Kingfisher Airlines' employees to seek closure of company, want management to sell assets

NEW DELHI: In yet another blow to cash-strapped Vijay Mallya-led KingfisherBSE 2.30 % Airlines, the company's employees will meet in the national capital on Wednesday to seek closure of the airline. 

According to ET Now, the employees are expected to write to the management, asking them to sell assets of the airline and clear salary dues that run into several months. At 2:07 PM, shares in Kingfisher AirlinesBSE 2.30 % were trading at Rs 13.68, down 1.08 per cent on the Bombay Stock Exchange. 

ET on Tuesday reported that lenders to Kingfisher Airlines have decided to take legal action against the airline company for its failure to repay over Rs 7,000-crore debt despite repeated reminders. 

Lenders had been pursuing a soft approach so far in the hope that the company, which has not paid interest on its loans for more than a year now, can be persuaded to come out with a revival plan. But their patience seems to be running out now. 

This is the first time that lenders are discussing recovery measures. Officials who attended the meeting said that lenders' initially step would be to issue a legal notice to the airline. 

With uncertainty over the revival of Kingfisher airlines,Civil Aviation Minister Ajit Singh last week said the airline should present a satisfactory operating plan to the DGCA and work on its rescue plans for the sake of its employees, stakeholders and passengers. 

He also pointed out that the airline has not renewed its licence which expired on December 31, 2012.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/kingfisher-airlines-employees-to-seek-closure-of-company-want-management-to-sell-assets/articleshow/17952589.cms

AirAsia looks for a partner to launch an Indian airline, promoter Tony Fernandes keen on India

MUMBAI: AirAsia plans to launch an Indian airline in partnership with a local promoter as the desire to earn share in one of Asia's biggest aviation markets trumps fears of a hypercompetitive industry full of bureaucratic obstacles.

Two people close to the development said Asia's largest budget carrier is exploring options to set up a company that will be majority owned by an Indian promoter, preferably a well-known business group.

AirAsia will hold 49% in the venture that will apply for an aviation licence. The Malaysian carrier has broached the issue with the VideoconBSE 0.64 % Group and the talks are at a preliminary stage, one person said.Venugopal Dhoot, the chairman of the Videocon Group, confirmed that they had been approached by the airline.

"They had approached us. These were preliminary discussions. There's nothing I can say now," Dhoot said. An AirAsia spokesperson in Malaysia declined to respond to an ETquery on the matter.

Tony Fernandes, the promoter of AirAsia, is a flamboyant businessman with a taste for Formula Oneracing and football. He built AirAsia into Asia's largest budget carrier and stunned the aviation industry in 2011 by ordering 200 A320 NEOs, breaking the record set by Delhi-based IndiGo that had ordered 180 aircraft for $15.6 billion.

Though initially not very enthusiastic about the liberalisation of FDI in aviation in India, he is believed to have changed his mind recently. He tweeted after a visit to Mumbai that he is feeling good about India, which he says will be a big market for AirAsia like China.

Fernandes is the owner of Queen's Park Rangers (QPR), which currently languishes at the bottom of the English Premier League and which he says is his biggest worry. "QPR keeps me awake at night, not the aviation business," he told the Financial Times of London recently.

Fernandes' interest in India adds an intriguing twist to the scrappy battle for market share in India between low-fare airlines IndiGo and SpiceJetBSE -0.44 %, the state-owned Air India, and Jet AirwaysBSE -0.95 %, which has full-service and low-fare options. Heavy debt and a cut-throat price war had savaged the balance sheets of many airlines and forced the once-high-flying Kingfisher AirlinesBSE 2.38 % to down shutters. The government intervened by allowing foreign carriers to hold up to 49% stake in local airlines and bailing out Air India.

AirAsia's entry would further stir up the industry and probably trigger consolidation by forcing some companies to come together in some way.

