Air India may not survive if strike continues: Official

New Delhi/Mumbai: Air India chief Rohit Nandan Saturday warned that the airline may not be able to survive in the long run if its pilots don’t end their 26-day-old strike.

If the airline has to survive in the long run, achieve the turnaround, it is essential for the pilots to come back,” Nandan told IANS.

“They (pilots) should think about the long-term impact this strike will have on the airline and their future.”

Nandan’s outspoken comments came even as the strike continued for the 26th day, pushing up the airline’s revenue losses to more than Rs.350 crore.

The losses, according to a senior Air India official in Mumbai, are among the biggest suffered by the airline due to any strike.

“Current load factor (passenger traffic) is at an all-time low for the international segment. Being the peak travel season, the overall losses will be far above the predicted revenue drain of Rs.400 crore,” the official in the operations arm of the airline said.

“In the peak travel season, international outbounds are highest for us. We have lost a lot of opportunities to cater to passengers going to the US-Europe and Far-East Asian regions.”

The airline expects to stabilise its international operations through the interim plan which it implemented Friday and cut its losses to less than Rs.5 crore a day from the present Rs.10 crore.

The interim plan has axed seven international destinations including Hong Kong, Osaka, Seoul and Toronto.

http://www.mizonews.net/nation/air-india-may-not-survive-if-strike-continues-official/

Air India introduces new Crew Management System

To ensure operational safety, meet regulatory requirements and optimise crew utilisation

Seeking to rule out scope of any subjectivity and favouritism in the deployment and management of crew and other staff, Air India on Saturday announced the introduction of a new computerised Crew Management System (CMS) for pilots.

The new initiative is part of the reforms suggested by the Dharmadhikari Committee report to bring efficiency in the operations of the national carrier.

With the introduction of CMS, the old manual system will stand phased out. This new system will include cabin crew and support staff later this month.

The system will ensure operational safety, meet regulatory requirements and optimise crew utilisation. Currently, the crew management is done by legacy manual systems for cockpit and cabin crew separately.

The first phase is operative for the cockpit crew while in the second phase the cabin crew along with support staff will be covered from the second half of this month.

Air India services are complex, consisting of international, domestic, regional (Alliance Air) and LCC (AI Express) operations. They are carried out by the operating crew under government regulatory requirements and company rules.

Integrated tool

The statement said the CMS is an integrated tool for crew planning (long, medium and short term) depending on the network plan and commercial schedule of the airline.

It will provide real-time visibility of operation and flexibility to manage disruptions by providing real-time crew availability; it will also manage and control crew duty time, leave & sicknesses and provide a firm plan of operation to management and crew.

Besides harmonising and enhancing crew utilisation and productivity across the entire fleet of different types of aircraft, the CMS would provide a stable duty roster and online portal for crew communication, it said.

The system would enable real-time monitoring and tracking of crew from a central location and help recover from disruptions quickly.

Currently, crew management is done by legacy manual systems for cockpit and cabin crew separately

CMS will enable real-time monitoring and tracking of crew from central location

http://www.thehindu.com/news/national/article3483886.ece

Foreign airlines see growth opportunities in India, says CAPA

Chennai, June 1:

Foreign airlines remain interested in India despite challenges.

A number of carriers have either suspended services to India ( such as AirAsiaX, American Airlines and Qantas) or have reduced frequencies on certain routes (Air France, Austrian and Lufthansa).

Jet Airways recently announced plans to suspend its Mumbai-Johannesburg service from June.

Reasons for these reductions include insufficient traffic, poor yields and high airport charges, according to the Centre for Asia Pacific Aviation, a research agency on aviation.

Apart from AirAsiaX, these are largely carriers that face competition from Gulf and Asian carriers on routes to/from India.

AirAsiaX's withdrawal was in part due to the weakness of its direct distribution strategy in the Indian market, which could not support the capacity generated by 11 weekly wide-body services into Kuala Lumpur, the agency said.

However, CAPA says there are several incumbent carriers that see growth opportunities.

These are mainly from emerging regions such as Asia, Africa and the West Asia with examples including:

Dragonair has announced plans to launch services to Kolkata from Nov-2012.

Etihad will launch Abu Dhabi-Ahmedabad services, effective Nov-2012.

Virgin Atlantic will be resuming London-Mumbai services from Oct-2012.

Kenya Airways commenced non-stop Nairobi-Delhi service in May-2012.

Air China launched Chengdu-Mumbai service in May-2012.

