Aviation ministry proposes foreign airline FDI in local carriers

Mumbai: The aviation ministry has proposed allowing foreign airlines to invest under 26 percent in Indian carriers and the final decision will be made by the cabinet, civil aviation minister Vayalar Ravi told news channel CNBC TV18.
India allows up to 49 percent foreign investment in Indian carriers but bars foreign carriers from owning stake.
With most carriers suffering losses due to high costs and debt in a crowded and competitive aviation market, the government is now mulling a change in regulation.
"FDI (foreign direct investment) is acceptable till a limited point. That limited point is still under debate," Ravi said in the televised interview.
"The proposal of my ministry is less than 26 percent," he said, adding the final decision will be taken by the cabinet. He did not give a timeline.
The Department of Industrial Policy and Promotion and the Civil Aviation Ministry differ on the quantum of stake that foreign airlines be allowed to pick up, government sources told Reuters in October.
29/11/11 Times of India

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Central staff get air travel sop to attract tourists to the Northeast

Shillong: The Union tourism ministry has renewed air travel concessions for central government employees to attract tourists to the Northeast.
An official statement issued here today by the tourism ministry said the government has relaxed Central Civil Services (Leave Travel Concession) Rules, 1988, to enable the central government employees to travel by air to the Northeast.
According to the proposal, group A and group B central government employees will be entitled to travel by air from their place of posting or nearest airport to a city in the Northeast or the nearest airport. The ministry said other categories of employees would be entitled to travel by air to a city in the Northeast from Guwahati or Calcutta.
All central government employees will be allowed conversion of one block of hometown LTC into LTC for destinations in the Northeast.
29/11/11 The Telegraph/E-Pao.net

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Airline heads meet PMO, discuss concerns on high fuel cost

Airline industry bigwigs met the Prime Minister’s Office (PMO) on Saturday with a wishlist that could help them fly into the black. The sector is estimated to post losses of around $3 billion in FY11-12, according to Centre for Asia Pacific Avation (CAPA)
The meeting was attended by industry bigwigs like Naresh Goyal, chairman, Jet Airways , Vijay Mallya could not attend the meeting but Sanjay Agrawal, Kingfisher’s CEO along with Aditya Ghosh, CEO of Indigo Airlines amongst other operators gave their valuable suggestions at the meeting.
Five years ago, when aviation turbine fuel cost around $60 for a barrel, they never complained paying a sales tax of anything between 25-33% on the commodity. But now, when fuel is priced at $115/bbl, they are being charged the same rate of tax, so where is the government support for aviation?
Industry representatives pointed out that the price which they pay to buy ATF is 70% higher then what carriers pay in other parts of Asia. “If ATF is brought under declared good category, it will attract a uniform sales tax of 4%,” said one of the airline operators during the meeting, according to a source.
ATF constitutes 40% of the operating cost to an airline and with its price escalating quarter-on-quarter, operators are facing margin pressure.
28/11/11 Moneycontrol.com

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IBS Soft retains top CMMI quality tag

Thiruvananthapuram: IBS Software, a provider of new generation IT solutions to the global travel, transportation and logistics industry, has been re-appraised at Capability Maturity Model Integration (CMMI) Level 5, a global benchmark in quality standards.
This was announced by the Software Engineering Institute (SEI) at Carnegie Mellon University. The appraisal was conducted by KPMG and included stringent reviews of the processes followed by IBS for software development and service delivery.
With this appraisal, IBS retains its membership in an elite group of around 200 organisations across the globe to achieve this level, the highest an organisation can attain in the CMMI framework. IBS had been appraised at Level 5 against earlier versions of the CMMI model in 2002 and 2006.
CMMI is a process improvement model used to assess the maturity of a company's software development processes and practices.
Level 5 indicates the highest level of process maturity and reflects an organisation's capability to evolve and implement best practices in the development of products and services through innovative process and technological enhancements.
28/11/11 Business Line

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First City no longer part of Mihan SEZ

Nagpur: In a major relief to Maharashtra Airport Development Company (MADC) developing the Mihan SEZ, the board of approvals (BOA) in ministry of commerce has agreed to denotify land given to M/s Reatox Developers and DY Patil International School as special economic zone (SEZ).
The decision was taken in BOA meeting held on November 28. In the same meeting, BOA also extended the letter of permit (LoP) to Tech Mahindra, Tatas' TAL and Zeon Solutions. LoP is an approval for availing tax benefits available in a SEZ provided the unit is ready within a specific period after allotment of land.
Almost every unit in Mihan is asking for an extension as it failed to meet the deadline.
Extension to Tech Mahindra holds significance as it is the first unit allotted land in Mihan. It took the land as Satyam Computers and was later taken over by Mahindra after Rajus' fiasco.
After denotification, both Reatox and DY Patil stand excluded from Mihan SEZ. Its promoters will not be entitled to any tax benefits available under SEZ scheme. At the same time, they will not be bound to follow the SEZ rules such as providing services exclusively to those related with Mihan-SEZ's activities.
29/11/11 Shishir Arya/Times of India

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Ajit Singh likely to get civil aviation portfolio

New Delhi: The Congress party and the Rashtriya Lok Dal (RLD) are likely to soon announce a pre-poll alliance, an arrangement that could see RLD chief Ajit Singh getting the civil aviation portfolio, two Congress leaders told ET on the condition of anonymity. A formal announcement could be made in the next couple of weeks, they said.
Singh, whose party is influential in Western UP, is believed to have asked for a significant Cabinet portfolio for himself and has indicated a preference for either commerce and industry, food and civil supplies or civil aviation, the leaders quoted earlier said.
All the three ministries are held by the Congress members, but the incumbent ministers are not regarded as heavyweights. Asking one of them to make space for Singh wouldn't be too hard for the party, the leaders said.
Anand Sharma is the commerce minister, while KV Thomas is the food and civil supplies minister. Vayalar Ravi holds additional charge of aviation, a sector which is experiencing considerable turbulence currently. Ravi's performance as the aviation minister has also not been impressive, say party leaders.
28/11/11 Rohini Singh/Economic Times

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Despite protests, EU goes ahead with emission cap for airlines

New Delhi: From January 1 all airlines flying in and out of the European Union will need to meet a specific carbon emission requirement. Though protests have been voiced from various countries, the European Union is going ahead with the emission caps for the airlines.
A senior oil industry official said, “We are at present producing jet fuels which meets the specifications laid out. Currently, there is no communications for any change in these specifications like was in the case of auto fuels – up gradation to Euro I-IV.”
However, tomorrow if there is any change proposed then the refiners will need to upgrade the quality. The refiners also export jet fuel. In 2010-11 the refiners exported 4.48 million tonne of jet fuel.
The norms are more for the airline than the refiners, industry sources say. Indian carriers operating to Europe are likely to see their costs rise by €50-60 million annually. “This figure is likely to rise as airlines expand operations to more countries in Europe,” said a senior airline official.
This is because from January 1, the legislation to include aviation emissions in the Emissions Trading Scheme (ETS) comes into force. Emissions from aviation currently account for just 2-3 per cent of global greenhouse gas emissions but they are set to grow very rapidly.
27/11/11 Richa Mishra/Ashwini Phadnis/Shishir Sinha/Business Line

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PM promises help to embattled private airlines, remains silent on direct investments by foreign carriers

New Delhi: Prime Minister Manmohan Singh promised to help the bosses of India's embattled private airlines but stopped short of commenting on a key demand of at least three of them - permission for investments by foreign airlines. The PM said the matter was under consideration, said an official who attended the meeting on Saturday.
"One airline promoter did raise the issue of FDI, but Singh said since the process had started (the industry ministry has floated a proposal to allow foreign carriers to buy 26% in Indian airlines), nothing could be said." But the PM acknowledged the problems of airlines - struggling against spiralling debts, high taxes and a ferocious price war - said the official asking not to be named.
The government permits 49% FDI in Indian carriers by non-airline firms but bans direct investments by foreign airlines, citing security reasons. IndiGo and Jet Airways are against FDI while SpiceJet, GoAir and Kingfisher favour the move.
The half-an-hour meeting began at 10:45 am at Singh's residence, 7 Race Course Road, and was attended by IndiGo promoter Rahul Bhatia and president Aditya Ghosh, Jet Chairman Naresh Goyal, Kingfisher Airlines CEO Sanjay Aggarwal, SpiceJet CEO Neil Mills, GoAir promoter Jeh Wadia and government officials.
Bhatia arrived in a CNG-powered blue (IndiGo colours) Wagon R, driven by Ghosh. Other airline bosses came in chauffeur-driven cars. One airline official familiar with Saturday's meeting said nothing much came of it. "The PM gave a patient hearing... Some of the smaller issues may be solved, but there were no specific promises."
27/11/11 Anindya Upadhyay & Binoy Prabhakar/Economic Times

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Airlines meet Prime Minister, seek help in tiding over crisis

New Delhi: Problems may not be new for the Indian airlines. But, today, they got an opportunity to raise those at the highest level of the government.
Top executives of all the airlines, excluding Air India, discussed their problems with Prime Minister Manmohan Singh, who acknowledged the issues, saying he would take those up with the authorities concerned.
In a meeting held this morning, the airlines mentioned high tax on aviation turbine fuel (ATF), high airport charges, permission to fly on international routes and the ground handling policy as key concerns. Allowing foreign airlines to buy stake in Indian carriers was not discussed in this meeting.
“We raised our problems about high taxes on fuel, higher airport charges and allowing Indian carriers to fly international. The prime minister patiently listened and said he would discuss these issues with the civil aviation and finance ministries,” said an airline official present at the meeting, requesting not to be identified.
From the airlines’ side, Jet Airways Chairman Naresh Goyal, IndiGo Co-founder Rahul Bhatia and President Aditya Ghosh, GoAir Chairman Jeh Wadia, SpiceJet Chief Executive Officer Neil Mills and Kingfisher Airlines Chief Executive Officer Sanjay Agarwal attended the meeting. Kingfisher Airlines Chairman Vijay Mallya was not present.
The major concern for the airlines was high tax on ATF, which now constitutes around 50 per cent of their total operating cost, compared to 40 per cent six months back.
The average tax charged by states on ATF in India, at 24 per cent, is the second-highest in the world, next only to Bangladesh’s 27 per cent. The airline companies have been demanding that ATF be brought under the capital goods category. That would fix the taxes on ATF at four per cent.
27/11/11 Business Standard

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Govt may review ground-handling policy for private airlines

