Govt almost shuts doors on striking AI pilots

Virtually shutting the doors on the striking Air India pilots, Civil Aviation Minister Ajit Singh on Wednesday said the sacked cockpit crew could return only if they applied afresh when new pilots are inducted.

"As far as we are concerned, the pilot's strike is over. If the (striking) pilots don't accept Dharmadhikari report which is part of the airline's turnaround plan, I don't think there is any point in their coming back....If terminated pilots want to come back, they will have to apply afresh," Civil Aviation Minister Ajit Singh told reporters here.

His comments came on the 30th day of the agitation when the Indian Pilots' Guild (IPG) members staged silent marches in Delhi and Mumbai to press their demands relating to career progression, apart from reinstatement of their 101 sacked colleagues and restoration of recognition of their union.

Indicating that the sacked pilots could be replaced by new ones, Singh said 90 pilots were currently undergoing training and would be available for flying in August.

"We're making sure we have enough resources - pilots and engineers to operate the new flights we have planned," he said in reply to a spate of questions on the pilots' strike.

"They (pilots) have decided not to come back. They have trashed the Dharmadhikari Report" which recommended several steps for integration of the staff of the two erstwhile airlines post their 2007 merger, he said.

"Our stand is that the strike is illegal. The High Court has also said it. They also did not give notice (for the strike)... They are still welcome if they want to come back, but there should be no pre-condition," Singh said.

Maintaining that the truncated international schedule being operated during the strike had stabilised, Singh also announced that Air India would get three new Boeing 787 Dreamliners this month itself and unveiled new global operations plan, including starting of new flights.

http://www.thesundayindian.com/en/story/govt-almost-shuts-doors-on-striking-ai-pilots/3/36024/

AI will hire pilots to replace striking ones

In another setback to Air India’s striking pilots, civil aviation minister Ajit Singh on Wednesday said the state-run airline would hire replacements and normalise its international operations to the earlier level by November.
Around 300 pilots, who operate long-haul international flights, are not reporting to duty. “We have 111 executive pilots and 60 pilots under training. We will be sending another 30 pilots for training. Air India will issue advertisements to hire expat (foreign) pilots. With this, the entire original network of 27 (foreign) stations shall be not only fully restored but expanded,” said Singh.

The only hope left for the agitating pilots is that they can also apply for the jobs. “Sacked pilots could apply, but there are certain rules in the public sector for re-application and they will have to follow that. The pilots will also have to undergo medical examination,” he added.

The stir has been on for a month and the revenue loss has been Rs 350 crore. Of the 300, as many as 101 pilots have been dismissed from service.

With the hiring, the airline plans to normalise its international operations to cover the entire original AI network By November, when the winter schedule begins, they hope to expand it further. “Flights to Hong Kong, Osaka, Toronto and Seoul, stopped when the strike began and would be restored over the next few months. Hong Kong would be connected by a narrow-body Airbus A-319 from July and this service would be extended to Osaka and Seoul from August,” Singh said.

He added that AI’s international passenger traffic, with its truncated flight schedule, had reached about 11,000 a day, 2,000-3,000 less than normal. Its domestic traffic had reached the pre-strike level of 26,000 passengers per day.

Singh said the pilots would have no place in the airline if they were unwilling to accept the Dharmadhikari committee report on redressing the various problems created by the messy merger of the erstwhile Indian Airlines with Air India some years before. Some of these issues had led to the strike and the pilots have already said they’ve rejected the Dharmadhikari recommendations. “We have formed a committee which will talk to employees and find out if there are anomalies. Issues related to allowances will be referred to the (Union) cabinet. Seniority lines of pilots and engineers will remain separate. The pilots should show patience,” said the minister.

He added that conciliation with the agitating pilots was not possible, as they had disregarded the government and even the courts. The Delhi High Court had termed the strike illegal, with the one at Mumbai giving a like ruling. Singh had announced more than once that the grievances of the pilots would be heard only if they ended the strike.

Singh is also confident that there are enough pilots to fly the new Boeing 787 Dreamliners and that the airline would be adding flights to Kuala Lumpur and Australia in the next two-three months.

