Airlines may take time to decide on fare cuts

New Delhi: Airlines may take another few days to decide on slashing air fares even though the jet fuel prices have been cut today — the sixth reduction since August this year.
Industry sources said a decision is likely only next week. According to industry estimates, the fares are likely to be lower by 10-12 per cent.
Sources said national carrier Air India could take the lead in announcing lower fares as it has already started working on it. State-run oil companies today cut Aviation Turbine Fuel prices by Rs 2,480 per kilolitre, effective from December 1. Civil Aviation Minister Praful Patel had appealed to airlines to cut fares and reciprocate the measures taken by the government to help the ailing industry.
Besides reducing ATF prices, government has abolished five per cent customs duty on jet fuel. It is also planning to amend the Central Sales Tax Act in the coming session of Parliament to include ATF in the list of declared goods so that only a flat four per cent tax is imposed on it across the country.
When contacted, an Air India official said the company is working on the impact of the price cut on the overall cost of operations. But it would take a few more days to take a decision.
30/11/08 Press Trust of India/Business Standard

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ATF prices to drop; no word on cheaper fares

New Delhi: Despite oil companies again announcing a reduction the sale price of aviation turbine fuel (ATF) from December 1 this year, domestic aviation companies are not commenting on whether they would make flying cheaper.
Sources in Indian Oil said from December 1 this year there will be an average reduction of between Rs 2.40 and Rs 2.60/litre of ATF being sold to the domestic airlines in the four metro cities. From Monday onwards, airlines will be charged about Rs 37/litre of ATF as against Rs 39.38 being paid at present. Similarly, in Chennai, airlines will pay around Rs 41/litre as against the current price of Rs 43.64.
Officials of the nine domestic airlines declined to comment on whether they will drop fares or reduce surcharge as fuel prices were falling.
ATF prices have been consistently going down since September this year. Recently, the Chairman of Kingfisher Airlines, Mr Vijay Mallya, had said his airline will reduce fares across the board only after Government approves the ‘declared goods’ classification for ATF. The move will ensure that airlines pay a standard 4 per cent sales tax on ATF.
At the moment the sales tax varies from 4 per cent to more than 30 per cent.
29/11/08 Business Line

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Oil cos cut jet fuel prices yet again

New Delhi: Extending a further relief to cash-strapped airlines, state-run oil companies on Saturday again cut Aviation Turbine Fuel (ATF) prices by Rs 2,480 per kilolitre, effective December 1.
This is the sixth cut in jet fuel prices since August when rates rose to an all-time high of Rs 71,028.26 per kl.
The ATF prices in Delhi will be lower by Rs 2,480 per kl at Rs 36,900.51 from Rs 39,380.51 per kl.
In Mumbai, home to the busiest airport in the country, prices were cut by Rs 2,584 per kl to Rs 38,103.42 per kl, an official of Indian Oil Corporation said.
Indian Oil, Bharat Petroleum and Hindustan Petroleum had on November 15 cut jet fuel prices by over 12 per cent or nearly Rs 5,580 per kilolitre.
29/11/08 PTI/Times of India

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Business travel to India on hold

Companies in Philadelphia and worldwide were clamping down on travel to Mumbai yesterday, as the terrorist attacks in India reverberated on many fronts.
GlaxoSmithKline P.L.C., which is based in London and has large operations in the Philadelphia area, said it had suspended employee travel to India for now.
AstraZeneca P.L.C., which has extensive operations in Wilmington and a research and development facility in Hyderabad, India, said it had suspended employee travel to Mumbai.
Merck & Co. Inc. also said it had suspended travel to Mumbai. Merck, which is based in Whitehouse Station, N.J., and manufactures vaccines in West Point, could not provide information about its Indian operations because the company was closed in the United States for the Thanksgiving holiday.
AppLabs, an information technology outsourcing company with offices in Philadelphia, employs 1,600 people in Hyderabad, about a one-hour flight from Mumbai. The company said its employees were safe.
The University of Pennsylvania's Wharton school said two employees for the Indian edition of its Knowledge@Wharton online publication were safe. Editor Mukul Pandya said one employee had left the office just a half-hour before the attack.
The attacks hit India's tourist industry at the start of peak season, compounding problems for airlines and hotels facing the slowest growth in visitor numbers in five years.
Terrorist attacks aimed at foreign tourists, such as the Mumbai assaults, may hurt hotel bookings and airline-ticket sales for more than a year. The island of Bali, which accounts for one-third of all foreign tourists to Indonesia, had not recovered a year after the 2002 bomb that killed 202 people, according to a World Bank report.
29/11/08 Miriam Hill/Philadelphia Inquirer, USA

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Tickets cancelled, tourists stay away from Mumbai

Kolkata: The Terror attacks in Mumbai has jeopardised the plans of the travel-loving Kolkatans. Tourists are cancelling their scheduled visits to the West coast en masse.
“Almost every passenger, who was going to Mumbai in the coming days, cancelled his ticket,” said Devesh Agarwal, Managing Director of Victoria Travels, a leading tour
operator in the city. “Not just Mumbai, nearly 25 per cent trips to all the destinations have been cancelled,” he added.
M A Rashid runs a ticketing centre in Park Street. “Business has been hit hard in the last 24 hours and nearly 95 per cent tickets to Mumbai have been cancelled,” he said.
Sources at Jet Airways said they have already experienced a 20 to 22 per cent cancellation in tickets in the last 24 hours.
An official at Air India, however, said there has been no cancellation till now in any of their flights to and fro Mumbai.
Spice Jet officials also said there have been no passenger cancellations so far and they are extending special services to those travelling to and fro Mumbai.
29/11/08 Indian Express

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Airlines cut down flights to and from Mumbai

New Delhi: Domestic airlines have cut back flights to and from Mumbai in the wake of the recent terrorist attack. The government on its part has
put all airports in the western region of the country on high alert.
The UB Group owned Kingfisher Airlines has combined some of its flights operating out of Mumbai. “We have decided to operate some of the flights jointly as we did on Friday. Our Mumbai-Delhi flight IT 331 may be combined with another Delhi flight IT 312. Similarly some of our daily flights to Bangalore- Mumbai and Bangalore- Delhi will also be merged together,” the airlines spokesman said.
Other domestic carriers Jet Airways and Air India have re-scheduled few of their flights out of Mumbai. Domestic carriers have reported an average 20-30% less boarding from various destinations for Mumbai-bound flights. According to airlines officials, the passengers load for the Mumbai-bound flights was much below the average forcing them to combine some of their flights.
Meanwhile few international carriers have already re-scheduled and cancelled their flights. Most of these are the East Asian carriers — Thai Airways, Malaysian Airlines, Cathey Pacific, Singapore Airlines — which have cancelled their flights due to the closure of Suvarnabhumi airport at Bangkok.
29/11/09 Economic Times

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Flight ops in Mumbai hit

New Delhi: Flight operations in and out of Mumbai were marginally affected even as the city fought incessantly with terror throughout Friday. The Mumbai airport saw 13 cancellations by carriers like GoAir, Indigo and Kingfisher. However, international flights in and out of the airport remained normal. Yesterday, a total of 29 flights, including international and domestic, were cancelled. Around 500 aircraft fly in and out of Mumbai every day.
However, domestic flights to the city saw a decline in passenger load factor (PLF) as fewer people are making it to the city.
According to figures given by Mumbai International Airport Ltd (MIAL), GoAir cancelled four arrivals and four departures, Indigo one arrival and one departure while full-service carrier Kingfisher cancelled one arrival and two departures.
International flights, especially outbound, saw healthy occupancy, airport sources said, adding that domestic flights, especially bound to Mumbai, would have taken a hit on their passenger load factors.
The number of passengers arrived was much less than those who departed because a lot of passengers wanted to leave Mumbai, said an airport executive.
“We saw healthy loads of 75 per cent in our flights today. We are taking each day as it comes and may see an impact in the next few days,” said a Singapore Airlines spokesperson.
Both Jet Airways and Air India, however, said that the crisis in the wake of terror attacks in the city has not affected their loads to a large extent.
29/11/08 Business Standard

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Airline, hotel bookings suffer post-attacks

Bangalore/Mumbai: The travel and tourism industry is likely to bear the brunt of the November 26 terror attacks on Mumbai, the commercial capital of India.
Airlines are expected to be hit badly as bookings for the holiday season travel from abroad drop massively after advisories are issued by various countries on travel into India. Travel agents were flooded with requests for cancellation of bookings. The terror attacks have struck fear into inbound tourists, who are cancelling their airline tickets and hotel bookings.
Anoop Kanuga, director, Bhathija Travels in Mumbai, said Thursday saw hectic cancellation of bookings into India. “Nearly 80% of our airline and hotel bookings by inbound tourists were cancelled while 20% have told us that they will get back shortly,” said Kanuga.
Mark D Martin, senior advisor, KPMG, agreed and said, “It is likely that there would be a spate of cancellations by inbound traffic around the holiday period. This is unfortunate for the aviation industry as December is considered a peak season of international travel into India.”
But there are some, like Kapil Kaul, CEO of Centre for Asia Pacific Aviation in India, who believe that the impact of the terror attack would be short-term.
29/11/08 Praveena Sharma & Nirmal John/Daily News & Analysis

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Bombay flights continue despite terror attacks

Airlines operating out of the UK have continued to operate flights to the Indian city of Bombay, despite a Foreign Office warning against all but essential travel.
The city has been struck by a wave of terrorist attacks over the last two days, with over a hundred dead and hostages still held at the Taj Mahal Palace Hotel and Oberoi-Trident Hotels.
Initial reports suggest American and British targets were sought by attackers, leading the Foreign Office to advise against travel to the city. Recommendations for the rest of India remain unchanged.
In spite of the Foreign Office warning British Airways, Virgin Atlantic, Air India and Jet Airways have all continued to operate as normal.
In contrast European and American airlines have halted or reduced departures to Mumbai, the commercial capital of India.
Alitalia has announced there will be no further departures until further notice, while Lufthansa has cancelled flights from Frankfurt and Munich.
Air France cancelled an earlier departure but expects to operate a normal service from Friday November 28th. In the UK both Virgin Atlantic and British Airways are offering passengers a chance to modify flights to Mumbai up to and including December 3rd.
28/11/08 Chris O'Toole/TravelBite.co.uk, UK

