the market for students going abroad is witnessing a 40-45 per cent year-on-year growth.
Starting this year, the travel company will also assist students in getting an education loan, for which it has tied up with HDFC Bank, State Bank of India and some other private banks. It is also offering extra baggage of up to 78 kg to London and to the US and Canada up to 110 kg. Exclusive fare of Rs 13,000 plus taxes is being offered on the Mumbai-to-London sector, while special discounts are also being given to family members accompanying students.
The list of perks does not end here. Students can avail themselves of one per cent discount on the foreign exchange rates from Cox and Kings and Thomas Cook. Cox and Kings also waives the commission on the forex otherwise charged from customers.
While India’s national carrier, Air India, is offering extra baggage allowance for students travelling to the West, Far East and South-East Asian countries on its flights till October 31, 2008, Jet Airways flies further: its offerings include special fares and a chance to earn 1,000 bonus JPMiles subject to terms and conditions.
30/07/08 Shubhra Tandon/Business Line

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Airlines cut flights to battle lean season blues

New Delhi: For the first time in three years, the number of passengers flying in India saw a fall of 4 per cent in June this year.
“I have not seen such low load factors ever, even during the lean season. Nor have I seen such a huge number of ad-hoc cancellations happening everyday at most airports,” said Kamal Hingorani, vice-president, sales and marketing, SpiceJet.
Agreed an executive of another low cost carrier (LCC), “This being a low season, most carriers are getting load factors of around 50 per cent compared to 60-70 per cent earlier. With most of our flights only half occupied, it is a better option to combine two flights which are closely scheduled.”
The executive said that on an average, every airline was cancelling around six to eight flights every day.
Take the case of Delhi airport: Around 200 flights were cancelled last week. Interestingly, LCCs accounted for as much as 73 per cent of the total last minute cancellations.
IndiGo cancelled 40 flights, while Simplifly Deccan cut 50. Normally, there are no more than 15-20 cancellations a week.
According to sources, Mumbai airport also saw around 25-30 ad-hoc cancellations on a daily basis.
In the last couple of months, airlines have reworked the remaining portion of their summer schedule ending in September by cutting 10 per cent of their capacity.
Around 160 of 1600 daily flights have been cancelled for the next two to three months.
29/07/08 Anirban Chowdhury/Business Standard

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Medical guidelines for flight crew

New Delhi: Taking a serious view of obesity and high blood pressure among flight crew, the Directorate General of Civil Aviation has come out with detailed medical guidelines to be compulsorily adhered to by them and followed by respective airlines before they undertake flying duties.
In fresh guidelines, the DGCA has laid down mandatory standards for airlines to get the blood pressure of the crew members checked and conduct medical examinations for obesity.
The regulatory body has categorically stated that if any crew member was found to be suffering from hypertension or high blood pressure in the blood tests conducted 24 hours before flying, they would be taken off from flying duties. A blood pressure limit of 140/90 is treated by DGCA as the upper limit of normal.
Those being treated for hypertension would be treated as being temporarily unfit for carrying out flying activities.
While acknowledging that there are no standard and universally accepted guidelines to measure obesity, the DGCA said one of the better methods to measure obesity was body mass index (BMI), which was a reliable indicator of body fat, as the correlation between body mass and body fat was fairly strong.
The DGCA also opined that BMI and waist-hip ratio were to be taken as parameters for grading and assessing obesity in civilian aircrew, rather than height-weight tables.
28/07/08 PTI/Sify

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Airlines set to post steep losses for June quarter, say analysts

New Delhi/Mumbai: Analyst expect all three listed airlines in India to report steep losses for the quarter ended June, a deterioration from year-ago results when they reported a small profit or smaller losses. A poll of four analysts points to consensus minimum loss of Rs282 crore for the country’s oldest private carrier, Jet Airways (India) Ltd, with the highest estimate pegging losses at Rs412 crore, excluding its subsidiary JetLite. It will declare results on 29 July. Two analysts predict low-fare carrier SpiceJet Ltd will post losses ranging between Rs70 crore and Rs87.5 crore.
Losses for India’s largest low-fare carrier Deccan Aviation Ltd, which is merging with Kingfisher Airlines Ltd and is now tracked by few analysts, are estimated at Rs350 crore, according to a single analyst’s projection.
SpiceJet will declare its results on 30 July. Deccan hasn’t set a firm date for reporting its results.
Jet Airways, Deccan and SpiceJet, whose shares are listed, have nearly 45% of the domestic market share with National Aviation Co. of India Ltd-run Air India, Kingfisher Airlines Ltd, InterGlobe Aviation Pvt. Ltd-run IndiGo, GoAir (India) Pvt. Ltd-run GoAir, Jet’s subsidiary JetLite and Paramount Airways controlling the rest of the market as per the June figures released by the Directorate General of Civil Aviation.
28/07/08 Tarun Shukla and P.R. Sanjai/Livemint

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No specific excise on ATF either: Finmin

New Delhi: Yet another attempt by the civil aviation ministry to provide relief to airlines from the high jet fuel prices has failed. After refusing to include aviation turbine fuel (ATF) in the declared-goods list, the finance ministry has rejected the aviation ministry’s proposal to levy a specific excise duty on ATF. Currently, ATF attracts an 8% excise duty and the ad valorem duty means the actual levy goes up every time price of the commodity is hiked.
"The finance ministry has rejected our proposal to levy specific duty on ATF. The committee headed by the Cabinet secretary to look into the financial crisis being faced by the airlines would, however, recommend it as one of the measures to save the industry in its report to the prime minister," a civil aviation ministry official said.
According to industry analysts, the specific duty can soften net fuel price only when the base price is too high. In case of low base price — which is expected as crude price has fallen to $124 a barrel from $147 a barrel in the last few weeks — it may not have the desired affect.
On July 3, prime minister approved setting up of a committee to examine various issues relating to the financial crises being faced by domestic airlines.
28/07/08 Nirbhay Kumar/Economic Times

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Nagpur-Mumbai air traffic down by one-third

Nagpur: According to Airport Authority of India's (AAI) latest figures, traffic on Nagpur-Mumbai sector has dropped nearly 35% since June 2008.
The number of people travelling daily between the two cities has declined from about 1000 in June to just 650 this month.
The sector had seen phenomenal growth earlier. From just two airlines (Then Indian Airlines and Jet Airways) operating flights on Mumbai-Nagpur-Mumbai sector in 2002 the number had grown to five (Air India, Jet, Kingfisher, Deccan and Indigo) by October 2008. On certain days there were as many as seven flights between two cities. Most of them having above 80% passenger load factor.
Kingfisher Airlines that had started daily morning evening flights on Nagpur-Mumbai sector cut fares to as low as Rs 2,100/-. Low-cost carriers were charging as little as Rs 1599/- during the period. This was the period when Nagpur witnessed real aviation boom.Then crude oil went through the roof taking Aviation Turbine Fuel (ATF) with it. The airlines responded by raising fares and passenger loads dropped. Kingfisher has discontinued operations to Mumbai following poor passenger response. Jet Airways has suspended its evening operations for the same reasons.
The full service airlines now charge a minimum of Rs 3,725/- for Mumbai while low cost ones ask for Rs 3,250/- and above. Air tickets, that were once competitive with AC II tier fares on trains, now exceed even AC I.
28/07/08 Sachin Dravekar/Times of India

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Two aircraft seized by customs dept

Mumbai: The city customs department has seized two aircraft for alleged misuse of the duty waivers given to non-scheduled operators.
Of the two aircraft, one is a chopper owned by Global Vetra Aviation, a UK company, which operates in India as well. The chopper, which is worth Rs 42 crore, was being used by ONGC for its deep-water operations.
The other one is a Cessna, which is worth Rs 25 crore. The eight-seater aircraft, which was imported in January, is owned by International Air Charter Operations Pvt Ltd, a company in which the Videocon group has a stake.
27/07/08 Times of India

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Carriers woo travellers with luxury perks

Mumbai: Get ready to be pampered when you fly abroad next time. Stung by the slowdown in the US, international carriers are going all out to woo travellers from countries such as India, which are still registering a double-digit growth in outbound traffic.
Your choice to fly an international carrier will now be influenced by how flat the beds are, how wide your business class seat is or whether a super luxury car drops you off at the airport. This is exactly what the international carriers are offering the premium Indian travellers.
International airlines pick up at least 60-65 per cent of the onward traffic from India. Many airlines feel this is the perfect time for improving the luxury quotient so that yields go up even if the load factor is down.
Mark D Martin, senior adviser, KPMG, said the Indian aviation sector is registering a double-digit growth despite the high air turbine fuel prices. This is not seen anywhere else.
International carriers are therefore seeing an opportunity in the country. The first class is increasing at the expense of the economy class. The thumb rule for every airline is that for every eight economy seats, at least one first class seat has to be sold.
Martin said foreign airlines are able to offer premium services as they can take advantage of the relatively lower air turbine fuel costs in their country of origin.
27/07/08 Manisha Singhal/Business Standard

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Civilian aircraft can fly in restricted airspace

New Delhi: The Indian Air Force has permitted civilian flights in restricted airspace above the Hyderabad skies, a senior IAF official has stated. Assistant chief of air staff operations (space) Air Vice-Marshal D.C. Kumaria said on Friday that the IAF had permitted civilian flights above level 240 (above 24,000 ft.) in the skies above Hyderabad. This is because there are IAF flights at low altitudes also in the Hyderabad skies, he added.
IAF sources said that Air Force trainees at the Air Force Academy at Dundigal (25 km from Hyderabad) train in their aircraft and hence fly at low altitudes. Air Vice-Marshal Kumaria said that the IAF is committed to flexible use of the airspace and had opened almost all its aerodromes for civilian use. He added that civilian-military cooperation with sharing of airspace, was growing as can be seen by measures such as establishment of the Joint Regional Air Traffic Coordination Centre at the Chennai airport.
Air Vice-Marshal Kumaria also said that the IAF was even sharing the airspace above its base at Hindon (near Delhi) with civilian flights so that this can ease air-congestion above the New Delhi IGI airport.
25/07/08 Sridhar Kumaraswami/AsianAge/Howrah News Service

