Air travel to cost more as airlines freed to charge extra for services

NEW DELHI: Air travel is all set to cost more as Indian carriers — like their foreign counterparts — are now free to charge passengers extra for almost every service.
 The aviation ministry on Monday allowed airlines to 'unbundle' services —meaning charge extra for blocking seats in advance, check-in baggage, and carrying sports and musical equipment or high value baggage. The list of items allowed for extra charge by aviation minister Ajit Singh will be reviewed in six months.Fallout of this order could be reduced free check-in weight. Domestic flyers are presently allowed to check-in 20 kg and airlines have been planning to reduce this to 15 kg. Airlines have been planning to hike excess baggage charge too, which means a double whammy for flyers.
Eco class flyers can use lounges for a fee
While almost all low cost carriers (LCC) and some full service ones were in favour of reducing free baggage limit, they were waiting for DGCA to first allow pre-booking of seat charges.Airlines have now been allowed to allow economy class passengers use their lounges for a fee apart from the common practice of onboard sale of food and beverages, except drinking water in cups (not the bottled variety) which has to be given free. Airlines are going to almost immediately start charging for pre-booking of seats as they had started doing so about three years backed and were stopped by the Directorate General of Civil Aviation (DGCA) in early 2012. They had then petitioned the DGCA to be allowed to resume charges for this facility. After keeping the global example in mind, the regulator is learnt to have permitted this charge."Our application for resuming pre-booking seat charges was lying with aviation authorities for years. When AirAsia's application for starting an airline here was cleared, we knew the move will get a push as foreign LCCs are famous for unbundling services and charging extra for everything. AirAsia on its international flights does not allow any free check-in baggage. Now the global LCC model will truly come to India," said an airline official, emphasizing that all carriers need to boost their ancillary revenues to keep base fares competitive.An aviation ministry statement said unbundling services and charging for them extra "has become a necessary aspect of exercising more control over operational costs and running a successful airline." The ministry has asked airlines to have fixed charge for services and not change them like airfares for different flights. The DGCA shall monitor the charges. Airlines will have to file details of services to be unbundled and their charges to the DGCA.
http://timesofindia.indiatimes.com/business/india-business/Air-travel-to-cost-more-as-airlines-freed-to-charge-extra-for-services/articleshow/19793961.cms
 

Green tribunal nod for Aranmula

Kochi: The southern bench of the National Green Tribunal in the city on Tuesday permitted the petitioner in the multi-crore KGS Aranmula International Airport case to withdraw the appeal following a request. The Chennai-based firm, KGS group, had planned to set up the airport in Aranmula, Pathanamthitta district.
Local residents and Aranmula Heritage Village Protection Action Council, Aranmula, had opposed the move and approached the southern bench of the Green Tribunal recently. They raised objections alleging that the construction work posed a threat to heritage sites, the holy river Pampa and agricultural land.
The proposed greenfield international airport was designed to handle 1,000 passengers at a time and cater to Airbus A-320 and Boeing 747-like aircraft. The airport, located near  Sabarimala, was expected to commence operation in 2014 and serve pilgrims and NRI passengers. On April 2, the judicial member of the tribunal, Justice M. Chockalingam, and expert member, Prof R. Nagendran, directed the management of the airport developed on 700 acres of land, to halt the work.On Tuesday, Justice Chockalingam said, “All respondents represented by their counsel were present. Advocate general of Kerala contended that the application was barred by limitation and jurisdiction and petitioner had suppressed the fact that a writ application on the same was pending before the Kerala High Court.”
However, the counsel for the petitioner prayed for the tribunal to give liberty to come back with a fresh application and permit to withdraw the application
“Tribunal gave permission to the application to withdraw their petition and accordingly the case was disposed as withdrawn,” the bench noted.
http://www.deccanchronicle.com/130501/news-current-affairs/article/green-tribunal-nod-aranmula

