Airbus expands footprint in India

With a view to providing a complete support base to its expanding fleet base in the Asian region, Airbus has launched an enhanced customer support network in India which combines numerous individual field service support stations into one integrated team.

Through this network Airbus now has a continuous and extended field service presence, operating from Mumbai and Delhi, to offer 24/7 regional support and services. Combined with Airbus Training India (ATI) and the Flight Operations Team in Bangalore, Airbus will provide a real local support footprint.

“This initiative will pilot the way for a global deployment of this structure to enhance support coverage for all our customers,” said Didier Lux, EVP of Airbus Customer Services.

In addition, a new position of Head of Airbus Field Service has been created to work closely with the aviation authorities, manage on-site technical assistance teams and act as the primary communication interface between operators and Airbus’ functions including: programmes; maintenance & engineering; material logistics & suppliers; training, and flight operations.

http://newindianexpress.com/business/article546455.ece

Air travel goes back to pre-low cost era

Low cost is not cheap anymore. These days a one-way ticket on an average would cost you a minimum of `6,000. Ticket prices have hit an all-time high due to several reasons ranging from high cost of aviation turbine fuel, increased airport charges (in case one is transitting from the metros) and also fewer seats that are available due to contraction in the number of seats due to sub-optimal operations by private carrier Kingfisher Airlines and also the ongoing strike by Air India pilots.

Till recently when low cost flying came to India in 2005 with the advent of Capt Gopinath led Air Deccan (now Kingfisher Red, now nearly defunct) a round trip from Delhi to any other metro would cost about `5,000, but today the same trip costs you `12,000 or more depending when the tickets were booked, however, early bookings can fetch slightly competitive rates.

To make the market more price sensitive, Air Deccan also offered some (about 10 tickets) per flight at `1 on a first come first serve basis, but that has become a thing of the past now. However, continuing with the same tradition, private carrier SpiceJet, to encash on the summer rush and lack of availability of seats is offering a limited number of one-way tickets for as low as `777, but the offer was just for a day, the airline did brisk business and sold about 38,000 tickets in an hour.

The falling rupee, a near 14% rise year on year of aviation turbine fuel prices and the overall sluggishness in the domestic market has left flyers with little choice but to contend with expensive air travel.

Aviation sector in India is one of the most taxed sectors - fuel, aircraft leases, airport charges, air passenger tickets, air navigation service charges, maintenance costs, fuel throughput fees, into-plane fuel fees, and other items subject to service taxes.

“Almost 70% of the airline costs like maintenance, jet fuel, spares etc. are dollar denominated. Rupee depreciation, rising jet fuel and the prevailing competition in the domestic market has wrecked the balance sheets of most Indian carriers,” says Amber Dubey of global consulting firm KPMG.

“Whilst it is true that fares have gone up significantly post Kingfisher’s reduction in flight schedule, we shouldn’t forget that

ATF costs are currently much higher than in the pre-low cost airlines era. More importantly, after the crisis airlines are no longer chasing market share at the expense of profitability something that they unwisely did earlier by offering below-cost level fares,” says former executive director Air India and aviation commentator Jitendra Bhargava.

“Airlines cash in on the urgency. Even if there are enough number of seats available the airline will say that please book now or else even these tickets would be sold out. However once inside the aircraft you find nearly half the seats vacant. I don’t understand why can’t there be a ceiling on the price of airline tickets,” a passenger travelling on a short haul flight said. The passenger had to buy a one-way ticket for `6,500.

Destinations like Kullu and Leh which are not served by the low cost carriers airlines are selling at a premium, thanks to the holiday season. A return ticket between Delhi-Kullu for a less than an hour’s flight costs `20,000.

Jet Airways’ low-cost carrier Jet Konnect shows air-fares that are higher than the carrier’s regular flights. Though the airline maintains that the capacity it offers increases on an average of 15 per cent every year, no relief is seen for passengers.

“Air India, earlier Indian Airlines, is today what it was in the pre low-cost airline era. Capacity constraint was of course there on mainline sectors between metros. Fares were uniform, no subclasses within the economy as is now. Food was an integral part but in-flight entertainment system wasn’t there. Airlines did not market as vigorously as they do now. Competitive fares came in not only because of low cost airlines but also when capacity exceeded passengers and airlines began to lure passengers in a bid to enhance market share,” Bhargava said.