On AI’s international plan, Singh said it included starting a new flight to Kuala Lumpur, using the Boeing 787 on the Mumbai-London sector from August and launching of Australia operations from August-September with these new planes. “The first Dreamliner would operate on domestic routes for six to eight weeks to train pilots for takeoffs and landings, before it is used to operate the Mumbai-London sector in August,” he said.

http://www.business-standard.com/india/news/ai-will-hire-pilots-to-replace-striking-ones/476584/

No respite from fuel, rupee

The SpiceJet stock rose over 15 per cent in the last three days to Rs 32 after the aviation ministry proposed a reduction in jet fuel taxes. These taxes make up for up to 30 per cent of the total fuel bill of an airline. Additionally, oil marketing firms cut aviation turbine fuel (ATF) prices by two per cent on June 1, after a 0.4 per cent reduction in mid-May.
While continuing losses on the back of high fuel costs still remains the key headache, a possible government approval for foreign investment in the aviation sector, further drop in ATF prices and the company’s plan to start importing the fuel by July are positives.

Though the operating environment continues to be challenging, Rashesh Shah, an analyst at ICICI Securities Ltd, said in a recent report the move to import fuel and focus on international routes could improve profitability. With the start of the peak season and partly due to a reduction in overall capacity (aided by fewer flights by the crisis-hit Kingfisher Airlines Ltd), the company has also been able to improve its load factor from 73 per cent in March to 80 per cent in April.

NO PROFITS IN FY13
In Rs crore	Q4’FY12	FY12	FY13E
Net sales	1,113	3,998	5,239
% change y-o-y	47.0	39.0	31.0
Fuel expenses	620	2,196	–
% change y-o-y	57.0	79.0	–
Ebitda	-200	-518	46
% change y-o-y	–	–	–
Adjusted net profit	-223	-580	-89
% change y-o-y	–	–	–
E: Estimates Source: Company, B&K Research

Given the market share gains, lower fuel prices and higher yields, most analysts (70 per cent) have a buy rating on the stock. However, given the rupee depreciation, analysts have reduced their target prices, with consensus price pegged at Rs 33.74.

Poor Q4 show
While a 57 per cent rise in fuel costs in the March quarter was on expected lines, the company’s employee and maintenance costs doubled due to capacity expansion. Deprec-iation charges rose five-fold due to the newly inducted Bombardier aircraft. However, while the company expanded its passenger capacity by a steep 26 per cent, passenger traffic growth was lower at 16 per cent, leading to a passenger load factor for the quarter at 74 per cent. Due to this, while revenues were up 47 per cent year-on-year to Rs 1,100 crore on the back of traffic growth as well as higher yields, the company posted losses to the tune of Rs 249 crore for the quarter, about six times more than a year ago. SpiceJet, on its part, said it was implementing various measures such as fare/route rationalisation, optimising aircraft utilisation, improving operational efficiencies and renegotiating contracts to improve cash flows.

While its promoters have put in Rs 230 crore in the company (Rs 130 crore in October 2011 and Rs 100 crore in April 2012), SpiceJet is again looking to raise additional money (networth is eroded) to meet its short and long-term obligations.

Rupee negates gains
The company improved its market share by 350 basis points to 17.1 per cent, thanks to an increase in its number of flights and lower supply/issues at other carriers such as Air India and Kingfisher Airlines. “SpiceJet’s yields for the March quarter were flat sequentially, and given that the quarter is a lean season compared to the December quarter, it is indicative of a strong yield environment,” said Jasdeep Walia, an analyst at Kotak Institutional Equities in a recent report.

Walia said industry yields had risen (by 12 per cent in the June quarter to date versus the March quarter) on account of recent capacity reduction by Kingfisher Airlines as also higher load factors. Thus far, a depreciating rupee has offset most gains accruing from higher yields, he said, adding an appreciation in the value of the rupee will act as a catalyst.

http://www.business-standard.com/india/news/no-respitefuel-rupee/476545/

Ajit Singh shuts door on pilots, says Air India strike is 'over'

In a clear signal that there was no hope left for the striking pilots, Air India (AI) on Wednesday announced its new international plans, which not only include adding more flights but also hiring new pilots from outside to fill the gap.

Tell us: What is the ideal solution for Air India?