Despite potential, Indian aviation is hobbled by high taxes, an intrusive government and a plethora of rules and regulations that stifle growth, industry executives say. AirAsia may be awed by the growth prospects, but it will have to negotiate its way through a labyrinth of rules, regulations and taxes.

Tim Clark, president of the Dubai-based Emirates Airlines, told ET in an interview last year that India is a difficult environment to operate in and the carrier is not happy with the 49% ceiling.

"Our point of view on this has been that what are you buying into? Would you buy into the balance sheet of Kingfisher or Air India? If the Indian government is having a tough time managing its carriers, how can we run them? Buying into Indian airlines means putting equity into them first.

Then one has to have a business plan, making which is not a difficult thing. But it is its implementation in the Indian environment which is a challenge," Clark had said.

The government is also not very keen on giving new aviation licences. "Overall, the environment for the aviation industry does not look good. All existing airlines are losing money heavily. Where is the scope for another airline?," a top civil aviation ministry official had told ET some time ago.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/airasia-looks-for-a-partner-to-launch-an-indian-airline-promoter-tony-fernandes-keen-on-india/articleshow/17960514.cms

A pilot with an unusual interest

Captain Mike Patel stands out, clad in black shirt and trousers, and there is a glittering ‘Airbus’ logo just above the pocket. “Yes, I am a test delivery pilot of the Toulouse-based Airbus Industrie,” he says. “This means, I deliver the planes when it is ready to be given to the buyer.” His latest delivery is the A-380, which costs a whopping $250 million. “I took a plane to Dubai because the Emirates had placed an order for 50 and we were giving them the 12th plane.”

Of course, the latest planes have the ‘fly-by-wire’, system. “This means that everything is computerised and the plane flies by itself,”  says Mike. “I only intervene when a problem arises.”

Based in London, Mike has been with Airbus for the past ten years. But the reason he has come to the Pravasi Bharatiya Divas is because he is a proponent of tantric sex.

“When you have sex, you experience a second of bliss,” he says. “I can enable you to prolong that state. The mind and body has to be in tune with nature. You have to awaken the chakras, and you need to do yoga and meditation.” Unusually, he has three thousand followers in the Ukraine. “I trained one man and they came one after the other,” he says with a wide smile.  

Saroja Raja Gopal is at the opposite end of the spectrum. She is flipping through a photo book on Mahatma Gandhi at the Timeless Mahatma Trust stall. “For me, Gandhiji means ahimsa,” she says. “The way he fought for the Independence of India was unique.”

She says that as a party member of the Malaysian Indian Congress, they follow his principles. “Our party represents the Indian community but we are all very happy in Malaysia,” says the Kuala Lumpur-based activist.

“Although there will be people who will tell you that we are having a bad time, but I don’t agree.”

At the Pravasi, Saroja, whose grandparents migrated from Thanjavur decades ago, says she is very happy to meet Indians from all over the world. “It has been a great experience,” she says. 

The portly Ram Chander is wearing a khaki uniform but with an unusual tag: ‘United Fire Services’.  He is a supervisor of a private organisation who has come all the way from Delhi with a team of six. The aim is to ensure that the 28,000 sq. ft. exhibition centre at the Pravasi Bharatiya Devas is fire-safe.

“My men are wandering around all over keeping a sharp watch,”he says. “If a spark can be immediately extinguished, it will avert a major fire.”

So they have fire extinguishers, a white powder which can be thrown onto the spark, and carbon dioxide foam.

http://newindianexpress.com/states/kerala/article1415191.ece

Kingfisher Airlines' employees seek closure of cash-strapped carrier

NEW DELHI: Let down on several occasions by unfulfilled promises to clear several months of salary dues, the employees of Kingfisher AirlinesBSE 1.64 %in Delhi have sought closure of the cash-strapped carrier by initiating legal proceedings against the company on Thursday.

Employees of the airline's maintenance and ground support departments, who held a meeting on Wednesday afternoon at the Delhi airport, have also decided to submit a memorandum to the ministries of corporate affairs, civil aviation and labour seeking an enquiry into the management of the company.