Operational Economics played no role in this era as all airlines vied to get passengers as a result of which the gap between the fares of low cost and legacy carriers narrowed. In the initial stage of low-cost phenomenon, fare difference was substantial. Gap narrowed as the capacity increased.

Today, DGCA has created price-bands for a particular number of kilometers which on the higher side are `10,000 and lower side are `3,000. Naturally in these expensive times none of the carriers are elastic towards lower fares.

http://newindianexpress.com/business/news/article545624.ece

New Jet Airways circular irks pilots

After 19 years of being established in 1993, top brass at Jet Airways have gone back to giving basic lessons to their pilots on how to be make flight announcements. What’s cheesed off the pilots more is the audacity of the 11-page circular that gives them tips on the most obvious points like posture, smile and attitude.

Issued by a vice-president in the company, the circular started with saying how a captain’s in-flight announcements add a human touch to passengers’ flying experience.

“We must endeavour to meet customer expectations by making them feel as if we are speaking to them personally, making our delivery smooth and natural, capturing their attention using good modulation and being conversational,” the circular read.

On how to deliver a good passenger announcement, the Flight Operations VP told its pilots (including senior executive pilots marked on the mail), “A good posture gives the audience confidence in you. It helps your voice stay relaxed and alert. Breath is the basis of good voice. You need plenty of voice under your control to support your voice so that you can be heard. Don’t forget to check your PA system’s serviceability. Do not tap or blow into microphone.”

On important pointers for making announcements effective, the circular said, “Put a smile on your face to make the message pleasant. Have an average speed of delivery, vary your pitch, use good modulation and have an emotional sincerity. Respect the microphone.”

An irked pilot rambled, “This 11-page circular was sent to assert the person’s authority as none of us report to him and he has no specific job mandate.” Yet another Jet official was more cordial and acknowledged that pilots did make bad announcements and a lesson or two reviewing them didn’t harm anyone’s interest. In fact, passenger feedback at many airports have shown that many pilots fail to make any announcements on the flight as it’s not mandatory. Others who are over-zealous end up using the wrong language, irking those travelling with them.

http://newindianexpress.com/business/article546443.ece

Charter flights from Middle East urges Kerala

Chief minister Oommen Chandy has suggested that the Union Government charter flights from the Middle East to clear the extra rush due to the cancellation of Air India flights following the pilot’s strike.

Replying to a calling attention motion moved by A.A. Arif of the CPM in the assembly Tuesday, Chandy said the state had urged the Centre to see if chartered flights could be operated charging only the normal ticket rates.

He would take up the matter with civil aviation minister Ajith Singh during his visit to Delhi on July 2 and 3. More than 20 international flights to the state were being cancelled on account of the strike by Air India pilots, Chandy said.

Discussions with student unions: While answering a submission by V. Sivankutty of the CPM, the CM said he would convene a meeting with student unions to discuss the recent lathi-charge on students in the capital.

Home minister Thiruvan-choor Radhakrishnan also assured the Opposition that DGP Jacob Punnoose would probe the context in which the lathi-charge took place.

The government will take appropriate action after getting the report of the DGP. Some unruly scenes were witnessed in the assembly over the lathi-charge when Opposition members displayed placards at the start of Question Hour.

The Opposition calmed down when the Speaker said the matter would be considered as a submission during Zero Hour.

While Sivankutty was presenting the submission, the Opposition rose from their seats displaying dailies containing pictures of the police action on students

http://www.asianage.com/india/charter-flights-middle-east-urges-kerala-873

Air India's continuing nightmare

Strike seems to go beyond just the pilots' obduracy

When 310 of Air India’s 450 pilots went on strike, they had little idea many of them would be pleading for their jobs to be given back forty days later. Yet, this is the latest imbroglio that the national carrier finds itself in. The Indian Pilots Guild (IPG), which represents Air India’s pilots, was completely blindsided by an unbending, newly appointed civil aviation minister, Ajit Singh. It had no idea that Singh would simply pick up the gauntlet thrown to him and turn the tables on the hapless pilots.