The Government could take a relook at the ground-handling policy and consider setting up an international route authority to provide some relief to private airlines.
This emerged at an hour-long meeting that the Prime Minister, Dr Manmohan Singh, had with the owners and operators of private sector airlines here on Saturday.
The meeting had been called in the background of the industry expecting to post a loss of about Rs 3,500 crore during the first six months of the current year.
Official sources indicated that the Prime Minister gave the delegation a patient hearing and told them that all their genuine grievances would be looked into, but no specific assurances were given.
The Centre for Asia Pacific Aviation (CAPA) estimates that at the moment India has bilateral air services agreements with 108 countries and 72 foreign airlines operating to and from various cities in India. In comparison, there are currently only five Indian carriers operating flights abroad. The CAPA estimates that as of April 2010, Indian carriers were eligible to sell 711,356 seats per week on flights to various countries but they utilised only 170,914 of this.
Despite repeated fervent appeals of industry, the Government is said to have made it clear at the meeting that nothing would be done on aviation turbine fuel (ATF) issue.
26/11/11 Business Line

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DIPP raises alarm over desi airlines’ survival

New Delhi:The department of industrial policy and promotion (DIPP) has said that unless foreign airlines are allowed to invest in desi ones, many cash-strapped domestic carriers may shut down. This serious push comes despite reservation against the proposal from airlines like Jet and IndiGo.
The note prepared by DIPP for the cabinet committee of economic affairs (CCEA), which proposed allowing up to 26% foreign carriers' stake in domestic airlines, said that "private airlines are in dire need of funds for their operation and service upgradation to compete with global carriers. Denial of access to foreign capital could result in collapse of many of our domestic airlines, creating a systemic risk for the financial institutions".
DIPP said that from January 2000 to August 2011, total FDI inflow into the air transport sector was $422.7 million - a 'negligible' 0.29% of the total FDI inflow into the country. "The reason for such a low level of investment in the sector is the lack of interest by private equity fund in a risky business like airlines. The prospective investors can be only from civil aviation industry itself," the note said.
26/11/11 Saurabh Sinha/Times of India

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PM meet to discuss high tax on ATF, liberal overseas permission

New Delhi : High tax on aviation turbine fuel (ATF) and allowing Indian carriers to fly liberally on international routes form two major issues airlines are planning to raise in their first such meeting with Prime Minister Manmohan Singh tomorrow.
The proposed conclave comes after the PM called all the heads of the country’s airlines for a discussion in the government’s bid to help cash-strapped carriers and resolve other industry issues. Among those slated to attend the talks are Jet Airways’ Naresh Goyal, InterGlobe Aviation’s Rahul Bhatia and Kingfisher Airlines’ Vijay Mallya.
Other matters that also could find place in the discussions are higher airport charges and allowing foreign airlines to buy stake in Indian carriers. “A major concern for us is the high taxes on jet fuel,” according to an executive of a full-service carrier. “That is one of the major reasons for our cost increase. This cost can only be controlled if the taxes on ATF are rationalised,” he told Business Standard.
The average tax on jet fuel in India — at 24 per cent -- is the world’s second highest, just next to Bangladesh (27 per cent). The airline companies have been demanding to bring ATF under capital goods category that will fix the taxes on ATF at 4 per cent. Recent increase in crude prices, also contributed by depreciation of rupee, has made the cost on fuel around half of their total cost, from two-fifth of the total cost a year earlier.
26/11/11 Business Standard

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Jet fuel: No breather for pvt airlines, says Jaipal

New Delhi: Private aviation companies such as Kingfisher Airlines may not get any respite on the payment mechanism of jet fuel they source from public sector oil retailers.
The Petroleum Minister, Mr S. Jaipal Reddy, said “at present, there is no proposal for reconsidering the credit facility for supply of fuel to private aviation companies.” He gave this information in Lok Sabha on Thursday.
High domestic jet fuel prices have been denting the finances of most airlines. The public sector oil retailers – Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation – sell jet fuel at a market price. The end price in India becomes steep because of the State taxes involved.
The Minister said that the oil companies sell jet fuel to private airlines based on mutually agreed commercial terms. Credit supplies are extended to the airlines and the airlines make payments depending upon the agreed commercial terms.
24/11/11 Business Line

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US firm sees India among key markets in aerospace sector

Bangalore: US electrical components company Eaton says it sees plenty of opportunities for itself in the country's unfolding civil and military aerospace story.
Thanks to increased aircraft purchases by the military and domestic airlines, among other factors, India looks set to be one of Eaton's key markets in the coming years, two senior officials said in email responses to Business Line.
Eaton's aerospace division globally supplies hydraulics and fuel systems that go into flight control devices of Airbus, Boeing aircraft and many domestic and global military planes.
Mr Joe-Tao Zhou, APAC President, Aerospace Group, Eaton Corporation, said, “India is expected to emerge as one of the largest aviation markets in the world and is likely to be a key market for Eaton's aerospace products and solutions.”
“India has a significant defence budget. Over the next five years, we see opportunities for Eaton in enabling development of new indigenous platforms and modernisation or replacement of its ageing fleet,” said Mr Einar Johnson, VP – Customer Service & Solutions, Aerospace Group. As domestic carriers looked set to grow, “we see a great opportunity in the commercial segment.”
24/11/11 Madhumathi D.S./Business Line

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Navy pilots to go to Russia for carrier-based training

New Delhi: Ahead of proposed induction of Admiral Gorshkov aircraft carrier by end of next year, the Navy will be sending a team of 10 pilots to Russia for training in operations of MiG-29K fighter planes from the warship. India had signed a deal with Russia in 2004 for purchasing the carrier along with 16 MiG 29Ks. As per the understanding between the two countries, a team of 10 pilots will be in Russia around three months before the scheduled induction of battleship in December next year, Navy officials told PTI here. Russia has given the assurance to train Indian pilots for arrested carrier landings and deck take-offs, they said.
24/11/11 PTI/IBN Live

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Fuel import decision to be for all, not just Vijay Mallya's Kingfisher

New Delhi: A decision to allow Kingfisher to import fuel directly will be a part of the overall package for the airline industry and not just for the troubled airlines, the government has said.
The struggling airlines has sought permission from the Directorate General of Foreign Trade to import fuel directly to avoid the steep sales tax levied by states. "When I examine the (Kingfisher's ) proposal I will naturally ask myself why I should do it only for it and not the others," Commerce Secretary Rahul Khullar said.
"A policy decision on the issue will be taken that would apply on all airlines," he added. Khullar confirmed that the DGFT received a letter from Kingfisher seeking permission to import aviation turbine fuel, or ATF, on their own instead of getting it through IOC. "The DGFT is looking at it at the moment," he said.
The levy from the states ranges from 4% to 30%. The DGFT has written to Kingfisher seeking more cost-related information, another official said. The Foreign Trade Policy 2009-13 includes ATF in the list of restricted products that cannot be imported by individuals and can be sourced only through canalising agencies, in this case Indian Oil Corporation.
24/11/11 Amiti Sen & Deepshikha Sikarwar/Economic Times

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Finmin may back DIPP proposal on airline FDI

New Delhi: The finance ministry is likely to support the proposal from the industry department for allowing foreign carriers to buy up to 26% equity stake in Indian airlines. The ministry’s inclination to endorse the move, also backed by the civil aviation ministry, was confirmed to FE by senior officials.
The development is significant since two of the top private carriers — Jet Airways and IndiGo — have opposed the move arguing domestic airlines are financially weak compared to foreign carriers and hence it could trigger hostile take-over of Indian companies.
Vijay Mallya-promoted Kingfisher Airlines has been lobbying hard with the government for relaxing the foreign direct investment (FDI) hoping it would help them access funds from foreign airlines like British Airways.
“Opening up the sector will be beneficial as more competition needs to be encouraged and will improve efficiency.
24/11/11 Nirbhay Kumar/Himani Kaushik/Financial Express

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Commercial aviation to soar by 9%

Dubai: The commercial aviation sector in India and the Middle East is expected to achieve overall annual growth of 9 per cent and 10 per cent, respectively, for several years to come and will account for 11 per cent of the total aircraft deliveries worldwide over the next decade.
A new report by aviation intelligence firm OAG and UBM Aviation, reveals a striking contrast of opportunities and challenges in two of the world's fastest-growing travel markets.
The OAG India and Middle East Aviation Market Analysis bases its projections on the consistently growing demand for air travel, a surge in aircraft orders, steadily increasing inbound tourism, spectacular airport development plans and the enthusiasm of investors for the sector.
"However, both markets face immense challenges in meeting the expected future growth in passengers and aircraft operations, which require massive expansion of infrastructure and high-performing aviation systems," the report said.
In India, the government's open-sky policy has enticed many foreign aviation leaders to enter the market, spurring rapid industry expansion boosted by the growing population and increased demand for international travel and trade, as well as an increasing VFR (Visiting Friends and Relatives) market, the report said.
However, airlines must contend with insufficient infrastructure and challenging political bureaucracy in India.
23/11/11 Express India

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Qatar Airways bats for 26% FDI in Indian carriers

Kolkata: If the UPA government allows 26 per cent stake by foreign airlines in Indian carriers, it would go a long way in drawing the latter out of the financial mess they are in, thereby taking domestic aviation industry to the next level, said Akbar Al Baker, CEO, Qatar Airways.
Al Baker’s comment came in the wake of the Union Commerce Ministry’s recently proposed 26 per cent foreign direct investment (FDI) by foreign airlines in domestic carriers.
At present, foreign companies, other than foreign airlines, are allowed to invest up to 49 per cent in the domestic passenger airlines. Non-resident Indians can invest upto 100 per cent.
Al Baker, who was here in connection for launch of Qatar Airways’ flights from Doha to Kolkata, said that carefully planned mergers and acquisitions and FDI inflows are the way forward for cash-starved India carriers. “It is a very good move by the government. Although the ideal cap for FDI would have been 49 per cent as it would have enabled the foreign players have a greater say in policy matters. The airline industry is very capital intensive and I don’t think the private Indian carriers have the funds to achieve the growth they desire,” he said.
23/11/11 Ritwik Mukherjee/mydigitalfc.com

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Piloting the aviation sector

What should the Government's role be in the aviation sector? Should it be extending a helping hand to an individual airline when it is in distress, or should it be creating an environment which will help all the players in the sector to not only survive but also thrive?
These are some of the questions being asked, given the current state of the industry, and the attempts being made by the Government to bail out the state-owned Air India (AI). Earlier, there were also rumours that the promoter of Kingfisher Airline, Mr Vijay Mallya had approached the Government for help.
There can be little doubt that the Government's role has to extend much beyond helping out a single airline in financial trouble. One of the most significant aspects of the Government's role is reducing input costs, most of which it controls. Take, for instance, the sales tax on aviation turbine fuel (ATF). This varies from 4 per cent to more than 26 per cent in different states throughout the country. Given that domestic ATF prices are almost 50 per cent higher than what an airline pays in, say, Singapore or Dubai, any decrease in its prices in India will hugely benefit the industry.
The Government should also focus on some other equally significant aspects which impact the industry as a whole. These include better air traffic flow management, and taking steps to decrease the holding time for an aircraft in an airport, so as to decrease flying time, thereby reducing consumption of ATF by home carriers. These are much-needed aspects that the Government should concentrate on, as these high-input costs are having a negative impact on the industry.
At a more micro level, the Government also has to step in, to ensure that predatory or irrational pricing mechanisms aren't followed by some airlines, so as to ensure that there is a level playing field for all. In this connection, FIA has also called for establishing a regulatory mechanism that would prevent malpractices like predatory pricing.
24/11/11 Business Line/Ashwini Phadnis