They have demanded clearing of salary dues by selling the company's assets.

"We have already appointed two advocates who will begin the legal procedures on Thursday and will soon go to the court to file the case. There is no meaning to pull the company like this when it has been grounded for months and our state is worse than being unemployed," the airline's maintenance employees association head Santosh Kumar Gautam said.

The winding-up petition would be filed under the Companies Act to close down the airline, which has been grounded since October 2012.

The employees, who attended the meeting, also said employees from other departments such as pilots and flight crew were also kept in the loop about this. They are in constant touch with the employees who plan to take the legal route.

"We would like to approach Ram Jethmalani to represent our case," Gautam said, adding that the workers' trust has been breached "umpteen number of times regarding salary payments".

Employees' action against the debt-laden carrier comes immediately after lenders decided earlier this week to take legal action against the company for its failure to repay over 7,000-crore debt despite repeated reminders.

Lenders had been pursuing a soft approach so far in the hope that the company, which has not paid interest on its loans for more than a year now, can be persuaded to come out with a revival plan. But their patience seems to be running out now.

This is the first time that lenders are discussing recovery measures. Officials who attended the meeting said that lenders' initial step would be to issue a legal notice to the airline.

With uncertainty over the revival of Kingfisher Airlines, civil aviation minister Ajit Singh last week said the airline should present a satisfactory operating plan to aviation regulator DGCA and work on rescue plans for the sake of its employees, stakeholders and passengers.

The airline could not save its licence from expiry on December 31, for not being able to present a credible recovery plan to the DGCA.

The airline has debts of close to 8,000 crore and has suffered losses of 1,609 crore in 2008-09, 1,647 crore in 2009-10, 1,027 crore in 2010-11 and 732 crore in 2011-12.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/kingfisher-airlines-employees-seek-closure-of-cash-strapped-carrier/articleshow/17961154.cms

Shut down Kingfisher Airlines, demands desperate staff as it escalates confrontation with Vijay Mallya

Beleaguered Kingfisher Airlines today faced fresh trouble with its employees deciding to move court seeking a formal closure of the company if Vijay Mallya did not spell out future plans giving a time-line for clearing their salary dues of eight months.

The employees are also learnt to have moved the DGCA, informing the aviation regulator of their plans which also include seeking the intervention of the President of India Pranab Mukherjee and the Prime Minister Manmohan Singh, airline sources said.

"We demand that the management should share the revival plan with us. We also want it to spell out a payment schedule for our salary dues. If we don't find their explanation satisfactory, we will file a winding up petition in the court under section 433 of the Companies Act," the sources said.

The decision was taken following a meeting of the Kingfisher Airlines Maintenance Engineers Association, which lasted for two hours in New Delhi.

The staffers have also decided to write to the Kingfisher management asking them to sell assets of the airline and clear salary dues running into several months, they said.

There was no immediate response from the airlines management to the employees' decision.

Kingfisher, whose flying license (Scheduled Operator's Permit) expired on December 31 last year, suffered another blow with the Mumbai International Airport Limited (MIAL) giving away six of 11 of flying slots, with sources saying most of them have gone to Indigo, official sources said.

Its bankers, which have been discussing recovery measures during the past few months, have also decided to take legal action against the airline company for its failure to repay over Rs 7,000 crore debt despite repeated reminders.

Kingfisher is burdened with a loss of Rs 8,000 crore and a debt burden of another over Rs 7,524 crore, a large part of that has not been serviced since January.

http://www.indianexpress.com/news/shut-down-kingfisher-airlines-demands-desperate-staff-as-it-escalates-confrontation-with-vijay-mallya/1056909/0

SpiceJet allots 1.5 cr warrants to Kalanithi Maran CHENNAI, JAN. 9:

SpiceJet Ltd informed the stock exchanges on Wednesday following the shareholders’ approval, the company on January 9, has allotted 1.5 crore warrants, having option to apply for and be allotted equivalent number of equity shares of the face value of Rs 10 each at a premium of Rs 26.18 to promoter Kalanithi Maran, on preferential basis.