Singh not only terminated the services of 101 of the striking pilots, but also de-recognised the union. This means its representatives will not be called for negotiations by the management. The minister insisted the agitation be called off first, only then would taking the pilots back be considered and, that too on a case-by-case basis. In the meantime, the airline prepared a contingency plan to operate 75 per cent of its international flights.

Some industry experts view this Bismarckian stance in a positive light. “This is a welcome approach, since the authority of the Air India management has to be firmly established. Its dilution may lead to more agitations, as we have repeatedly seen in the past”, says Amber Dubey, partner and head (aviation) at KPMG, a global consultancy firm.

However, the strike seems to go beyond just the pilots’ obduracy. More than anything else, it is a classic scenario of the complications that may arise due to a failure in troubleshooting a merger of two entities.

Here is what lies at the heart of the Air India problem: Even as it had merged with Indian Airlines in 2005, the pilots of the two airlines stuck to flying the aircraft attached to their respective airlines — wide-bodied ones used for international legs in the case of Air India, and the more short-haul, narrow-bodied ones in the case of Indian Airlines. What threw the existing state of affairs into a loop was the entry of the much-hyped ‘Dreamliners’—wide-bodied Boeing 787s that promised to help turn things around for Air India.

The match that lit the tinder hot was a proposal to get an equal number of Indian Airlines pilots and Air India ones to fly the twenty-seven planes that Air India would take delivery of in the next few years. Yet, not all pilots are made equal, apparently. In Indian Airlines, it took six years to automatically become a commander. In Air India, it took ten, but only if there was a vacancy available. Someone in Air India who was waiting in the wings for, say, fifteen years to become commander would probably be enraged to see a six-years-in-service, narrow-body aircraft pilot, substantially junior to him, occupy his turf and deny him his long-awaited promotion.

With eight pairs of pilots required for each Dreamliner, as many as 432 pilots would have had to be trained once all the 27 planes were delivered. This would have brought most of the erstwhile Air India pilots their long-awaited promotions. In fact, Air India had hired pilots to handle the increase in the international fleet size, from 23 to around 50 after the induction of the new planes.

Industry observers say that the whole problem lies in the very genesis of the union of the two entities. “Airlines like Air France-KLM let the pilots function as separate units under one airline. The fact is that Air India’s merger was badly planned and operating it as two separate units under one airline would have solved many of the problems,” an industry insider, who does not want to be identified, says.

If the airline wanted to bring the pilots together under one entity, it could have asked them to choose from among several options that strived for parity. “When British Airways was formed after the merger of four airlines, the pilots flying narrow-body planes and eligible to be promoted as commanders were given an option to either become commanders on narrow bodies, or to become co-pilots on wide-body planes and then get promoted as commanders,” he says, adding that such a solution would have resolved all conflicts.

Apparently, IPG pilots say that this issue — of competing pilots and aircraft type — was to be resolved by the Justice Dharmadhikari committee. But Air India pushed through a policy in October 2011 under which equal number of pilots of the formerly separate airlines would train for the Dreamliner. IPG objected, went to court, and lost.

For Air India, this impasse can turn out a sizeable blow, that too when the airline is witnessing a large increase in revenues and an improvement in operations. A substantial part of the airline’s sales — Rs 15 crore of the daily revenues of Rs 22 crore — comes from international operations. This has been hit.

Ultimately, the one taking the biggest blow is the taxpayer. Therefore, it is now the government’s urgent responsibility to end the impasse, restore confidence in the airline and its staff and allow it to continue with its recovery before it manages to sink it, once again.

http://business-standard.com/india/news/air-indias-continuing-nightmare/477911/

Delayed take-off: Airport projects live on hope

The story of new airports in India has been synonymous with regulatory uncertainties, government inertia and land acquisition woes. Put simply, it is a story of big promises, false starts and missed deadlines.

But the industry is still clinging to hopes after Prime Minister Manmohan Singh announced work would be awarded for three airports that would be built from scratch at new locations (greenfield airports) at Navi Mumbai, Goa and Kannur and new international airports at Lucknow, Varanasi, Coimbatore, Trichy and Gaya. Also, new hubs would be developed in Chennai and Delhi to make India a destination, as well as transit point.