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267 unused flight slots by domestic airlines: DGCA

New Delhi: India's aviation regulator on Wednesday said it has found 267 slots unused by various airlines out of the total of 1,900 flight operation slots granted to the domestic carriers in the ongoing winter schedule.
"We have found that in total, there are 267 slots unused by airlines out of the total of 1,910 slots allotted in the winter schedule," a senior official at the Directorate General of Civil Aviation (DGCA) told media.
According to the official, the regulator has asked the airports to submit proposals on how to utilise the vacant slots. "We have asked them (airports) to submit a report on how to utilise the vacant slots," the official said.
Asked if the slots may be transferred from defaulting airlines to other carriers, the official said this would be decided after the airports submit their report. "The decision is likely by the end of the week."
Earlier, the DGCA had warned the airlines on flight cancellations and said that it is monitoring the flight operations of all airlines on the respective slots allotted to them.
23/11/11 IANS/Economic Times

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Outcome Of ICAN Conference

The 4th ICAO Civil Aviation Negotiations (ICAN) Conference was held last month in Mumbai. During her inaugural speech, the President, Smt Pratibha Devisingh Patil had mentioned that emphasized the importance of aviation in the economic development of countries. She had called for evolving innovative and flexible business modules for enhancing connectivity. She mentioned that governments must continually negotiate new bilateral treaties to allow for and expand access to new and emerging markets for their carriers.
ICAN 2011 attracted high attendance by 64 States and four regional bodies. During the conference, more than 370 bilateral meetings (nearly 600 hours) were held between air service negotiators from all regions of the world which led to the signing of over 120 agreements and arrangements. In so far as India is concerned, talks were held with 37 countries; MoUs/ agreed minutes were signed with 22 countries.
A special Africa session was held on the inaugural day which included participants from the African Union, ICAO, Ministry of External Affairs and the Ministry of Civil Aviation. During the ICAN, India was able to sort out with Kenya the provisions of 5th freedom rights. The provisions of code share/domestic code share were also sorted out with Scandinavian countries, Republic of Korea, Canada, Australia, Finland, Ethiopia and Turkey. New ASAs were initialed with Mozambique, Dominican Republic and Uganda. Model texts of the ASA were handed over to Lao PDR, Botswana and Macedonia with the aim to finalise the ASA as early as possible.
Through ICAN 2011, substantial progress has been made to broaden the framework for increasing the connectivity either through direct services or through code share operations and many issues which were pending clarification were resolved. The event enabled aviation negotiators from different countries to conduct bilateral air services negotiations and consultations at Mumbai.
23/11/11 Press Information Bureau

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Pak may have inspected Indian chopper: Antony

New Delhi: It is possible that the Pakistani authorities examined an Indian Army helicopter that strayed into their territory a month ago and was returned the same day, Defence Minister AK Antony informed the Rajya Sabha on Wednesday.

The Cheetah helicopter from the Indian Army's aviation corps carrying three officers and a Junior Commissioned Officer from Leh to Bimbhat in Drass sector of Jammu and Kashmir strayed into Pakistani territory on October 23 and landed in Skardu along the Line of Control inside Pakistan-administered Kashmir.

The chopper was in the Pakistani Army's custody for over four hours before Pakistan allowed it to return to Kargil with the four Indian Army personnel later in the day.

23/11/11 IANS/ZeeNews

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Army in pursuit of winged dream

New Delhi: The Indian Air Force may crib all it wants, but the Army is pressing on regardless - with its plans to have its own air force, albeit a 'mini' one. Fighter jets may not be on its wish-list, but the 1.13-million strong force wants everything else, from attack helicopters to fixed-wing aircraft.
Army's long-term plans include a squadron each of attack/armed, reconnaissance/observation and tactical battle-support copters for each of its 13 corps. The three 'strike' corps, with HQs at Mathura (1 Corps), Ambala (2 Corps) and Bhopal (21 Corps) will get more 'air assets' in keeping with their primary offensive role, say sources.
To top it off, each of Army's six regional or operational commands will at least get 'a flight' of five fixed-wing aircraft for tactical airlift of troops and equipment. "Army Aviation Corps, which is observing its 25th anniversary this month and operates around 250 light helicopters, has plans till the end of the 14th Plan (2022-27)," said a source.
In the short to medium term, AAC plans to induct 259 light-utility and observation helicopters to replace its ageing Cheetah and Chetak fleets that service Siachen, Kargil and other high-altitude areas.
Army Aviation Corps also wants 140 multi-role tactical battle-support helicopters to provide 'integral tactical lift to its formations' and 114 light combat helicopters that are being developed indigenously.
23/11/11 Rajat Pandit/Times of India

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Army in pursuit of winged dream

New Delhi: The Indian Air Force may crib all it wants, but the Army is pressing on regardless - with its plans to have its own air force, albeit a 'mini' one. Fighter jets may not be on its wish-list, but the 1.13-million strong force wants everything else, from attack helicopters to fixed-wing aircraft.
Army's long-term plans include a squadron each of attack/armed, reconnaissance/observation and tactical battle-support copters for each of its 13 corps. The three 'strike' corps, with HQs at Mathura (1 Corps), Ambala (2 Corps) and Bhopal (21 Corps) will get more 'air assets' in keeping with their primary offensive role, say sources.
To top it off, each of Army's six regional or operational commands will at least get 'a flight' of five fixed-wing aircraft for tactical airlift of troops and equipment. "Army Aviation Corps, which is observing its 25th anniversary this month and operates around 250 light helicopters, has plans till the end of the 14th Plan (2022-27)," said a source.
In the short to medium term, AAC plans to induct 259 light-utility and observation helicopters to replace its ageing Cheetah and Chetak fleets that service Siachen, Kargil and other high-altitude areas.
Army Aviation Corps also wants 140 multi-role tactical battle-support helicopters to provide 'integral tactical lift to its formations' and 114 light combat helicopters that are being developed indigenously.
23/11/11 Rajat Pandit/Times of India

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Discount on return trips fetching money for airlines

New Delhi: Amid a fierce competition to woo passengers, the country’s funds-strapped airlines are earning rich dividends from cash discounts on return tickets. For, they are offering 5 to 20 per cent discounts on key routes, if you book return tickets with the same carrier.

Yatra.com estimates that such discounts have led to some 20 per cent increase in return-ticket bookings with the same airline. “Earlier, return bookings with the same airlines were much less compared to normal bookings,” says Sabina Chopra, co-founder of the online portal.

MakeMyTrip.Com, another such travel website, says the increase in the overall return ticket bookings has been around 10 per cent in the last six months. “This is because of cash discounts being offered for booking return rickets,” notes Keyur Joshi, its co-founder and chief operating officer. Airline companies too acknowledge a the role of the discount offeres in the rise in return-ticket bookings. “We are offering discounts on tickets that are a part of the fare schemes,” points out an airline executive. “This is like incentivising passengers to flying back in our airline. It has paid for us.”

23/11/11 Mihir Mishra/Business Standard

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DIPP proposes 26 % FDI in domestic airlines

New Delhi: The Department of Industrial Policy and Promotion (DIPP) on Tuesday moved a Cabinet note, proposing 26 per cent foreign direct investment (FDI) in domestic airlines, which are in crisis and need immediate infusion of funds.
The note is contrary to the proposed move by the Civil Aviation Ministry, which has stuck to 24 per cent FDI in domestic carriers. The move comes at a time when several domestic airlines, including Kingfisher, are in complete financial mess and struggling to maintain their day-to-day operations.
“Private airlines are in dire need of funds for their operations and service upgradation to compete with other global carriers. They need immediate infusion of funds,'' the note circulated has stated. The Cabinet note has been sent to various ministries for their inputs before being placed before the Union Cabinet.
“Investor with 26 per cent or more holding is considered strategic, as he can have a say in the policy decision of a corporate entity under the Indian company laws.
22/11/11 The Hindu

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Pilot held for forging marksheet

New Delhi: A 23-year-old pilot was arrested here for submitting the forged marksheet of an exam conducted by the Directorate General of Civil Aviation (DGCA) to get a commercial pilot licence from the regulator, police said Tuesday.
Anirudh Kiran Deshpande was arrested from his house in Vasant Kunj yesterday, said Deputy Commissioner of Police Ashok Chand.
Deshpande, who obtained his foreign commercial pilot licence from the US, was held after police received a complaint from the chief vigilance officer of the DGCA. He had given forged marksheets in the DGCA to get an Indian commercial pilot's licence.
23/11/11 IANS/GulfNews

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Honeywell Develops Flying Competition to Educate Next Generation of Indian Aerospace Engineers

New Delhi: Honeywell has conducted India's first Aero Club flying competition at the Air Force Bal Bharti School (AFBBS) in Delhi, to train the next generation of Indian aviation enthusiasts and engineers on the science of model aircraft design and air worthiness capabilities.
Launched in July 2011, the Aero Club at AFBBS is an extension of Honeywell Hometown Solutions' Science and Math education focus, a series of programs created to inspire the next generation of innovators by improving science, technology, engineering and math education around the world.
The Aero Club competition affords students the real-world opportunity to do what few other young students ever get to do.
It challenges students to design and build their own wood and paper aircraft, and flying it in a designated circuit.
Aircraft design must be based on students' learning and understanding of aerodynamics and principles of flight.
Students are provided with kits specially designed by Honeywell Aerospace.
Students are asked to challenge each other on their respective theoretical and practical knowledge by flying aircrafts to test the air worthiness, speed and handling capabilities.
23/11/11 PRNewswire/The Sacramento Bee

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KPMG misleading report on loss making Indian aviation sector

A report published by KPMG’s Indian branch painted over optimistic picture and in a way mislead investors about loss making Indian aviation sector. The report suggested in 2008 that the airline sector in India can still be profitable despite the high oil prices and other issues.
Now in 2011, three years down the line all we can witness is disastrous results in the Indian Aviation sector with national carrier Air India, private airlines such as Kingfisher, Spice jet all in severe losses.
As of now Kingfisher Airlines Ltd’s loan funds stand at Rs7,543 crore (debt-to-equity ratio of about 3.2), Jet Airways (India) Ltd’s is Rs14,123 crore (debt-to-equity about 4.2) and that of Spicejet Ltd, debt at Rs712 crore (debt-to-equity about 0.7).
Eminent consultant from prestigious companies who created and published unrealistic report believe that growth will take care of the problems, as India is the fastest growing market in the world.
Now as per latest statistics India’s airlines reported domestic passenger growth of 18 per cent in 1H2011. India is now the ninth largest and fastest growing civil aviation market in the world.
However I have highlighted and predicted long ago in my book published in July 2008 "Doing Business in India and Understanding pitfalls" that India is just a different market. The concept which works globally doesn't necessarily works in India.
Even though India has the fastest-growing number of passengers in the world but still domestic airline industry in India is fighting for its survival.
At a time when many eminent consulting companies such as KPMG had wrongly over estimated the potential and predicted that Indian Aviation sector will be profitable around 2011, the aviation industry in India is still losing money and number of operators are struggling to meet day-to-day expenses.
21/11/11 Barbara/journalism.co.uk

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Airlines bleed, but domestic air passenger traffic up 18%

Mumbai: Domestic air passenger traffic continues its enviable growth with the country registering an 18% increase this year compared to last year despite turbulence in the aviation sector. That translates to 77 lakh more domestic passengers flown in the period between January and October this year.