In another filing, the company has said that Kalanithi Maran and Kal Airways have increased their holding in SpiceJet to 53.48 per cent.

Earlier, the company’s board decided to raise Rs 130 crore through issue of 14 per cent unsecured compulsorily convertible debentures to Kalanithi Maran, and another Rs 15 crore through preferential allotment of warrants with an option to apply for equity shares to him.

Besides, it has also been approved that the company’s authorised share capital be raised to Rs 1,000 crore from the current Rs 565 crore; to redesignate S. Natrajhan as Managing Director of the company; and election of Kalanithi Maran and Kavery Maran as directors not liable to retire by rotation.

http://www.thehindubusinessline.com/markets/stock-markets/spicejet-allots-15-cr-warrants-to-kalanithi-maran/article4291199.ece?homepage=true&ref=wl_home

Putting North India on the global air map

A number of established international airlines including British Airways, Air France, Lufthansa, Singapore Airlines, Thai Airways, Virgin Atlantic, Emirates, Kuwait Airways, Etihad and SriLankan operate regular flights from various parts of the world to Delhi’s Indira Gandhi International Airport.

In a bid to make it easier for tourists and others to travel from Agra to Khajurao and the holy city of Varanasi, Air India recently launched a three times a week flight linking these cities.

The move has seen Agra coming back on to the air map of the country. In many ways, the launch of the new flight epitomises the potential that exists in North India not only for developing airports and air routes for tourism, but also for economic activities.

NEW AIRPORTS

According to officials of the State-owned Airports Authority of India (AAI), catering to the growing demand in North India, there are 28 operational and three non-operational airports in the region.

Also, two airports at Bikaner and Bhatinda are under construction.

In addition, AAI plans to develop the Kishanganj airport in Rajasthan into a full-fledged airport subject to the State Government transferring land. Creating civil enclaves in both Jaisalmer and Bikaner is also on AAI’s radar. Besides, a civil enclave is also proposed at Bareillly, Uttar Pradesh.

“Feasibility of developing State Government airports at Meerut, Moradabad and Faizabad in Uttar Pradesh for scheduled civil operations subject to land transfer by the State Government is also being examined,” a senior AAI connected with the projects, said. On the anvil is also a plan to develop the Indira Gandhi Rashtriya Udyan Academy at Fursatganj in Uttar Pradesh to cater to scheduled civil operations.

INTERNATIONAL AIRLINES

It is not only the domestic flyers who are being targeted to visit North India.

To facilitate the arrival of international passengers directly into more cities in the region, the Government recently declared Lucknow and Varanasi in Uttar Pradesh as international airports.

This means more international airlines can now apply to the Indian Government for operating flights to these cities.

These will provide seamless connectivity for tourists and others coming to the region for business interests.

Besides, Chandigarh and Agra are customs airports and can receive international flights. A number of international airlines already operate to the region.

These include the Dubai-based low cost airline flyDubai, which operates regular flights between Lucknow and Delhi.

Besides, a number of established international airlines including British Airways, Air France, Lufthansa, Singapore Airlines, Thai Airways, Virgin Atlantic, Emirates, Kuwait Airways, Etihad and SriLankan operate regular flights from various parts of the world to Delhi’s Indira Gandhi International Airport which was modernised in 2007.

The region also has air strips that support basic operations for both aircraft and helicopters.

Realising the business potential that exists in North India, not only do established domestic airlines such as Air India, Jet Airways and low-cost airlines like IndiGo and SpiceJet operate regular services linking various cities in the region, but recently Religare has also started services linking many cities.

These domestic airlines also help flyers reach various smaller cities in the region from Delhi and other parts of the country.

RS 1,000 CR FOR AIRPORTS

Keeping in mind the potential of the region, AAI plans to spend about Rs 1,000 crore during the 12th Plan for developing airports in North India.