Iraqi Airways launched routes from Baghdad to Delhi and Mumbai in first quarter. BMI commenced London-Amritsar service in Oct-2011.

SilkAir launched a new Singapore-Kolkata route in Aug-2011.

Singapore Airlines has launched five additional frequencies to Mumbai last year.

Virgin Atlantic will benefit from the suspension of Kingfisher's Mumbai-London operation.

It plans to schedule the service to facilitate convenient onward connections to at least four US destinations. It is expected to emerge as an important player on Mumbai-UK and Mumbai-US routes, says CAPA.

Africa - interest

Meanwhile, Africa is a region of growing interest.

Kenya Airways, which launched its second Indian destination in May-2012, has identified Ahmedabad, Bangalore, Chennai and Hyderabad as cities that it plans to expand to over the next few years.

Ethiopian Airlines has similar expansion plans and has suggested that its Addis Ababa hub could play an important role in carrying traffic between India and South America.

Several airlines that do not currently operate to India are understood to be evaluating the possibility of entering the market in the next 12-24 months.

These include Alitalia and Czech Airlines (in Europe); Garuda Indonesia, Jetstar Asia, Lion Air, Myanmar Airways and Vietnam Airlines (in Asia) and Air Austral (Africa).

Expansion

But it is carriers such as Emirates, Qatar Airways and Turkish Airlines that have the most aggressive expansion plans and are pushing for additional ‘bilaterals' as their current entitlements are exhausted.

Emirates, the largest foreign carrier in India, already operates 184 weekly services to 10 cities across India, not including its low-cost subsidiary, Flydubai, but has exhausted its ‘bilaterals'.

Turkish Airlines, which has a daily service to Mumbai and Delhi, is seeking to increase this to double daily and wishes to operate to an additional six destinations.

Singapore Airlines and Cathay Pacific are also expected to seek increased rights, CAPA said in its analysis on Indian aviation.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/article3481042.ece

Pay will be protected, Ajit Singh assures staff

New Delhi, June 1:

Air India employees are likely to receive their salary in August as per the recommendations of the Dharamadhikari committee report. The Committee had been set up to bring about integration of unified Air India, including pilots, cabin crew and engineers.

Addressing a press conference in the Capital on Friday, the Civil Aviation Minister, Mr Ajit Singh, said that pay of employees will be protected.

The Minister and officials, however, declined to comment on whether there will be a decline in the monthly pay package that some employees will receive after the implementation of the report.

Annual savings

The Minister said the implementation of the report would lead to an annual saving of about Rs 250 crore.

The saving would be on account of implementation of Voluntary Retirement Scheme and a cutback in passage rules.

Passage relates to the number of free and subsidised air tickets that are provided to each airline staff and their extended family at present.

The committee is likely to recommend a severe curtailment of family members entitled to such passages after implementation of the report. Mr Singh said that April 1, 2007 has been set as cut off date for new pay scales and promised that senior employees will not be paid less than junior employees. There will be uniform pay scales for all employees of erstwhile Air India and Indian Airlines, the Minister said.

For the executive cadre, pay scales are according to the Department of Public Enterprise (DPE) norms and for non-executive cadres, pay scales are as per the industry norms.

Panel formed

A four-member Committee headed by Mr Nasir Ali, Director in Ministry of Civil Aviation, has been entrusted with the task of doing level mapping of the airline employees for implementing the report.

The committee has been asked to submit its report within the next 45 days.

The Minister also announced that Productivity Linked Incentive (PLI) in its present form shall be abolished.

However, it will be subsumed in determination of basic pay to the extent DPE guidelines.

Officials indicated that with the implementation of the Committee report the various agreements signed with Air India will be null and void.

 http://www.thehindubusinessline.com/todays-paper/tp-economy/article3481009.ece

Air India may hire more pilots

New Delhi, June 1:

With the pilot agitation continuing for close to a month, Air India may look at hiring some pilots, the Minister for Civil Aviation, Mr Ajit Singh, said on Friday.

The agitation has seen a severe curtailing of the long haul international flights operated by the airline. Addressing a press conference, the Minister said that a new Government panel was now looking at which international routes operated by the airline were able to meet their costs and which were not.

On the Boeing 787 Dreamliner aircraft joining the airline fleet, the Minister announced that the Cabinet Committee on Economic Affairs will take a view on what compensation the aircraft manufacturer should pay Air India. The compensation is being sought in view of the close to five-year delay in delivery of the first aircraft.