Increased access to Etihad to benefit fliers: Ajit Singh

Ajit Singh says the move was made keeping “passenger convenience” in mind as more foreign carriers would increase options for fliers.
 NEW DELHI: Defending the move to allow UAE city-state Abu Dhabi's airlines increased access to the Indian market, civil aviation minister Ajit Singh says the move was made keeping "passenger convenience" in mind as more foreign carriers would increase options for fliers and bring down airfares on overseas routes. "Everyone has been criticising revision of bilateral traffic rights between India and Abu Dhabi. We looked at passenger convenience in doing it and, therefore, revision of bilateral rights is important," Singh told ET.
 Last week, in the backdrop of the financial deal between the Naresh Goyal-owned Jet Airways and Abu Dhabi's national carrier Etihad, the two regions decided to raise air capacity by 36,670 seats per week from the existing 13,300 seats per week, sparking concerns among the local airlines and private airports. "Why should everyone come to Delhi to catch a flight? Why can't we have a direct overseas flight from Muzzaffarpur? Increase in competition among foreign airlines and cheaper operations from regional airports, where state governments are ready to offer a lot of tax benefits, will ultimately help bring fares down," "Air India's problem is high costs, which they will have to cut. They have offices and staff all over the world without having even a single flight at some places.
 Growth of international traffic, according to AI's own projections, is 10% per annum and there's a lot of scope for everyone to service this," he said.
 Comptroller and Auditor General, in its report on Air India in 2011, had pointed out how Air India had lost out on international air traffic due to generous grant of traffic rights to foreign airlines, especially from Dubai, Bahrain, Qatar and other Gulf and South East Asian countries. Till date, Gulf airlines such as Emirates, Etihad and Qatar, which are gateway carriers, dominate air routes between India and the Middle East to an extent that 40% of total west-bound Indian traffic is routed through the Gulf. Latest official statistics corroborate this showing how Emirates garnered a lion's share of the total Indian passengers in 2011-12 at 13.04% market share. No wonder then that the national auditor recommended that the ministry of civil aviation could look at "options for rollback of excess entitlement granted beyond genuine traffic requirements." the minister said. Singh said more access to foreign carriers would enable direct flights to overseas locations from small towns improving air connectivity and means of transport for all.Revision in air capacity granted to Abu Dhabi will help their official carrier Etihad attain equal footing with Dubai's airline Emirates, which now has 54,200 seats per week into India. Air India CMD Rohit Nandan had last week told ET about his apprehension of other foreign carriers, especially Dubai's Emirates, pushing more aggressively for increase in their traffic rights too as they've been requesting the same for the past one year. The minister brushed aside Air India's concerns arguing that Etihad's increased India operations "will give more headaches to Emirates than Air India.""Air India's problem is high costs, which they will have to cut. They have offices and staff all over the world without having even a single flight at some places. Growth of international traffic, according to AI's own projections, is 10% per annum and there's a lot of scope for everyone to service this," he said. Comptroller and Auditor General, in its report on Air India in 2011, had pointed out how Air India had lost out on international air traffic due to generous grant of traffic rights to foreign airlines, especially from Dubai, Bahrain, Qatar and other Gulf and South East Asian countries.Till date, Gulf airlines such as Emirates, Etihad and Qatar, which are gateway carriers, dominate air routes between India and the Middle East to an extent that 40% of total west-bound Indian traffic is routed through the Gulf. Latest official statistics corroborate this showing how Emirates garnered a lion's share of the total Indian passengers in 2011-12 at 13.04% market share. No wonder then that the national auditor recommended that the ministry of civil aviation could look at "options for rollback of excess entitlement granted beyond genuine traffic requirements."
http://m.economictimes.com/news/news-by-industry/transportation/airlines-/-aviation/increased-access-to-etihad-to-benefit-fliers-ajit-singh/articleshow/19811742.cms

Jet-Etihad alliance triggers open offer, says SES

The deal between Jet Airways and UAE-based Etihad Airways should trigger an open offer, says proxy advisory firm Stakeholders Empowerment Services (SES).

“Jet has announced Etihad has agreed to subscribe to a preferential issue, SES is of the opinion that an open offer should have been triggered under the SAST Regulations. The public announcement for an open offer should have been made on the date of the agreement. Since that date has already passes, SES is of the opinion that the Company is non-compliant with the SAST (Substantial Acquisition of Shares and Takeover) Regulations,” the firm has said in a report.
 Jet announced last week the UAE national carrier had agreed to subscribe for about 27 million new shares (24 per cent stake after dilution) in Jet Airways for $379 million (about Rs 2,000 crore). The two airlines, however, haven’t announced any open offer as the trigger limit is 25 per cent, under the new takeover code regulations. “Shares and voting rights being acquired by Etihad are below the trigger level (24 per cent of equity capital or voting rights) prescribed in Regulation 3(1) and therefore, do not trigger the takeover code.
 However, there is no minimum limit or threshold level of shares or voting rights for control that will trigger the takeover code. SES understands that if any agreement, written or oral, puts any person in position of control, such an agreement will trigger provisions of the SAST Regulations," said the SES report.
 The Mumbai-based proxy advisory firm believes that Jet, Etihad and current promoters (Tail Winds) are person acting in concert (PAC) and this triggers an open offer under SAST Regulations
http://www.business-standard.com/article/markets/jet-etihad-alliance-triggers-open-offer-says-ses-113043000776_1.html