The reason for this hectic pace for developing airports in North India is not difficult to gauge.

AAI officials point out that air traffic in the north region has been growing on the fast track since 2003-04. “In the last 10 years, passenger traffic recorded a compounded annual traffic growth rate of 16.3 per cent per annum, with domestic passenger traffic recording a growth of 18.4 per cent, while there was a 11.7 per cent growth in international passenger traffic,” AAI officials said.

The total passenger traffic touched 47 million in 2011-12 up from 10.21 million in 2001-02.

http://www.thehindubusinessline.com/features/putting-north-india-on-the-global-air-map/article4290566.ece

Maldives Airports turns down Axis Bank’s claim

Maldives Airports Company Ltd., which last month took over the control of the Male International Airport from the GMR-led consortium, has rejected the claims of Axis Bank for recovery of its loans extended to the project.

In a letter dated December 27, 2012, a copy of which is available with The Hindu , Maldives Airports has turned down Axis Bank’s demand for payment of $163.5 million citing various clauses of the cancelled concession agreement based on which the bank had lent money to the project.

“Under Clause 3 of Direct Agreement (dated November 24, 2010), the Granter (Maldives Airports Company) has the obligation to pay to the Security Agent (Axis Bank, Singapore branch) all sums only upon an early termination occurring. Since no such early termination has occurred, you have no basis to demand payment under the Direct Agreement,” the letter signed by Ibrahim Mahfooz, Managing Director, Maldives Airports Company said.

“The concession agreement was void ab initio (to be treated as invalid at the outset) and that was the basis of the Grantor (Maldives Airports Company) taking back the airport from the project company (GMR Male International Airport Private Ltd),” the letter added.

“As a result, your request for payment of the sum of $163,596,347.78 is hereby rejected,” the letter said.

It further added, “All our rights are reserved, including (but not limited to) pursuing our case relating to the validity of the Direct Agreement itself in light of our position that the concession agreement is void.”

A top Maldives Government official, when contacted, said that he would check the facts and get back on Thursday.

The Singapore branch of Axis Bank had written a letter to Maldives Airports Company on December 21, 2012, seeking payment.

Maldives Government, through the state-owned Maldives Airports Company, took control of the airport on December 8. This was India’s biggest FDI project in Maldives and it ran into trouble since change of guard at the helm last year.

http://www.thehindu.com/todays-paper/tp-business/maldives-airports-turns-down-axis-banks-claim/article4292583.ece

Kingfisher flies into more trouble

Kingfisher Airlines is heading for more trouble with its employees now planning to head to court, a move that comes after the management delayed in paying pending salaries, if a time-line is not given on clearing all dues. A section of engineers from Kingfisher’s Delhi base are planning to take the airline to court to recover their dues. A meeting was held in Delhi on Wednesday to chalk out the plan and it was decided to write a letter to the management seeking clarity on operations and related matters.

“We have asked the management to share with us their strategy on re-capitalization and the time frame on restart of operation. We want to know as to when they would clear our dues. If we don’t get a satisfactory reply, we will move the court to recover our dues,” said an employee asking not to be named.

“All these days the management did not share anything with us about operations. Top officials are not taking our calls They need to re-assure us. Our salary from June is pending and the management has gone back on its commitment,” said another employee.

The employees said that they have registered their trade union Kingfisher Maintenance Welfare Association which would take up their matter. “The registration came today,” an employee said. Employees said the pending salary bill for all could be over Rs. 120 crore. A strike by the airlines’ engineers and pilots in October last year led to partial lockout of the airline and since then it has been grounded. Since January 1, the airline’s flying permit has been cancelled as the management failed to satisfy the Directorate General of Civil Aviation (DGCA) on a re-capitalization and turnaround plan to renew the permit.

Apart from employees, the airline is faing problems with its vendors, service providers and lenders. Tax authorities have also initiated asset attachment proceedings to recover the unpaid dues. At a recent meeting, the lenders had hinted at starting recovery proceedings.