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Crude fall may help carriers but not fliers

After a long rally which saw crude prices at new highs, the black gold seems to be correcting.
This should bring smiles to the faces of airline executives in India, who have been blaming their losses on the zooming aviation turbine fuel prices.
From its high of $145-plus a barrel, crude climbed down to about $124 this week. Both airline executives and aviation analysts are positive that this slide will reflect in the new prices that oil marketing companies will release soon. An official review of ATF prices would come only at the end of the month, as is the norm.
Airline companies are hoping that the recent slide is the beginning of a correction in oil prices. They want to see oil settle at around $60-70 so that red ink can be wiped off their balance sheets.
"For all you know, prices might go up again. But we are hoping that it will come down to between $60 and $70 and settle there," A Raghunathan, chief financial officer of full-services carrier Kingfisher Airlines, said.
An analyst with a foreign brokerage said, "It is likely that crude will come down to the $75-$80 region and stabilise. If that happens, one of the biggest beneficiaries will be the airlines industry."
Will passenger benefit from the fall in prices? The constant spike in surcharges has been forcing cost-conscious Indian passengers to take other modes of travel. Passenger growth figures in June were negative for the first time in three years.
25/07/08 Nirmal John/DNA MONEY/Sify

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Aviation industry ready for take-off again

Aviation is attempting to remain bullish about future prospects as the credit crisis and the effects of the huge jump in the price of fuel bite deeper.
Last week's Farnborough Air Show, the industry's premier showcase, may have lacked the debut of an eye-catching new airliner but total orders and options unveiled by Boeing and Airbus, the two commercial aviation giants, topped $50bn (£ 25bn), almost all from one airline, Etihad, the Abu Dhabi based carrier with ambitions to match the achievements of Emirates, its Dubai-based neighbour.
Further down the aircraft food chain, Rolls-Royce announced £ 4.6bn worth of new aero-engine orders, well down on the Paris total of £ 7.5bn but well above the combined tally of £ 3bn from rivals General Electric and Pratt & Whitney.
There is a tradition of using Farnborough and its ''sister'' air shows as a platform to demonstrate vitality in order book terms. This year would have been a flop but for Etihad with orders for 205 planes costing $43bn at list prices.
Airbus claimed business worth $40bn of the $50bn package but both the European planemaker and Boeing have healthy order books with enough business to keep production and assembly lines working almost flat out for six years. Farnborough also saw the arrival of competition at the bottom end of the market for the two majors with Canada's Bombardier pushing the CSeries, a 110-130 seater rival for the A320 and Boeing's 737 on to the runway with Lufthansa as a first customer.
Boeing produced the most bullish and detailed projections. Its planners estimate that by 2027 there should be a market for 29,400 new aircraft to replace older planes and accommodate the growth of air travel. The order flow and traffic growth allied with retirement will create the need for another 360,000 pilots, equivalent to an extra 18,000 a year while at ground level a further 480,000 jobs should be provided for servicing and maintaining the new fleets.
In Europe, pilot numbers could grow from 40,000 to 70,000 and in North America from 60,000 to 98,000 but the fast-growing economies in the Far East could see a fourfold increase. The number of pilots in China is projected to reach almost 50,000 by 2027 and 15,500 in India.
The Middle East, where Emirates and Etihad are competing to become the biggest in the region, will be instrumental in fuelling demand for 17,500 pilots, again a fourfold increase on current levels. Etihad's shopping list at Farnborough was one of the biggest in commercial aviation history, comprising 100 firm orders and options for another 105.
25/07/08 Roland Gribben/Telegraph.co.uk, United Kingdom

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Indian carriers likely to buy more planes

Boeing Co. raised the 20-year aircraft sales outlook in India as rising disposable incomes boost travel demand there.
India's carriers may buy 1,001 new planes worth $105 billion in the next two decades, the planemaker said in a release in Mumbai on Wednesday. Chicago-based Boeing had last year forecast sales of 911 new passenger planes worth $86 billion during 2007-26.
Record economic expansion and the start of discount carriers have made air travel more affordable in India. The nation's air traffic may rise to as many as 313.72 million people by 2012, from 116 million today, KPMG said in a report.
"Strong economic growth has driven and will continue to drive demand for air travel," Dinesh Keskar, senior vice president of sales at Boeing, said at a press conference. "In spite of all the problems, the market fundamentals here are solid."
24/07/08 Chicago Tribune, United States

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Aviation industry divided over working hours for pilots

Mumbai: The aviation industry and analysts are divided over the impact of the Supreme Court’s decision to stay a Bombay High Court order, which quashed the guidelines issued by the directorate general of civil aviation (DGCA) on working hours for pilots. The SC had asked pilots to comply with a DGCA circular, which specified that they can operate three flights within nine hours, instead of two flights in nine hours as ordered by the HC.
According to senior industry executives, a pilot can follow the DGCA guidelines in the domestic sector, but it is different to comply with them while flying on international routes. The Indian Commercial Pilots Association (ICPA) is likely to decide on its future action this week. The stand of the private airlines, led by Jet Airways, is not known yet.
An e-mail query sent to Jet Airways did not elicit a response. On domestic routes, a pilot flies for four days and three nights, followed by three days off. He is then assigned another four days of flying. This adds up to about 85 hours a month of flying, and the total time away from base each month is about 300 hours, said an ex-pilot, who used to work with a national carrier.
The US Federal Aviation Administration limits commercial pilots to flying eight hours a day, 30 hours in seven days, 100 hours a month and 1,000 hours a year. Aviation analysts said the industry should be able to sort out this issue on its own keeping in mind the safety factor.
25/07/08 Mithun Roy/Economic Times

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Boeing raises India sales forecast by 10%

New Delhi: Boeing, the world's second-biggest commercial aircraft maker, has raised India's 20-year aircraft sales outlook by 10 per cent on expectation of a rise in travel demand.
Boeing projected a demand for 1,001 aircraft from 2008 to 2027, which is worth more than $105 billion at current list prices of aircraft around 10 per cent more than its last year's outlook for 2007-2026, which stood at 911 aircraft.
Of these, 24 will be freighter aircraft while the rest will be passenger planes.
"We have developed the forecast in a manner that considers today's market environment but, more importantly, takes a long-term view of this dynamic industry and the fundamentals that drive commercial aviation," Dinesh Keskar, senior vice-president (sales), Boeing, said in New Delhi.
As many as 313.72 million people are expected to travel by air by 2012 from the present level of 116 million, KPMG said in a report in June. Record economic growth and introduction of discount carriers have made air travel more affordable in India, the world's second fastest-growing major economy.
The 2008 outlook for India included 59 regional jets, 728 single aisle, 203 twin aisle and 11,747 and larger aircraft. Compared with last year's forecast, Boeing projected a 9 per cent increase in demand for single aisle aircraft and 18 per cent increase in demand for twin aisle aircraft.
24/07/08 Business Standard

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Aviation Ministry takes up unfinished agenda

New Delhi:The Union Civil Aviation Ministry is all set to take up some of the unfinished agenda like setting up of the Airport Economic Regulatory Authority, rationalization of tax on aviation turbine fuel, etc.
"Time is not enough for reforms or for bigger work," well informed sources in the Civil Aviation Ministry told this website's newspaper.
However, Union Civil Aviation Minister Praful Patel is likely to ask the Committee, headed by Union Cabinet Secretary, to examine various issues relating to the financial crises faced by domestic airlines to hold a meeting in August first week. A significant issue that would be taken up by Patel is the rationalisation of tax on aviation turbine fuel.
It is also learnt that Air India has been asked to take harsh decisions, including reduction in flights, to cut down the mounting losses and reduce expenditure. "Air India will bring down the losses by Rs 1,000 crore. However, for the remaining part of this fiscal, the national carrier should achieve Rs 500 to Rs 600 crore," sources added.
But the government has no plans for retrenching employees. "The company does not have enough funds for voluntary retirement scheme if people are retrenched." Both the Civil Aviation Ministry along with Air India is working on a proposal on infusion of equity and soft loans for the national carrier.
It is learnt that Praful Patel has appraised Prime Minister Manmohan Singh and Finance Minister P Chidamabaram on the proposal.
24/07/08 Newindpress

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Slowdown in Indian aviation may end in a year: Boeing

Mumbai: The current downturn in the Indian aviation industry would end in the next 10 to 12 months as the sector reduces flights and resolves overcapacity issues, said the US-based aircraft manufacturer Boeing here on Wednesday.
Declaring the Boeing’s market outlook for India in 2008, Mr Dinesh A. Keskar, Senior Vice-President, Sales, Boeing Commercial Airplanes, said that the Indian carriers can resolve the overcapacity problems by flying to smaller towns and expanding overseas operations.
“The solution is not in grounding the aircraft but optimizing their usage. One definite good news for the industry is that not much capacity is being inducted this year,” Mr Keskar said.
Maintaining that passenger traffic growth in India will remain bullish, he said, that the demand for air travel will match the high rate of economic growth in the country.
According to Boeing’s 2008 forecast, the air travel in India will grow at an average rate of 8 per cent annually over the next 20 years, the fastest pace in the world, and more than twice the global average, he said.
In its annual outlook, Boeing forecast that India will need 1,001 new aircraft worth $105 billion by 2027.
The maximum increase will come in for commercial planes in the 100 to 400 seat categories, the company said.
23/07/08 Business Line

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Satyam, Infospectrum join hands to serve Aviation industry

New Delhi: Country's leading IT company Satyam on Wednesday announced its partnership with Infospectrum to provide various services to the aviation industry.
The Indian IT major has signed an agreement with US-based Infospectrum to provide services to operators, third party maintainance, repair and overhaul (MRO) and component repair providers in the global aviation industry, said a company statement.
As per the agreement, Satyam would offer services like system configuration and installation, functional and technical training, integration and remote hosting in a software-as-a-service (SAAS) model.
The alliance will also see Infospectrum providing supply chain software products that support maintenance and repair, engineering and asset life-cycle management, it added.
23/07/08 PTI/Economic Times