Under the new route plan, the carrier will start two new flights to Kuala Lumpur and London and resume its Hong Kong, Osaka and Seoul flights by August. Unveiling the AI's international plans, civil aviation minister Ajit Singh said that “by November (when winter schedule begins), AI's international operations will be further expanded. With this, the entire original AI network of 27 stations shall not only be fully restored, but expanded also.”

The airline had stopped flying to Hong Kong, Osaka, Toronto and Seoul after the strike. The airline is planning to restore that in the next few months. Hong Kong would be connected by a narrow-body Airbus A-319 from July and this service would be extended to Osaka and Seoul from August.

Singh said the airline would soon get the delivery of three Boeing 787 – the Dreamliners aircraft. The aircraft would be initially used for domestic routes to train the pilots for landing and take-offs, after six-eight weeks, it would be start flying to long-haul Mumbai to London and Australia by August and September.

“The companies (Boeing and AI) have agreed to a compensation, It will come up before the CCEA (Cabinet Committee on Economic Affairs) soon, following which we will get the Boeing 787. The aircraft will help the airline to better utilise its international routes,” he said.

For the striking members of Indian Pilots' Guild, who continued their protest even on the 30th day, the doors have been completely closed. “As far as we (ministry and AI ) are concerned, the strike is over,” Singh said.

The carrier will come out with new advertisements to hire about 100 pilots to fill the gap. Most of the recruitment would be for co-pilots. It has also started the training of its 90 pilots, that would be able to fly by August. “We're making sure we have enough resources - pilots and engineers to operate the new flights we have planned,” Singh said. For pilots who have been terminated, he said, “they can apply fresh once the ads are out.”

“If the (striking) pilots don't accept Dharmadhikari report which is part of the airline's turnaround plan, I don't think there is any point in their coming back....If terminated pilots want to come back, they will have to apply afresh,” Singh said.

AI has sacked 101 pilots so far. The IPG members, who staged silent marches in Delhi and Mumbai maintained that they can't go back to the company without the assurance that these members would be taken back. “What are we asking for, our career progression. How can you blame some of the pilots for running the airline into such huge losses? How can we join back unconditionally, leaving some of us behind, when there is already enough indications that they (management) will not take them back,” said one IPG member.

http://www.indianexpress.com/news/ajit-singh-shuts-door-on-pilots-says-air-india-strike-is-over/958546/2

Ajit outlines Air India’s new flying plans

Civil Aviation Minister Ajit Singh on Wednesday announced expansion plans for Air India, hoping to chart out a profit-making course for the airline.

Aiming to not only restore the entire original Air India network but extend it further, Singh said, “Air India now plans to use narrow-bodied aircraft optimally and connect Hong Kong with A-319 aircraft from the first week of July 2012. This flight will extend its operations to Seoul and Osaka from August thus ensuring regular services to Hong Kong, Seoul and Osaka,” Singh said.

On pilots’ strike Singh said, “We have terminated 100 pilots and many others have contempt action against them.”

“The pilots on strike have condemned the Dharmadikari report...But, the D report is a part of the turnaround,” he said.

For its long haul flights to the US destinations, Singh said that the airline had about 90 pilots under training of which 60 will be ready to fly within five months. The rest of the requirement is going to be filled through hiring from the market including expats.

AI also plans to expand its network by undertaking a new flight between Delhi-Kuala Lumpur from August 2012. The 787s will be first deployed domestically and later be flown on the Mumbai-London route from August. Singh said that he has enough trained pilots to operate 787.

“We are also bringing a new and objective examination system for in-service pilots in place of the existing system in which there will also be a provision of appeal,” he said.

On ATF and service tax in aviation, Ajit Singh acknowledged the high ATF prices and the unduly service tax that was being charged in India.

On service tax on air tickets, he said, “Service tax during the financial year 2012-13 on air passengers has been increased 4 times and now it is levied upon 40% of gross ticket value. A 10% rise in the price reduces the demand for domestic air traffic travel by about 12%,” Singh noted.

Meanwhile, a large section of the Air India pilots went on a silent protest in Mumbai and Delhi refusing to change their stance.