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Air passenger traffic falls in Q2; IATA warns worse yet to come

New Delhi: Even as the financial crisis in the aviation sector has taken a heavy toll on the passenger traffic growth rate in India, the global body of airlines IATA has warned that the worst was yet to come.
The number of passengers handled by all Indian carriers registered a whopping fall of minus 13.7%, as per the latest figures of Gross Domestic Product for the second quarter (July-September) of 2008-09, released by the government here.
However, the amount of cargo carried by the aviation sector grew modestly by 5.7% over the second quarter of 2007-08, the figures showed.
Commenting on the declining traffic, IATA CEO and DG Giovanni Bisignani warned, “the gloom continues and the situation of the industry remains critical... The slight slowing of decline in passenger traffic is likely to be temporary and the deepening slump in cargo markets is a clear indication that the worst is yet to come.”
In its monthly traffic data, the International Air Transport Association (IATA) also painted a “gloomy” picture of the scenario facing the global aviation industry, saying recession was “now the biggest threat” to its profitability.
The Asia-Pacific carriers, which represent 31% of the global passenger traffic, has seen a fall of 6.1%.
28/11/08 PTI/Livemint

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Terror strike may hit aviation industry

New Delhi: The domestic airline companies hoping resurgence in air traffic during the winter may hit hard due to the Wednesday terror attack in Mumbai, the business capital of India. The attack has certainly struck India’s tourism industry with falling passenger traffic.
In just two days, the domestic and international flights have seen a steep fall in inbound traffic load owing to one of the worst ever terror strike in south Mumbai, which took the toll of 130 and injured over 375. The Non-Residents Indians (NRIs) and foreigners, who usually visit India for tourism and for enjoying holidays are expected to cancel their tickets and several people have already cancelled their trip following the incident, sources revealed.
The price of air fuels have been slowed down, and it is expected that the airline firms may cut their airfares to boost the air traffic, which it had lost due to rising cost of airfares, said officials but ‘now the hope of rising traffic has been axed,’ added officer.
According to an official report, one out of five air passengers in India fly via or from Mumbai, and the terror incident would definitely have an adverse impact on the air traffic.
Besides Mumbai, airports in Delhi too witnessed a 30% drop in traffic in just two days. Due to lack of passengers, airlines are waving the number of flights and adopting the way to merge the passengers of two flights of the same route as Kingfisher did it on Thursday.
Kingfisher Airlines considering insufficient passengers combined the travellers of two flights: Delhi-Mumbai and Bangalore-Mumbai into one while it had also combined the flights from Mumbai-Hyderabad and Mumbai-Nasik into one.
Similarly, some international carriers have cancelled their flights, scheduled to depart Mumbai, while a Lufthansa flight from Frankfurt to Mumbai was diverted to Delhi.
28/11/08 Noor En Ahmed/Newstrack India

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Mumbai Air Freight Disrupted; Airlines Flying

The largest international package delivery companies said Friday that disruption to Indian services is expected to continue in the wake of the terrorist attacks on Mumbai, though all staff have been accounted for and no injuries were reported.
International commercial airlines are resuming services to India's commercial capital after halting some flights Thursday.
DHL, a unit of Deutsche Post (DPW.XE) and one of the largest operators in India, said it expected the impact on shipments to continue over the next 48 hours, though none of its own offices or those of local affiliate Blue Dart had been affected by the attacks.
TNT NV (TNTTY) said it had closed one office in Mumbai, affecting pickup and deliveries in the south of the city where the terrorist incidents occurred. The Dutch company said it was rerouting some shipments from Europe via Delhi.
FedEx Corp. (FDX) said Friday that disruptions to service would likely continue Friday, with no pickups or deliveries in some areas of Mumbai due to local restrictions. Spokeswoman Sandra Munoz said that scheduled air service has resumed. The company sponsored a trade mission to the city two weeks ago.
United Parcel Service Inc. (UPS) said Friday that operations in and out of Mumbai have been temporarily suspended, but service to the rest of India is proceeding normally.
Commercial airlines have continued or resumed flights to what has been one of the fastest-growing international markets.
28/11/08 Doug Cameron/Dow Jones/CNNMoney.com

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International air traffic will be hit hard

New Delhi: International airlines, that have seen their business out of India grow 12-17% annually for seven of the past eight years, will bear the brunt of the impact of the terror attacks in Mumbai as foreign travellers defer travel to the popular destination.
One in five air passengers in India fly through or from Mumbai, the country’s financial capital. International passenger traffic, expected to grow almost 10% through March 2009 even as domestic passenger traffic is falling, may now moderate to single-digit growth.
The only time international growth contracted—by 2.4% —year-on-year was in fiscal 2002 after the September 2001 terror attacks in the US.
“They (terrorists) are like small military units going around...just to dissuade people (from coming) to India,” insists Robey Lal, former country head for International Air Transport Association (Iata), a travel industry group. “Even when people are coming (travelling) on business, and they can do it on phone, they would much rather do that than show up in person. It will impact everything.”
Around 70% of India’s inbound tourist traffic, itself one-third of India’s total international passengers, is in the September-March period, according to the Centre for Asia-Pacific Aviation (Capa).
This busy season may see a significant drop for at least the next “two-three weeks”, the aviation research and consultancy firm said.
28/11/08 Tarun Shukla/Livemint

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Flight, train tickets to Mumbai cancelled

Lucknow : A day after the Mumbai Terror attack began, Mumbai-bound flights and trains bore its brunt.
Travel agents, airlines offices and railway reservation counters had a hard time on Thursday, given the largescale cancellations.
Some of the bigger airlines decided to waive the cancellation fee, which varies between Rs 350 to Rs 750.
No flight or train, however, was cancelled, though some flights were late.
The Air India flight to Mumbai scheduled for 12.15 pm was an hour late, and Jet Airways flight scheduled to take-off at 1:30 pm was late as well.
A customer service executive of Air India said there were 13 people who had booked seats from Lucknow to Mumbai, but nine cancelled their tickets.
“We have had around 10 cancellations — cutting across Indian Airlines, Jet Airways and Kingfisher,” said Ajay Kumar Singh, the owner of Samar Travel Agency.
“Some foreigners had booked themselves for our package as well, but all of them cancelled, asking for a direct flight to Ahmadabad instead. We hope the situation does not get worse,” said Yasir Shah, an agent with Tour and Travel.
28/11/08 Maulshree-Seth/Indian Express

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No change in airline schedules

New Delhi : Airlines have assured that the inbound and outbound traffic from Mumbai will largely remain unaffected, with flights scheduled to operate as per the itineraries.
State carrier Nacil said Air India operated its domestic and international services as per normal schedule last night. Air India said in view of the Mumbai airport functioning normally, it would maintain its normal schedule. “We haven’t received any cancellations for either inbound or outbound flights,” said NACIL executive director, Jitendra Bhargava.
Jet Airways has waived cancellation and re-issue charges on its domestic and international services into and out of Mumbai, for Thursday and Friday. Kingfisher Airlines, citing cancellations and dipping travel numbers, has combined its flights on Delhi-Mumbai, Bangalore-Mumbai, Mumbai-Hyderabad, Mumbai-Nasik and Nasik-Mumbai.
Low cost carrier Spice Jet will continue to operate its flights as per schedule, refunding full amount for any cancellations that Mumbai-bound passengers may make on reservations for today and tomorrow, said the company’s spokesperson.
28/11/08 Smita Aggarwal/Indian Express

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Major airlines keep Mumbai linkage intact

Dubai: Major airlines in UAE said on Thursday that they will be operating on schedule to Mumbai but did not rule out changes and delays if the situation in Indian commercial capital worsens.
Indian Airlines, Emirates and Etihad Airways will be operating their flights to Mumbai on schedule and there have been no cancellations.
Anand Kumar Pandey, Country Manager, Indian Airlines, said: "Two flights left for Mumbai on Thursday and two will fly on time on Friday."
An Emirates spokesperson said: "Currently our flights to and from Mumbai are operating as per schedule. We will continue to closely monitor the situation. The safety of our passengers and crew is of utmost importance." Emirates operates four flights a day to Mumbai.
Thomas Clarke, a public relations official at Etihad Airways said: "There are no flights cancelled but for the next four days, we will reduce the on-ground time of our flights at the Mumbai Airport. For this, the departure of our flights to Mumbai will be delayed for five hours from Abu Dhabi. In addition, on Friday and Saturday, we will be operating the A330 Airbus instead of A320 to accommodate more passengers."
Jet Airways in a statement said in view of the recent turmoil in the city, Jet Airways advises its passengers to carry valid photo-identification and report at the airport well before the scheduled departure of their respective flights, in compliance with enhanced security requirements.
Air Arabia has two flights daily to Mumbai and is operating on schedule.
27/11/08 Sunita Menon/GulfNews, United Arab Emirates

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Bombay flights continue despite travel ban