Declining to reveal the amount being sought in compensation, Air India officials said that the aircraft had been cleared by a team of the Directorate General of Civil Aviation.

“At the moment we have 32 pilots who fly the wide body aircraft in the fleet that have been trained to fly the Boeing 787. In addition we also have 16 pilots who operate the narrow body fleet who have also been trained to fly the new aircraft,” a senior AI official said.

The airline fleet consists of wide body aircraft like the Boeing 777 and narrow body like Airbus A-320 family of aircraft.

New international airports: Meanwhile a proposal to declare five airports including Tiruchy and Lucknow as international airports will soon be taken up by the Union Cabinet.

The Cabinet nod for the proposal will allow foreign airlines to fly to these airports and enhance air connectivity.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3481008.ece

Jet fuel price cut may not bring down air fares, say analysts

Mumbai, June 1:

The two per cent cut in jet fuel prices on Thursday will have little impact on airline companies, analysts say. Fuel accounts for 40 per cent of airline companies' expenditure.

Passenger fares are not headed down for now. “The aviation sector is reeling under losses. And in such a scenario, it will be difficult to bring down the fares. Airlines would use any dip in fuel price to consolidate their profits,” an official of an airline company said.

Aviation analysts feel that the difference would be minimal. “Since international oil prices seem to be stabilising on the higher side, a two per cent reduction on the jet fuel prices will hardly make any difference,” said Mr Amrit Pandurangi of Deloitte.

The extremely competitive nature of the aviation industry will make it difficult to bring down air fares, he added.

“It is the industry behaviour that determines the profit or loss of an airline company. If one airline reduces air fares, others have to follow suit. The benefit from the jet fuel cost reduction is minimal,” Mr Pandurangi said.

Even after the reduction, Aviation Turbine Fuel (ATF) prices are still considerably higher than a few months earlier.

In Mumbai, jet fuel will now cost Rs 66,587.90 per kilo litre (kl), against Rs 68,022.08 per kl. The three fuel retailers, Indian Oil, Hindustan Petroleum and Bharat Petroleum, revise jet fuel prices twice every month, based on the average international price in the preceding fortnight.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3481006.ece

Kolkata airport to turn swanky with modernisation

Kolkata, June 3:

The Kolkata airport or Netaji Subhas Chandra Bose International (NSCBI) Airport is often a “traveller's nightmare.” It is small, clumsy, mismanaged and perhaps not what an airport should be like. But come October and all these are set to change.

“Flights will be operational once airlines are able to shift their counters to the new terminal. It might take up to December,” an airport official said on conditions of anonymity.

The nearly Rs 2,500-crore modernisation programme, stuck by several delays, is being carried out by the Thai-Indian consortium of ITD-ITD Cementation. The modernisation work will bring the airport at par with international standards.

It had an initial completion date of August 2011. It has been revised to May 2012 and now to October 2012. Currently, over 90 per cent of the modernisation work is complete.

Mr B.P. Sharma, regional director, Kolkata airport, remained unavailable for comment.

Proposals

So what exactly is special about the modernisation?

If airport officials and the initial plans are to be believed then the programme includes a number of infrastructural changes and once fully operational, the new integrated terminal will cater to an annual increased capacity of nearly 20 million people.

At the moment, the annual footfalls at the airport are nearly 9 million – almost double the existing capacity of the airport (the airport has a passenger handling capacity of 5 million).

The international look of the new terminal at Kolkata and Delhi's T3-like feel are just some of the surprises that the new airport has in line for those who walk into it. The landscaping of the integrated terminal will have references to Rabindranath Tagore's writings.

According to officials, the arrival corridor and hall of the airport terminal have been built in such a way that they allow the smooth switching of operations between the domestic and international terminal.

Landscaping

At the heart of the building a landscape courtyard sits; the roof above looks like it's clothed in silk.

The central roof canopy, with an estimated area of nearly 24,000 sq. m is designed to facilitate rainwater harvesting. The design allows natural light into the terminal building's interiors.

The terminal building will be equipped with modern passenger facilities and state-of-the-art security arrangements. This apart, a modern exit taxiway from the main runway to the secondary runway is also on the cards.

Challenges

Currently, there are two operational runways at the Kolkata airport. The main runway has a length of nearly 3,627 m and can handle wide-body aircraft of up to the Boeing 747-400 type.

The extension of the secondary runway was delayed after questions were raised about the shifting of a mosque located inside the premises. The secondary runway has a length of 2,839 m and handles the smaller aircrafts.