“There are many concerns and gaps in the current operations and human resources practices. Any short-term acceptance will leave these issues simmering and unresolved with long-term ramifications Our appeal to the powers-that-be to discuss our genuine concerns,” Captain E A Kapadia, General Secretary of the AI pilots’ union said.

The union members also added that they had continued work even in the most trying times, including when salaries were not paid for 6 months. “We have always been supportive of the management and understanding of the airline’s problems. In fact in the last ten years the IPG has had a protest march only once and we have been compelled to raise a protest this time only due to the extreme situation we face,” Kapadia added.

http://newindianexpress.com/business/news/article537825.ece

Kannur airport gets nod from PM panel

With GDP growth slipping to nine years low, Prime Minister Manmohan Singh on Wednesday met his infrastructure ministers to set up aggressive targets for 2012-13 in roads, power, aviation, ports and coal sectors to boost the economic growth.

Dr Singh asked the ministers to go the extra mile in implementing their targets for the current fiscal and resolve any inter-ministerial differences which may hold these projects.

The high-level committee of infrastructure ministers, headed by PM, cleared a host of projects. The three new green field airports are Kannur, Navi Mumbai and Goa.

Dr Singh said at the meeting, attended by the ministers and secretaries of key infrastructure ministries- power, railways, roads, shipping, civil aviation and coal, that the government was committed to taking the necessary measures to reverse the present situation and revive India's growth story.

He said that infrastructure sector will need over $ 1 trillion investment in the next five years.

The clearance for Kannur reflects the State Government resolve to ensure that the first flight landed at the airport in three years from now.

The land acquisition has been going apace and the Government on Wednesday announced amendments to the share distribution pattern for the airport under the PPP model.

http://www.deccanchronicle.com/channels/nation/south/kannur-airport-gets-nod-pm-panel-296

International airports for Coimbatore, Tiruchi

As part of the detailed exercise undertaken to finalise targets for key infrastructure sectors for the fiscal, work on the Itanagar airport is to be started by the Airports Authority of India and the total investment in AAI projects will be Rs. 2,100 crore. This apart, three new greenfield projects will be awarded during the fiscal and these airports are to be located at Navi Mumbai, Goa and Kannur (Kerala).

Alongside, new international airports will be declared in three or four of the locations this year, namely Lucknow, Varanasi, Coimbatore, Tiruchi and Gaya.

“An airline hub policy would be finalised and hubs would be operationalised in Delhi and Chennai in FY13. By end-July 2012, additional PPP projects would be finalised for 10-12 existing airports and for 10-12 greenfield airports. These would be awarded during the year,” the statement said while noting that PPP (public-private partnership) in airport operations would be explored.

At a meeting held here with the Ministers and Secretaries of the key infrastructure Ministries of Power, Roads, Shipping, Civil Aviation and Coal, Prime Minister Manmohan Singh on Wednesday expressed satisfaction over the detailed exercise undertaken to finalise the targets.

“We are all aware of the need to give a major push to these important sectors and today's exercise is a part of our efforts in this direction.” The global economy, he said, was passing through difficult times and there was “a flight to safety” taking place globally. Besides, the persistent problem of rising international petroleum and commodity prices and rising domestic demand along with supply-side bottlenecks contributed to inflationary pressures.

“In these difficult times, we must do everything possible to revive business and investor sentiment. We must work to create an atmosphere which is conducive to investment and to removing any bottlenecks to growth. We as a government are committed to taking the necessary measures to reverse the present situation and revive India's growth story. We are aware that we have to act on multiple fronts to achieve this and we will indeed do all that is required of us,” he said.

http://www.thehindu.com/todays-paper/tp-national/article3499177.ece

Flight makes precautionary landing in Nagpur

A Hyderabad-Delhi IndiGo flight with 114 passengers made a precautionary landing at the Nagpur airport on Wednesday following an indication of engine vibration. All the passengers were safely deplaned. “Flight 6E308 was diverted to Nagpur today [Wednesday] morning. IndiGo Captain-In-Command received an engine vibration indication in the cockpit, though it had more than a normal vibration. Owing to this indication, Captain-in-Command decided to land at the Nagpur airport for an immediate inspection of the aircraft. The landing was a precautionary measure. Our checks show that it was possibly a false indication and no discrepancy has been found on the engine. The suspected vibration transmitter is being replaced,” an airline statement said.