Flights are operating between the UK and Bombay despite a Foreign Office statement advising Britons against travel to the city.
British Airways, Virgin Atlantic, Air India and Jet Airways are all operating London-Bombay (Mumbai) flights as normal.
The only flight cancellations so far have been among European and US carriers. Alitalia has cancelled all Bombay flights until further notice, while Lufthansa has cancelled two flights, from Frankfurt and Munich to Bombay today.
Air France cancelled one service between Paris and Bombay, but said Friday flights would operate as normal. Delta Airlines also cancelled its Seattle-Amsterdam-Bombay flight today.
Among the four carriers that are continuing to operate flights from the UK, all are allowing customers to change flight bookings to a later date or alternative destination if they do not wish to fly. Most are not offering refunds at this stage, unless the terms and conditions of the original ticket allow it.
Virgin is currently allowing amendments to bookings for flights up to December 3, and British Airways is offering the same.
The Foreign Office advice, against all but essential travel, affects Bombay only. Its travel advice for the rest of India remains the same.
For those travellers who wish to continue holidays to Bombay, in spite of advice, there is a risk that their travel insurance policy could be invalidated owing to the Foreign Office advice. Although travel insurers have been sympathetic in situations of this kind in the past, If you are thinking of travelling to Bombay, it is wise to check with your insurer before you travel.
Chris Price, head of travel insurance at Direct Line said: "Terrorism is normally excluded from travel insurance policies. However, for Direct Line customers, we are doing everything we can using our agent in India who has local knowledge and contacts to help Direct Line customers get out of Mumbai quickly and safely.
"The British Embassy has offered to help stranded British tourists. If you can't get through to them or your travel agent or tour operator, we can assist in booking flights home and offer advice to concerned holiday makers and business travellers stuck in Mumbai."
Kuoni, which has an extensive programme in India, had four customers in Bombay who were due to stay at the Taj Mahal Hotel. There were taken to an alternative hotel and have been accounted for.
Its remaining holidaymakers who are already in India and are due to visit Bombay will continue with transits through Bombay airport. Those due to visit the city in the coming weeks are being offered an alternative holiday.
Explore, an adventure holiday company that operates in India, says customers booked on its Bengal to the Malabar Coast tour will be rerouted to avoid Bombay.
Cox & Kings, an India specialist tour operator, had a British couple staying in the Heritage Wing of the Taj Mahal Palace Hotel who were evacuated, and has no other clients in Bombay at present.
Director Philip Hamilton-Grierson said: “Cox & Kings will be contacting all affected clients – a relatively low number – to discuss alternative arrangements. Mumbai is not one of the major tourist centres in India and although some of our clients pass through Mumbai en route to other destinations, relatively few actually stay in the city.”
Lonely Planet travel editor Tom Hall says there will be reprecussions for Bombay's tourism.
27/11/08 Times Online, UK

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Aviation, hotel stocks to take a beating

Mumbai: Wednesday's terror attacks could affect the already struggling airlines industry and the travel & tourism sectors for at least next two to three months. Other than the direct impact of lower travel needs due to a slowing economy, there is a high probability of what analysts term `collateral damage', like dip in tourist inflows because of adverse travel advisory by other countries on India.
The silver lining, at least for the airlines industry, is the recent dip in crude oil price, that could lead to lower ATF prices, which, in turn, could allow the operators to cut price of tickets to attract more travellers to fly.
Within 24 hours of Wednesday's attacks on the city, Australia has cautioned its citizens about travelling to India. Market players now feel more countries could follow Australia. "Negative developments like these could lead to collateral damage for the airlines as well as travel & tourism industries,'' said Amitabh Chakraborty, president-equities, Religare Securities. Such warnings, coming just before the busy holiday season, could aggravate the pains for these industries, analysts feel.
These industries could also be affected by the cancellation of international conferences, earlier scheduled in India, Chakraborty said. For example, on Thursday, a leading ratings agency cancelled its scheduled conference in one of the two five start hotels in the city, majorly affected by the attacks.
However, marker players feel the slide in these sectors could be a temporary phenomenon.
27/11/08 Times of India

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No recovery for Air travel

New Delhi: Domestic airlines' hopes to get back into shape on cheaper fuel and higher flier numbers this tourist season could well be dashed as air travel is expected to further slow down following terror attack on Mumbai.
The airlines were hoping to reverse the sharp downfall in number of fliers by the promise of lower fares in December. The enhanced fear factor now has led to airlines like Jet advising passengers to reach airports early and carry valid identity proofs to meet tighter security requirements.
"It's another continuing pressure on airline industry as the attack will have a significant immediate impact on travel. This year has seen a fall in number of fliers over 2007. In November, traffic was down by 8% over same period last year and now December fall could be in double digits. This slowdown will further aggravate the situation," said Kapil Kaul, Asia head of Centre for Asia Pacific Aviation.
Kingfisher chief Vijay Mallya has already asked his airline to take all steps to ensure safety of passengers. "The extent and manner of these attacks is unprecedented in our country. This leads me to conclude that terrorists will stop at nothing," he said.
The attack is the third direct assault on airline and travel industry. Since March, airlines were reeling under impact of steep oil prices. Then economic slowdown pushed the fare higher and passenger traffic started slowing down. The current panic is expected to worsen the scenario.
Air travellers approaching Mumbai on Thursday morning hours after the attack started feeling the impact. A Lufthansa flight from Frankfurt to Mumbai was diverted to Delhi and its passengers are in the capital. Three outgoing international flights (one each of Lufthansa, Air France and Northwest) were cancelled in early hours of Thursday. Some passengers and crew members were not able to reach the airport due to a blast in a car on western express highway. Domestic airlines like Kingfisher combined some flights to and from Mumbai.
28/11/08 Times of India

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Mumbai passengers postpone trips

New Delhi: Airlines reported many travelers postponing trips to Mumbai Thursday after terrorists attacked luxury hotels in India's financial center.
The airport remained open and planes continued to land through the day, Press Trust of India reported. Some incoming flights from Europe were diverted to New Delhi.
Two five-star hotels in Mumbai and other targets, including a Jewish community center, were attacked Wednesday by gunmen. By late Thursday, more than 100 people were reported dead as government forces tried to bring the city under control.
About 30 percent of those with reservations from Delhi to Mumbai can canceled, airlines reported. Kingfisher Airlines said that scheduled flights to Mumbai from Delhi, Bangalore, Nasik and Hyderabad were combined because there were so few passengers.
While travelers in Mumbai were trying to get out as soon as possible, some residents of the area apparently decided to postpone travel plans. Singapore Airlines said its flights out of the city left on time with some no-show passengers.
27/11/08 UPI

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It'll be a frosty Christmas for airlines cos

Mumbai: Indian domestic airlines continued to fly into Mumbai on Thursday. But analysts say the outlook for the industry has become gloomy, as
leisure travellers may now cancel their bookings in the forthcoming Christmas holiday season due to adverse travel advisories issued by various governments.
State-owned Air India and the country’s largest-private sector airline, Jet Airways, operated flights out of terror-struck Mumbai according to their normal schedules while low-cost carrier Spice Jet offered to refund for cancellation.
Vijay Mallya’s Kingfisher Airlines clubbed some of its flights on the Delhi-Mumbai, Bangalore-Mumbai, Hyderabad-Mumbai and Nashik-Mumbai sectors with other flights on the same routes.
In a statement to its employees, Mr Mallya said, “The extent and manner of these attacks are unprecedented in our country and leads me to conclude that terrorists will stop at nothing. At Kingfisher Airlines, safety and security are our most important parameters and each one of you must take extreme care to ensure that both safety and security are strictly enforced.”
A Jet Airways spokesperson also said that their flights in and out of Mumbai would operate in accordance with their normal schedule. Industry analysts say the terror attacks have come at a time when the industry was expecting to earn some revenues in the peak season of Christmas.
Meanwhile, Jet Airways asked passengers to report well before the flight’s departure. “Passengers are advised to carry a valid identification document and report to the airline’s counter well in advance from the scheduled departure,” a Jet spokesperson said.
28/11/08 Mithun Roy/Economic Times

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Govt approves air services pact with UAE

New Delhi: The government on Thursday approved an agreement with the United Arab Emirates to enable any number of airlines to fly to each other's destinations and enter into commercial agreements and code-share.
The Cabinet approved the proposed air services agreement, which would be signed soon. Discussions between the two sides on it were held in February this year, an official spokesperson said. Under the agreement, which supersedes the previous one signed in 1989, both countries would be entitled to designate any number of airlines for operating mutually agreed services and enter into cooperative marketing arrangements like code- share or other commercial arrangements.
The designated airlines would be free to decide tariffs at reasonable levels, based on commercial considerations, the agreement says, adding that each of the parties would have the right to intervene to prevent tariffs which would constitute “anti-compet itive behaviour” or would “cripple”competition on a route.
Both countries, under the agreement, would follow the obligations to protect the security of civil aviation against acts of unlawful interference, the spokesperson said.
27/11/08 Business Line

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More passengers taking to air travel

It seems the aviation scene is getting back on track from November with more passengers taking to air travel again. And this has again increased flight movements at the Mumbai airport. At present, there are 700 flight movements daily as compared to 615 earlier.
The winter schedule of the airlines has put back the ‘busiest airport’ tag on Mumbai. With this being the peak tourist season, the air traffic has risen considerably at Mumbai airport with 700 landings and take-offs daily.
“We are witnessing 700 flight movements daily and at times they even go up to 720,” said a Mumbai airport official. “This is more because of it being the tourist season and all the domestic airlines have increased their flights. Moreover, Haj flights to Jeddah have also been increased, which has further added to the air traffic,” said the official.
This is a phenomenal increase as flight movements had decreased drastically in the last few months. For instance, in October there were 615 daily landings and take-offs.
As such the air traffic also saw a downward trend at Mumbai airport, which used to have 750 daily movements before June. It saw a 12% drop in traffic from June-September with 7-10% decline every month.
27/11/08 Navita Singh/Daliy News & Analysis

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Transaction fee cut to hit travel agents

Mumbai: Travel agents are feeling the pinch. With airlines scrapping the transaction fees, travel companies and other online portals may end up losing a sizeable part of their total revenues.
Players such as Akbar Travels, Thomas Cook, Mercury Travels, Makemytrip, Yatra and Cleartrip earn substantially from airline bookings during the peak season.
Makemytrip Founder and CEO Deep Kalra said, “50% of our domestic revenues come from air tickets bookings. We are monitoring the situation closely and will take appropriate steps in the next few days.” The 2,000-agent strong Travel Agents Association of India (TAAI) is weighing the possibility of going to court and seeking restoration of the commission structure.
However, according to a senior lawyer, the agents may not stand much of a chance in court. “Under what ground will they move the court? Any company is free to practice trade without paying anything to middle-men,” he said. An analyst with a local brokerage said that 70% of the airline tickets were sold by travel agents, with corporate bulk bookings contributing substantially to the revenues. Cancellations can sometimes be a hassle if tickets are booked online. This is where travel agents play a role.
A senior Kingfisher Airlines official said that travel agents are divided on the commission structure. There will be no problem in selling tickets without agents as more than 21 countries operate airlines with a zero commission structure, he said.
27/11/08 Mithun Roy/Economic Times