On Tuesday, Mumbai airport authorities cancelled six departure slots of Kingfisher and allotted to them to Indigo. Delhi airport authorities have yet to take any such action. The airline owes GMR’s Delhi and Hyderabad airports approximately Rs. 60 crore. Airports Authorities of India is also asking for repay of dues totalling over Rs. 220 crore.

http://www.thehindu.com/todays-paper/tp-business/kingfisher-flies-into-more-trouble/article4292582.ece

State must get AIE shares if Air Kerala fails: Chandy

Upping the ante for the proposed Air Kerala project, Chief Minister Oommen Chandy has said that the State government will stake claim to Air India Express (AIE) shares if the Union government refused to relax conditions that hindered its airline from taking off.

Addressing a session to showcase the investment opportunities in the State among the NRIs at the final day of the 11th Pravasi Bharatiya Divas here on Wednesday, Mr. Chandy said the move was to ensure that the State government had control and participation in the operation of AIE.

The government strongly believed that the State was fully eligible for exemption in conditions to take forward its airline project as transportation woes of Malayali expatriates was a matter of great concern.

The State government would not have pressed its case, if the Union government’s conditions were applicable universally and none had been granted exemption in the past.

But AIE was given an exemption within six months of its registration to operate international operations with just two aircraft and before operating a single domestic service.

“If AIE could be granted such a benefit simply because it is the subsidiary of Air India, then an airline proposed by a State government has every right for a similar relaxation,” Mr. Chandy said.

Stipulations

As per the existing regulations of the Union government, an airline should have five years’ experience in domestic operations and a fleet of 20 aircraft before it could be permitted to fly abroad.

Mr. Chandy said that Air Kerala cannot run the risk of starting off with domestic operations as it would threaten its very survival.

He said the concept of Air Kerala was launched during his tenure in 2005. A detailed project report was prepared and a company was registered paying Rs.1 crore.

Taking a dig at the Left Democratic Front government that followed, Mr. Chandy said that while it did not dissolve the company, it failed to do anything to take the project forward.

Earlier, managing director of Air Kerala V.J. Kurian said that while the project received a fresh impetus owing to the overwhelming support evinced by the delegates at the last year’s Emerging Kerala investors’ summit, the airline cannot probably take off without getting relaxation in the twin-conditions.

Domestic services

Operating domestic services will entail big loss. Since none of the expatriates with deep pockets had shown any interest in taking that risk, there was nothing much to do except for waiting for the relaxation of conditions by the Union government, he said.

---

·  State eligible for relaxation in conditions: Chandy

·  Says AIE was granted exemption

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/state-must-get-aie-shares-if-air-kerala-fails-chandy/article4293083.ece

Airport cargo workers go on indefinite strike

A large number of temporary workers, contracted to the private company handling operations at the International Air Cargo Complex of Chennai Airport, launched an indefinite protest on Wednesday.

The protest was in support of their demands, including a hike in wages, permanency, basic medical and canteen facilities, among others.

The workers are members of an employees union affiliated to the All India Trade Union Congress and are working for Bhadra International India Limited. They said the failure of their company as well as the State and Central government agencies, including the labour departments and Airports Authority of India, to address their grievances forced them to protest and abstain from work.

 They receive a monthly salary between Rs. 6,000 and Rs. 8,000 and this has remained unchanged for the past two years. According to Dayanidhi, a handyman, the cargo complex did not even have basic first aid or an ambulance and other vehicles. The complex did not have a canteen either, he added.

  Without any further delay, the workers should be made permanent staff of the company and they should be given house rent allowance, dearness allowance apart from decent canteen facilities, the workers said.  

Gurudas Dasgupta, AITUC leader and Lok Sabha Member of Parliament, addressed the workers, in support of their demands. Repeated attempts by The Hindu to get the reaction of officials of Bhadra International were in vain. Cargo handling operations were not affected due to the strike, airport sources said.

http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/airport-cargo-workers-go-on-indefinite-strike/article4292862.ece

Kannur airport runway tender by next week

Kochi, Jan. 9:  

Tender for the runway of the Rs 1,400-crore Kannur International Airport in Kerala will be ready by next Tuesday (January 15).