The airport said no emergency was declared on the IndiGo flight. “The flight was only diverted due to some technical snag,” an official said. The passengers were flown to Delhi by 3 p.m. on another IndiGo flight.

http://www.thehindu.com/todays-paper/tp-national/article3498936.ece

Prospects brighten for Kannur airport

Prime Minister Manmohan Singh's announcement on Wednesday that work would be awarded for the greenfield airport at Kannur along with the airports at Navi Mumbai and Goa is a “clear step for the development of the fourth international airport of the State', Managing Director of Kannur International Airport Limited V. Thulasidas said.

Talking toThe Hindu, Mr. Thulasidas said the Union government had already given the nod for the Kannur international airport and only specific clearances such as the final environment clearance, DGCA licence and security clearance were needed.

“We are on the threshold of commencing the work. The pre-qualification tenders for the earthwork have already been invited. We want to commence the work this year itself,” he added.

Development potential

The approval has come at a time when the government is ready to float global tenders for the construction of a runway for the airport being developed near Mattannur here.

The airport project is expected to kick off massive development in the region. The government has already initiated steps to secure environmental clearance for constructing the runway as the Kannur International Airport Ltd. (KIAL) has submitted its project report for the runway development.

http://www.thehindu.com/todays-paper/article3499495.ece

Air India to hire 100 new pilots: Ajit Singh

Air India is going to induct about 100 new pilots in the next few months, Civil Aviation Minister Ajit Singh said on Wednesday while virtually shutting the doors on striking pilots, asking those sacked to apply afresh.

http://www.thehindu.com/todays-paper/article3498986.ece

Don't write Kingfisher off

Short public memory is a brand's best friend.

I'm curious. What's next for Brand Kingfisher? Is it all over?

- Samantha P. Cox, New Delhi

Samantha, good to be curious on the whole.

Kingfisher is a dominant brand in the Indian context. The brand, for a start, is a beer. And from there on has developed the brand equity of Brand Kingfisher Airlines. To that extent, the recent set of issues in aviation tends to hurt the equity of Kingfisher Airlines more than the beer. The airline is a service brand that touches the lives of hundreds of people. The beer is a product brand. To that extent there is less of an issue there. There is no transfer of negativity from aviation to beer, for sure.

The negative publicity that hits Kingfisher Airlines is really about the pains of the traveller more than anything else. A traveller faced with flight cancellations at the last minute is affected the most. This is where the biggest pain point of the brand equity of Kingfisher Airlines lies.

Public memory is, however, short. Do believe me, but this proverbial short public memory is a brand's best friend.

To that extent, all the current woes of Kingfisher Airlines will be forgotten faster than we believe they will. Remember all the issues that Jet Airways went through, with its employees protesting and venting their ire in public on national network television? Everything is forgotten today. Everyone lives happily ever after. Till the next fracas.

In reality nothing succeeds like success. I do believe this is a temporary blip in the brand equity fortunes of Kingfisher Airlines. With some degree of fund infusion, it will be business as usual. Just wait and watch for FDI in the aviation sector, and you will see the king of good times soar again. And how!

Right now, Kingfisher needs to get off the pedestal of being a brand and talk and emote with its users and those sitting on the fence of its usage. It is important to be transparent and admit folly where folly lies.

The Kingfisher brand is one that has been designed carefully with a lot of patience and passion. It would be unfair to write it off so soon and so quick.

Nokia is still topping brand charts in India despite its low growth and loss of market shares. How?

- Seenu Venkatesan, Mumbai

Seenu, the reason why Nokia does get repeatedly listed in the top ten is simply because of what I call the “ubiquity effect”. Please do note that the largest numbers of mobile handsets in use as of now in India are quite likely to be of Nokia in the middle and upper-end segment. Add to it the fact that the mobile phone is a 24 X 7 device that people do not switch off even when they sleep.

This ubiquity gives a halo effect to the brand that is used by most. Many swear by their mobile phones. Many can't do without them. This proximity adds to the halo effect of the hand-phone brand. And Nokia is a benefactor, as of now. Give it five years more for the Samsung effect to set in. Samsung is the next big guy lurking round the corner.