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Airlines cut fares as fuel costs fall

Mumbai: Air India, Jet Airways and Kingfisher Airlines have withdrawn the transaction fee with effect from Wednesday in the wake of a sharp fall in Aviation Turbine Fuel (ATF) and due to expectations of lower sales tax outgo in the coming months.
India's three leading full-service carriers have scrapped the transaction fee on tickets sold through call centers, web sites or city offices. The fee ranges from Rs350 on a domestic economy ticket to Rs1,200-10,000 on first class international tickets.
"We are withdrawing the transaction fee for tickets sold through our offices, airport counters or web sites, effective today (Wednesday), a Jet spokeswoman said.
"For tickets booked directly with us through our website, call centre or city offices, there will be no transaction fee levied," a Kingfisher spokesman said.
State-run Air India said late on Tuesday that it has withdrawn the fee for domestic and international air tickets effective Wednesday.
Last week, Civil Aviation Minister Praful Patel asked domestic airlines to consider lowering air fares due to easing jet fuel prices. ATF prices, which account for 40-50% of an airline's operating costs, has dropped almost 40% since hitting a high of Rs73,673.56 per kilolitre in August.
26/11/08 India Infoline.com

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Indian carriers withdraw ticket transaction fee

Mumbai: Top airlines in India have withdrawn a transaction fee on air tickets effective Wednesday for tickets sold through call centres, websites or city offices.
Air India, Jet Airways (India) Ltd and Kingfisher Airlines Ltd have withdrawn the fee, which ranges from Rs350 on a domestic economy ticket to Rs1,200-10,000 on first class international tickets. State-run Air India said late on Tuesday it has withdrawn the fee for domestic and international air tickets effective Wednesday.
The move comes after aviation minister Praful Patel said that domestic airlines should cut fares on easing jet fuel prices.
26/11/08 Livemint

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ATF set to get "declared goods" status, air fares likely to fall

There is good news for high-fliers. Finance Minister P. Chidambaram said that a Bill will be introduced soon in the coming session of Parliament to give aviation turbine fuel (ATF or jet fuel) the status of "declared goods."
In his address at the Economic Editors' Conference in New Delhi, Monday, Chidambaram said the "declared goods" status will bring down the central sales tax (CST) rate on ATF to about 4 percent. Currently, the tax varies between 4 percent and 30 percent from state to state. If the Bill is passed successfully, it would be a huge relief to cash strapped airline companies as well as passengers.
"I have told the Minister for Civil Aviation that if he can marshal support for the Bill in Parliament, we can introduce the Amendment in the Central Sales Tax Act," Chidambaram said.
A political consensus is needed for the move to be successful as this is a Money Bill and is considered a confidence vote for the ruling party.
Once the Bill turns into law, the states may have to bear a combined revenue loss of about Rs.2000-3500 crore, which they are presently collecting from airlines on ATF in the form of sales tax. It is believed that the main Opposition party, the Bharatiya Janata Party (BJP), is likely to support the move, though the Left Parties may not.
25/11/08 IBTimes India

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Plan to cut fuel prices sparks row

New Delhi: Bowing to in-house political pressure, the government is set to reduce motor fuel prices by Rs 5 a litre for petrol and Rs 3 for diesel after the current round of assembly polls are concluded, oil minister Murli Deora said on Tuesday.
Though Deora said the decision to wait till state elections conclude was out of deference to the poll code, the announcement immediately led to howls of protest from BJP and UPA's former ally, the Left, who said this was a form of "appeasement'' when state elections were still in progress. BJP threatened to move the Election Commission on the matter.
"Crude has fallen from an all-time high of $147 per barrel to around $50 now. Naturally, there are expectations that petrol and diesel prices should be reduced and we will do that. We have to reduce prices but it will happen after assembly elections,'' Deora said on the sidelines of a conclave of energy ministers from Russia and CIS countries here.
TOI had first reported on September 8 that the UPA leadership was moving towards reducing fuel rates after oil prices slid for eight weeks. The reduction will bring motor fuel prices back to the level that prevailed till June 4 when the government had decided to raise these prices, including that of cooking gas by Rs 50 a cylinder.
On November 25, TOI reported that the cut was imminent as Congress managers had conveyed to Deora their rejection of arguments being given to delay cutting pump prices even when international crude had come down to nearly one-third of its July peak.
26/11/08 Times of India

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Re fall negates drop in aircraft lease costs

Mumbai: Lease rentals for aircraft have seen a dip of late, what with airlines around the world trying to trim operations and demand for aircraft dipping. But the Indian airlines industry has nothing to cheer about — the depreciation of the rupee against the dollar is acting as a counterweight and has, in effect, pushed up the effective rates for Indian carriers.
The market rates for leasing a narrow-body aircraft such as the Boeing 737 have fallen from $380,000 at the peak of demand to about $320,000. Wide-body aircraft rates too have eased significantly, as business travel has been down due to increasing economic woes.
The rupee, which has lost almost 25% of its value over the recent past, has pushed up costs for India’s airlines, which have a large part of their payments denominated in dollar.
Hitesh Patel, executive vice president, Kingfisher Airlines, said, “While it is true that rentals have softened, we haven’t had too much benefit as the dollar has gone up. Also, we have been trying to cut excess capacity ourselves. Not renewing leases is a good way to reduce capacity.”
A senior Jet Airways executive, who did not want to be named, added, “Lease rentals have come down by 10-15% for most aircraft types compared with 6-8 months ago. But that hasn’t benefited us too much.” He said that Jet would not be renewing the leases of three of its Boeing 737-400 aircraft, which are to expire early next year.
26/11/08 Nirmal John/Daily News & Analysis

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Virgin Atlantic, BA want FDI stakes in Indian airlines

Coimbatore: International carriers such as Virgin Atlantic Airways Ltd and British Airways Plc. (BA) say they are keen on buying stakes in India’s airlines if investment barriers are lifted.
The formal expression of interest comes on the heels of Kingfisher Airlines Ltd chairman Vijay Mallya saying that overseas carriers want to buy a stake in his airline.
While India allows up to 49% foreign stakes in the country’s commercial airlines, such investors cannot be airline companies.
“Virgin Group has a long-standing expression of interest in investing into the Indian aviation market and in spite of tough economic conditions we remain optimistic for the future of this sector,” Virgin Atlantic general manager Michael Burke wrote to Mint. “Virgin Atlantic is very much in favour of a level playing field for competition—we believe this is the best way to serve the customer—and as such, any relaxation of ownership restrictions within India would be welcomed.”
While an email sent to the media agency representing BA didn’t receive an immediate reply, in an earlier conversation a senior executive of the airline had told Mint the British carrier is keen to team up with Indian carriers.
New York-based private equity fund WL Ross and Co. Llc. recently invested $80 million (Rs399 crore) in low-fare airline SpiceJet Ltd in July but that investment isn’t counted as foreign direct investment, where there are significant restrictions.
26/11/08 P.R. Sanjai/Livemint

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Tickets from airline office to cost less

New Delhi: From tomorrow, air passengers will find their tickets Rs 350-Rs 10,000 cheaper if they buy them from the airline office or website rather than through travel agents.
Full-service carriers Jet Airways, Kingfisher and Air India have told the travel agents that they would not levy the transaction fee on air tickets from tomorrow. This was decided in a meeting held today between the Travel Agents Federation of India (TAFI) and the executives of the three airlines.
Transaction fee, ranging between Rs 350 and Rs 10,000, is to be levied by the travel agents in lieu of the 5 per cent commission that the airlines have stopped giving them since November 1, 2008. In all, 16 carriers including the three full-service carriers have shifted to the zero-commission mode.
“The airlines have now decided to go back on their word of levying the transaction fee on the air tickets. This means that only the agents can levy the transaction fee now, though we have not decided whether we will go ahead with it because that would steer customers away from us,” said Ajay Prakash, General Secretary, TAFI.
Even though the transaction fee was the airlines’ proposal to the travel agents, the agents in turn had asked the airlines to levy a similar fee so that there would be a level playing field in terms of pricing.
25/11/08 Anirban Chowdhury/Business Standard

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‘Lower tax on aviation fuel needs political consensus’

New Delhi: In what could be good news for the domestic airline industry, the Finance Ministry has said that it is open to the idea of amending the Central Sales Tax Act to make Aviation Turbine Fuel (ATF) cheaper.
The amendment will ensure that airlines pay a standard 4 per cent sales tax on ATF throughout the country instead of the State-specific tax that they currently pay. This move will give ATF a ‘Declared Goods’ status.
“I have told the Minister for Civil Aviation that if he can marshal support for the Bill in Parliament, we can introduce the Amendment in the Central Sales Tax Act,” the Finance Minister, Mr P. Chidambaram, said at the Economic Editors’ Conference here on Monday. Political support for the move is crucial as this is a money Bill and is considered a confidence vote for the ruling party.
Sources told Business Line that the main Opposition party, the Bharatiya Janata Party, is likely to support the move; the Left Parties may not.
Another issue the Government will have to tackle while amending the Act is how to compensate the States for a combined revenue loss of about Rs 3,500 crore. The States annually collect sales tax from airlines on ATF.
The airline industry has often complained that since the duty on ATF is fixed on an ad-valorem basis, the States are making a windfall.
The Finance Minister also said that the Government might not have to issue more bonds to the State-owned oil retailing companies in the current financial year, if crude prices stabilise at the current level.
24/11/08 Business Line

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EADS keen to build export base in India