Minister for Ports and Airports K. Babu announced this during a session on ‘Investment opportunities’ at the Pravasi Bharatiya Divas here on Wednesday.

FOURTH IN STATE

The first flight will take off from the new international airport, fourth in the State, by 2015, he told non-residents on the final day of the three-day convention.

As much as 49 per cent of the equity is open for subscriptions by the public. Babu invited non-resident investments into the PPP project. Environment impact assessment (EIA) report is pending for clearance with the authorities in Delhi.

The third stage of the land acquisition procedure is now in the final stages, the Minister added.

SOFT LOAN

Separately, Babu said that the State Government has come out with a scheme of subsidy of Re 1 per km for each tonne of freight moved alongcoastal waters. Soft loan is being made available for manufacture of special carriers that can navigate the canals with relatively smaller draft.

A Rs 750-crore tender has been given to Malabar Ports Company to develop the Ponnani port as part of the scheme to develop a chain ofminor ports in the State.

An agreement has been signed for setting up a cement terminal at the Kollam port, which is being developed on the ‘landlord’ model. A similar course is being proposed with the Azhikkal port towards the north of the State, the minister added.

VIZHINJAM PORT

As for the Vizhinjam port and container transhipment terminal, the Minister said the EIA clearance is expected within the next three months.

The procedure has been delayed since the study had to be carried during the period encompassing the two annual monsoons in the State.

Even as the EIA is getting cleared, steps are under way to proceed with the other tenders with respect to the Vizhinjam project, he said.

The first flight will take off from the new international airport by 2015. As much as 49 per cent of the equity is open for subscriptions by the public.

http://www.thehindubusinessline.com/todays-paper/tp-others/tp-states/kannur-airport-runway-tender-by-next-week/article4291778.ece

British Airways launches 3rd phase of marketing campaign

Mumbai, Jan. 9:  

British Airways and Visit Britain have launched the third phase of their joint marketing campaign. Customers from India can enjoy attractive fares to the UK in World Traveller and Club World cabins. The offer will be valid on flight tickets booked between January 7 and January 31, for travel between January 7 and June 30, 2013. Christopher Fordyce, British Airways Regional Commercial Manager, South Asia, said, “This is one of the best seasons to visit London and the rest of the UK.” The third phase of the campaign begins this week, with print and digital advertising featuring special all inclusive economy class return fares from Rs 48,020 and business class fares from Rs 149,760. 

http://www.thehindubusinessline.com/todays-paper/tp-marketing/british-airways-launches-3rd-phase-of-marketing-campaign/article4291691.ece

UPS announces new express air freight service

Mumbai, Jan 9:  

UPS has announced a new express air freight service, UPS Worldwide Express Freight, for urgent, time sensitive and high value international heavyweight shipments. This new service is an extension of the UPS Worldwide Express package portfolio.

Customers now can ship pallets over 70 kg as easily as packages exclusively within UPS’s global air network from 37 origins to 41 destination countries. UPS Worldwide Express Freight service offers many of the same features as UPS’s Worldwide Express package service, including automated shipment, online tracking and proactive notification technology. This service is to be rolled out across Asia Pacific, covering Australia, India, China, Hong Kong, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand.

“With the US and Europe being Asia’s largest export markets and given promising developments within Asia, the launch of the new service presents immense opportunities for businesses,” said Brendan Canavan, President, UPS Asia Pacific, in a statement.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/ups-announces-new-express-air-freight-service/article4291684.ece

Airport fee refund has flyers in a flap

“Please arrange to refund my Airport Development Charges of Rs 600 collected excess while booking of ticket before January 1, 2013 as my return journey (Tokyo-Shanghai-Delhi) will end on February 27, 2013. Since this payment was made through credit card, the amount may please be credited through credit card.”