West Asian airport dreams bank on Indian travelers

It may be just an hour-and-a-half drive from the Dubai airport, West Asia's undisputed aviation hub, Abu Dhabi is still expanding the capacity of its international airport from 12.5 million passengers per annum now to 40 million by 2018 and 60 million subsequently. The airport will need passengers to justify the billions of dollars that are being invested. Last week, Abu Dhabi took a significant step in that direction when it signed a new bilateral traffic agreement with India to increase the capacity on the sector from 13,000 seats a week to 50,000 in the next three years. The announcement came just a few hours after Abu Dhabi's national carrier, Etihad, picked up 26 per cent in Jet Airways. Etihad wants to funnel passengers from 23 Indian cities to Abu Dhabi and onwards to Europe, Africa and the US. "The deal is a game changer for Etihad," says Kapil Kaul, who heads the Centre for Asia Pacific Aviation in India.

Abu Dhabi and Etihad aren't the only ones who are discovering the importance of India to feed their hubs. Other West Asian carriers as well as airports and some new European destinations are also expanding their capacities furiously. According to CAPA, foreign carriers Qatar Airways, Emirates, Air Arabia, Turkish Airlines, Singapore Airlines and Cathay Pacific have together demanded over 160,000 additional seats per week from the Indian government. For over two years the government had closed the doors on bilateral traffic rights, saying it has to protect Air India. The Abu Dhabi deal, most experts say, shows this consideration no longer weighs on the government's mind and it will open the Indian skies further in the days to come.
 Dubai's rivals
 There are other places, too, apart from Abu Dhabi, which are challenging Dubai's dominance in West Asia. In Doha, the home of Qatar Airways, the new international airport, which is expected to open by the end of this year, will handle 24 million additional passengers in a year - it will go up to 50 million passengers by the end of this decade. To feed this capacity, Qatar Airways, which is also expanding its fleet size, wants to triple its seat entitlements to 72,000 a week from 24,000 at present. Sharjah, from where low-cost carrier Air Arabia operates, has announced that it will also expand its airport as the capacity of 7 million passengers is almost fully utilised. So, even though it is a small player compared to the other West Asian giants, it has now asked for additional 11,500 seats a week, which will nearly double its capacity to India.The battle for Indian passengers is not limited to West Asian carriers. In Europe, Turkish Airlines, leveraging Istanbul's location to address travel from South Asia to Europe and the US, has asked the Indian government to expand its weekly seat entitlement nearly five-fold, from 4,000 a week to 20,000. It wants to increase it frequency of flights from both Mumbai and Delhi and fly to new destinations like Chennai, Kolkata, Hyderabad, Bangalore, Amritsar and Ahmedabad. Istanbul is challenging the supremacy of hubs like Frankfurt and Amsterdam, and even London, by offering value-for-money fares. That's because the Turkish capital is putting up up a third airport which will initially have a capacity to handle 90 million passengers going up to 150 million when it is fully completed.