New Delhi: With India becoming a manufacturing major, European defence consortium EADS today said it was keen to develop relations with large suppliers to create a base for exporting defence and civil aviation equipment.
"The ambition of EADS is to identify a strong Indian supplier base that will contribute to enhance its (India) global competitiveness," Vice President (Global Sourcing) Philippe Advani told PTI.
While observing that there were "a number of hurdles" to be overcome for realising India's civil and defence aviation potential, he said EADS had this year assisted suppliers to contribute to the IAF's Multi-Role Combat Aircraft (MRCA) and also set up its India sourcing office last year.
"In support of our group business units, we have assisted in February 2008 Eurofighter (a product of EADS) to build an extensive network of Indian suppliers to contribute to the MRCA related offset requirements," he said.
A similar approach was being adopted for Eurocopter with a major Indian suppliers' conference being held.
The global attitude towards India, including on its Aerospace and Defence sectors, has changed radically over the past five years. Aerospace and Defence Original Equipment Manufactures (OEMs) were shifting from vertically integrated manufacturing (from detail parts to the final assembly line) to a strong focus on design and systems integration.
24/11/08 Press Trust of India/Business Standard

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Raj takes on Sena with new aviation union

Mumbai: In less than 24 hours after meeting his uncle Bal Thackeray, Maharashtra Navnirman Sena (MNS) chief Raj Thackeray gave a severe jolt to senior cadres in the rival Shiv Sena by launching his own union in the aviation sector.
Called the Hawai Karmachari Sena (HAKSE), the union is expected to stage agitations in "typical MNS style'', said its newly-appointed president Nitin Sardesai. "Our union is already creating waves and several smaller airport unions are joining us. They believe in the power of Raj Thackeray in Mumbai and are frustrated by the other political parties,'' he said, hinting at the Shiv Sena.
On Monday, as Raj and Sardesai were to board a flight to Pune, the duo was given a rousing welcome at the airport which was milling with airport staffers shouting pro-MNS slogans and waving the party flags.
It was just a few days ago that the Shiv Sena had revamped its union and appointed its MP Bharatkumar Raut to head three unions and Vinayak Raut to head a slew of 30 units in premier aviation companies. But the Sena now faces stiff opposition from the MNS, which has already won on its side 20,000 lower-rung airport employees in less than a week.
25/11/08 Somit Sen/Times of India

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Will private airlines cut airfares?

New Delhi: As oil prices come down, the voices in favour of reduction in airfares have started gaining in strength. None less than the Minister for Civil Aviation, Praful Patel has indicated to private airlines that he would like to see the airfare going down. Speaking at the Hindustan Times Leadership summit, he said the main market for airlines were the masses and growing the no frills category was a must for the air transport industry.
However, Jet Airways chairman Naresh Goyal and Kingfisher Airlines chairman Vijay Mallya, said they had little room to bring prices down.
Goyal said his books were open. And if some one could show him that he was wasting money, he would be glad to correct that. “We are willing to do whatever the minister or the ministry want, but we have to be profitable,” he said. Mallya too agreed with Goyal and said that it was too simplistic to conclude that since the prices had come down, one would be able to reduce airfare as well.
But the government is sticking to its stand and says that the private airlines must reciprocate in kind to the helping hand the government has extended to them recently. These include extending the deadline for airlines payment of Rs 2000 crore to oil companies.
Minister Patel says that the price of oil has come down by over 45% and airlines should bring down the airfare accordingly. He adds that the market is a competitive one and if others decide to lower airfares, the market leaders will have to follow suit.
The minister also hinted that state carrier Air India may also be asked to reduce prices as a mechanism to bring the overall fair level down in the economy.
24/11/08 Taneesha Kulshrestha/Livemint

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Sena shuffles aviation unions

Mumbai: The Shiv Sena has revamped its unions in the aviation sector in an attempt to contain the Raj Thackeray-led MNS. But this has affected the fortunes of Kiran Pawaskar, who is said to have helped the Sena make deep inroads into the aviation sector, especially the officers' grade.
The MNS grabbed headlines recently when a large number of sacked Jet Airways employees - who were later taken back - sought Raj's intervention and called on him at his Shivaji Park residence.
Jet chief Naresh Goyal reinstated the employees even before the MNS could flex its muscles. But this episode, said Sena observers, made party strategists take a closer look at its aviation agenda.
"Although there is no immediate threat from the MNS, we can't let the grass grow under our feet. Raj Thackeray's party has an eye on publicity, which may eventually help them make a dent in the aviation sector,'' said a senior Sena leader.
Sena MP Bharatkumar Raut has been appointed in-charge of the Air India Cabin Crew Association, Air India Engineers' Association and the Employees' Union. Sena secretary Vinayak Raut will captain a slew of units - 30 in all - in premier aviation companies. The division of labour between the two Rauts was worked out by Sena executive president Uddhav Thackeray.
"The Sena is set for a major expansion in the aviation sector and the division has been worked out to streamline the functioning of our unions,'' said Vinayak Raut, denying that the MNS was a threat to the Sena in the aviation sector.
Pawaskar, a close aide of Uddhav who won a seat in the state legislative council earlier this year, has been eased out of the aviation unions in the shuffle.
24/11/08 Ambarish Mishra/Times of India

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Low cost airports may be way forward for Indian aviation

Low cost airports and non-operational airports may be the way forward for airport infrastructure in India, according to the latest KPMG report titled 'Indian Airports – Global Landing Ground'
The report points out that besides offering the advantage of enhancing connectivity across the country, these airports will help in rationalising costs incurred by the airlines and decongesting traffic at regular airports. The report suggests that these airports will also provide much-needed relief for Low Cost Carriers (LCC) whose financial position has been negatively impacted by rising aviation fuel prices and operational costs. These airports will further the 'no frills experience' being offered by the LCC currently.
The study has an optimistic outlook towards the future of airport retail as well. Its key findings suggest that the takers for airport retail are spread across industries and service providers.
A new urban infrastructure form is on the anvil is the 'Aerotropolis', a cluster of aviation-oriented businesses around airports and transportation corridors emerging from them.
The aviation space in India is witnessing one of the worst turmoil of recent times. The figures from the Airports Authority of India (AAI) in August 2008, indicate that aircraft movements and passenger traffic decreased by 1.5 per cent and 10.2 per cent respectively compared to traffic in August 2007. International passengers grew by 9.3 per cent while domestic traffic decreased by 17.1 per cent in the same period.
Smaller non-metro airports like Coimbatore in southern India, registered a three-fold increase in international traffic as Air Arabia, Silk Air and Sri Lankan airlines started operations to this industrial hub, from October 2007.
Passengers are key stakeholders in the entire process of airport development in India as they are the end users of the facilities and drivers of revenue growth. The report highlights the lack of representation for this set of stakeholders and brings out the challenge faced here.
23/11/08 Nina Varghese/Emirates Business 24/7, United Arab Emirates

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Patel pitches for lower air fares

New Delhi: Renewing his pitch for making air travel cheaper, Civil Aviation Minister Praful Patel on Saturday asked airlines to slash fares in response to the government’s support to the aviation industry.
But Jet Airways chief Naresh Goyal voiced the industry’s concerns over the prevailing financial crisis and said, “I certainly would not like to close down my company.”
However, Mr. Patel, who shared the dais at the Hindustan Times Leadership Summit here with Mr. Goyal and Kingfisher chief Vijay Mallya, later exuded confidence that air fares would become cheaper by December. “December onwards, you will see the fares coming down,” he said after the session.
At the session, Mr. Patel said “perceptionally, the government is trying its best to help you [aviation industry] to tide over the situation ... It has taken the onus to help you. Now with the fuel prices coming down, you must match the perception that fares are coming down.”
With the general elections weighing on his mind, Mr. Patel said “we live in a democratic set up and have to face the people. Therefore, we want the entire aviation industry to know that we understand your difficulties and are trying to help you out.”
Wanting the industry to reciprocate, Mr. Patel said the airline’s action in this regard “must reflect in better, lower air fares for the passenger.”
Asked if he would ask State-owned carrier Air India to reduce fares, Mr. Patel said, “We have never dictated what Air India should do in terms of pricing or routes or capacity. But AI, as a responsible government carrier, will also understand that if the oil prices are coming down, so should the fares.”
23/11/08 The Hindu

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Aviation honchos sure India will fly smooth

New Delhi: India’s aviation honchos came together at the Hindustan Times Leadership Summit against the backdrop of deepening recession and the worst crisis facing the sector.
Praful Patel Civil Aviation Minister admitted that the biggest hurdle for the aviation industry was lack of infrastructure. The Indian aviation sector has reported a loss of Rs 8,000 cr in the recent past.
“The biggest reason why Indian aviation did not grow all these years is wrong taxation because even today we fail to acknowledge that air transport is a mode of public transport. The biggest reason is that not creating the right infrastructure,” he said.
“Tell me one Indian airport where you can take a connecting flight. Airport infrastructure has never been designed,” he said.
He also insisted efforts must be made to bring down air fares. “I will urge the entire aviation industry whenever some help is given then it should reflect in some form like lower airfares,” he said.
Speaking at the Summit, Kingfishers and UB Group Chairman Dr Vijay Mallya said that fares can only be reduced if ATF is listed under the declared good category.
Also speaking at the summit Jet Airways chairman Naresh Goyal said the aviation industry at present was going through a bad phase and the phase will continue for the next one or two years.
22/11/08 CNN-IBN

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Let competition take care of airline prices