Experts said the fact that the prime minister has thrown his weight behind these projects is expected to give a push to the airports in Navi Mumbai and Goa, which have been stuck for a decade. The government had begun planning a second airport in Mumbai from the mid-90s. Initially, it had examined three sites—Navi Mumbai, Rewas Mandwa and Sindhudurg—before selecting Navi Mumbai.

SLOW PROGRESS

Though the Centre announced a policy for new airports in 2008, plans for many airports, including Navi Mumbai, were drawn much earlier. For instance, Mopa airport in Goa received in-principle clearance in 2000. Work yet to begin at Navi Mumbai, Mopa and Kannur airports due to delays in land acquisition and policy changes New airports have been planned at Sindhudurg, Shirdi, (Maharashtra); Gulbarga, Bijapur, Hassan and Shimoga (Karnataka); Pakyong (Sikkim); Dabra and Gwalior (Madhya Pradesh); Durgapur (West Bengal); Paladi-Ramsinghpur (Rajasthan); Kushinagar (Uttar Pradesh); Karaikal (Puducherry) and Ludhiana (Punjab). Work is on at Pakyong, Gulbarga, Shimoga and Durgapur In 2010-11, the airports handled 144 million passengers (domestic plus international). About 70 per cent of the passenger movement was at metro airports. In the 12th plan (2012-17) Indian airports are expected to handle 274 million passengers. New airports are expected to handle 38 million passengers Rs 42,000 crore investment required for airport infrastructure development in 12th Plan

In 2001, City and Industrial Development Corporation (Cidco) had prepared a techno-economic feasibility report for the Navi Mumbai airport. The International Civil Aviation Organisation gave a site clearance two years later, while the Union Cabinet’s in-principle approval came in 2007. Though the environment clearance was received in November 2010, even now, land acquisition problems persist. The request for qualification document to shortlist bidders has not been finalised by the government yet.

“After the Mumbai and Delhi airports were privatised, there were expectations on other airport projects, but that did not happen. Companies were anticipating bids for the Navi Mumbai airport would be issued last year,”’ said Amrit Pandurangi, senior director, Deloitte Touche Tohmatsu.

T C Benjamin, Mahara-shtra’s additional chief secretary (urban development), however, is confident about the progress. “All conditions laid down by the environment ministry have been fulfilled. We have permission from the defence ministry and have moved the Bombay High Court for permission to cut mangroves,” said Benjamin, who is overseeing the Navi Mumbai airport project. “The required government land has been transferred, and now it is a question of private land,”’ he added. The acquisition of about 1,000 acres of private land is the most challenging part, as farmers are asking for Rs 20 crore per acre to part with their land, and this is way above the market price.

Cidco has also prepared a new rehabilitation plan and would now offer developed land, instead of monetary compensation. “Giving cash compensation would increase the project cost and make it unviable. The new compensation plan has been discussed with villagers and is being finalised. Now, land acquisition will move very fast,” Benjamin added.

The Mopa airport in Goa and the Kannur airport in Kerala, too, have been plagued by the problem of land acquisition. Under the planning stage for over a decade, the Mopa airport received the government’s in-principle approval in 2000, while the Kannur airport was cleared in 2008. The Goa government has also finalised a master plan for the airport and Chief Minister Manohar Parrikar had recently said the process of land acquisition was 75-80 per cent complete. An official from the Goa government said the government hoped to finalise bids by the end of 2012-13 and the project would be completed in three years from then.

The Kannur airport, conceptualised in 1996 during the term of then chief minister E K Nayanar, has failed to take off because of land acquisition delays and changes in the planning model. The project cost is pegged at Rs 1,414 crore, of which about Rs 630 crore would be funded by debt. The process of raising equity for the project is not yet over, and Kannur International Airport Limited (KIAL) is still scouting for investors.

“The Kerala government is the main sponsor, and would hold 26 per cent stake. Twenty per cent stake would be given to public sector companies and the rest is open to the private sector. We have received proposals from state oil marketing companies, and these have expressed keen interest. We will not go for an initial public offering. Equity would be mobilised through private placement,’” said

V Thulasidas, head of KIAL and former managing director, Air India. The company already had 1,275 acres and could start work, he added.