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Civil Aviation ministry lobbies for 4%tax on ATF in all states

New Delhi: The civil aviation ministry is vigorously pursuing with the finance ministry for pegging taxes on aviation turbine fuel at four per cent in every state so that relief could be provided to both airlines and passengers from increasing operating costs and fares.
"We have taken the issue very seriously. We are making all out efforts to get relief on levies imposed on ATF," a highly-placed source in the civil aviation ministry said.
At present, the ATF price for domestic airlines include customs duty of 10 per cent and excise duty of eight per cent, while different states levy sales tax ranging between 20 per cent and 30 per cent.
"We hope that the finance ministry will do something on our plea regarding the ATF taxes," sources said.
The price of ATF has more than doubled in the last three years. While in April 2007-08, the basic ATF rate was Rs 30,124.17 K/L, now it is Rs 69,097.19 per K/L now.
23/07/08 PTI/Economic Times

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Airnetz to bring private aircrafts to India

Mumbai: Airnetz Aviation, a private air-charter company, is planning to bring single- and twin-engine aircraft that will make travel affordable to the masses.
A single engine aircraft's hourly operating cost will be around Rs 2,000 for a 4-seater aircraft, which will amount to Rs 500 per person. A twin-engine hourly operating cost will be around Rs 4,000 for a 5-seater aircraft.
An hour's journey will cover any destination in the range of 250 to 300 km.
22/07/08 Business Standard

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India floats $750 mn global tender to buy choppers

New Delhi: The government is all set to float its biggest military tender this year worth a whopping $750 millionfor buying 197 light utility helicopters for the armed forces with three of the six bidding companies being giant American aviation transnationals.
A request for proposals for the Rs 3,000-crore contract to buy 133 helicopters for Army Aviation and another 64 for Indian Air Force are to be floated tomorrow, officials said.
New helicopters are expected to replace by 2010 Army and IAF's ageing fleet of Cheetah and Chetak choppers, which have been in service for the past over four decades, well past their service ceiling.
All the helicopters are to be procured off the shelf with state-owned HAL being entrusted with only maintenance. The new choppers are being brought on fast track basis to shore up army formations guarding the dizzy Himalayan borders with China and Pakistan.
Like the IAF's $10 billion contract to purchase 126 fighters, the foreign company winning the lucrative contract would have to invest 50 per cent as offsets in India. The three US companies invited to submit their bids are Bell Helicopters with their Shen 407 light choppers, McDonnel Douglas with their AH-64 A and Sikorsky with their S-3000 helicopters. Other bidders are European consortium Eurocopter, Russian Rosenbroexport with their new range of Kamov light helicopters and Italian firm Augusta Westland.
23/07/08 Press Trust of India/Business Standard

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Praful made sure MP flights on time

New Delhi: Civil aviation minister Praful Patel had personally ensured that flights carrying unwell MPs from other parts of the country to New Delhi could land on time so that these MPs could cast their vote in the Lok Sabha on Tuesday on the Motion of Confidence tabled by the Prime Minister, highly-placed civil aviation ministry sources have confirmed.
"There were baseless allegations from some quarters that the government was trying to prevent Opposition MPs (who were unwell and arriving in flights) from reaching Delhi.
Therefore, civil aviation minister Praful Patel personally monitored that flights carrying these MPs landed in New Delhi in time.
For instance, the minister made sure that the flight carrying BJP members of Parliament Mahesh Kanodia (who is unwell) landed in time.
23/07/08 Asian Age/Howrah News Service

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Travel agents threaten to stop selling airline tickets

Mumbai: Major travel agents have threatened to stop selling domestic and international air tickets until airlines agreed to restore commissions that they had said they would scrap starting October 1, citing higher costs and slower growth.
The decision was taken at a meeting in Mumbai by the country's three top travel associations — the Travel Agents Association of India, Travel Association Federation of India and Indian Association of Tour Operators — representing over 4,500 IATA-accredited international and domestic agents and more than 85 per cent of the total air ticketing business.
The associations said they would stop selling tickets if a meeting between the agents and leading airlines scheduled for July 24 in Delhi did not come out with a solution. The move could impact air travellers, who may face problems booking or cancelling tickets only through company-owned ticketing counters or through the internet, which is not a popular option for internatonal travel. Airlines have been giving agents 5 per cent of their base fare on the tickets as commission, a recent reduction from the earlier 9 per cent. Last month, domestic airlines Jet Airways, Kingfisher and Air India unilaterally sent letters to travel agents saying no commissions would be given from October 1. Foreign carriers like Lufthansa, Singapore Airlines and British Airways, among others, did the same. Airlines say they will save over Rs 1,000 crore from the move.
22/07/08 Manisha Singhal/Business Standard

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Airlines’ move to cut commission uncalled for, say agents

Mumbai: The recent move by leading airlines to cut travel agents’ commission from the prevailing 5 per cent to nil is being described as a ‘threat to livelihoods’ of as many as 21 lakh professionals employed in the tours and travel industry.
On Monday, over 300 agents from in and around Mumbai and belonging to six different associations of travel agents got together in a bid to express their solidarity and jointly proclaimed the move by airlines as “uncalled-for and impetuous”.
“It’s a very foolish attitude to stop something that been in practice for the last 60 years with just a notice period of 90 days, and without any discussion from the other party,” said Ajay Prakash, CEO of Nomad Travels and also the president of TAFI’s Mumbai chapter.
On Wednesday, the leaders from the six travel agents’ associations will be meeting airline representatives from the National Aviation Company of India (NACIL), Kingfisher Airlines and Jet Airways on the issue, besides seeking a divine intervention by means of a ‘hawan’ to save the industry from the current chaos. The six associations include Travel Agents Federation of India (TAFI), Travel Agents Association of India (TAAI), Indian Association of Tour Operators (IATO), IATA Agents Association of India (IAAI), Association of Domestic Tours Operators of India (ADTOI) and Enterprising Travel Agents Association (ETAA).
21/07/08 Mumbai Newsline

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Air Works announces JV with Air Livery Plc

Mumbai: Air Works, the largest independent general aviation and commercial maintenance, repair and overhaul (MRO) company in India, has announced a joint venture with Air Livery Plc, Europe's leading aircraft refinishing company to offer services in India.
As per the joint venture agreement signed by Air Works and Air Livery, the new company will be India's first dedicated paint facility for commercial, VIP, executive and military for narrow and wide body aircraft up to and including the B777-300, said a press release.
Air Works will invest $50 million for setting up the paint shop, interior completions and engine MRO facilities over the next three years.
"This joint venture between Air Works and Air Livery Plc is an integral part of our strategy and represents another step in our commitment to build a strong aviation infrastructure in India," said Fredrik Groth, Chief Executive Officer of Air Works.
As part of the joint venture, Air Works and Air Livery will provide dedicated aircraft painting services at its MRO facilities at Hosur Airport with a view to serve the entire Asia Pacific region.
This venture will offer paint maintenance service to commercial airlines, VIP and business jet operators at their own facilities or a complete repaint service at Hosur.
21/07/08 Business Standard

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Global Vectra to start shuttle services in Mumbai, B'lore & Kolkata

Mumbai: Global Vectra Helicorp Ltd (GVHL), a provider of offshore helicopter services to India’s oil and gas sector, intends to venture into helicopter shuttle services between airports and cities to ferry commuters wishing to avoid choked roads.
A source said that the company has plans to start the full-fledged services from the airports of Mumbai, Bangalore, Mysore and Kolkata by the end of current fiscal. It will start the test ferry service from Kolkata airport in the next quarter. The fare is likely to vary from Rs 4,000-5,000 per trip according to the distance.
Global Vectra Helicorp has purchased two Bell 412 helicopters for $15 million and has submitted papers to the government to obtain necessary clearance to start the service. The company will either build its own helipad in the cities or will use the existing private helipads on a rental basis. It is also discussing leasing of helicopters with various companies that include US-based Bell Helicopter Textron.
When contacted, Global Vectra Helicorp CEO David Hayler told ET, “We have plans to start shuttle services from airports to cities but everything is at a nascent stage. Our internal team is working on it and once things get finalised, company will able to share further information.”
22/07/08 Mithun Roy/Economic Times

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Passengers see fares to India slashed

Indian Airlines cut its fares from Dubai and Sharjah to destinations across India by as much as 30 percent after Dubai-based Emirates said it will raise ticket prices up to 10 percent in the face of soaring fuel costs.
Flights from Sharjah to New Delhi are down 30 percent to 740 dirhams ($201), while flights from Dubai to New Delhi have dropped 26 percent to 790 dirhams, India’s Business Standard reported on Friday.
Fares from Dubai to destinations in Kerala have been cut around 12 percent to 790 dirhams, while fares from Dubai to Mumbai have gone down about 10 percent to 790 dirhams.
The newspaper said Indian Airlines began the promotion last Monday.
Emirates said earlier this month that from from Aug. 1 it will raise ticket prices on all routes by 10 percent for first and business class passengers and by 5 percent for those in economy.
It is the second time Emirates has hiked its fares in the last few months after increasing ticket prices by 9 percent in June.
The entire aviation industry is coming under increasing pressure due to record oil prices, which have sent the cost of jet fuel skyrocketing.
19/07/08 Dylan Bowman/ArabianBusiness.com, United Arab Emirates

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Airlines stay on the sidelines of futures trading in jet fuel