How do coffee café chains globally ensure consistency in terms of delivery? And what is the learning for me?

- Rohinton P. Malla, Mumbai

Rohinton, the issue is all about scale. Once scale develops, you can look at central sourcing. And central sourcing is all about consistency in offerings. Starbucks and Dunkin' Donuts globally believe in the mechanics, efficiency and delivery of central sourcing. Their systems are totally integrated with technology and what it can deliver in terms of back-end efficiency.

What is it that you can learn from the business model of Starbucks or Dunkin' Donuts then?

From Starbucks, Indian companies can learn about the power of a brand and the power of consistency in delivery, the power of pulsating with the consumer mind, mood and movement. From Dunkin' Donuts, the best thing to learn is the fact that the consumer has little time to sit and dawdle in the future. On-the-go coffee is a format whose time will come in the future. Prepare for it aggressively and morph your sit-down models to talk the language of stand-up and on-the-go coffees as well.

It is important to remember that every cafe market has a glass ceiling. This glass ceiling is all about saturation in terms of numbers, boredom with ubiquity, lack of differentiation, the consumer in a state of recession, and a continuous lack of value-for-money propositions. Most Western markets have reached this level over the last three decades. India to that extent is still a nascent cafe market and this is a market that will grow. Café Coffee Day, the market leader, has shown us that success can be made to happen.

How is tea such a big drink in India, far bigger than coffee?

- Sapna Khanna, New Delhi

Sapna, tea is India's favourite beverage. The per capita consumption of tea is a multiple of 11 to that of coffee. India's mass beverage of choice is tea.

All this has happened progressively over the decades with the painstaking effort of the early companies in this space that did yeoman work. Brooke Bond and Lipton were the two companies that worked hard in this field.

The heritage of tea plantations run to painstaking British norms in the North Eastern regions of the country helped establish an origin status for tea as well. Pioneering marketers went village to village in the country to popularise the drink. The edifice of tea consumption was built brick by brick with painstaking marketing effort. I would call this early tea evangelism. That created this big status for tea in India.

http://www.thehindubusinessline.com/todays-paper/tp-brandline/article3498640.ece

Weak rupee adds to woes of ailing airlines

Mumbai, June 6:

The 25 per cent rupee depreciation and the 40 per cent hike in crude oil prices over the past year have exerted pressure on the profitability of airline companies in the country.

Fuel costs account for 45-50 per cent of operating costs.

Operational costs

“The primary reason for the losses is on account of a large share of expenses (almost 60-70 per cent) of the carriers being accounted for in dollars.

As a result, fuel and operating cost have increased at a fast pace,” Mr Ajay D'souza, Director, CRISIL Research, said.

He added, “Around 30-35 per cent of a carrier's operating costs are denominated in dollar.

The rupee depreciation against the dollar has pushed up the operational cost for carriers.

A weaker Indian currency translates into higher costs for the carriers as they have to pay more towards lease rentals, ticket reservation using the global distribution system (GDS), aircraft spare parts, salaries of expatriate pilots, higher interest cost on foreign currency debt and other costs borne in dollars.”

Ticket prices

On the other hand, only a handful of them earn revenue from international operations, thereby, providing them a natural hedge.

However, even for these players, stiff competition has led to average ticket prices remaining flat.

Cost increases have not been passed on. For instance, losses for Jet Airways increased 140 per cent in the fourth quarter of 2011-12 to Rs 298 crore.

Similarly, SpiceJet reported over four-fold rise in net loss at Rs 249 crore during the same quarter.

Two of the main carriers (Air India and Kingfisher) have severely curtailed flights.

As a result of the capacity crunch, air tickets prices have gone up.

“While average ticket prices on the domestic routes have gone up, it has not been sufficient to offset the steep increase in cost,” Mr D'souza said.

The hike in ticket prices has led to domestic air passenger traffic growing at a mere 7 per cent in January-March 2012 quarter.

This growth is much lower than the 16 per cent growth recorded in the first nine months of 2011-12.

According to the Centre for Asia Pacific Aviation (CAPA), Indian carriers made a combined industry loss of $2.5 billion in the year to March 31.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/article3498553.ece

Jet Airways to launch second service to Kuwait from Mumbai

Mumbai, June 6:

Jet Airways will be launching a second service between Mumbai and Kuwait from June 8.