India has now turned into an apt example of the well-known industry fact that passenger traffic growth need not have a correlation with financial health of airlines. Even as airlines in the country bleed, globally, India continued to hog the top slot as far as percentage passenger traffic growth in the domestic sector is concerned.

According to the latest statistics released by the directorate general of civil aviation (DGCA), domestic airlines in India carried a total of 4.9 crore passengers in the Jan-Oct period this year as compared to 4.2 crore carried in 2010, making it a 18.3% growth. Then again, International Airline Transport Association ( IATA)'s comparison of domestic passenger growth in six countries (Australia, Brazil, China, India, Japan, the US) for the period of September shows India in the lead with 18% growth in revenue passenger-kilometres.

22/11/11 Times of India

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Fog hinders smooth air traffic

Lucknow: Light early morning winds dispersed the fog on Monday morning to some extent but it was not enough for a smooth air traffic movement. According to reports, around half a dozen morning flights got delayed causing inconvenience to passengers.
Almost all morning flights, essentially those coming from Delhi, arrived almost two to four hours late. The Jet Airways flight 9W-2237 which was scheduled to touch down at Amausi airport at 6.20 am arrived nearly four hours late. Likewise, the Go Air flight from Delhi, G-8-351, with a scheduled arrival time of 6.35 arrived at 10.51.
The conditions persisted till almost noon. Even the Indigo flight from Delhi, 6E-184, with a scheduled arrival time of 10 am finally arrived at 12 noon. The state met office said that light fog will persist for few more days.
Met director, JP Gupta said that it was sudden cooling of the moisture laden air that resulted in fog."That fog subsequently lowered causing disruption in visibility,'' he said. Gupta, however, said that the light winds may disperse it a bit bringing much needed relief.
The fog blocked the sunlight bringing the maximum day temperatures down. Najibabad near Moradabad recorded minimum temperatures in the state with the mercury plunging to 11.8 degrees Celsius early morning.
22/11/11 Times of India

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CM's visit, wasps ground aero show in Karnal

Karnal: The two-day event showcasing radio-operated aircraft organized by Aero Modellers Association of India (AMAI), was not much of an excitement due to frequent radio interruptions and disconnections.
Sources said the official helicopter of chief minister Bhupinder Singh Hooda landed at the Kunjpura airstrip, which caused signal losses and disruption. Also, onlookers were let down after a pack of wasps attacked visitors on Saturday.
The air show was organized at Haryana Institute of Civil Aviation (HICA) in collaboration with Haryana government and Aero Club of India. Sources said the chief minister had approved holding of the event, but cops had the premises vacated for CM's arrival. The disappointed organizers were told to pack up and leave around 1pm, much before the show was to conclude.
22/11/11 Anita Singh/Times of India

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Airline struggles in troubled skies

There was certainly relief all around in 1990, when the aviation sector was opened up to private investors and the monopoly of the State owned airlines (don't forget Pawan Hans) came to an end. Most of the initial start-ups, such as East West, Damania and Modiluft were short lived, only Sahara endured and survived. The entry of Air Deccan witnessed the launch of a new model in Indian skies, that of a low cost airline, to make air travel affordable for the common man, without "coffee and kebabs". But even the man with a mission had no recourse but to sell out because of working capital issues.
Globally, the aerospace market remains one of the fastest growing, notwithstanding recessionary trends. It must be kept in mind that mergers allow airlines an option of survival and diversion from insolvency or bankruptcy which the Damanias faced and should be encouraged as long as they are in consumer interest.
Investors are either Private Equity (PE) or other airlines. In India, in spite of FDI by foreign airlines being prohibited, there have been three major M&A activities since private entry was permitted.
The first of such acquisitions was of Air Sahara by Jet Airways, to take its market share to 50 per cent, and gaining entry into international routes to become the largest airline in India. The deal was in the danger of being aborted with Jet alleging that the Sahara aircrafts were in poor condition. Several hidden losses emerged on due diligence. Sahara alleged breach of contract and the parties were locked in arbitration and before courts, but finally settled and the rest is history.
United Breweries (UB) Kingfisher's parent company acquired 40 per cent of Air Deccan's parent Deccan Aviation, holding 52 per cent of the target company. The reverse merger with Deccan became effective in April, 2008 and Deccan Aviation was renamed Kingfisher Airlines. Its low cost fleet was rebranded as Kingfisher Red in 2007-08. Did KFA require the value addition of a law cost airline? Not really, but the deal carried some major benefits - fast forwarding KFA's entry in the international sector riding on Deccan's five year experience, savings on operating costs, and the right to operate charter flights, as well as Deccan's own market share. What also came on board were debts.
Unlike Jet, which retained / absorbed and continues the Sahara business in a separate entity, with a dedicated work force, and operating the flights as 'S2'even now.
The post merger integration failed, which is not unusual, as historically integration of low cost and high cost carriers have worked as exceptions. Perhaps the Deccan brand was abandoned too soon.
21/11/11 Kumkum Sen/Business Standard

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Why airlines run into rough weather

The Indian airline space has attracted a lot of attention over the last six months. First it was the debate over how to rescue Air India. The airline was teetering on the edge following years of mismanagement, a bloated cost structure and botched merger. Now it is Kingfisher Airline's turn to face the heat.

A slew of ill-managed cancellations and losses since inception six years ago have raised the question: Are several Indian airlines such poor performers by virtue of bad regulation or inept operations? A quick history lesson illustrates that it takes intense discipline, favourable regulation and friendly governments for sustained success in this business.

Running airlines is a challenging business. You've got a massive and volatile fuel bill to manage.

A large fleet of maintenance-intensive aircraft, staff with high-skill level don't come cheap and a chock full of expenses include handling baggage, landing, take-off and docking. For every airline which has pulled off sustained success such as Southwest Airlines, Singapore Airlines or Ryan Air, there is a casket full of companies such as Delta Airlines, Continental Airlines, JAL, KLM which have been in and out of bankruptcy courts in an effort to stay afloat. It is little wonder that Warren Buffett (who had a near capital-death experience with US Air in the 1990's) once remarked: ‘The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers.

20/11/11 Adarsh Gopalakrishnan/Business Line

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Why Indian aviation is sick

New Delhi: The Indian aviation market, the ninth largest in the world, is going through the most turbulent times. Ironically, the airlines in the fastest-growing aviation hub are losing billions of dollars. Kingfisher is just the newest kid on the block. It is estimated that this year’s combined industry losses could cross Rs 15,000 crore.
Now is the time to introspect — what ails the industry? Why, after five years of continuous double-digit growth from 2005-08, has India’s domestic air market registered negative growth of 11 per cent in 2009? And why is the sector not able to fly into profits since?
“The Indian aviation sector is in the intensive care unit. To save we need thing is a magic wand,” says one of the top airline operators in the country when asked about the health of the Indian aviation sector.
High aviation turbine fuel (ATF) costs — possibly highest taxes on ATF in the world as it attracts anywhere between 4 per cent to 30 per cent sales tax in different states within the country — low yield per seat, not too impressive passenger carriage and high cost of capital and high interest rates, have all dragged the Indian aviation sector in the red.
To cite an example, ATF costs have gone up on an average by Rs 16,000 to Rs 20,000 per kilolitre in the four metros in past one year in the country, making aviation an expensive proposition even for carriers with deep pockets. High fuel costs have led to lower yields.
Had the aviation sector been in good health, India could have added another 50 aircraft (the average price of an medium sized or 130-150 seat aircraft is about Rs 300 crore a piece) to its existing fleet of 450 aircraft, for Rs 15,000 crore, which unfortunately is the projected loss for the Indian carriers in this fiscal.
19/11/11 Samiran Saha/Tehelka

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Where's the flight going?

The aviation industry, once touted as a sunrise sector, seems to have run into turbulence . With all airlines, except Indigo, bleeding over the last quarter, and Kingfisher Airlines facing a severe cash crunch, it will be some time before the sector gets out of the dark cloud.

The figures are distressing. During the September quarter, Jet reported a loss of Rs 714 crore, SpiceJet Rs 240 crore and Kingfisher Rs 469 crore. As for Air India, the less said the better. The national carrier's total loss and debt burden stands at a staggering Rs 67,000 crore.

But there is a silver lining. In September, India was the fastest growing domestic market with 18.4% growth (almost 2.5 times the GDP growth). This, according to the International Air Transport Association (IATA), exceeds China's (9.7%) and Brazil's (7.5%), making it the 9th largest aviation market. What's wrong, then?

Ironically, the growth rate itself. It has led to capacity creation far ahead of demand, leading to excess aircraft seats. "Every airline is trying to fiercely undercut the other with low fares. That's suicidal when they can't even recover costs. Air India's fares went very low but it still continued to pay for lounges, travel agents and various schemes. Other airlines had no option but to follow suit. Now everyone is in a mess. Compete, but for being more efficient," says an aviation ministry official.

The fundamental structure of the airline industry is such that margins are wafer-thin - not more than 3%, so it's difficult to make money, says the COO of an Indian airline. "It is a cyclical industry where there is recovery, downfall and recovery again. But the recovery is very slow. Plus, cash has to be preserved for global uncertainties, high inflation and interest rates, but few have it. An airline owner, therefore, needs very deep pockets," he says. But in today's environment, raising capital is not easy either. This coupled with depreciation of the rupee has added to airlines' financial problems.