Mumbai: India’s airlines haven’t yet jumped at the opportunity to trade in jet fuel futures on the Multi Commodity Exchange of India Ltd (MCX) despite staring at $2 billion (Rs8,560 crore) in cumulative annual losses through March 2009, much of it from rising prices of aviation turbine fuel (ATF).
ATF purchases account for about 45% of the operating cost of airlines in India. ATF in Mumbai cost Rs71,630 per kilolitre in July, up from Rs39,062 per kilolitre in the same month last year.
Meanwhile, consumption of ATF increased by almost 77% in 2006-07, the most recent data available, from 2000-01.
MCX launched its futures trade in jet fuel on 7 July. The Tokyo Commodity Exchange (TOCOM) is the only other exchange in the world that trades ATF and Indian airlines now have the option of either participating in MCX or hedging in TOCOM.
As airline companies are the single largest users of aviation fuel, they can use ATF futures to hedge their price risk in the commodity and safeguard themselves from extreme volatility in international jet fuel prices. Consider an airline company that consumes 1,000 barrels of ATF every month. Assuming it places orders on a monthly basis, the airline can buy ATF at the prevailing rate of $130 per barrel, adding up to $130,000 for 1,000 barrels. If the airline estimates that crude oil prices will rise sharply the following month, it can buy ATF futures for the next month at the prevailing rate.
19/07/08 P.R. Sanjai and Ajayan/Livemint

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Air travel agencies tap options to offset shrinking commissions

As domestic and international airlines are readying to stop paying commission to travel agents in India as part of their efforts to cut costs, travel agents are changing their roles—from sellers of airline tickets to tour consultants.
Industry experts say most small-time agents will be forced to shut shops but the bigger ones will not face any problem as they will earn special bonuses, instead of commission, from airlines by raising the volume of business.
There are nearly 3,000 Iata-accredited agents and at least 40,000 non-Iata agents in an industry that employs around 500,000 people across India. Less than 10% of them are big-ticket agents.
According to Ajay Prakash, national general secretary of the Travel Agents’ Federation of India, there is bound to be a shake-out. “When similar thing happened in the US early this century, 30% travel agents downed shutters. Here, if the airlines want to stop commissions, it should be done in phases,” he says.
C. Venkateshwara Prasad, president of Travel Agents Association of India, or Taai says the smaller travel agents will start operating from home. These agents will also broad-base activities by handling tours for cruise ships or adventure spots, he adds.
Online travel agents, or OTAs, such as Ezeego1.com, Yatra.com and Makemytrip.com have also started finding alternative sources of revenue.
With airlines doing away with commissions, some agencies will fold up while others will add fees.
18/07/08 P.R. Sanjai/Livemint

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As airfares soar, tourist inflow nosedives

New Delhi: The increase in price of aviation turbine fuel and economic slowdown has spelt doom for the hospitality and tourism sectors, with hotel room tariff crashing almost 50% in certain cases.
Several city hotels have applied summer rates nearly after two years as this is the first time since 2006 that they are witnessing occupancy as low as 50% in June and July. Since pricing is demand-based, the severe room shortage meant they need not have resorted to lower tariff in past two years.
The crisis sparked by the rising price of crude oil seems to have come a full circle for the travel industry, as it has affected every sector. In the good old days of low air fares, high hotel tariff in Delhi meant companies started sending their executives on a day trip to Delhi as staying overnight was more expensive than flying again to the Capital next morning. Then airfares started shooting and have now reached such levels that companies are cutting travel costs with a heavy hand. This, in turn, has led to a sharp drop in room tariff.
Blaming the hike in ATF, Indian Association of Tour Operators (IATO) president Vijay Thakur said that long haul destinations like India had suffered resulting in a 10-15% dip in arrivals.
18/07/08 Saurabh Sinha & Himanshi Dhawan/Times of India

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Carriers jettison ovens, coat hangers to cut ATF bill

New Delhi: Considering that cost of aviation turbine fuel (ATF) accounts for major part of operational costs and more an aircraft weighs more jet fuel it will conume, airlines are now trying every possible way to reduce in-flight weight and save on fuel.
Fuel can comprise up to 50 per cent of operating costs, depending upon the age of the aircraft. Therefore, while international airlines are reducing in-flight load by jettisoning magazines, cutlery and entertainment services to reduce fuel bills, India’s currently loss-making aviation sector also is trying its bit to save money by cutting down on extra flab.
International audit, tax and advisory services firm KPMG had also recently recommended cutting the flab to domestic airlines in India to draw in profits even during a lean period.
It said India's loss-making aviation sector should be ready to accept rising jet fuel as a way of life, adding that at present ATF accounted for about 30 per cent of the cost of operating a new aircraft and about 35 per cent of the cost in the case of an older aircraft.
As far as low-cost carrier Spicejet is concerned, chief financial officer Partha Sarathi Basu said the airlines had curtailed the weight of the aircraft by not carrying ovens and coat hangers.
President and CEO of IndiGo Airlines Bruce Ashby also said his airlines had been careful in developing aircraft specification to avoid carrying any extra weight.
17/07/08 Vibha Sharma/Chandigarh Tribune

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Govt issues seizure notice for an aircraft of Anil Ambani

New Delhi: Ambani group plane today hit the airpocket with government issuing a notice for its seizure as part of tirade against the alleged customs duty evasion in aircraft imports by Corporate India.
Customs issued the notice for an estimated Rs 150 crore Global 5000 Bombarider plane belonging to the Reliance Transport and Travels Pvt Ltd for over Rs 37 crore as duty.
Till now, the authorities have seized about 10 aircraft obtained by corporate entities, including a Mukesh Ambani group firm, GMR, Oberoi and Indiabulls under non-scheduled operator permit, but released the same on bank guarantee and bonds.
ADA group firm Reliance Transport and Travels said immediately that though it had done no wrong, it offered a voluntary bank guarantee and indemnity bond, a move spurned by the customs on the ground that without issuance of seizure notice no such offer can be accepted.
Customs department is scrutinising over 250 corporate jets, including those belonging to Tatars, DLF and Raymonds, amid reports that different regional custom offices are issuing notices to them one by one. A spokesperson of Reliance Transport and Travels said that "RTT is a valid NSO permit holder and has responded and furnished full and comprehensive documentation regarding its aircraft.
"RTT further informed the Customs that it has complied with all existing rules and regulations," spokesperson said.
16/07/08 Snehesh Alex Philip/Press Trust Of India/Hindustan Times

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Airlines may have to reduce 25% capacity to check losses

New Delhi: With crude continuing its ascent, airline companies in India are facing the nightmarish task of having to ground 100 aircraft.
Considering that the total fleet of Indian airline companies was in double figures till the low-cost revolution, the move means downsizing by a huge 25%.
The largest-ever in India’s aviation history, the grounding would lock up equipment worth Rs 20,000 crore, according to industry estimates.
As of now, the total number of aircraft used by Indian airline companies is around 400. Industry leaders feel that 25% overcapacity has to go out of the market. What makes matters worse is the inability to lease out aircraft as there is no demand in most markets abroad.
Average aircraft utilisation has already come down by 25-30% to nine hours a day compared to 12 hours a day till recently. Unless crude prices decline dramatically, it will be a nightmare for the airline business in India.
“We have reduced capacity by 10% in the domestic market in the last few months. Going by this and considering that we operate 54 aircraft in the local market, around 5-7 aircraft are not in operation. However, this doesn’t mean physical grounding of aircraft as we operate these aircraft in peak time,” Jet Airways CEO Wolfgang Prock-Schauer told ET.
16/07/08 Nirbhay Kumar/Economic Times

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Air Works to launch India's first 3rd party commercial MRO

In its endeavour to build a strong platform for the aviation services infrastructure in India, Air Works India announced its plans to launch a commercial maintenance, repair and overhaul [MRO] facility in Hosur, near Bangalore.
With 5 state of the art and fully equipped hangars, Air Works MRO will offer services like airframe, engine and APU maintenance; aircraft paint shop, engine repair and overhaul, passenger to freighter conversion, interior completions, avionic upgrades, aircraft component repairs and spares. The MRO facility would support a wide variety of commercial aircraft certified to DGCA, FAA, and EASA standards.
At present, Air Works MRO at Hosur has 8000 ft X 150 ft runway to accommodate the landing of all narrow and wide body aircraft. The company plans to start operations by September 2008 with one existing hangar. Airworks will complete two additional hangers by year end designed to accommodate wide body aircraft, and another two more by end of 2009. Going forward, Air Works India plans to invest an upward of $ 50 million for setting up the infrastructure to support the Commercial MRO initiative.
15/07/08 Moneycontrol.com

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Jeppesen to enter India through Hyderabad

Mumbai: Boeing subsidiary Jeppesen Commercial & Military Aviation, known for its navigation and operation solutions to airlines the world over, has expressed concrete plans of setting up shop in India to make its services available to Indian carriers.
Headquartered in Colorado, the company initially began as a publisher of airway manuals and a producer of navigation databases for aviation operators. Today it has diversified into a technology-driven information solutions provider.
The company will set up office in Hyderabad by the third quarter of 2008 and has plans to secure 50 per cent of its clientele in the first two years of operation. "Our initial target will be to get as many airlines as possible to opt for our integrated operations solutions," Max Ali, director (Business Development) for Jeppesen (India, Africa & Middle East), said. Jeppesen's other services include fleet management, dispatch services, movement control, runway analysis, navigation solutions as well as professional services and training.
It is also in talks with Hyderabad-based Flytech Aviation Academy to integrate its commercial aviation training curriculum with that of the institute.
16/07/08 Andrea Lopez/Express TravelWorld

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Agents fight airlines with samosas, roses