“We have invited pre-qualification bids for earth work at the site and hope to start work after the monsoon,” he said, adding the engineering, procurement and construction work for the airport would be awarded by next March.

Leela Group of Hotels Chairman C P Krishnan, who hails from Kannur, has been actively pushing the government to expedite the project. In 2010, the Leela Group had tied up with ILFS and had planned an investment in the airport. But the plan went into cold storage following objections from the Kerala government. A Leela Group of Hotels spokesperson did not respond to a query on the issue.

‘Why does Fraport not criticise Britain?’
The government’s announcement on fast-tracking infrastructure projects was overshadowed by another development in the same week. German airport company Fraport AG, which holds 10 per cent stake in the Delhi airport, said it was shutting its India office, citing lack of opportunities.

While others such as Zurich Airport, Aéroports de Paris and TAV Airport Holdings said they were exploring investment opportunities in India, there galore concerns galore on policies and government support. TAV, a Turkish company, said the government must clearly lay down the project scope, define revenue streams and give a guarantee for revenue. “The investor should be aware of the roles and responsibilities of all the entities that would be involved in the pre-bid and post-bid phases. Besides, the investor also has to be assured works or responsibilities are clearly defined in the tender documents,’’ the company said. However, Airports Authority of India chairman V P Agrawal said though it was easy to criticise, government processes take time. “Britain has not constructed a greenfield airport in the last 50 years. Why do they (Fraport) not criticise Britain?’’ he asked.

http://www.business-standard.com/india/news/delayed-take-off-airport-projects-livehope/477905/

HPCL stops fuel supply to Kingfisher, resumes after payments

NEW DELHI: State-owned Hindustan Petroleum Corp Ltd (HPCL) on Tuesday briefly stopped jet fuel supplies to Kingfisher Airlines over delays in payments but resumed supplies shortly after the beleaguered airline made payments.

HPCL had a few months back put Kingfisher on cash- and-carry requiring the the Vijay Mallya-run airline to make daily payments before fresh aviation turbine fuel (ATF) supplies are made.

"There was delay in payment this morning and so supplies were stopped," a source said. "Kingfisher immediately cleared the payment, shortly after which jet fuel supplies were resumed".

There was not much disruption in flight schedule as the stoppage happened in afternoon when Kingfisher has very few flights.

Kingfisher's ATF consumption has come down drastically during the past couple of months. It consumed fuel worth Rs 4-4.5 crore per day in first quarter of 2012 calendar year which has now come down to Rs 2-2.5 crore.

"There are no issues now," the source said. HPCL, the airline's biggest fuel supplier, had in March too stopped supplies over non-payment of dues.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/hpcl-stops-fuel-supply-to-kingfisher-resumes-after-payments/articleshow/14273801.cms

The agitation by sections of Air India pilots appears set to escalate

On Tuesday, the 40 {+t} {+h} day of the pilot’s agitation, more than 20 executive pilots reported sick. Executive pilots are senior members of the airline who by virtue of their seniority spend more time doing managerial duty rather than flying duty. Executive pilots being part of the management, are generally not allowed to take part in any industrial action.

The agitation, which has led to a severe curtailment in AI’s international operations also, began with pilots suddenly reporting sick shortly before they were to operate scheduled flights. While AI officials claimed that the truncated schedule was being maintained, sources maintain that in the coming days there could be some disruptions.

Senior AI officials played down the number of executive pilots reporting sick. “Even when there was no pilot agitation, it was normal for about 11 executive pilots to report sick. Right now we have a situation where some of the executive pilots do not have passports and hence cannot be put on international flights. In addition, at least two executive pilots have cancer patients in their houses to look after,” a senior airline official said.

With the pilot agitation showing no signs of ending, the airline has been depending on executive pilots to maintain a truncated schedule. The sudden decision of executive pilots to report sick is said to be linked to them being upset about an increase in their flying duty since the agitation began. Officials denied this but maintained that airline was following the laid down procedures for the number of hours each pilot was mandatorily allowed to fly.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3548084.ece