20/11/11 Shobha John/Times of India

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The churn in Indian aviation

The travails of the Indian aviation sector, in general, and Kingfisher Airlines, in particular, have been in the spotlight over the past fortnight. It is a paradoxical situation.
On the one hand, India is among the countries with the fastest growing passenger traffic (in the mid to high teens). On the other, high costs (primarily that of aviation turbine fuel) and the inability to raise fares even to break-even levels has meant that all the listed players have been posting big losses over the past three quarters.
Compounding the woes for players such as NACIL, Jet Airways and Kingfisher Airlines is huge debt and massive accumulated losses. Amidst talks of an imminent shakeout, it is noteworthy that Indian aviation is not unfamiliar to churn.
The first round of consolidation happened in the mid-1990s when airlines such as Damania Airways, East-West Airlines and ModiLuft which had opened shop after the ‘open skies' policy of 1991 either shut down or sold out, due to lack of management bandwidth or financial constraints. It was an era of high fares which made air travel a luxury restricted to business executives and moneyed individuals. This scenario continued till the early part of the last decade.
20/11/11 Anand Kalyanaraman/Business Line

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Tipsy pilots now face 1 yr jail, 5L fine

New Delhi: Reporting to work drunk would now mean more than just cancellation of licence for pilots and cabin crew. It will now also invite anywhere up to one year in jail and up to Rs 5 lakh in fine for tipsy pilots and crew.
The aviation ministry's move by amending the Aircraft Act will make its recent change on punishing drunk pilots foolproof. It had two years back decided to suspend licences of tipsy pilots caught drunk for the first time for three months. And commercial pilot licence of pilots caught drunk for the second time would get suspended forever. This means, such a person would never be able to fly as a pilot ever again in any Indian carrier.
"However, there was one major lacuna in these stringent changes. Pilots caught drunk while reporting to operate a flight or those who came to airports in an inebriated state but fled after finding that breath tests are going on argued that their licence could not be suspended as they did not actually operate a flight. Since they did not break any law, they argued no action could be taken against their licence and that only airlines may take some disciplinary steps," said highly placed sources.
Realizing that this argument was blunting their "zero tolerance" on the issue of drunk flying - something that directly affects safety of passengers, - the government decided to make even an attempt to operate a flight in a drunk condition a legal offence with criminal culpability.
20/11/11 Saurabh Sinha/Times of India

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Kingfisher Airlines slips to 3rd spot, IndiGo gains

Mumbai: India's struggling Kingfisher Airlines slipped in market share to the third position in October, from second in September, ceding ground to budget airline IndiGo, government data showed.
Kingfisher is unlikely to recover lost ground in coming months because the loss-making carrier has cancelled scores of flights in November, catching both customers and government authorities by surprise and spooking investors.
Kingfisher recorded a market share of 16.7 percent for October, a busy season for the airline industry, trailing IndiGo at 19.6 percent.
Kingfisher was almost neck-and-neck with state-run Air India, which had a share of 16.6 percent, while Jet Airways remained the dominant carrier with a market share of 24.8 percent, which included its subsidiary JetLite.
Close on Kingfisher's heels was budget airline SpiceJet with a share of 16.1 percent.
19/11/11 Reuters/Times of India

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SpiceJet biggest gainer in market share, Kingfisher loses heavily in Oct

Presenting a different side of the airline industry, for the second time in a year, all the domestic airlines have carried over 54 lakh passengers in October. Low-cost airline SpiceJet has emerged as the biggest gainer in terms of the market share, while Kingfisher lost maximum in comparison to September.

According to the data complied by the aviation regulator, the Directorate General of Civil Aviation (DGCA), seven domestic airlines (including JetLite) carried over 8.14 lakh passenger more in October in comparison to September. However, with cancellation of flights by Kingfisher, the experts feel that growth may slow down in November and December.

Interestingly, all the three full service carrier, Air India, Jet Airways (including JetLite) and Kingfisher have shaded its market share while barring Indigo, the two low-cost carriers SpiceJet and GoAir have gained handsomely. There is no change for Indigo. Despite all these, Jet and JetLite combined have managed to hold the top rank in total market share, while Indigo retained the second position.

A senior official in the DGCA said that with the introduction of regional connectivity with Q400 type of plane, SpiceJet has been able to increase its market share more than expected. Seat factor (seats filled in comparison to availability) for Chennai headquartered airline increased significantly to 78 per cent.

18/11/11 Shshir Sinha/Ashwini Phadnis/Business Line

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Aviation Ministry says no to prosecution of official in Airbus case

New Delhi: The civil aviation ministry has refused CBI sanction to prosecute a former joint secretary who, along with five other officials, was allegedly responsible for not availing of $175 million worth of concession from Airbus Industrie. The case relates to the 2006 purchase order of 43 aircraft from Airbus for Indian Airlines.
An Empowered group of ministers (EGOM) had negotiated $175 million worth of concessions before finalising the order. CBI says these concessions were not extracted from Airbus.
The civil aviation ministry's letter, written last week, urges CBI to 'review' its decision to seek clearance for prosecuting former joint secretary MP Vijay Kumar, who is now a member of the Airport Economic Regulatory Authority (AERA).
"We disagree with the fundamental principle on which CBI is basing its case because the investment that Airbus is supposed to make in India is not Indian Airlines specific. They are ready to invest in India anyway and they are not going back on that commitment. We have written to CBI to not investigate this case at all as it is flawed," the official told ET.
CBI cannot register a regular case unless it gets the parent ministry's consent to probe the role of an official of the rank of joint secretary and above. In all likelihood, CBI will resend the request to the civil aviation ministry to grant sanction to prosecute Kumar.
19/11/11 Devesh Kumar/Economic Times

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National Aerospace Manufacturing Seminar Inaugurated

Trivandrum: The Society of Aerospace Manufacturing Engineers (SAME) a premier body aiming to promote the scientific development of aerospace manufacturing engineering in all its branches organised its bi-annual event, National Aerospace Manufacturing seminar (NAMS-2011).The seminar was inaugurated by former ISRO chairman, Dr G Madhavan Nair at Hotel Mascot here today.

Speaking on the occasion, he said, “The work of government industries and other private industries which manufacture aerospace materials in India are commendable.We are able to precisely reproduce the aerospace materials.”

The theme of NAMS 2011 is the making, shaping and treating of materials for aerospace to provide a common platform to a wide spectrum of technologists, engineers, academia and industries involved in aerospace manufacturing to share their ideas, experience and goals.

19/11/11 Yentha

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FDI in aviation: No takers for Indian carriers?

With the government considering allowing foreign carriers to invest in Indian airline companies, CNBC-TV18 reached out to international carriers to check if they would get on board an Indian carrier if the FDI rules changed.
Unluckily, the answer was not positive.
CNBC-TV18’s Swati Khandelwal Jain says there may not be too many takers for India's bleeding carriers.
Emirates Airlines has the money but not the inclination to invest in an Indian carrier. The airline saw a 52% jump in its net profit despite a challenging business climate and declared a net profit at USD 1.5 billion for the year 2010-2011. But, it only wants to focus on its core business.
“Emirates has no plans to acquire a stake in another airline. We are busy focusing on the many aspects of our own growth including the launch of flights to seven new destinations in the next four months,” the company said in a statement.
Singapore Airlines, which explored a tie up with the Tata's in the past, is also not on the look out. “There are no immediate plans to acquire a stake in an Indian airline,” the airline said.
Queries to Qatar Airways, Lufthansa and British Airways are still awaited.
British Airways had in March told an Indian news paper that it would be interested in picking up a stake in an Indian carrier if the FDI rules were relaxed.
But airline companies are confident of attracting strategic players.
18/11/11 CNBC-TV18/moneycontrol.com

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Too many aircraft forced aviation sector to hit air pocket

The aviation sector is in a mess and the airlines are at fault.

Barring IndiGo, all the companies are running at a loss. Most have high debts on their balance sheets and at least one of the airlines is nearly bankrupt.

Kapil Kaul of the Centre for Asia Pacific Aviation (Capa) said the airlines were “too aggressive”, trying to double their capacity between 2004 and 2008. Also, none of the companies planned their business rationally, he said.

“Airlines needed 3-3.5 aircraft during that period,” Kaul said. “But they added 6-6.5. Several airlines ordered hundreds of aircraft and they are in the pipeline for delivery. But there is no clear funding plan.” Kaul said the airlines refuse to accept that the aviation infrastructure in the country is weak. “They do not have any business plan that could cushion the effect of fuel price hikes.”

Though most airlines have rationalised capacity, they continue to lose money with every flight. Capa estimates say the industry could add more than $2.5 billion in losses to the accumulated loss of $6 billion. If Air India goes ahead with its plan to buy 27 Boeing 787 aircraft, the losses this fiscal could go up to $4-5 billion. At present, the industry is saddled with a debt of $16 billion; foreign exchange fluctuations keep the figure changing.

18/11/11 Sindhu Bhattacharya/Daliy News & Analysis

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The churn in Indian aviation

The travails of the Indian aviation sector, in general, and Kingfisher Airlines, in particular, have been in the spotlight over the past fortnight. It is a paradoxical situation.

On the one hand, India is among the countries with the fastest growing passenger traffic (in the mid to high teens). On the other, high costs (primarily that of aviation turbine fuel) and the inability to raise fares even to break-even levels has meant that all the listed players have been posting big losses over the past three quarters.

• Compounding the woes for players such as NACIL, Jet Airways and Kingfisher Airlines is huge debt and massive accumulated losses. Amidst talks of an imminent shakeout, it is noteworthy that Indian aviation is not unfamiliar to churn.

The first round of consolidation happened in the mid-1990s when airlines such as Damania Airways, East-West Airlines and ModiLuft which had opened shop after the ‘open skies' policy of 1991 either shut down or sold out, due to lack of management bandwidth or financial constraints. It was an era of high fares which made air travel a luxury restricted to business executives and moneyed individuals. This scenario continued till the early part of the last decade.

However, the low cost carrier (LCC) model introduced by Air Deccan in 2004 proved a game changer. By offering seats at rock bottom fares unheard of before, it democratised air travel in the country and catalysed rapid growth in passenger traffic. The full service carriers — Indian Airlines, Jet Airways and Sahara Airlines — who till then were operating in an oligopolistic market with high fares and plum profits found themselves at the receiving end and saw market share erode.

The advent of the LCC also set into motion some key structural changes in the sector. Perceiving a burgeoning opportunity in Indian aviation, three more LCCs (SpiceJet, GoAir and IndiGo) and a couple of full service carriers — Kingfisher Airlines and Paramount Airways opened shop during 2006 and 2007.