Mumbai: On Monday, some travel agents decided to take their fight with Jet Airways (India) Ltd to an entirely new level—with samosas.
The agents, protesting the decision by Jet and other airlines, both Indian and international, to end from October this year a 5% commission paid on sale of tickets, sent at least a hundred boxes of samosas to the sales office of India’s largest private carrier in south Mumbai.
The airlines are doing so to cut losses. India’s airlines lost around $1 billion (Rs4,280 crore today) in 2007-08 and expect to lose almost double that this year, a consequence of soaring fuel costs. Passenger traffic, too, has begun to decline. In June, the number of passengers fell around 3% against the same month last year.
In most countries, agents earn no commission on tickets.
It is unlikely that the fried pastry containing vegetables, or meat has been used as a weapon before—not unless the idea is to kill someone with an overdose of cholesterol.
The agents also sent letters to the company, each saying that they had taken to selling samosas. “Please accept a sample of delicious samosas, which is a new line of business we are getting into, after our travel agency days are over...,” said one letter.
The letters also said the agents would offer one samosa free for every 10 that the airline bought, “with no other hidden costs or surcharges”, a reference to the fuel and other surcharges on air tickets that are levied by airlines.
“This is just the beginning. We will be sending roses to other airlines. It could be National Aviation Co. of India Ltd, that runs Air India, or other domestic airlines...,” said a travel agent, who does not want to be named.
15/07/08 P.R. Sanjai/Livemint

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The groom who fell from the sky for his bride

Bhubaneswar: Hundreds of people witnessed a bridegroom and his friends coming to the bride’s house for marriage in a unique way on Sunday. They all fell from the sky.
As friends, relatives and neighbours of the bride were anxiously waiting, the marriage priest started chanting the ‘mantras’ to welcome the groom, and finally the groom came from the sky – quite literally with two of his wedding guests.
Thirty-year-old Shishir Mishra, an aircraft technician in the Indian Air Force and a skydiver trainer hired a private helicopter and from a height of seven thousand feet, dived on a ground in Bhubaneswar very near to the bride’s house.
Along with him two of his skydiving friends also jumped from the same helicopter as wedding guests.
“I always wanted to display my diving skills in Bhubaneswar and since my marriage was very near, I thought of making a unique combination of the two and make a record,” says the groom, Shishir Mishra.
Shishir, an ace skydiver has more than ten years of experience in this adventure and has so far completed over two thousand free fall jumps. Though he was very confident of his adventure on the marriage day, his 21-year-old bride – a genetic science student from Bangalore and his in-laws were not very keen on this unique idea. However, finally they too gave up after Shishir insisted.
“It was our wedding day. I was very worried that if something goes wrong, we all will be in trouble. But thank god it all ended well,” says the bride, Sweta Prusty.
15/07/08 Jajati Karan/CNN-IBN

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Low-Cost Asian Airlines Still Thrive, on Silver Linings Aviation

Tony Davis, the chief executive of Tiger Airways, based in Singapore, readily admits that he is much happier running an Asian- based low-cost airline right now than he would be running one in Europe or the United States.
For one thing, the significant strengthening of Asian currencies against the dollar in recent months has helped mitigate some of the effects of the ever-rising price of oil, traded in dollars, while historically low interest rates have made paying for new aircraft less expensive.
"There are some benefits to being outside of a U.S.-denominated revenue area, and we're certainly taking advantage of those," Davis said in a recent interview.
But maybe most important, there is still very high demand for air travel in the region and no easy alternative in a region that mostly lacks sophisticated railroad systems or road infrastructure. "It would take days for someone to drive from Singapore to Cambodia," Davis noted.
Asian national carriers have not been immune to the sharp rise in the price of oil and the global economic slowdown, and several have had to pare down capacity on some routes. China Airlines, the largest carrier in Taiwan, has canceled about 10 percent of flights, mostly to the United States and Asia, and Thai Airways has canceled its nonstop services to New York and reduced its frequency to Los Angeles. Asiana Airlines, based in Seoul, and Qantas, in Australia, have also cut several routes or reduced capacity.
Still, the gloom that has descended on much of the world's aviation industry is far from affecting everybody, and some Asian low-cost airlines are drawing up expansion plans, looking at opportunities where others see losses.
The Malaysian airline AirAsia, the biggest low-cost carrier in Southeast Asia, measured by fleet size, is also pressing ahead with an ambitious route expansion program. It recently introduced four new destinations - Kuantan in Malaysia, Haikou in China, Makassar in Indonesia and Hong Kong - and its chief executive, Tony Fernandes, says it will fly to southern India by the end of this year.
14/07/08 Sonia Kolesnikov-Jessop/RedOrbit

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DGCA technocrats criticise appontment of non-techie as DG

Mumbai: Technocrats in the Directorate General of Civil Aviation (DGCA) have criticised the government's move and subsequent appointment of a non-technocrat as the Director General of Civil Aviation.
"The Ministry of Civil Aviation is going ahead with filling up the DG's post only from person on deputation and departmental candidates are being ignored," a petition submitted to Civil Aviation Minister, Praful Patel, said.
The petition was submitted on the day Union Public Service Commission (UPSC) called in two Air Force officers and one IAS officer for the interview to select the Director General of Civil Aviation.
The Government subsequently appointed an IAS officer, Naseem Zaidi, as the DGCA on July 1.
Zaidi is a 1976-batch UP cadre IAS officer and currently India's representative at the International Civil Aviation Organisation (ICAO) at Montreal.
13/07/08 PTI/Economic Times

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More flights, but only international

A decline in passenger load because of rising fares may have forced airlines to take flights off some domestic sectors, but winter could see quite a few being added to the international roster.
Kingfisher Airlines is planning to launch flights from Calcutta to Dhaka and Chittagong in October, airline sources said this week.
“We have definite plans to start operations to Bangladesh from Calcutta. Surveys reveal the sector has potential for growth,” a Kingfisher official said.
The flight schedules have not been worked out yet, but Kingfisher will probably operate two flights daily, one in the morning and another in the evening, between Calcutta and Dhaka. In the Calcutta-Chittagong sector, the airline is planning three flights a week.At present, Biman Bangladesh, GMG Airlines and Jet Airways operate flights between Calcutta and Dhaka. Kingfisher intends to introduce a flight to Yangon, too. The directorate general of civil aviation last year granted permission to Deccan, acquired by the UB Group that owns Kingfisher, to operate international flights on completion of five years of operations. Kingfisher will be using this license to operate international flights.
Kingfisher is scheduled to start its first international flight between Bangalore and San Francisco this September, airline sources said.
14/07/08 The Telegraph

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Maha CM to get Rs 67 crore jet

Mumbai: Vilasrao Deshmukh is all set to be the first CM in the country to have a jet aircraft at his disposal. The ministry of civil aviation recently approved the state government's proposal to import a Cessna Citation XLS aircraft, which will cost the government Rs 52 crore. If the tax component is included, the amount swells by an additional Rs 14-15 crore.
"The aircraft acquisitions committee gave the import permission in the last week of June. The Maharashtra government had asked for an import permit under the private category, which attracts a duty of about 26%. Since the aircraft will be registered as a private one, the government cannot give it out on hire or for monetary compensation.
According to the proposal, the aircraft will be used for VIPs and state guests," said a source from the ministry.
"The aircraft should be coming in by the end of the year," said Capt Sanjay Karve, director, aviation, government of Maharashtra. The government's fleet currently comprises a B 300 and a Dauphin N 3 helicopter. It has two pilots from the Indian Air Force on deputation along with two more pilots dedicated to the fleet. "There is a clause under which the state government can seek a waiver on tax and we will approach the customs department for it," Capt Karve added. Aviation sources said the government could easily get the tax waiver.
14/07/08 Manju V/Times of India

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Reliance looks to NAL to make carbon fibre

Bangalore: Reliance Industries Ltd plans to source locally developed technology from state-owned National Aerospace Laboratories, or NAL, to make carbon fibre, a scarce, steel-like material used in building light aircraft.
India’s largest private sector company by sales would make the carbon fibre at a 4,000-tonne plant in Vadodara, Gujarat, using technology developed at NAL, an arm of India’s biggest public research agency, the Council of Scientific and Industrial Research, people familiar with the development said.
The people, who did not want to be named, would not disclose investment details because an agreement for technology transfer is yet to be signed. Questions sent to Reliance spokeswoman Sharmili Vashani on Thursday had not been answered until late Sunday.
Carbon fibre, produced from polymers, is used to make composites that are as strong as steel, but nearly half its weight. These composites have a longer lifetime and are less prone to corrosion, and are used in products ranging from Formula One cars to pipes that carry petroleum products. It is also used in the manufacture of fighter planes, rockets and missiles.
13/07/08 K. Raghu/Livemint

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Software firms offer cost-cutting solutions to anxious carriers

Mumbai: As India’s ailing airlines run out of options to cut costs, technology firms are pulling out travel software that could help these carriers save some more.
Air transport technology services firm SITA says mobile phones can be used as passenger tracking devices to cut flight delays, saving about $600 million (Rs2,580 crore) collectively, for airlines globally. Mumbai-based travel software firm Kale Consultants Ltd says it can help airlines cut 30% of their revenue accounting costs with effective use of technology.
Because nearly 80% of their operational costs are fixed, airlines are seeking other options to save on costs.
Domestic airlines are expected to post a combined loss of $2 billion in fiscal 2009 because of spiralling aviation fuel costs that have almost doubled in a year, while international carriers are facing an estimated loss of $6.1 billion for the year.
SpiceJet recently implemented a monitoring software to arrest credit-card fraud, cutting down on staffing, and is now looking for cargo management software as well.
The UK’s second largest carrier, British Midland Airways Ltd, which does business as bmi, has reduced at least 30% of its revenue accounting costs by outsourcing to Kale Consultants, said bmi chief financial officer Robert Palmer.
India’s largest private airline Jet Airways (India) Ltd recently said the industry is losing at least $20 per passenger, signifying a 20% oversupply, or imbalance.
Globally, airlines are increasingly relying on technology to streamline operations and save costs in the process. In June, airlines all over the world stopped issuing paper tickets with multiple layers and colours in favour of e-ticketing.
13/07/08 P. R. Sanjai/Livemint

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Airlines’ problems: consolidation can help