Construction of the new ATC tower too has been temporarily postponed.

According to officials, since automation of the ATC has been carried out at the existing terminal building, setting up a new tower at a cost of around Rs 300 crore will be done in the second phase of modernisation of the airport.

What's there now

·  Runways: Two

·  Passenger Handling capacity: Nine million

·  Existing domestic terminal area: 24,450 sq m

·  International flights from the airport: 16

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After modernisation

·  Passenger Handling Capacity: 20 million

·  Integrated terminal area: 187,000 sq metre (apprx)

·  Elevated road in front of passenger terminal building

·  Car parking basement

·  Flyover to airport entry point for faster traffic movement

http://www.thehindubusinessline.com/todays-paper/tp-others/tp-states/article3487713.ece

Air India may not lose its loss-making foreign routes

New Delhi, June 3:

Air India may still have to fly on international routes on which it is not making money at the moment.

Air India operates around 45 international flights a day, a majority of which do not make money.

Sources said that there are some flights like those to destinations in North America such as Toronto, which do not even meet the cost of the aviation turbine fuel needed to operate the service.

Timeframe for turnaround

Official sources told Business Line that the thinking in the Government is to give Air India a set time-frame to turn around the loss-making international routes that it operates.

Sources also indicated that the airline could be given between six months to a year to make an unprofitable route profitable.

“The Group of Ministers (GoM) was clear that Air India's routes must be profitable. We will implement the decision,” a senior Government official said.

The GoM, headed by the Finance Minister, Mr Pranab Mukherjee, while providing funds to the tune of Rs 30,000 crore to Air India, categorically stated that the airline routes must be made profitable.

Committee set up

A committee has now been set up to look at the international routes on which Air India operates and suggest ways of making those that are losing money profitable for the airline.

Air India may temporarily withdraw its services from these loss-making routes but at the moment, there is no thinking on asking other Indian or international carriers to operate on these international routes in place of Air India.

Induction of New aircraft

Officials indicated that the induction of new aircraft such as the Boeing 787 will make a major difference in operating revenues on several routes.

This could be on account of lighter weight of the aircraft which increases fuel efficiency by 20-30 per cent of the existing aircraft in the airline fleet.

The induction of the Boeing 787 aircraft has been delayed by close to five years due to production problems that the manufacturer is facing.

The delay in induction is also affecting the profitability on international routes, officials said.

Currently several of the long haul routes are losing money as the wrong aircraft type are being deployed on these routes.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3487644.ece

New proposal for FDI in aviation is on fast track

New Delhi, June 3:

Amid all the criticism on policy inaction, the Government is to soon take up a new proposal to allow foreign airlines to acquire a stake in domestic airlines. The new proposal, which addresses security concerns that have been raised earlier, is expected to come up before the Union Cabinet shortly.

Now, sources claim that various differences between Ministries, and even some political parties, have been sorted out and accordingly a new proposal has been readied with more and more safeguards.

One of the key safeguards suggested is to allow foreign investment only through the inter-ministerial Foreign Investment Promotion Board route. With the Home Ministry being a part of the FIPB, any proposal seen as against India's security interests will be blocked, the source said.

Different limits

A nod for the new proposal will help domestic carriers get equity support from foreign airlines. A highly placed Government official told Business Line: “It is expected that foreign airlines may be allowed to pick up equity of up to 49 per cent in domestic carriers.”

Currently, the foreign direct investment limit in scheduled domestic passenger airlines is 49 per cent and 74 per cent in non-schedule domestic passenger airlines. But the condition is: “No foreign airlines would be allowed to participate directly or indirectly in the equity of an air transport undertaking engaged in operating scheduled and non-scheduled air transport services, except cargo airlines.”

Funding problems

Although the proposal to liberalise the FDI norms was being discussed last year, it could not be taken forward, for many reasons. Earlier, the issue was whether to allow 26 per cent or 49 per cent foreign investment in the domestic airline sector.

A senior Civil Aviation Ministry official also said that, contrary to popular belief, a number of domestic airlines are seeking an early decision on this proposal. At the same time, the chief executive officers of various global airlines have been visiting the Ministry, seeking details of the proposal. All the three listed domestic airlines have posted higher losses for fiscal 2011-12. The big problem is that banks are hesitant to give money to airlines. So, the hope lies in foreign funding.

http://www.thehindubusinessline.com/todays-paper/article3487657.ece