18/11/11 Business Line

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India to pick Medium Multi-Role Combat Aircraft by mid-December

Bangalore: India will pick by mid-December a Medium Multi-Role Combat Aircraft ( MMRCA) in a multi-billion dollar deal, the Indian Air Force chief, Air Marshal Norman Anil Kumar Browne, said Friday.

"By mid-December we should have very good sense of who has been selected," Browne told reporters here without naming the two competing aircraft - Eurofighter Typhoon and Dasault Rafale - whose commercial bids were opened Nov 4 in New Delhi.

Of the original six bidders, the defence ministry short-listed in April European consortium EADS Cassidian (Typhoon) and French Dassault Aviation (Rafale) for the estimated $10 billion (Rs.50,000 crore) contract to supply 126 fighters to the Indian Air Force ( IAF).

"In another four weeks, we should be able to wrap-up the deal as a lot of work is going on and we are calculating hard," Browne said on the margins of a conference on aviation medicine.

The four other contending aircraft were the F-16 of Lockheed Martin, F/A-18 of Boeing, MiG-35 of Russian United Aircraft Corporation and Gripen of Swedish SAAB.

18/11/11 IANS/Economic Times

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Foreign airlines may get to invest 24%

New Delhi: Kingfisher can breathe easy. The Cabinet is set to examine a proposal to allow foreign airlines to pick up equity in Indian carriers.
As of now, airlines are allowed to take in 49% foreign direct investment (FDI), but any investment by foreign carriers is banned.
An official source said the Ministry of Civil Aviation has mooted a 24% cap on investments by foreign airlines, whereas the Department of Industrial Policy and Promotion is pushing for 26%.
“The civil aviation ministry has proposed 24% investment by foreign airlines. The Cabinet is likely to take a call on the issue in a couple of weeks,” the source said. “Whatever decision the government takes, everyone will have to accept.”
A 26% cap would allow a foreign investor to have voting rights on the board of the Indian airline.
The proposal, if cleared, could help Kingfisher Airlines raise much needed cash. Indeed, it is the possibility of Kingfisher actually failing that has pushed the FDI issue to the fore. Barring IndiGo, all domestic airlines have been incurring losses due to high jet fuel prices, a depreciating rupee and fierce competition.
18/11/11 Sindhu Bhattacharya/Daily News & Analysis

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India, US to sign Aviation Safety pact

New Delhi: In a move that could open up a huge market abroad for indigenously developed aeronautical products, India and the US would tomorrow formalise a Bilateral Aviation Safety Agreement (BASA) to provide for airworthiness certification of these items.

"BASA would encourage indigenous aircraft and aeronautical products industry and the US acceptance of Indian products would help their global acceptance," official sources said today.

At the India-US Aviation Summit here tomorrow, the two sides would sign the Implementation Procedures for Airworthiness (IPA) which provides for airworthiness technical cooperation between the US Federal Aviation Administration (FAA) and its Indian counterpart Directorate General of Civil Aviation (DGCA).

The IPA would address specific areas such as design approvals, production activities, export airworthiness approval, post-design approval activities and technical cooperation.

The BASA was initialled in July this year by Civil Aviation Secretary Nasim Zaidi and FAA Administrator J Randolph Babbitt, weeks after it was approved by the Union Cabinet.

16/11/11 PTI/Economic Times

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Aviation fuel price 50% higher in India

New Delhi: Domestic airlines are paying 50 per cent more for aviation turbine fuel here than the price in West Asian and the European markets. Even flights on foreign routes pay more when they refill in India.

ATF accounts for nearly half of an Indian carrier’s operating cost, compared to 20-25 per cent globally. Ad valorem taxes of 20-29 per cent are making domestic airlines shell out nearly 52 per cent more for the fuel compared to the average global price. While international airlines are exempt from state-level taxes, they pay nearly 16 per cent more than the global average.

The domestic ATF price has moved up 40 per cent in a year, compared to an increase of 30 per cent globally. “With the increase in price, the component of tax also keeps rising, rendering the fuel even costlier,” said an aviation industry expert. While there is no basic customs duty on ATF, it attracts eight per cent countervailing duty and eight per cent basic Cenvat.

Following dismantling of the Administered Price Mechanism from April 2001, the price of ATF in India is based on international import parity prices, and directly linked to the benchmark of Platt’s publication of FOB Arabian Gulf ATF prices and do not relate to the actual cost of producing it in India. ATF prices for domestic operations include freight charges from the Gulf to India, domestic transportation and other charges, in addition to the margins for oil companies.

17/11/11 Business Standard

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EU emission caps for airlines to come into force next year

New Delhi: Despite protests from various countries, the European Union is going ahead with its carbon emission caps for airlines operating in and out of the region.

The Director-General of European Union for Energy, Mr Philip Lowe, said that the norm would come into effect from 2012 as planned. He, however, added that certain airlines would be given a grace period to meet the requirements.

“Allowances would be provided for the airline companies to come up with efficient and climate friendly aeroplanes,” he said, adding that “we presume that it would take airlines two to three years to make a start towards reducing emissions and by 2020 they should be in a position to use blend of fuel which is environment friendly and support use of aircrafts which are more fuel efficient.”

On the protests from Indian aviation sector, he said that some of the airlines such as Jet Airways and Air India have got a modern fleet which are sure to meet the requirement. At the moment, Kingfisher, Jet Airways and Air India are the airlines which have regular flights to Europe.

According to the norms, in the trading period from January 1- December 31, 2012, 85 per cent of the aviation allowances will be allocated free of charge to aircraft operators. For the period January 1, 2013, to December 31, 2020, this will be 82 per cent. The remaining 15 per cent allowances in each period will be auctioned and in 2013-2020, three per cent will be set aside in a special reserve for new entrants and fast growing airlines.

17/11/11 Business Line

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Women pilots organisation to celebrate 100 yrs of Indian civil aviation

Mumbai: Isabelle McCray, a USA-based flying nurse on a ship transiting through the port of Bombay, stopped at the Bombay Flying Club in 1966. She was surprised to see sari-clad women checking fuel tanks and readying their aircraft for flights on the runway near the fishing village of Juhu. McCray befriended these women pilots and invited them to join the International Organisation of Women Pilots (IOWP) known as the 99s.

Five of these pilots were sponsored by the IOWP and within a year the Indian Women Pilots Association (IWPA) and the 99s’ India chapter took shape. The group has come a long way since then and currently has a membership of more than 150 women pilots.

Next month, the 99s will be celebrating 100 years of civil aviation with a conference organised jointly by the Indian and international women pilots’ organisations which will be attended by aviators from the country and abroad. “The idea is to share the passion of flight and the pride of being a woman aviator,” said Chanda Sawant Budhabhatti, who was instrumental in starting the organisation after being rejected for the post of co-pilot several times by airlines in India. Chanda and four others, Mohini Shroff, Rabia Fatehally, Sunila Bhajekar and Capt Durba Banerjee, were the five women sponsored by IOWP back in 1960s.
17/11/11 Daily News & Analysis

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Foreign airlines' stake in Indian carriers will be a disaster: Oppn

New Delhi: BJP and CPI(M) today lambasted the government for considering allowing foreign airlines to invest in Indian carriers, saying it would bring "disaster" to the Indian aviation industry. "The decision is being taken in the backdrop of a few airline companies doing very badly. But such a move will completely annihilate the domestic civil aviation industry vis-a-vis foreign carriers," BJP leader and former Civil Aviation Minister Rajiv Pratap Rudy told reporters here. Government is likely to take a final decision on allowing foreign airlines to pick up stake in Indian carriers in a couple of weeks, with Civil Aviation Ministry proposing a 24 per cent cap as against 26 per cent recommended by the Industry Ministry. Maintaining that the move to allow foreign airlines was "fraught with lot of danger", Rudy said, "It is a calculated move by government to possibly benefit a few airlines. But, at the end of the day, it is going to bring disaster to our airlines and their network."

17/11/11 PTI/IBN Live

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SAROD strikes a chord among aerodynamicists

Bangalore: With the aim of deliberating on the recent advances in experimental aerodynamics and aerospace vehicle design, a three-day symposium on applied aerodynamics and design of aerospace vehicle (SAROD-2011) took off in the city on Wednesday.
“Aerodynamics is a vast field and is not fully understood by even those in the profession. By bringing in knowledge and experiences of several engineers, SAROD can help in finding aerodynamic innovations,” said T.S. Prahlada, former Director of National Aerospace Laboratory (NAL).
Being held for the fifth time, the biennial event is jointly organised by Aeronautical Development Establishment (ADE) and Aeronautical Development Agency (ADA).
One of the important themes of the symposium is ‘Technologies to push for a cleaner, greener and more efficient aero-system'.
Elaborating on the need for aerodynamic innovations that could save time and money, P.S. Subramanya, Director of ADA, said: “An improvement in any of the three parameters — analytical tools, wind tunnel testing, and flight testing — can drastically cut down time of production and increase the performance of the aircraft.”
17/11/11 The Hindu

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Airburs not aware of their own MRO in Mihan!

Nagpur: State chief minister Prithviraj Chavan's announcement about Airbus setting up its maintenance repair and overhaul (MRO) depot at Mihan in Nagpur maybe just another pie in the sky for local people. The European aircraft maker has categorically denied having any plans for such a facility in city.
Chavan had told newspersons at the sidelines of world economic forum (WEF) meet in Mumbai that Airbus MRO too will also be a part of international aviation hub at Nagpur. The hub he referred to is Mihan project being developed by Maharashtra Airport Development Company (MADC). Airbus' rival Boeing has already begun work on a MRO here.
Airbus executive president (marketing and contract) and president India Kiran Rao said there was little chance of the company setting up MRO in Nagpur. "Airbus is certainly going to come up with a MRO but it is not going to be in Nagpur. Details of project cannot be divulged at this juncture," Rao told TOI over telephone. Vice-chairman-cum-managing director of MADC UPS Madan also tactfully replied, "no formal request has been received from Airbus). Let's see, something is going on. We'll see once we get the request or demand (for land)."
Despite repeated attempts by TOI Chavan, who was on a tour to Ahmednagar, could not be contacted. His public relations officer Satish Lalit responded through a SMS saying the CM does not comment over telephone. MADC was also been wooing Airbus earlier during R C Sinha's regime but the deal did not work out.
16/11/11 Shishir Arya/Times of India

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BJP warns govt against allowing foreign airlines equity in Indian companies