The sharp, over 40%, drop in fuel costs over the past three months has raised the clamour for a cut in air fares. Lower aviation turbine fuel
(ATF) cost has certainly made life easier for the beleaguered airlines, but that does not mean they are out of the woods.
The rationale for fare cut is based on the logic that airlines are charging a fuel surcharge of Rs 3,100 per sector compared to Rs 1,350 last November even as the price of ATF has fallen below that in November 2007.
A part of these savings has been offset by the sharp depreciation of the rupee, as airlines tend to have significant dollar costs, rentals on aircraft leased, maintenance and some personnel costs. The sharp drop in traffic has, on the other hand, negated the increases in fares.
Therefore, it is doubtful that even at these lower fuel costs, airlines would be making any significant profits. Besides, India’s airlines reported cumulative losses of about Rs 4,000 crore in 2007-08, which are expected to increase further to about Rs 9,000 crore in 2008-09. This means the larger task of balance-sheet repair remains.
India’s airlines need to turn in significant profits for fare cuts to become feasible. In any case, it is not for the government to meddle in pricing. The right way to ensure fairness in pricing is to have an empowered competition commission that can help foster competitive market. Such oversight is particularly urgent in the case of the airlines where a spate of acquisitions have certainly reduced the competition intensity of the market.
22/11/08 Economic Times

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Only in India is ATF cheaper than petrol: Ram Naik

Mumbai: Former Petroleum Minister Ram Naik has flayed the UPA government lowering prices of Aviation Turbine Fuel (ATF), saying India is the only country where ATF is cheaper than petrol.
"This is the eighth wonder of the world. In no other country will you find that ATF is cheaper than petrol", Naik said here today.
The senior BJP leader has put up hoardings decrying the government over the move in the North Mumbai Lok Sabha constituency, where he lost to Bollywood actor Govinda in the 2004 elections.
"ATF is sold at Rs 40 per litre to the airlines, whereas petrol which is consumed by the common man, the mobike riders, taxi and autorickshaw users costs Rs 57 per litre," he said.
21/10/08 Press Trust of India/Business Standard

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Grooms go high-flying in eastern parts of UP

Lucknow: A young entrepreneur in Purvanchal has launched a helicopter service to carry grooms to marriage pandals and fly the couple back home after `bidai'.
The service is just a phone call away and requires apart from Rs 51,000 as charges only a barren plot of land near the venue of the wedding for choppers landing. The rest of the requirements are taken care of by the service provider. "In western UP, this is nothing new. But for us, perhaps this is the first such service in India,'' says a beaming RK Tripathi, who has come up with this service.
But, can people in the this part of the state, considered one of the poorest, afford such a leisure? Tripathi is sure they can. "Shelling out a lakh of rupees to make your wedding different from everybody else in town is no longer a big deal in UP. At least our market survey says so.''
Tripathi has a list of chopper flights chartered by over half a dozen people mostly in western UP for wedding during the recent past. The service was provided by agencies based in Delhi.
22/11/08 Pervez Iqbal Siddiqui/Times of India

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Transaction fee on air fare to come down

New Delhi: Both travel agents and airlines have agreed on Thursday to cut the transaction fee. While agents want to return to the old commission system under which they got 5% of basic fare, airlines want the current fee Rs 350-500 for domestic and Rs 1,200-10,000 for each international ticket to be drastically reduced to reasonable levels. Whichever side wins in the end, the passenger will be paying much less booking charge to get a ticket.
The 2,000-agent strong Travel Agents Association of India (TAAI) had a marathon eight-hour-long meeting of key members here on Thursday. “The transaction fee in its current form is unacceptable to us as airlines have not met our demands like parity of fares and giving our share at the time of sale and not after a month. We will agitate to get remuneration from airlines. Agents who have not signed this new system’s agreement with airlines will be free to charge any mutually acceptable amount from customers,” TAAI president Rajinder Rai said after the meet.
With most agencies now charging less, it will be difficult even for agents those who signed this agreement with airlines to stick to the steep fee structures. Among full service Indian carriers, Air India and Jet had started levying the same fees on tickets sold by them directly so as not to undercut agents’ business but Kingfisher did not do so.
“We are going to boycott Kingfisher ticket sales from December 1,” Rai said even as passengers may thank the Vijay Mallya-owned carrier for revoking of this steep charge.
21/10/08 Times of India

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Left backs travel agents’ agitation

New Delhi: Agitating travel agents have found support among the Left parties and trade unions. In the past one month, 15 airlines, including Air India, the national carrier, have withdrawn the 5% commission they paid to travel agents. With the Left parties all set to bring it up in the Parliament session that begins 10 December, the travel agents’ commission issue has now become political.
peaking at a public meeting called by IATA Agents Association of India (IAAI) in New Delhi, CPI(M) leader Brinda Karat said, “At least 1 million members of the Indian public are going to be affected by a decision of the Indian government and yet the government does not find necessary to speak to a single representative of the travel agency. I think this is absolutely outrageous and we strongly protest against it.” She also accused Civil Aviation Minister Praful Patel of being a “private airline minister” and not taking into account the views of other stakeholders.
Citu President, M.K.Pandhe also pledged the support of the trade unions for the travel agents.
Airline companies have told travel agents that they are free to levy transaction charges anywhere between Rs350 to 10,000. But agents say this is something that effectively destroys their source of earnings. The travel service sector employs more than 1 million people and accounts for more than 97% of all air ticket bookings.
20/11/08 Rahul Sharma/Livemint

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Airlines in a position to pass ATF price cut benefit to customers

New Delhi: Indian carriers can pass on some of the reduction in cost due to the dramatic fall in aviation turbine fuel (ATF) prices to customers without taking a major hit on their bottomlines. Airlines have also cut costs on a variety of areas, including manpower and distribution, while increasing the fares steeply.
While ATF prices have decreased by around 45 per cent in the last four months, ticket prices have increased by more than 100 per cent over the same period. With ATF constituting 50 per cent of the operational cost of airlines, they have been able to reduce their costs by 20 per cent due to the lower ATF prices, which was the gap between airlines revenue and expenditure. In other words, they are closer to operational break-even.
So, companies can now reduce airfares and increase passenger load factor (PLF) to improve their bottomlines rather than keep airfares high and keep the PLF low.
According to its half yearly results, Kingfisher has increased its average price per passenger by 55 per cent in the six months to September this year. Jet, in its Q2 numbers, disclosed that its average passenger fare per ticket had gone up by 33 per cent.
The cost cutting has not come only on the ATF side. While the government has already given numerous benefits on ATF, the airlines have taken care of the other half by laying off employees, especially expats, decreasing distribution costs by cancelling commissions paid to travel agents and increased synergies in ground handling, engineering and maintenance.
The other benefits that the airlines are looking at include a 50 per cent reduction in airport charges, which is expected to give them overall savings of Rs 55-60 crore, if implemented by the government.
20/11/08 Anirban Chowdhury/Business Standard

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Eased ATF won’t bring down airfares: experts

Not just lower aviation turbine fuel (ATF) prices, even the government’s proposal to notify ATF as a ‘declared good’ will not have an immediate impact on air fares, say industry experts. Although some carriers have said that if the government would provide ‘declared goods’ status for ATF, they would immediately cut air fares, experts say most airlines have posted losses in the second financial quarter and are trying to improve business visibility at this point of time.
Says an expert working with a reputed financial services company, “Aviation is an industry characterised by intense competition and high cost structures. Even if the government announces easing of ATF tax load, airlines will have to balance their revenues and costing. Airlines will certainly be at an advantage as ATF contributes nearly 45% of their operating cost, but they have to first clear their dues to the AAI and oil marketing companies. It will take a while for airlines to slash fares.” It may be noted that airlines are currently looking at strategic benefits by bringing noticeable changes in the areas of revenue generation (on profit-making routes) and cost savings by discontinuing on loss making routes.
An executive from a Mumbai-based full service carrier opines, “We will look at the economic viability before taking any decision on reducing fares. As the peak winter season begins, carriers will utilise this opportunity to make up for their losses before they decide to slash fares.”
20/11/08 Shaheen Mansuri/Financial Express

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Air travel may get a bit cheaper

New Delhi: Air travel may soon cost less as agents are planning to withdraw transaction fee of Rs 350-500 on each domestic and Rs 1,200-10,000 on international ticket, after facing protests from the passengers.
The Travel Agents Association of India (TAAI) has called an emergency meeting of its over 2,000 members on Thursday to chalk out the future course of action.
"We tried hard to make this system work. But there are four main problems we are encountering — peoples' adverse reaction; airlines not having a uniform policy; aviation ministry's stand against a uniform charge and commercial. We may ask agents to call off the fee system altogether and then levy some amount that's more agreeable to clients as people are anyway haggling over these charges at present," said TAAI president Rajinder Rai.
Sources say agents are likely to move court or strike work for restoration of the earlier commission system, where agents would get their money comparatively painlessly from airlines. Nearly 85% of all tickets sales in India are through agents.
Agents and airlines have been having serious disagreements over the new system. "We wanted the 'cut and pay' system under which the transaction fee would be kept by us and ticket amount given to airlines. But the latter insisted that the entire money be given to them and then after a month we would get our money. This is not acceptable," said Rai.
Moreover, agents insisted that airlines also levy a similar charge on tickets sold directly by them so that people don't find their tickets cheaper.
20/11/08 Saurabh Sinha & Himanshi Dhawan/Times of India

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Discriminate against foreign airlines in FDI policy?