The flight to Kuwait will be four times a week.

11 flights to Kuwait

With the launch of this second service, Jet Airways will now offer 11 flights a week from Mumbai to Kuwait.

flight schedule

The flight will depart Mumbai at 2220 hrs local time (LT) on Thursday, Fridays, Saturdays and Sundays respectively and arrive in Kuwait at 2350 hrs (LT).

On the return leg, the flight will depart Kuwait at 0050 hrs (LT) on Mondays, Fridays, Saturdays and Sundays respectively and arrive in Mumbai at 0730 hrs (LT).

http://www.thehindubusinessline.com/todays-paper/tp-logistics/article3498552.ece

Development of airports: Focus to be on tier-II, -III cities

Bangalore, June 6:

The Airports Authority of India (AAI) will invest Rs 67,500 crore over the next two decades to get 400 airports operational in the country.

“We have about 450 airports and airstrips in the country at present, and we want to mobilise as many as possible over this period of time,” Mr G.S. Bawa, General Manager, public relations for AAI, told Business Line, on the sidelines of the Global Investors' Meet 2012 in Bangalore on Wednesday.

According to him, about 125 airports are with the AAI, while 30-35 are civil enclaves. “The rest are all airstrips which need to be mobilised and made operational by 2030,” he said. The target is a steep increase from the current 84 operational airports in the country, he pointed out.

The focus for airport development will be tier-II and tier-III cities, as the “future lies in local hubs”, added Mr Bawa. The AAI will be banking on innovation to generate new traffic in these tier-II and tier-III cities, and he pointed out that while bigger cities become local hubs, smaller destinations will act as sub-hubs. “The model will be decided over a period of time,” he said.

Funding

On the funding of these new airports, he said, “We plan an investment of Rs 67,500 crore, of which Rs 15,000 crore will be the AAI outlay.” AAI is open to getting funding from various investors, and “we are thinking of our own bonds over a period of time. Whatever the gap can be filled through that,” said Mr Bawa.

On the dues that airlines like Kingfisher Airlines owe AAI, he pointed out that all efforts are being made to realise the dues as early as possible.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3498527.ece

Ministry for easier currency norms for global transit passengers

New Delhi, June 6:

International air travellers transferring through Indian airports could soon be allowed to withdraw cash which they would be able to use in the airport terminal for food and beverages among others.

This is one of the suggestions put forward by the Ministry of Civil Aviation in a paper on ‘Developing aviation hubs in the country'. The suggestion has been made as the country looks to develop airports to attract more passengers thereby generating more income and employment from the sector.

It called for a change in the existing currency policy, which also restricts the amount of Indian currency domestic and international passengers can carry beyond the immigration point. The suggestions which have been sent to various stakeholders including airlines, airports and other Government Departments will have to be cleared by the Union Cabinet before it is implemented.

The Ministry said that the lack of such a policy was hurting the development of Indian airports as hubs for airlines.

The Ministry has pointed out that the current currency policy is favourable for arriving passengers who terminate their journey here but it is a major hindrance for passengers transferring from hub airports and not terminating journey at any international port of arrival in India.

The Ministry paper states that the ratio of transferring passengers at any Indian airport ranges between 2 per cent and 8 per cent of the total traffic and is miniscule in comparison to other developed mature overseas international hub airports, where it ranges between 35 per cent and 55 per cent.

“The time spent by the transferring passenger range from more than two hours and less than 24 hours, and these passengers are required to spend substantially on food and beverages and use other facilities in the transfer area, and spending in foreign currency is usually not feasible,” the paper states.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3498517.ece

Bring jet fuel under oil regulatory body: Panel

New Delhi, June 6:

The Ministry of Petroleum and Natural Gas should bring aviation turbine fuel (ATF) under the Petroleum and Natural Gas Regulatory Board's (PNGRB) regulatory scope by notifying the product so that the Board can take action to protect the interest of users, a Civil Aviation Ministry panel has said.

This is one of the recommendations put forward by an expert committee set up by the Ministry of Civil Aviation to bring down ATF cost for domestic airlines.