Mumbai: Facing the heat with spiralling fuel prices, the intensively competitive Indian aviation industry now has to contend with negative growth in domestic air traffic as well.
For the first time in three years, early July has seen domestic air traffic decline by four per cent over the year-ago period, attributed largely to higher ticket pricing-led lower passenger load factors (PLF) and a capacity cut by airlines during the last few weeks.
Average ticket prices have gone up by around 100 per cent over a year which saw PLF dip to around 60 per cent from 70-75 per cent last year. The past two months have also seen the industry cutting about 10 per cent, about 160 daily flights, of their total domestic capacity.
The rise in aviation turbine fuel (ATF) price translates into a substantial loss for airline companies and average ATF prices have risen from Rs. 43 a litre in the last fiscal to Rs. 61.70 a litre in May this year. A Crisil Research report says that fuel cost as a percentage of total operating cost has risen by 300-600 basis points. Though airlines have countered this by gradually increasing fuel surcharge, they continue to bleed.
“The incessant increase in the price of ATF and the consequent increase in ticket prices has led to a reduction in growth of passenger traffic, thereby leading to a drop in PLF,” say the report adding that at current ticket prices even if the airlines operate at 100 per cent load factor, low-cost carriers will not breakeven and full service carriers will just about breakeven at the operating level, however, assuming a 100 per cent load factor is unrealistic. “In July, we are seeing the first signs of negative growth in domestic travel and there has also been a 10-15 per cent cancellation or withdrawal of domestic flights by several airlines,” C. V. Prasad, Chairman, Travel Agents Association of India (TAAI), told The Hindu. The airlines’ woes do not end with high fuel prices as they may have to re-introduce cancelled flights at some stage.
13/07/08 Ramnath Subbu/The Hindu

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Booked a flight? Pray the airline stays afloat

New Delhi: Cautious passengers who have bought tickets way in advance for a domestic carrier must keep their fingers crossed that the airline does not fold before their date of travel.
For while record oil prices and mounting losses have dented the airline industry worldwide, India — unlike the west — does not have any consumer protection law in place to protect passengers who hold the ticket of a company that has shut down. Invariably, they will have to queue up behind bigger creditors and wait for some kind of a refund. The crisis has hit home, with government and industry waking up to potential shutdowns. Aviation secretary Ashok Chawla said the government would examine procedures for ticket refunds in other countries before arriving at a solution. Kingfisher EVP Hitesh Patel said he would take up the issue in the next industry meeting.
Usually, if a passenger holds a ticket of an airline which gets consolidated with some other carrier, s/he is allowed to travel on the merged entity. The problem arises if the airline goes belly up. "If an airline goes out of business in the US, other airlines, as a goodwill gesture, offer to carry such passengers on highly discounted rates. In India, we don’t have any such practice. We’ll raise this issue at the next industry meeting," said Patel. Flyers now booking tickets closer to departure date.
13/07/08 Saurabh Sinha/Times of India

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HAL finalises partner to set up MRO business

Bangalore: The public sector Hindustan Aeronautics Limited (HAL), which had a sales turnover of more than $2 billion in 2007-08, will soon sign up with a partner for the setting up of its long-awaited, full-fledged commercial aircraft maintenance, repair and overhaul (MRO) business. This could happen in “a month or two,” according to the HAL sources.
The sources said that an American company, a worldwide leader in the commercial aviation MRO business, had agreed to partner the HAL in the $75-million venture. Said an official: “Final talks on sewing up the partnership are going on, we shall make an announcement soon.”
The HAL is likely to contribute 45 per cent of the required capital with the American company putting up the rest.
The American company has been chosen after the HAL evaluated offers from a handful of major commercial aircraft MRO players, including Singapore Airlines, Germany’s Lufthansa and Israeli’s Bedek Aviation.
The MRO will be equipped to service both the Boeing and the Airbus families of commercial aircraft. And will be operable for both wide-bodied and single-aisle aircraft. The HAL expects sufficient business opportunities at the MRO with around 25 to 30 aircraft being serviced during the initial years of operation. It will also be looking to ramp up the two-bay hangar MRO to a four-bay hangar operation in the next phase.
13/07/08 Ravi Sharma/The Hindu

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Air traffic slides 15% in June

New Delhi: Domestic fliers are now deserting planes and settling for other modes of transport. On Friday, the aviation ministry released figures that showed the number of fliers in the school holiday season of June was 35.06 lakh — a good 6 lakh less than the number in May — showing a 15% fall in one month. The Indian aviation growth story is in air pocket due to oil crisis.
Wadia group-owned GoAir, which has cancelled the largest number of flights, led the fall with 33%. The Kingfisher-Deccan combine flew nearly 19% less passengers and Jet-Jetlite suffered an erosion of 14%. All airlines have reduced flights to cut losses. GoAir which once claimed to have 561 weekly flights reduced the number to 800 per month in June and is may reduce it by another 300.
While airlines expected a fall in numbers from July to September, the lean season, the early fall in June has come as a shock. Now many airlines will start renegotiating lease terms and may ask pilots to have a take home salary depending on the number of hours they fly.
For instance, a Boeing 737-700 has a lease rental of $ 300,000 and airlines took them on the assumption of using a plane for 10 hours 30 days a month. So the lease rental comes to $10,000 an hour. If oil prices continue to rise and airlines are forced to cancel flights, then they could ask lessors to accept a fee on the number of hours the plane flies for.
12/07/08 Saurabh Sinha/Times of India

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Air traffic declines first time in four years on back of rising fares

New Delhi: Air traffic growth contracted in June for the first time in nearly four years as rising fares deterred travellers, and at least one airline executive said he expects the decline to accelerate.
The number of passengers carried by India’s airlines declined 3.8% to 3.5 million in June, traditionally a strong month in the aviation business, from 3.64 million a year earlier, according to data released by the Directorate General of Civil Aviation (DGCA) on Friday. Historically, July-September is a lean period for India’s airlines, which profit from traffic growth in June, when summer vacations are on.
In May, airlines carried 4.11 million passengers, a rise of 6.8% from 3.85 million a year earlier.
Rising jet fuel prices—which have almost doubled in the past year—have forced airlines to pass on the increase to passengers. Airlines are piling up losses and deferring new aircraft inductions as they are buffeted by rising costs, including fuel prices.
All the country’s 10 airlines flew fewer passengers per flight in June.
For the first six months of the year, passengers flown expanded a modest 7.5% from the first half of 2007. Between January and June this year, airlines carried a cumulative 22.7 million passengers compared with 21.12 million in the first half of 2007.
12/07/08 Tarun Shukla/Livemint

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Domestic passengers carried by Indian Scheduled Airlines

The total domestic passengers carried by the Scheduled Airlines of India in the second quarter of 2008 - April 2008 to June 2008 - was 115.14 lakhs. The break-up is as follows:
Air India (Domestic) – 17.71 lakhs, Jet Airways –24.28 lakhs, Jet Lite – 9.48 lakhs, Deccan – 15.54 lakhs, Kingfisher – 16.52 lakhs, Spice Jet – 12.04 lakhs, Paramount – 1.41 lakhs, Go Air – 4.49 lakhs, IndiGo – 13.50 lakhs.
It may be recalled that the total domestic passengers carried by the Scheduled Airlines of India in the first quarter of 2008 - January 2008 to March 2008 - was 111.90 lakhs. Air India (Domestic) – 16.42 lakhs, Jet Airways –25.44 lakhs, Jet Lite – 7.98 lakhs, Deccan – 16.39 lakhs, Kingfisher – 16.26 lakhs, Spice Jet – 11.55 lakhs, Paramount – 1.42 lakhs, Go Air – 4.92 lakhs, IndiGo – 11.52 lakhs.
The total domestic passengers carried by the Scheduled Airlines of India in the month of June, 2008 were 35.06 lakhs. The break-up is as follows:
Air India (Domestic) – 5.75 lakhs, Jet Airways –7.44 lakhs, Jet Lite – 2.85 lakhs, Deccan – 4.48 lakhs, Kingfisher – 5.02 lakhs, Spice Jet – 3.66 lakhs, Paramount – 0.46 lakhs, Go Air – 1.08 lakhs, IndiGo – 4.22 lakhs.
The percentage share of the carriers in the month of June, 2008 was:
Air India (Domestic) – 16.4%, Jet Airways – 21.2%, Jet Lite – 8.1%, Deccan – 12.8%, Kingfisher – 14.3%, Spice Jet – 10.4%, Paramount – 1.3%, Go Air – 3.1 % and IndiGo – 12.0%.
The percentage share of the carriers in the second quarter of 2008 was:
Air India (Domestic) 15.4%, Jet Airways – 21.1%, Jet Lite – 8.2%, Deccan – 13.5%, Kingfisher – 14.3%, Spice Jet – 10.5%, Paramount – 1.2%, Go Air – 3.9% and IndiGo – 11.7%.
The percentage share of the carries in the second quarter of 2007 was:
Air India (Domestic) 21.0%, Jet Airways – 21.9%, Jet Lite – 7.0%, Deccan – 18.1%, Kingfisher – 12.0%, Spice Jet – 8.3%, Paramount – 1.4%, Go Air – 3.7% and IndiGo – 6.7%.
The seat factors of the domestic airlines in June 2008 were:
Air India (Domestic) – 59.6%, Jet Airways – 68.1%, JetLite – 68.4%, Air Deccan – 63.0%, Kingfisher Airlines – 64.1%, Spice Jet – 67.8%, Paramount Airways – 80.1%, Go Air – 71.0% and IndiGo – 71.2%.
11/07/08 Press Information Bureau

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SC asks pilots to fly 3 flights in 9 hrs, stays Bombay HC order

New Delhi: Pilots will have to fly for more hours. The Supreme Court on Thursday stayed a Mumbai High Court order that had quashed the guidelines of the Directorate General of Civil Aviation (DGCA) directing airline pilots to fly three flights in nine hours.
The bench headed by Chief Justice KG Balakrishnan issued the interim directions on the petition of Solicitor General G.E. Vahanvati, who challenged the high court order. Vahanvati objected to the high court’s observation that the DGCA’s circular to restore the flying hours, which existed in 1992, was to please the airline operators.
The Solicitor General said, “World-wide the airline industry is in a mess. Flights are being cut down due to a rise in the fuel prices. The high court has erred in holding that the airlines are increasing the flights and the DGCA’s circular is to favour the companies. Also, this argument was never placed before the court, either by the petitioners or the respondents.”
Vahanvati further argued that the high court misread the statutory provisions and proceeded on surmises and conjectures. It overlooked the statutory rules by venturing into complex areas of policy and aviation, he said.
The Solicitor General criticised the two-judge bench of the high court who also gave a finding against the civil aviation minister for issuing the orders, increasing the number of flying hours for pilots. The high court had concluded that the minister “acted without application of mind in a most arbitrary and irrational manner”.
10/07/08 Bhadra Sinha/Hindustan Times