UB group chief Vijay Mallya’s bid to open the Indian skies for investment by foreign carriers has brought back to limelight the contentious aspects of foreign direct investment (FDI) in civil aviation.
Several foreign airlines, including Singapore Airlines, made attempts to pick up stake in Indian carriers, but none succeeded in piercing the policy barrier. Recently, there were reports about British Airways trying to buy equity in an Indian airline and that attempt too has met with a similar fate.
Under such circumstances, will the policymakers turn more liberal now? If top government functionaries are to be believed, the opening up is unlikely to happen now. That is quite unfortunate for Indian airlines as they are struggling with mounting losses, liquidity crunch and overcapacity.
It is not that foreign airlines are queuing up to pump in moolah into Indian carriers, but there is no doubt that closure of one window of opportunity brings valuations under pressure. Given the state of their finances, this is something that Indian airlines would love to do without.
Once the doors are opened, strong players with persisting interest in India such as Emirates, Singapore Airlines, Lufthansa and British Airways would love to invest in Indian carriers due to the huge huband-spoke benefits that would be available. As of now, most foreign carriers primarily touch gateways like Mumbai and Delhi. Therefore, strategic alliance with a domestic player would enable them to route traffic from the hinterland to boost their market share and revenue.
Before criticising the policy, we should remember that this is not responsible for the sorry state of affairs that Indian airlines find themselves in. While government-owned Air India is a different kettle of fish, others such as Jet Airways and Kingfisher have to blame themselves.
20/11/08 Economic Times

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During polls, copter demand skyrockets

Mumbai: With the country in the midst of assembly polls in a few states and general elections not too far away, the helicopter charter industry in India seems to have left recession several nautical miles behind. In the last three months as many as 40 chopper import permissions have been granted by the government.
The 40 import permissions, amounting to Rs 600 crore by conservative estimates, speak volumes about the fast-growing popularity of these machines in a country which had only 190 civil choppers till now.
While it is well known that demand for these utility vehicles always skyrockets prior to elections, what has made the industry sit back and take notice is the sudden surge in supply.
The most popular choice of wings is the Bell 407 which makes for fifteen out of the 40 orders.
While most companies have gone in for one import permissions, companies like A K Aviation in Mumbai, Skymaster Aviation and K R Chawla Pvt Ltd in Delhi have placed multiple import orders. While the names of charter companies may seem obscure, most of these are the aviation arms of corporates. For instance, Ryan Air Services which got permission to import one Bell 430 in September is promoted by Ranbaxy. Similarly, Jupiter Aviation of Bangalore is promoted by former BPL chief Rajeev Chandrashekar and it plans to import one Eurocopter AS 365 N3.
The demand has sure been high this time around. ‘‘As six states are going to the polls the demand is extremely high this time around,’’ says Capt Uday Gelli, president, western region, Rotary Wing Society of India.
In India, though there is a trend towards buying helicopters prior to every parliamentary election, the current rise in supply is unprecedented. So there is a word of caution from the industry. ‘‘It remains to be seen how many of these import permissions will actually translate into purchases,’’ says Capt Gelli.
20/11/08 Manju V/Times of India

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New navigation system not used

Mumbai: Mumbai airport has been witnessing smoother air traffic ever since the Performance Based Navigation System (PBNS) was launched two months ago.
However, this has not lead to a reduction in the Air Traffic Control (ATC) workload, as the system is yet to be utilised by all airlines. This has resulted in creating more stress among officials as they have to follow two different sets of procedures to control air traffic.
On August 28, Mumbai airport took the first step towards the concept of Future Air Navigation System (FANS) when it introduced the PBNS. Although the domestic airlines have endorsed the system, the National Aviation Company of India Ltd.
(NACIL) and GoAir are still waiting for approval from the Directorate General of Civil Aviation (DGCA). According to sources, the lack of regulatory approval to use the PBNS for these two airlines as compared to the others is creating problems for the Air Traffic Control (ATC) at Mumbai.
“While airlines which have endorsed PBNS rely on satellite or the aircraft navigation facility, NACIL and GoAir need to be guided by the ATC with a different procedure,” said an airport official.
The system makes use of satellite navigation, and reduces the airlines’ dependency on ground-based navigation system. PBNS has brought Mumbai airport on par with several in Europe, Singapore, Japan, the US and the UK. Airports in West Asia, and those of countries around the Indian Ocean, are yet to be equipped with the system.
PBNS reduces congestion in the sky by creating new routes, thus enabling the ATC to handle more aircraft in a limited airspace.
20/11/08 Navita Singh/Daily News & Analysis

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Aerospace Companies Look To Tap The Indian Aviation Market

Global players in the aerospace sector are increasing their interest in India. Companies such as Boeing , Northrop Grumman, Lockheed Martin, Airbus, Rolls Royce, Bell Helicopter, Textron, ATR and Bombardier are all looking to gain from the prospects the Indian aviation sector has to offer.
On account of numerous airline operators facing severe financial crisis and stagnating aviation markets around the world, manufacturers and aerospace service providers are turning to a developing aviation market such as India.
The future of the civil aviation sector shows promise and scope for robust growth. According to the Ministry of Civil Aviation in India, passenger traffic has shown significant growth in the last two years. It has grown from 48.8 million people in 2003-2004 to 118 million in 2007-2008 ' an annual growth of about 56%. Although India's flight penetration is only 0.2 per capita, while US has 2.2 per capita, the sector shows tremendous potential, as increase in penetration will give way to millions of passengers.
Also, the sector in India currently consists of a fleet of 350 aircraft for commercial aviation. This market is expected to reach 1000 aircraft by 2020. Airplane replacements would amount to a market of $80 billion and an additional $30 billion would be required for development of airport facilities and infrastructure. There is also scope for helicopter manufactures.
20/11/08 Trading Markets, USA

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Air fares may get lighter on jet fuel tax rejig

New Delhi: The government is examining the possibility of notifying jet fuel as a ‘declared good’ . This would ensure that jet fuel attracts
uniform sales tax of 4% across the country, against the prevailing average sales tax rate of 21%. If this were to happen, airline companies, which have largely resisted reducing fares despite a fall in fuel prices, are likely to do so. This should come as a major relief to air travellers who have seen an almost 100% jump in travel costs in some cases in the early months of financial year 2008-09 .
“The issue of high sales tax on ATF and ways of rationalising this was discussed in a meeting on Tuesday. The law ministry has been asked to look into the possibility of bringing an ordinance in Parliament in the absence of a finance bill to put ATF into ‘declared goods’ category. The civil aviation ministry would also take up the issue of sales tax with the states on one-on-one basis,” a person close to the development told ET on condition of anonymity.
A committee of secretaries (CoS), which was set up in August to look into the financial crisis being faced by airline companies, had a meeting on Tuesday. It has asked the law ministry to explore if an ordinance could be issued to notify the fuel as a declared good.
The government recently announced a bailout package for airline companies, which included measures like removal of the 5% customs duty on jet fuel and an extended credit period for airline companies to pay off their outstandings to oil companies.
19/11/08 Nirbhay Kumar/Economic Times

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ATF prices fly low but fuel surcharge still soaring

Mumbai/Bangalore: Aviation turbine fuel (ATF) prices have only been sliding since August this year. This month, for the first time after three cuts, Delhi’s jet fuel prices fell 5% against those in November last year.
But the fuel surcharge in the same period is over 114% and 66% higher for long-haul and short-haul flights, respectively, for budget carriers.
Low-cost airlines were charging Rs 1,350 as fuel surcharge per ticket in November last year. This year, the levy is Rs 2,250 per ticket on short routes and Rs 2,900 per ticket on longer routes.
Till last month, jet fuel prices were higher when compared with last year. For instance, October’s price was 42% higher than in the same month last year and climbed up 82% on a year-on-year (y-o-y) basis in August. But softer fuel prices now are not pulling down fuel surcharges, which are currently between Rs 2,250 and Rs 3,350 per ticket.
Why are the airlines refusing to slash fuel surcharges despite a 44.55% drop in ATF prices since August?
Most airline executives blame the devalued rupee for not revising the fuel surcharge.
19/11/08 Nirmal John & Praveena Sharma/Daliy News & Analysis

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Airlines cry over huge losses

New Delhi: Despite mounting pressure from the various corners of the government, major airlines of the country Jet, Kingfisher and Air India
expressed their inabilities to reduce fares, citing huge losses. On Tuesday, FM P Chidambaram asked airlines to lower fares and help stimulate consumer spending in the slowing down economy. Though low-cost carriers (LCCs) responded favourably, the full service trio pointed out massive accumulated losses as a roadblock to lower tariffs in a hurry.
However, people's anger over airlines' refusal to reduce fares, despite steep reduction in jet fuel prices, has made the government worried. On Tuesday, a Prime Minister-appointed panel asked the aviation ministry in a meeting, to take up issues of cutting fares, improving connectivity and increasing the number of passengers in skies with the carriers.
The aviation ministry also made a case for getting a declared good status for ATF (aviation turbine or jet fuel) so that a uniform 4% sales tax is levied on it throughout the country. Currently states levy 30% sales tax that made ATF expensive in high crude price days, while the aviation industry is fearing a loss of $2 billion in the current financial year.
Full service airlines Air India, Jet and Kingfisher lost anywhere up to Rs 11 crore daily in the five months from April to August when fuel prices were very high. They have piled up huge dues with various agencies like oil companies, airport operators and other suppliers.
19/11/08 Saurabh Sinha/Times of India

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Badal reviews progress of civil aviation projects

Chandigarh: Punjab Chief Minister Parkash Singh Badal on Tuesday reviewed the progress regarding the various ongoing projects of civil aviation in the state including the prestigious Mohali International Airport, Talwandi Sabo Flying Training Academy and expansion of Amritsar International Airport.
Taking part in the deliberations, Badal asked the Secretary Civil Aviation to get these projects expedited so that they could be completed with in the stipulated time schedule.
He was apprised in the meeting about the presentation made by Price Waterhouse at New Delhi about the Mohali International Airport in which Airport Authority of India (AAI) and officers of Governments of Punjab and Haryana participated at Delhi on November 17 for setting up of joint venture in this regard.
It was also informed in the meeting that the Civil Enclave Bathinda and the extended Cargo and bonded Warehouse facility at Amritsar International Airport had already been cleared by the AAI apart from approval by the Ministry of Defence for setting up of Talwandi Sabo Flying Training Academy.
18/11/08 PTI/The Hindu

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RBI may extend period for banks to classify aviation sector assets

Mumbai: After mutual funds (MFs) and non-banking finance companies (NBFCs), now it is probably the turn of the aviation industry to get succour from the Reserve Bank of India (RBI).
With banks apprehending large-scale defaults in the aviation sector, RBI is examining data from all lenders regarding their exposure to it.
According to sources close to the development, the study is aimed at providing some relaxation to banks in lending to the sector without worrying about defaults. Sources said that banks with considerable exposure to the aviation sector have met RBI officials and apprised them of the problem.
It is observed that public sector banks are mostly exposed to the aviation sector, besides one or two major private sector lenders. The airline industry is reportedly facing high debt burden, which could turn bad as a consequence of a slowdown in air traffic and high oil prices. At present, the domestic air traffic is reportedly at its five-year low. One of the options under consideration of the regulator is to extend the number of days for the banks to classify an asset as default.
Right now, a loan becomes default if the dues remain unpaid consecutively for two quarters, or 180 days. The period could be extended to one year or more in order to avoid an increase in the level of non-performing assets (NPAs) on bank books. Asset classification norms relate to the period in which banks classify their loans and advances as standard or performing assets and non-performing assets.
19/11/08 Anindita Dey/Business Standard