New Delhi: Alleging that government was clandestinely working on allowing foreign players 24 to 26 per cent equity in Indian airlines, BJP on Wednesday warned that such a step would destroy domestic aviation industry and asked the UPA dispensation to clear the air on the issue.
"What we are hearing about efforts to bail-out a particular loss making airline is not the full story. There are reports that government proposes to allow 24 per cent equity in Indian airline companies while department of industrial promotion and policy (DIPP) is suggesting 26 per cent," BJP spokesperson Rajiv Pratap Rudy said.
He sought a clarification from the government on the issue and claimed that this will lead to cartelisation.
"This policy may suit one company but the end-product will be cartelisation by foreign airlines. The day this is done, that too clandestinely, there will be complete annihilation of civil aviation industry in India," he said.
16/11/11 PTI/Times of India

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Why some airlines are more profitable

New Delhi/Chennai: Flying lighter aircraft, operating several flights between fewer cities and keeping a tighter rein on costs could probably explain why the low-cost carriers (LCCs) in India are able to report better financials than full-service carriers, despite having to work in the same operating environment of high fuel costs and airport charges.
Consider the figures: The two low-cost airlines IndiGo and SpiceJet reported profits of Rs 550 crore and Rs 61 crore in 2009-10. On the other hand, Kingfisher Airlines reported a loss of Rs 1,647 crore and Jet Airways reported a loss of Rs 420 crore. Again, in 2010-11, while Jet and Kingfisher posted losses, SpiceJet and IndiGo remained profitable.
Industry analysts believe that LCCs run tighter ships and thus are more profitable. Take, for example, the no-frills model of a low-cost airline. Since it does not provide a hot meal service, the aircraft has none of the equipment required to keep the food hot. It also does not carry any cutlery. All this lightens the aircraft, which in turn leads to less fuel burn. And given that fuel in India is at least 50 per cent more expensive than globally and one of the biggest expenses, these measures help.
LCCs also keep their aircraft utilisation rates high, by cutting turnaround times and using their space better. On an average a low cost airline can seat between 160-190 passengers as compared to about 150 by a full service aircraft. The pure low-cost model also requires lower staffing.
16/11/11 Business Line

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Commerce and aviation ministries agree on FDI from foreign airlines

New Delhi: The commerce and civil aviation ministries have agreed on allowing foreign airlines to pick up stakes in Indian airline companies but they still have to take a call on whether the FDI cap would be 24% or 26%. The two ministries are slated to discuss the matter soon.
Talking to FE, commerce and industry minister Anand Sharma said: "A proposal has come from the civil aviation ministry and it is receiving our active consideration. A (Cabinet) note will be circulated only after the inter-ministerial consultations."
Last month, the civil aviation ministry had written to the Department of Industrial Policy and Promotion (DIPP) agreeing to equity participation by foreign airlines in domestic carriers, proposing to allow foreign airlines to invest up to 24% in local carriers within the existing cap of 49% for foreign investors.
15/11/11 Timsy Jaipuria/Financial Express

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'Inter-ministerial consultation very soon on FDI in aviation'

New Delhi: With cash-strapped Kingfisher Airlines demanding that foreign carriers be allowed to pick up stake in Indian airlines, the Industry Ministry Monday said it would "very soon" start inter-ministerial consultations on the issue.

"Yes. Suggestions have come from the Civil Aviation Ministry. It is attracting our active consideration. We will be seeking inter-ministerial consultation very soon," Commerce and Industry Minister Anand Sharma told reporters here.

According to official sources, the Industry Ministry is for allowing foreign airlines to pick up stake in domestic carriers but with a cap of 26 per cent -- a major move to liberalise the cash-strapped sector.

However, the Aviation Ministry, which was earlier opposing the move on the grounds that it was not a practice in many major countries like the US, has proposed 24 per cent, sources said.

Maintaining that no foreign player will be willing to invest in an Indian entity with a 24 per cent equity cap, sources said such a low stake might not be an agreeable option as that would not give a right to block a special resolution in a company.

14/11/11 PTI/Daily News & Analysis

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Why private airlines deserve a bailout

A leader of industry has recently said that in a market economy private players should not get any bailout in case they are in trouble. The airline industry is in trouble, indeed. Air India is continuously making huge losses, Kingfisher is almost at the verge of collapse, Jet has made huge losses, and Spice Jet, too.

There is something wrong if an entire critical industry is in such deep trouble. This requires a policy response for industry, not mere rhetoric about capitalism and too from people, who in the not-so-distant past, asked for protection for Indian industry, and rightly too.

The root of the current crisis lies in bad policy of the government. Our airlines are not allowed to fly overseas unless they have five years of operations.

Overseas airlines are freely allowed, within bilaterals, to fly to India. This shuts out lucrative routes for our airlines and allows overseas airlines to charge outrageous prices to Indian consumers.

Our fuel cost is around 60 per cent of operational cost, an absurdly high percentage because of monopolistic conditions in the market place.

This is compounded by very high taxes on airline fuel, levied by both the Centre and States. Each time prices are raised, both the Centre and the State earn more taxes, out of the misery of the industry. A case of exploitative suppliers and an insensitive government.

But the biggest factor is the existence of a player who does not believe in rational pricing — Air India. This airline is pricing below cost, to get market share and making huge losses. It is asking for a massive bailout from the government, using taxpayers' money.

This is absurd and distorts market pricing. No industry can compete and survive where one player makes huge losses, believes in predatory pricing and is bailed out continuously by the government.

14/11/11 TV Mohandas Pai/Business Line

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Pilot assaults traffic cop, held at SDelhi farmhouse

New Delhi: A 27-year-old England-based commercial pilot was sent to judicial custody after he allegedly assaulted a traffic police constable near Tivoli Gardens. The accused, identified as Siddharth Kasana -working with a private airlines - was arrested late on Friday night at his Tivoli farmhouse for criminal charges of obstructing a public servant, assault and voluntarily causing hurt to a public servant on duty. He was produced in court on Saturday following which he was sent to judicial custody.
Kasana had parked his Toyota Landcruiser on a narrow lane, parallel to Chhattarpur Road, when he went to buy cigarettes around 11pm. The car was blocking the path of other vehicles which compounded the congestion on the stretch, said cops.
The constable, Dinesh, had asked Kasana to remove his vehicle. Taking offense, Kasana verbally abused the constable and even broke a soda bottle to assault the constable, said cops. "Soon, a police force rushed to the spot but the accused managed to flee. Chase and challan cops followed him to his residence in Tivoli from where he was arrested," said a senior police officer.
15/11/11 Times of India

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Indian airlines must hike fares to offset costs, Boeing says

Indian airlines need to raise fares in the next six to eight weeks to cut losses as fuel prices climb and the depreciation of the rupee increases costs, according to Dinesh Keskar, president of Boeing Co’s local unit.
“There’s a gap between break-even fares and actual fares the airlines are charging,” Keskar said in an interview yesterday in Mumbai. “Airlines need to reduce costs and increase fares.”
Jet Airways (India) Ltd, the nation’s biggest carrier, posted a bigger-than-expected loss in the second quarter, while SpiceJet Ltd, India’s only listed discount carrier, reported a loss of 2.4 billion rupees (US$48 million) in the same period, as higher fuel prices eroded gains from carrying more passengers.
“Airlines are unable to pass through costs including fuel price increases and airport charges due to competitive dynamics and any increase in fares will surely impact growth,” said Kapil Kaul, the New Delhi-based CEO for South Asia at the Centre for Asia Pacific Aviation, an industry consultant. “A cost-plus pricing strategy seems to be the only way out.”
14/11/11 Bloomberg/Taipei Times

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Indian Billionaires Fail to Turn Air-Travel Boom Into Profits

Even billionaires can’t figure out how to make money in Indian aviation.
Kingfisher Airlines Ltd., controlled by brewing tycoon Vijay Mallya, is expected to report a second-quarter loss today, following Kalanithi Maran’s SpiceJet Ltd. and Jet Airways (India) Ltd., the nation’s biggest carrier. All three company have also slumped more than 65 percent in Mumbai trading this year.
Indian airlines have failed to turn a 19 percent jump in passenger numbers into profits because of a price war, fuel taxes that average about 25 percent and the rupee’s 11 percent depreciation this year. State-owned Air India Ltd. can also offer below-cost fares after winning 32 billion rupees ($639 million) of government bailouts since a 2007 merger.
“We have a serious issue on hand and that is to address the viability of Indian carriers,” said Kapil Kaul, the Indian head for CAPA Centre for Aviation. The financial status of domestic carriers is “very fragile,” he said.
CAPA expects the nation’s airlines to lose about $2.5 billion in the year ending March, including losses of as much as $2 billion for Air India. Only closely held IndiGo, India’s biggest discount airline, may make a profit, Kaul said, without giving a precise forecast.
14/11/11 Karthikeyan Sundaram and Mehul Srivastava/Bloomberg/Business Week

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Airllines fudge 'on-time' record

Mumbai: It's an open secret in the airline industry. Exaggerating the time it takes to operate a particular flight, especially those prone to chronic delays, is the easiest way to improve a carrier's on-time performance record.
Till recently, when booking an air ticket, passengers found that flight duration for a given route varied from airline to airline. For instance: Mumbai-Delhi flights operated by different airlines within minutes of each other showed different journey times or what's called "block time in airline parlance. If one airline listed a block time of one hour fifty-five minutes, another listed it as a two-and-a-half-hour flight and a third may list it as a two-hour-fifteen-minute flight.
No wonder then, passengers of certain airlines found that they often reach their destination well ahead of their scheduled arrival time. Afterall, adding a margin of 20-30 minutes to the actual time it takes to operate a given flight ensures the airline a spotless on-time record even if the departure is delayed.
14/11/11 Times of India

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Not just Kingfisher, turbulence for other private airlines too

chennai: Kingfisher Airlines may not be the lone case to suffer flight cancellations arising out of high debt.
In fact, if the estimate of an industry body is anything to go by, a series of private airlines may follow suit leading to a slew of flight cancellations, inconveniencing passengers.
High fuel costs and fierce price wars have already pushed airline companies to huge losses with aviation turbine fuel accounting for over one-third of operating costs as it is heavily taxed, said the Associated Chambers of Commerce and Industry of India.
“Airlines could suffer losses of about Rs 15,000 crore in the current financial year with Air India alone likely to account for more than half of it,” said Assocham secretary general D.S. Rawat.
As the key infrastructure sector expands to keep up with booming passenger and cargo traffic, investments of Rs 1.5 lakh crore will be required in the next 15 years. In fact, there has been a 19 per cent growth in passenger traffic this year. However, rising crude oil prices, depreciating rupee and cut-throat competition have eroded airlines’ ability to raise fares.
This has pushed major private and government-owned airlines like Air India, Jet Airways, Kingfisher Airlines and SpiceJet into debt turbulence.
Lowering of taxes on jet fuel, liberal foreign investment norms and a new civil aviation policy in tune with current global and domestic realities could be a rescue measure from the government, says the industry body.
13/11/11 S. Sujatha/Deccan Chronicle

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Probe into recovery of bullet from Rahul aide

Agartala: The Tripura Police on Saturday began an inquiry into the recovery of a bullet from the baggage of Congress general secretary Rahul Gandhi's aide and Youth Congress leader Anil Dhantori at the airport here.