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Govt seizes more corporate jets

Tightening the noose, the government has seized more aircraft of leading companies like GMR, Oberois, India Bulls and has brought under scanner over 250 such planes acquired since 2007 to detect duty evasion.
Anybody found guilty of acquiring aircraft with duty exemption under Non-scheduled Operator Permit Scheme could be levied penalty up to five times the duty evasion, a finance ministry official said.
Sources in the Customs department said that as many as six aircraft were seized this month but released after the owners provided a bank guarantee and bonds in relation to the cost of aircraft.
The issue had first come up with seizure of two aircraft of Reliance Industries, but now planes belonging to corporate bigwigs like Tata, DLF, Escorts, Kingfisher, Punj Lloyd have come under government scrutiny.
A Customs official said some business houses had taken ‘advantage' of the duty exemption announced last year on import of aircraft meant for chartered flights.
More than 65 firms of the total 86 operators having the NSO permit are under scanner, sources said.
11/07/08 Press Trust of India/Business Standard

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Air passenger traffic takes a hit on high fares

For the first time in the past three years, the first week of July has seen the domestic air passenger traffic declining by 4 per cent over the year-ago period. After slowing down to a single digit in the past few years, the passenger traffic slipped into the negative zone this month.
"There has been a decrease of 5-6 per cent in the first eight days of July for full-service carriers compared with that in the same period of 2007," said Ankur Bhatia, executive director, Bird Group, which controls Amadeus India, one of the leading technology providers to the Indian travel industry.
Apart from full-service carriers, executives of low-cost carriers like JetLite and Simplifly Deccan confirmed that their numbers had gone down. Experts said taking a marginal growth of SpiceJet and IndiGo into account, the overall passenger traffic would go down by close to 4 per cent for the industry in the July.
According to figures released by the civil aviation ministry, the domestic passenger traffic in the country had seen a double-digit growth in the first quarter of 2008.
The growth in the first quarter of this calendar year was 11.12 per cent over the same period last year. The growth fell to a single digit in April compared with 8.65 per cent growth in the same month last year. The growth in May came down to 2.9 per cent over the previous year's.
The decrease has happened primarily because of two reasons — increase in prices leading to lower load factors and a cut in capacity in the last couple of months.
11/07/08 Anirban Chowdhury/Business Standard

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Soon a plane at the cost of luxury cars!

Spurred by the growing affluence of the Indian upper-middle class, a Rajasthan-based investor has entered into a joint venture with an Italian company to manufacture two-seater aircrafts in Sikar. On offer are brands like Ikarus, Vampire and Little Genie.
"We hope to have the first plane out in the skies by April next year,” Vibhuti Singh Devra, CEO of West Wind Aviation said. Singh’s company would invest Rs 200 crore for assembling the planes.
Two-seater planes are the latest fad among the uber rich of India. According to recent estimates, more than a lakh Indians can easily spend nearly Rs 4 crore on buying speed machines.
"The trend these days is to buy micro light aircrafts that can cruise at a speed of 150-200 km hour. With the craft in their possession, the owners can fly to nearby places for business deals and to getaways on weekends,” Devra said. The cost of the basic plane is around Rs 35 lakhs, much less than an S-Class Merc. The fuel used in the craft is the same premium-category petrol we nowadays buy for our cars. According to industry claims, a microlite plane can fly 10 km on a litre of petrol.
"The average running cost of a microlite plane is just Rs 1600 per hour. Imagine flying two people to Delhi for less than Rs 2000,” said Singh.
10/07/08 Sandeep Dahiya/DNA MONEY/Sify

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Fly single airline to limit losses: Crisil

With bad times showing no signs of going away for airlines, aviation industry analysts are coming up with possible exit routes which carriers can take to limit losses.
The latest in the line is Crisil which suggests that merged carriers should operate as a single full-service carrier (FSC) brand rather flying two separate airlines, one running the low-cost carrier (LCC) model and the other being an FSC.
Such a move would signal the death of brands like Deccan and Jetlite. Sudhir Nair, Head, Crisil Research, in his report says, "As the fare differential between the LCCs and FSCs has reduced considerably, the Kingfisher-Deccan and Jet-JetLite groupings could look at single brand FSC operations, which would not only help in yield management and reduce other operating costs, but also augment revenues on account of superior pricing."
An analyst with a foreign brokerage firm while agreeing with this assessment adds, "While it will surely help to increase yields, it should be noted that in the case of Kingfisher and Deccan, the differences in fares are higher than between Jet and JetLite. So it makes a lot of sense for Jet to have a single brand. The differential seems too low to justify two airlines."
10/07/08 Nirmal John/DNA MONEY/Sify

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Charter operators to pay Rs 1,000cr as taxes for aircraft imported under NSOP

Charter operators might have to cough up Rs 1,000-Rs 1,200 crore as taxes and penalty for aircraft that they have imported under the Non-Scheduled Operators Permit (NSOP) even though they are being put on personal use.
However, this is based on the assumption that all the 50-odd aircraft and helicopters, which have been bought after April 2007 — when the differential import duty regime for charters and aircraft for personal use was imposed by the government — have violated the regulations. But the numbers would be much less as many would have been bought by regular private charter operators, flying schools and even the state government.
A private aircraft can cost Rs 20 crore to Rs 160 crore and about 80 per cent of the private aircraft are second hand, which are much cheaper than the market price. And some of them would have also imported helicopters which are much cheaper. So the average list price of an aircraft is Rs 85 crore-Rs 90 crore.
Companies importing private aircraft have to pay a Customs duty of 3 per cent, a countervailing duty of 16 per cent and an additional duty of 4 per cent totalling 23 per cent. However, they are exempted from all these taxes if they are importing the aircraft for scheduled or non-scheduled (charter) operations.
10/07/08 Business Standard

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Charter operators to raise rates 20% from September

New Delhi: Even as growth in traffic on chartered flights has fallen 6 to 8 per cent over the past year, rising fuel prices are forcing private charter operators to raise tariffs a substantial 20 per cent from September 1.
This follows an 18 per cent increase in the last 12 months. India has more than 50 non-scheduled operators, which include helicopter operators like Global Vectra, aircraft operators like Ran Air and Taj Air and companies like Deccan Aviation Ltd that fly both helicopters and aircraft. A chartered flight costs Rs 50,000 to Rs 2 lakh an hour, depending on the aircraft capacity and the services offered.
Aviation turbine fuel (ATF) accounts for around 35 per cent of the total costs of a private charter operator against around 25 per cent last year.
Demand for charters has slowed for two reasons. First, because airlines have cut fares (though these have also increased drastically in the past three months), and increased the number of flights. As a result, corporate travellers find flights to suit their schedules.
Second, many companies are now buying their own jets that they use in preferences to charter services.
10/07/08 Anirban Chowdhury/Business Standard

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Airlines to incur losses even if crude prices fall

New Delhi: Airlines operators in India would continue to incur losses even if there is a significant fall in crude oil prices, if they do not undertake a revenue augmentation exercise in conjunction with cost-cutting measures and efficiency improvement initiatives soon, a leading research firm warned today.
"The sharp increase in crude oil prices in the first half of 2008 has led to a corresponding rise in the price of aviation turbine fuel (ATF) for all airline companies, due to which they are expected to post heavy losses," a Crisil Research report said today. Fuel cost as a percentage of total operating costs has increased by 300-600 basis points. "Although airlines have gradually increased the fuel surcharge to counter the impact of rising ATF prices, they continue to remain in the red.
This incessant increase in the price of ATF and the consequent increase in ticket prices have led to a reduction in growth of passenger traffic, thereby leading to a drop in passenger load factors," Crisil Research Head Sudhir Nair said.
Even at sharply lower crude oil prices, airlines will not break-even and a structural increase in ticket prices is required in the near term, Nair added.
09/07/08 Press Trust of India/Business Standard

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Samtel bags major HAL order worth 250 cr

New Delhi: Samtel, a new entrant into the country's growing defence electronics market, today announced it had won a major deal order worth more than Rs 250 crores from the Hindustan Aeronautics Ltd to manufacture indigenous Multi Functional Displays for SU-30 fighters and jet trainers.
Samtel, which is India's largest integrated manufacturer of television displays and avionics, said the production would be carried out in a joint venture company to be called 'Samtel-HAL Display Systems'.
With this the 300-million dollar company would be the first Indian JV to produce such Multi Functional Displays (MFDs) in the country. Samtel has also tied up with European aviation and defence system major Thales to make similar MFDs and cockpit helmets for the upgraded Mirage 2000.
"The LCD based MFDs have already undergone extensive testing by Defence Avionics and Research Establishment (DARE) for their flight worthiness," a company spokesman said. These MFDs are likely to be installed in SU-30 MKI fighters which are being assembled at HAL under technology transfer from the Russian manufacturers. In the next few years HAL is to assemble 120 Sukois.
09/07/08 Press Trust of India/Business Standard

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Airlines act against e-ticket fraud