This is not a letter written to an airline for a refund for the excess Development Fee (DF) collected at Delhi airport; instead it is a letter from a reader of Business Line. Reading about the Directorate General of Civil Aviation’s (DGCA) decision to halve the DF collected at Delhi’s Indira Gandhi International Airport from Rs 1,200 to Rs 600 for an international flight and from Rs 200 to Rs 100 for a domestic flight, readers like this one are wondering how they can collect the refund.

NEEDLESS CONFUSION

This is a valid question as the decision is to be implemented with retrospective effect. What this means is that all those passengers who had booked their tickets before January 1 for a flight after that date are entitled to get this money back.

This decision was taken after DGCA issued an Aviation Information Circular, commonly known as AIC, on collection of Development Fee at IGI Airport, Delhi on December 31, 2012. The circular also says that the airlines were being directed to refund the excess amount that they had collected from passengers who will travel after 1.1.13 but who had booked their tickets prior to this date.

To realise the mess that this decision has created, just consider the numbers. Close to 1.4 million passengers depart from Delhi airport every month --- or over 45,000 passengers every day, two-thirds of whom are domestic flyers while the rest are international flyers. Further, the airport handles 47 international airlines and 7 domestic airlines.

Passengers entitled to the refund will have to run after the airline to get the money back. The other option is running after travel agents who booked the tickets to get a refund.

Even if 50 per cent of these flyers have to be paid a refund, the daily payout will be Rs 15 lakh for domestic flyers and Rs 45 lakh for international flyers, which will divided among the airlines. On their part, some of the airlines maintain that a circular specifying the refund in DF has not been issued to them as yet.

Messy though this sounds, the situation is even more complicated as airlines collect DF as a part of the ticket cost. The DF is then separated and parked in an Escrow account managed by the Airports Authority of India (AAI).

The airport operator (GMR) approaches AAI with a request for releasing funds which are to be used to pay off loans against the shortfall of funds for developing the airport. This billing cycle is twice a month. Imagine the problem that will be created, as even collating the number of passengers due for refund has to be worked out, for which the airlines will have to give the numbers. The amount to be returned too will have to be collated. There is no clarity on the time limit within which the airlines should refund this amount, so will it be an indefinite wait to find out how much money the airport operator will get for this period?

Little wonder then that many are coming to the conclusion that this was a hasty decision taken by the airline regulator, DGCA, without considering the ramifications of such a move.

BETTER OPTION

DGCA could have been populist and yet implemented the decision in a more rational manner. Take the case of how and when airlines increase the fuel surcharge. An increase in fuel surcharge means that a passenger has to pay more, but the airlines specify that the enhanced fuel surcharge will be applied on tickets issued on or after a particular date.

This is what the DGCA should have done when it came to reducing the DF. It could easily have said that the amount would be halved for tickets booked after January 1 this year.

This way flyers would have known that they will have to pay less, the airlines would have deducted this amount from the tickets, AAI would have got the right amount and GMR would have known what was coming to its kitty.

If it did not want to follow the airlines’ approach then it should at least have made the flying public aware of its move. What sense does it make to come up with something favourable for the flyers when they don’t even know about it?

Now that the decision has been taken, the only way out seems to be to follow what was done in 2012. After the Supreme Court first disallowed and subsequently allowed imposition of DF at Delhi, rather than setting up physical counters to collect the fee, it was decided that the Airports Economic Regulatory Authority will allow the airport operator to collect DF for an additional number of days, to ensure that the passengers were not inconvenienced and the airport operator did not suffer any financial losses.

But will the DGCA take this step? Or will hapless flyers write letters to the editor to find out where to get their money back?

Directorate General of Civil Aviation could have been populist and yet implemented the decision in a more rational manner.

http://www.thehindubusinessline.com/todays-paper/tp-opinion/airport-fee-refund-has-flyers-in-a-flap/article4291663.ece