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Govt may not give more sops to airlines

New Delhi: According to top officials in the ministry, the government is likely to deny any more benefits to airlines, if they do not pass the gain from lower jet fuel price to consumers, in terms of lower fares.
And, the ministry may have to face this question on Tuesday itself when it presents a case for giving more relief to the aviation sector before a PM-appointed panel.
"ATF (aviation turbine or jet fuel) prices have been lowered five times in past three months and they are now at September 2007 level. Airlines should now start passing on the benefit to passengers. Otherwise, why will the government keep giving sops if that ultimately do not reach the common man?" said highly placed sources.
There's now a growing feeling in the higher echelons of government that ATF price is now at a level where airlines should be able to swim through financially even if no further sops are given.
The ministry is pitching for further rationalisation of ATF prices by lowering taxes and duties as India has among the highest prices for this fuel. It's demanding the "declared good" status for ATF so that it attracts a uniform 4% sales tax across the country. Airlines maintain that massive rise in fuel prices from April to August led to huge losses.
18/11/08 Saurabh Sinha/Times of India

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Airlines wait for panel to trim taxes before taking a call on fares

New Delhi/Mumbai: Despite a drop in jet fuel prices by nearly 30% in the past two months, airlines are unwilling to pass on the benefit to passengers immediately, waiting instead for the decision of a committee appointed by Prime Minister Manmohan Singh on further reduction of taxes on jet fuel, also referred to as aviation turbine fuel or ATF.
The committee, tasked with looking in to the grievances of the loss-making airline industry, is scheduled to meet in New Delhi on Tuesday. One of the options before the panel headed by cabinet secretary K.M Chandrasekhar includes reducing state-level sales tax on ATF to a uniform 4% from as much as 30% in some states now.
After four price revisions in two months, ATF today costs airlines Rs39,380.51 a kilolitre in Delhi, nearly equal to price levels in August last year. The revisions were also a result of a customs duty waiver offered by the government earlier this month.
“We are still evaluating, but no decision has been reached as yet,” said Kingfisher Airlines Ltd executive vice-president Hitesh Patel on whether there were any possibilities of the carrier reducing airfares. Executives from Jet Airways (India) Ltd and National Aviation Co. of India Ltd, or Nacil, that runs Air India, echoed the sentiment.
17/11/08 Tarun Shukla and P.R. Sanjai /Livemint

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Air India to get $1 bn for aircraft funding

Mumbai: Cash-strapped Indian carriers are finally finding money to finance expansion plans or merely fund operations. State-owned Air India is set to receive a $1 billion (Rs 4,900 crore) loan and Naresh Goyal-promoted Jet Airways is close to striking a deal for a Rs 500-crore loan from Indian Overseas Bank (IOB).
Flag carrier Air India is raising funds to buy 23 new aircraft and is in discussions with a consortium of UK-based Barclays and promotional bank for German and European countries KFW, and with Deutsche Bank. The deal is expected to be finalised in a week.
The loan, however, will have a sovereign guarantee, which is expected to help the airline access finer rates. Dollar denominated loans to companies are currently pegged at the London-Interbank offered rate (Libor) plus 1,000 basis points (10 percentage points). With a government guarantee, the rate could drop to Libor plus 450 or 500 basis points.
Air India is buying 23 Airbus A319s/320s, for which orders have already been placed with the European aircraft manufacturer. Sources in Air India confirmed the development.
Apart from the loan from IOB, Jet is also believed to have secured another funding of Rs 1,000 crore from the Abu Dhabi government investment firm Mubadala Development Company. Jet could not be reached for confirmation. IOB officials declined to comment on the deal.
18/11/08 Manisha Singhal/Business Standard

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Govt policy not going to help the aviation companies: Yechury

New Delhi: Criticising the government's recent policy of giving sops to the aviation companies for boosting the sector, CPI(M) leader Sitaram Yechury said it will neither help the common people nor the companies.
"Government's policy to reduce excise duty and waive off customs duty on Air Turbine Fuel (ATF), after its price fell, is not going to help the aviation companies or the common man," Yechury said while addressing the third All India Conference of Airport Authority Employees Union here today.
The government's approach, which is exactly opposite to what it should have been, was not going to help the aviation companies, he said, adding when people won't have money they would not fly and aviation sector would continue to face the slowdown.
Yechury stressed that government should have focused on making people economically empowered in order to face the ongoing global economic recession.
The CPM leader also suggested that the old airports at Bangalore and Hyderabad should be used for commercial purpose, which he feels could help the industry in its revival and also provide work for the Airport Authority of India (AAI) employees stationed there.
17/11/08 Press Trust of India

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AAI refuses to play ball on dues

New Delhi: A month back, civil aviation minister Praful Patel worked his charm on oil marketing companies to wrangle several concessions for ailing airlines, including the flexibility of repaying fuel dues in equated monthly instalments (EMIs).
It seems, however, that Patel has not been able to persuade the Airports Authority of India (AAI), a body very much under his command, to follow suit. According to sources, there is still no concrete proposal with the ministry, which would suggest that AAI allow airlines to clear their airport dues in a staggered manner.
Besides, the ministry has also not agreed to airlines’ demands of reducing airport charges — which include landing and parking fees, navigation and other charges — to help them tide over the present financial crisis.
These sources indicated that the matter of AAI dues - which amount to well over Rs 2,500 crore - is getting trickier by the day since they continue to pile up and no mechanism has been evolved to address the issue.
This situation prevails even as Kingfisher chief Vijay Mallya is scheduled to meet top AAI officials on Monday to urge for some relief in the quantum of dues as well as the mode of their repayment. Mallya’s airline owes the largest amount among all private carriers.
17/11/08 Sindhu Bhattacharya/Daliy News & Analysis

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Airlines in no mood to reduce fares despite lower ATF prices

New Delhi: The cash-strapped airline industry is not yet ready to reduce airfares despite the cut in jet fuel prices today by another 12 per cent, saying that the heavy losses that accumulated during the past several months, when the prices peaked, were still to be recovered.
The impact of the cut will be evaluated before a decision is taken to pass on the benefits to the air traveller — this was the common refrain of most airline executives contacted for their reaction on the reduction in aviation turbine fuel prices, bringing them on a par with the price level of September 2007.
Air India Executive Director Jitendra Bhargava said, “We will wait and look at the economic viability before any decision on reducing fares,” Pointing out that the US dollar had appreciated significantly vis-a-vis the rupee, Bhargava said several major cost-heads of an airline were dollar-denominated.
A Kingfisher Airlines spokesperson said, “We will evaluate the impact and then take a view” on lowering the fares or the fuel surcharge.
16/11/08 Press Trust of India/Indian Express

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Aviation fuel prices cut again; fare cuts unlikely for now

New Delhi: The domestic oil companies have reduced the price of aviation turbine fuel by between Rs 5,500 and Rs 6,000 a kilolitre at the four major metros. The decision of the oil companies means that domestic airlines will be paying for ATF what they were in August 2007.
The latest move is likely to cut the airlines annual fuel bill by about 10 per cent and result in an annual saving for the industry of between Rs 1,000 crore and Rs 1,200 crore.
This reduction will, however, not immediately translate into lower fares. Domestic airlines cite the depreciation of the rupee which is increasing their costs, the huge losses that have been accumulated in the last six months and also the higher airports charges in India as reasons for not lowering fares just yet.
On Saturday, Indian Oil announced that airlines will pay Rs 39.38 for every litre of ATF being lifted in Delhi down from Rs 44.96 a litre being charged till now. Similarly, in Chennai domestic airlines will now be charged Rs 43.64 a litre down from Rs 49.67 being charged earlier.
Pointing out that it was “too early” to think of any price change, the Chief Commercial Officer, Spice Jet, Mr Samyukth Sridharan, told Business Line that the airline will evaluate the impact next week and decide on any pricing change.
Besides, the decision of Organisation of the Petroleum Exporting Countries (OPEC) to cut oil production has also raised fears in the industry that the downward revision in global oil prices could be a temporary phenomenon.
16/11/08 Business Line

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ATF prices fall further, air fares stay high

State-owned oil marketing companies have cut the prices of aviation turbine fuel (ATF), or jet fuel, by 12 per cent from midnight tonight — the first fortnightly price revision.The cut of Rs 5,580 a kilolitre is in line with the fall in global crude oil prices, which are hovering at the 22-month low of about $55 a barrel.
This is the fifth cut in ATF prices since August, when rates rose to an all-time high of Rs 71,028.26 a kilolitre.With today’s reduction, jet fuel prices are at Rs 38,163.23 a kilolitre, the same as in September last year.The latest cut in prices has made jet fuel 45 per cent cheaper than it was in August this year. Crude oil prices in the period have dipped by 60 per cent.
The lower jet fuel prices are however not likely to result in lower air passenger fares as airlines claim they are still making losses and that fuel prices are still high. October was the fourth consecutive month when air passenger traffic fell.
Oil companies have agreed to revise jet fuel prices every fortnight from this month till the end of March in a bid to help airlines, whose finances are under pressure.
The impact of the cut will be evaluated before a decision is taken to pass on the benefits to air travellers — this was the common refrain of most airline executives contacted for their reaction on the reduction in ATF prices.
When oil companies raised jet fuel prices by around 34 per cent between May and August this year, the airlines increased fares by over 65 per cent on most routes. The government has already allowed airlines to clear their outstanding of Rs 2,962 crore by March next year, extending the credit period to 90 days from 60.
16/11/08 Business Standard

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