Calcutta: The next time you buy an air ticket online for someone you know, don’t forget to give that person an attested photocopy of your credit card because airlines are becoming stricter in implementing a fraud-prevention rule that has been in existence for some time. The high incidence of identity theft — all you need for an online purchase is the credit card number, the expiry date and the three-digit CVV number printed at the back — is the reason why airlines are insisting on fliers carrying photocopies of credit cards if their tickets have been booked by someone else.
“Henceforth, if any passenger fails to show the photocopy of the credit card attested by its owner, the ticket will be cancelled and a fresh ticket issued. The owner of the card will get the refund,” a Jet official said. The system is, however, far from foolproof. A card that is stolen can be used to buy tickets, photocopied and presented as proof of the purchase being bona fide.
There have even been instances of hackers cracking online payment gateways with fake credit card numbers and purchasing tickets. In such cases, airlines incur losses. Most frauds are committed by small-time tour operators. "Tickets are issued usually 24 hours before departure, giving us little time to detect the fraud," a Deccan official said.
10/07/08 Sanjay Mandal/The Telegraph

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BJETS to begin Asian fractional operations in September

BJETS, which aims to be Asia's first dedicated fractional ownership operation, plans to begin commercial flights by the first week of September with five aircraft.
Air operators' certificates were obtained in May and the company, which has 30 jets on firm order, has signed maintenance contracts with regional authorised workshops, says chief executive Mark Baier.
The company, which has offices in India and Singapore, had said earlier that it would begin operations by end-June. But Baier now says: "The first week of September was always our target and commercial flights will start by then. We've been running test flights for over a month now and everything is falling in place."
There is growing interest in BJETS' plans to have dedicated business jet fleets and guaranteed availability for customers in Asia, especially India, he adds. "We've said before that there is a lot of pent-up demand for business jets, and that can be seen in the number of enquiries since we announced our plans in February. This is not from just businessmen, who are the traditional customers for corporate aviation. Many people who are new to business jets are keen to experience what we offer," says Baier.
BJETS has ordered 11 Hawker 900XPs, nine Hawker 850XPs, 10 Hawker 4000s and 20 Cessna Citation CJ2+s, and these will have Indian registrations. That helps to remove much of the red tape faced by non-Indian registered aircraft flying into the country. The aircraft will be based primarily in India's financial capital Mumbai and in Singapore. The company hopes to have 15 aircraft in service by the end of this year. Apart from fractional ownership, BJETS will also offer block charter and aircraft management services.
08/07/08 Siva Govindasamy/Flight International

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Airlines see logic in ATF futures

Delhi/Mumbai: Low-cost carriers SpiceJet and IndiGo were two of the main traders of aviation turbine fuel (ATF) at the Multi Commodity Exchange of India (MCX), which started trading of ATF futures today, market sources said. Around Rs 34.8 crore worth of ATF was traded till five in the evening today. Neither the trading value nor the contract period could be ascertained. IndiGo executives denied having traded any ATF today and SpiceJet executives said they were unaware of any such development. SpiceJet's annual spending on ATF for 2007-08 amounted to Rs 702 crore. Industry estimates show that ATF spending for a low-cost carrier might go up to Rs 1,000 crore for 2008-09. The aviation industry is estimated to have spent around Rs 15,000-18,000 crore annually on ATF last year. MCX launched ATF trading in India today. The maximum period of the contract is six months and the maximum order size is 10,000 barrels.
Trading of ATF in India would give companies an opportunity to hedge the fuel prices on a domestic platform and lock them for a particular period, thus hedging their risks against price rise on ATF for that period. Earlier, airlines were only allowed to hedge fuel from overseas but they have been always wary of doing so due to the constant rise in crude oil prices, uncertainties regarding fuel pricing and complications in trading overseas.
08/07/08 Business Standard

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Consolidation hopes buoy airline stocks

Bangalore: The stocks of three domestic airlines rose substantially on Monday giving indications of a possible consolidation in the industry.
Stocks of SpiceJet, which is the focus of a takeover, rose as much as 22 per cent to Rs 30.45, gaining Rs 5.45 on a single day while that of Deccan Aviation rose the highest by 24 per cent to Rs 72.45. Jet Airways stocks rose 5.62 per cent to Rs 354.50.
Both Jet Airways as well as the UB Group, which owns Deccan Aviation, are learnt to have thrown their hats in the ring for taking a major stake in SpiceJet. However, sources in SpiceJet said that it may no longer be interested in either of the airlines picking up a stake after an offer from private equity investor, WL Ross & Co LLC.
The US-based firm has reportedly offered around $100 million for the airline’s working capital requirements. SpiceJet is learnt to be keen on accepting the offer from WL Ross as the company is known to be a turnaround specialist — something the airline needs badly after three straight years of losses. SpiceJet posted a loss of Rs 133.51 crore during 2007-08, which was about 98 per cent more than the previous year.
08/07/08 K. Giriprakash/Business Line

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Travel agents to meet airlines over commission issue

Mumbai: Upset over air-carriers' decision to withdraw 5 per cent commission to travel agents from October, representatives of various travel bodies have decided to meet airline industry officials seeking a rethink on the issue.
This was decided at a joint meeting of five travel agents' bodies here on Monday.
"We all are unhappy with the decision as we feel it will be detrimental for the travel industry. So, we have charted out a joint strategy and propose to meet major airlines this week," Travel Agents Association of India's President C Venkateshwara Prasad told media after the meeting.
Travel agents are concerned over the mounting losses of airlines in the wake of the rising air turbine fuel prices. "Eighty-five per cent of airlines' business comes from travel agents. So we are for a win-win situation for both or at least a situation in which no party stands to lose."
The travel agents' representatives had also met Civil Aviation Minister Praful Patel over the issue. "We explained to him the consequences of the decision," he said. Those attending the meeting were representatives of Travel Agents Association of India, IATA Agents' Association of India, Travel Agents Federation of India, Indian Association of Travel Operators and Association of Domestic Tour Operators of India.
07/07/08 PTI/Economic Times

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It helps to pile up frequent-flyer points

Mumbai: Until recently, airlines were being preferred to other time-consuming modes of travel as the ticket prices kept falling. But, of late, the trend has reversed with most airlines having hiked prices.
In such a situation, don’t you wish there was some way you didn’t have to take a train to that far-off destination just yet?
You do? Well, you could have ensured as much had you piled up mileage points when the going was better. Indeed, you could have ensured a free ticket or two as a ‘frequent flyer’.
Under the frequent flyer system, one accumulates points when he books a flight ticket. And with the online ticketing facility available across the country, airlines can credit mileage points immediately as one makes a booking, irrespective of where the booking was made from. Of course, a flyer needs to quote his membership number while booking a ticket.
In fact, many websites offer a point calculator on their websites to help you calculate the number of points a certain journey can help accumulate.
The number of points one gathers depends on the distance of the flight and also the class one travels by.
08/07/08 Khyati Dharamsi/DNA MONEY/Sify

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Airlines look to cut ad spending in times of rising fuel prices

Mumbai: India’s airlines are axing ad spends while sharpening their advertisments to stay visible, as rising jet fuel prices force them to cut costs they consider as secondary.
Television advertising volumes for domestic airlines dropped 27% between January and May, compared with the same period last year, while print advertising volumes dropped 36%, according to TAM Media Research Pvt. Ltd.
They have, instead, started using different media to communicate their brands, including direct mailers to reach core target groups such as frequent fliers.
“At a time like this, what we will see increasingly is full-service carriers using loyalty programmes as a means of retaining top-of-the-mind recall and for select incentivization,” said Meenakshi Madhvani, managing partner at Spatial Access Media Solutions Pvt. Ltd. “Whenever there is a pressure on numbers, advertising spends are the first to go. What doesn’t get cut is the below-the-line ad spends, which are your promotions, etc.”
“If you are clear that these (ad spends) are not an expense but are going towards building a real business asset, also known as the brand, the amount of pruning (of ad spends) is either nil or marginal,” said Ramesh Thomas, president and chief knowledge officer at Equitor Management Consulting Pvt. Ltd. “So, those companies will look at increasing efficiency, rather than see it as a means of saving money for the bottom line, which can then go towards fuel costs.”
07/07/08 P.R. Sanjai and Gouri Shah/Livemint

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Airlines cut flights, change course of business

New Delhi/Mumbai: There is more bad news from the aviation industry. Hit by high fuel prices, major airlines have reduced flights on the domestic circuit as demand is ebbing and flights are going half empty.
It is learnt that state-owned carrier Air India has cancelled around 30 flights whereas Jet Airways grounded more than 20 flights due to poor bookings. Delhi-based budget carrier SpiceJet has cancelled around 10 flights and Simplify Deccan has done away with 50 flights.
Jet Airways has combined some flights, due to poor loads, on routes like Delhi-Mumbai and Delhi-Kolkata. Simplify Deccan is said to have carried out a similar exercise on short haul routes. When contacted, a Jet spokesperson said that few flights have grounded but this was a temporary measure.
Kingfisher is said to have postponed plans for international operations and the target now is September 2008 instead of August 2008. Tom Wright, general manager (India, Middle East, Africa & Pakistan) at Cathay Pacific, told ET that crude prices are expected to reach $200 per barrel by the end of the calendar year. For the last few months, Indian carriers' attempts to find funds for their loss-making ventures (that can be as high as Rs 9 crore daily for giants like Air India-IA or Jet-JetLite) could get more desperate now as crude inches towards the $150 mark.
07/07/08 Economic Times

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Customs probe business tycoons' jets for duty evasion

Mumbai: The Central Board of Excise and Customs have sent notices to several corporates across India for evasion of customs duty on import of private jets. The evasion amounting to several hundred crores of rupees came to light after two jets belonging to Reliance Industries were seized by the customs officials in Mumbai.
Now private jets belonging to the corporate honchos are under the customs scanner.
The evasion of customs duty came to light after an investigation against Reliance Commercial Private Developers Ltd, a subsidiary of Reliance Industries, for evading customs duty of Rs 58 crore on the import of an Airbus 319 and a Falcon 900.
According to the rules corporate jets can be imported under two categories.
Jets imported under non-schedule category is used for renting out to a third party and attracts customs duty of 10 per cent while jets imported for personal use attract a higher customs duty of 18 per cent.
Customs department has alleged that corporate houses like Reliance evade eight per cent customs duty by importing planes meant for private use under the non-schedule category.
06/07/08 Jency Jacob/CNN-IBN

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