"Police have begun investigation over the recovery of the bullet from the baggage of Dhantori under Section 157 (a) of the CrPC (Criminal Procedure Code, 1973)," police officer Babul Das told reporters.

"This is suspected to be a cognizable offence and that's why the police invoke this Section of the CrPc," he added.

Dhantori, also a member of the Haryana Assembly, came to Tripura early this week to oversee Gandhi's programme in the state on Thursday.

He was detained by the Central Industrial Security Force (CISF) at the Agartala airport on Thursday evening after the recovery of a pistol bullet from his hand baggage when he was about to board a Delhi-bound private aircraft.

Police said: "The CISF, following the persuasion of the local Congress leaders, released Dhantori without handing him over to the Tripura Police."

12/11/11 ZeeNews

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India remains a key market for Airbus

Toulouse: From selling its first passenger aircraft to India way back in 1974, leading European aircraft manufacturer Airbus has come a long way with nearly 200 of its aircraft being in service today in India which has also emerged as the seventh biggest operator of Airbus planes worldwide. Leading the pack is the best seller single-aisle aircraft from Airbus — the A320 for which the erstwhile state-owned Indian Airlines was the launch customer in 1989 and now low-cost private operators — IndiGo and GoAir — have become the largest fleet operators of A320 airliners.
Confident of its future potential, Airbus is also launching a fuel-efficient, advanced version of A-320, called the NEO (New Engine Option) equipped with bigger wingtips ‘sharklets'. Airbus has already received nearly 1100 firm orders from 22 customers worldwide for the newer A320 version. Among the Indian operators, IndiGo and GoAir, have placed orders for A320 (NEO) which will result in 15 per cent fuel burn reduction translating into fuel savings of nearly $2 million a year for airlines.
The A320 has turned out to be the flagship aircraft from the European consortium and is the world's best-selling aircraft with 7,926 firm orders, 4,700 deliveries and a backlog of 2,900 aircraft, Joost Van Der Heijden who heads airline marketing in India and Southeast Asia, told a group of visiting Indian journalists at Airbus headquarters here.
IndiGo, India's largest low-cost carrier which has recently launched its international flights, will be the launch customer for A-320 NEO which would be delivered to it from 2016. The new version will also result in reduction of emissions and lower engine noise. While IndiGo has ordered 150 NEOs, GoAir has placed an order for 72 of such aircraft.
12/11/11 Vinay Kumar/The Hindu

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ICAO adopts India's stand against EU aviation norms

New Delhi: The Indian government Friday said that a working paper presented by it to the International Civil Aviation Organization (ICAO) against aviation emission norms proposed by the European Union (EU) has been passed as a resolution.

'After a long debate in the council of ICAO, the working paper presented by India and supported by 25 other states was fully adopted,' the civil aviation ministry said in a statement here.

According to the statement, the working paper was adopted by the ICAO in a meeting on Nov 2, in Montreal (Canada). The paper urges the EU not to include non-EU airlines in the its emissions trading system.

The EU had unilaterally passed a regulation to include aviation in the European Emissions Trading Scheme (ETS), whereby all airlines - regardless of nationality - would be taxed if they overshoot their emission limits while operating over Europe.

The ETS is scheduled to come into force from January 2012.

11/11/11 IANS/msn.com

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ASSOCHAM calls for low taxes on jet fuel

With dozens of flights cancellations across the country, industry body ASSOCHAM today called for low taxes on jet fuel, liberal foreign investment norms and a new civil aviation policy which are in tune with current global and domestic realities.

The aviation industry has all ingredients to grow but airlines are facing huge losses as over one-third of operating costs are on account of aviation turbine fuel which is heavily taxed, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

As the key infrastructure sector expands to keep up with booming passenger and cargo traffic, investments of Rs. 1.5 lakh crore will be required in the next 15 years. But major private and government-owned airlines like Air India, Jet Airways, Kingfisher Airlines and SpiceJet have flown into debt turbulence due to elevated fuel costs and fierce price wars.

"Airlines could suffer losses worth about Rs. 15,000 crore in the current financial year with Air India alone likely to account for more than half of it," said ASSOCHAM secretary general D.S. Rawat.

12/11/11 India Infoline

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It's adapt, or lose their place in the skies

The real question is not whether airlines would survive another recession so soon after the 2008/2009 global economic meltdown, but how successfully each will adapt to the redefined aviation landscape.

According to the International Air Transport Association, passenger numbers have increased but 2012 profit will fall from US$6.9 billion (S$8.9 billion) to US$4.9 billion. It means airlines are incurring higher costs or enjoying lower yields, or that capacity growth has outpaced demand.

The prolonged volatility of the global market reaffirms the lessons of the previous downturn - lest they have been forgotten - and provides a respite for the airlines to re-strategise, at least for those who have wised up to knowing that, going forward, it cannot be business as usual.

The market has shifted downward, leading to a flourish of budget carriers including joint-ventures and subsidiaries established by full-service airlines to protect their turf. Among them is Singapore Airlines' Scoot, which is expected to commence operations next year on routes beyond the four-hour duration of the traditional budget model, targeting China and Australasia.

SIA is pushing the evolution of the budget model from a mere no-frills entity in a segregated market into a viable competitor in the larger market - something that has happened in Europe and the United States and was preceded by budget long haul flights such as AirAsia X's services from Kuala Lumpur to Paris and London.

Interestingly, India's Kingfisher Airlines has decided to exit the budget market and focus on full-service operations although India's low-cost traffic is booming. Kingfisher CEO Sanjay Aggarwal, foreseeing impending saturation, said: "Capacity induction of the LCCs (low-cost carriers) has outpaced the demand growth in the domestic market. (It) will potentially lead to substantial overcapacity and a price war with declining yields."

11/11/11 David Leo/Today Online

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Second Meeting of Security Advisory Council to Civil Aviation held

The second meeting of the Security Advisory Council to Civil Aviation (SACCA) was held here today, under the Chairmanship of the Secretary, Dr. Nasim Zaidi. The meeting was graced by Shri Vayalar Ravi, Union Minister of Civil Aviation and Overseas Indian Affairs. Addressing the meeting, Shri Ravi said that the challenge in aviation security is to develop a robust security system for tackling the security challenges posed by criminals with the help of advanced technologies and methods. He said that Ministry of Civil aviation is constantly examining the need for infusion of new modalities and technology for fast and secure clearance of passengers and their carry-on items. He further said that this meeting is significant as the inputs and interaction of stakeholders, users regulatory authority and Government bodies create an environment of aviation security, while ensuring the passenger facilitation.

Highlighting the initiatives taken by the Ministry on aviation security, the Secretary, Dr. Nasim Zaidi said that the new Aircraft (Security) Rules, 2011 was framed for the first time, which is under process of Notification. He said that the anti-hijack Act 1982 is being amended to give severe punishment. He suggested that the passengers’ convenience and passenger friendly aspects should also be part of the security mechanism.

In a power point presentation the Commissioner of BCAS highlighted initiatives taken on airport security. Around 16000 persons trained in civil aviation security this year to compared 9000 last year. 61 mock exercises were conducted this year. Assessment of security threats for all airports is underway. A committee was set up for Fate House Plan for screening of vehicles and persons entering airside.

11/11/11 Press Information Bureau

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Aviation regulator starts financial monitoring of airlines

New Delhi: India's aviation watchdog Friday commenced the monitoring of airlines to determine if they were in a position to devote resources for aircraft maintenance, given the financial strain some of them were in.

"We have started the financial monitoring from today," Direcctor General of Civil Aviation E.K. Bharat Bhusan told IANS.

According to the regulator, the monitoring process would asses if airline companies had adequate resources for maintaining and repairing their aircraft.

There have been fears that carriers may cut corners in taking all the required safety measures to bring down operating costs. Fuel, which constitutes 40 percent of the operating costs has risen by over 30 percent since December 2010.

"This (monitoring) is necessary because airline which are in financial mess, may not be able to fulfill all the safety requirements like maintaining their aircraft," a senior official at the DGCA said, on account of anonymity.

“The airlines may not be allowed to add any more aircraft in their fleet. This will save resources for looking into the safety requirement of the existing fleet.”

The official said that monitoring was not a new step and that the DGCA had undertaken such checks during 2008-09 when the economy and the aviation industry in particular was witnessing a slump.

11/11/11 IANS/Deccan Herald

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Aviation ombudsman likely soon

New Delhi: With a sharp rise in number of economically unstable airlines, the government is finalizing a slew of measures to come to the aid of hapless air travellers who despite paying sky high fares is now uncertain of flights taking off.

The aviation ministry's economic advisory committee met on Friday and paved the way for setting up much-delayed aviation ombudsman who would do grievance redressal of air travellers. Also, an economic regulatory framework is being finalized for framing of airfares. This will also disallow predatory pricing - practice of charging so low that others are also forced to follow suit and the entire industry goes sick. This is will also prevent foreign airlines from "dumping fares" in India and making Indian airlines economically unviable.

"The current practice of airlines giving a vast range of airfares where the sky seems to be limit is not a very satisfactory way of ensuring that the consumer is not fleeced. As of now, we can just ask airlines to charge up to the upper limit, which may be too high like Rs 24,000 for a one-way Delhi-Mumbai ticket.

12/11/11 Times of India

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DGCA puts airlines under stress test

New Delhi: Alarm bells are ringing over safety of airlines' operations due to severe financial stress faced by them. The Directorate General of Civil Aviation (DGCA) is starting a detailed financial surveillance of all airlines from Friday. Carriers that are found to be seriously strained after this survey would not be allowed to add any aircraft to their fleet till they meet all safety requirements for the existing fleet.

Also, the extension of such airlines' licences could come under cloud if the regulator finds that their financial capacity has degraded to such an extent that it would not be safe to allow them to fly passengers. DGCA chief Bharat Bhushan said: "We will finalise the modalities of the detailed surveillance shortly and begin the process from Friday. The focus will be on the airlines' economic viability and safety."

The concept of financial surveillance in India started in 2009 at the height of global recession and the consequent slowdown in India. The basic idea is to categorise airlines according to their financial health and keep a close watch on the fleets of the most strained ones. The reason: A broke airline is unlikely to be able to invest in keeping their fleets completely airworthy and safe by replacing or repairing parts that need attention.

10/11/11 Saurabh Sinha/Times of India

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