SOARING HIGH
Airport
Expansion plans
Dubai
Capacity of existing airport to be upped from 60 million to 90 million passengers per annum. New airport Dubai World Central to handle 160 million passengers by 2028
Abu Dhabi
Increasing capacity from 12.5 million to 40 million by 2018
Doha
Increasing capacity by 24 million to 50 million passengers per annum by 2018
Sharjah
Plans to expand airport capacity from 7.5 million passengers per year
Istanbul
New airport with capacity to handle 150 million passengers after completion. 90 million passenger per annum capacity will be introduced in the first phase.
Singapore
Increasing capacity from 73 million passengers a year to 85 million passsngers by 2017
The rush for India is not without reason. According to CAPA, international travellers from India will more than double from 44 million a year to over 100 million in the next 10 years. On the other hand, the four airports of Abu Dhabi, Dubai, Doha, and Istanbul are together creating an additional capacity in their airports of over 100 million additional passengers. Capacity of another 300 million passengers would be added in the next 10 years. The capacity being built in Dubai, Abu Dhabi and Doha in the next five to six years will be greater than Frankfurt, Heathrow (London) and Charles de Gaulle (Paris) airports put together. To keep pace with the huge expansion in the airport capacity, airlines operating from these hubs are also spending billions of dollars to substantially increase their fleet. Kaul says that in West Asia, the three big operators, Emirates, Qatar and Etihad, have together ordered over 500 new airplanes, out of which over 300 are wide-bodied and as many as 90 of them are the large Airbus A-380s. There is no doubt that a substantial part of this fleet will be deployed on the routes to India.
 The old guard
 The traditional players are of course not keeping quiet. Emirates, the national carrier of Dubai, for instance, exhausted its bilateral rights over two years ago (it has been aggressively pushing with India to allow it to fly the A-380, but the government has been sitting on the proposal for a while). It is the king among foreign carriers in India - it controls over 12.2 per cent of the international travel from India which is more than the 7.41 per cent share of Etihad, Qatar and Air Arabia put together. But with 54,000 seats a week as its entitlement, it has to expand quickly. Or else it could lose market share to Etihad and Qatar Airways. This is why Dubai has asked the government for additional 20,000 seats a week immediately. Experts estimate that this demand will go up to at least 50,000 seats in the next three years. This doubling of its entitlement, if cleared, could ensure Dubai's position as the preferred hub for Indian passengers going to the US or Europe. And it will have nearly double the seats to Abu Dhabi or Doha. Also, in combination with flydubai, its low-cost carrier, Emirates has sought permission to fly to more cities like Jaipur, Amritsar, Pune, Nagpur, Varanasi and Mangalore.
This strategy makes sense because Dubai airport is also expanding its capacity to stay ahead: from 60 million passengers a year to 90 million by 2018. More important, Dubai is planning a new airport, the Dubai World Central, which will be the biggest airport in the world with capacity to handle a staggering 160 million passengers a year when it is completed by 2028.The challenge from West Asia and Turkey has reverberations on other markets. Lufthansa, for instance, which uses 49 frequencies a week, has been pushing for introducing the A-380 to expand its capacity. Singapore increased its seat entitlements by 10 per cent last year. But analysts say it will need to do more, otherwise it will lose out on the traffic to the US. Indian passengers are important for Singapore's Changhi airport from which they go onwards to Australia, north Asia and the west coast of the US. And the airport is also expanding capacity from 73 million passengers per year to 85 million passengers by 2017. After all, India is the seventh largest market for the airport based on current seat capacity. But Singapore Airlines has faced some major roadblocks: its request to fly to new cities like Pune and Madurai and press the A-380 into service, for instance, has been rejected. No doubt global airlines and their home airports are working in tandem to ensure that they can woo customers from India.
http://www.business-standard.com/article/companies/west-asian-airport-dreams-bank-on-indian-travellers-113043001022_1.html
 

Bench dismisses plea against Aranmula airport

The National Green Tribunal, Chennai bench, on Tuesday dismissed the petitions challenging the decisions pertaining to the industrial area notification for the Aranmula International Airport project and a no-objection certificate granted by the Kerala government for the project. The bench dismissed the interim order passed earlier by the Tribunal.Post the verdict, the stay on the construction of the Aranmula airport has been lifted. The decision is likely to speed up the project, which is the biggest infrastructure project in central Kerala.The Rs 2,000-crore KGS Aranmula International Airport project is India's first private sector international airport, being promoted by the Chennai-based KGS Group. The Kerala government has a 10 per cent equity stake in the project.
 "We always knew that the green tribunal's verdict would be favourable as we have not violated any norms laid down by the authority. The verdict will help the company speed up work. We will now go forward with the project," said Gigi George, managing director, KGS Aranmula international airport.
 The airport is expected to be a boon for NRIs from central Kerala and the pilgrims to the Sabarimala temple. The economic advantages of the airport would be realised by the four districts of Pathanamthitta, Kottayam, Alappuzha and Idukki, he added.
http://www.business-standard.com/article/current-affairs/bench-dismisses-plea-against-aranmula-airport-113043000994_1.html