Currently ATF costs comprise about 40-50 per cent of operations of domestic airlines.

The PNGRB should also regulate all ATF infrastructure outside the airports including the pipelines as well as connecting intermediate storage infrastructure.

The suggestion has been made as due to lack of effective competition in the ATF market in the country, the oil marketing public sector undertakings maintain ownership and control access to the infrastructure, the committee has said.

Declared goods

The Committee has also recommended bringing ATF under the ‘Declared goods' category so that it attracts a uniform 4 per cent sales tax across the country. At the moment the sales tax on ATF varies from 4 per cent to 30 per cent.

On an average the sales tax rate on ATF is around 20 per cent which makes aviation fuel price at Indian airports significantly higher than in Singapore, Hong Kong, Dubai, London and Abu Dhabi.

Call for specific duty

In addition the Committee has suggested that States start charging a specific rate of duty on ATF instead of the ad-valorem rate as is done at present.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3498516.ece

Call for changes in visa-on-arrival norms

The Aviation Ministry has also called for enlarging the list of countries whose citizens should be provided visa-on-arrival (VOA) at international airports here.

“This facility for attracting more international passengers and ease in getting short-term visa would help the industry to develop products such as ‘hop-on/hop-off' tours that would stimulate international traffic and the tourism industry in India,” the Ministry adds.

It has also suggested rationalising the rate at which the visa-on-arrival is issued.

“We charge $60 to issue a VOA, but the same Indian visa is available for $20-25, if applied in the applicant's country of residence. In other countries like Thailand and Malaysia, the difference between normal visa charge and VOA charge is very nominal. It is advisable to reduce the VOA charges to make it more attractive,” the Ministry has said.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3498515.ece

Airline stocks surge on FDI hope

Move expected to provide relief for ailing industry

Mumbai, June 6:

Airline stocks surged on both the NSE and the BSE on expectation of a favourable decision on FDI in aviation.

Kingfisher Airlines gained 17.3 per cent to Rs 12.46. Similarly, SpiceJet and Jet Airways stock went up 6.54 per cent and 5.55 per cent respectively on the BSE closing at Rs. 31.75and Rs.334.95.

Trading volumes have also seen significant increase. The total traded quantity on Wednesday for KFA doubled from a two-week average quantity of 54 lakh shares to 112.66 lakh shares. For Jet Airways, it went up from a two-week average of 3.01 lakh shares to 6.64 lakh shares; SpiceJet saw a volume of 84.82 lakh shares, up from a two-week average of 48.81 lakh shares.

Kingfisher registered its all-time low of Rs 10.05 on June 1.

Aviation analysts told Business Line that the Government's decision to allow foreign airlines to invest in domestic carriers would be positive news for the aviation sector.

Stake buy

The Minister of Aviation, Mr Ajit Singh, said on Wednesday in New Delhi that he was in talks with the coalition partners of the Government to agree on a decision on allowing foreign airlines to buy stakes in local carriers.

The move is expected to bring in relief for the ailing aviation industry. Running a truncated schedule, debt-laden KFA had posted 10 straight quarterly losses due to high fuel costs and tough price war.

Kingfisher's fourth-quarter loss widened to Rs 1,152 crore in the three months ended March 31.

Losses for Jet Airways increased 140 per cent in the fourth quarter of 2011-12 to Rs 298 crore. Similarly, SpiceJet reported over four-fold rise in net loss at Rs 249 crore during the same quarter

http://www.thehindubusinessline.com/todays-paper/tp-markets/article3498572.ece

Ajit Singh to striking pilots: Accept turnaround plan or don't come back

New Delhi, June 6:

With passenger carried by Air India on both international and domestic flights rising, the Ministry of Civil Aviation has hardened its stand against the agitating pilots.

“If the striking pilots do not accept the Dharamadhikari committee report, which is part of the turnaround plan for Air India, I do not see any point in them coming back. If terminated pilots want to come back, they will have to apply when Air India issues advertisements,” the Minister of Civil Aviation, Mr Ajit Singh, said on Wednesday.

The Dharmadhikari Committee was set up to bring about integration of the workforces of former international carrier Air India and domestic carrier Indian post their merger.

For the past one month, a section of Air India pilots belonging to the erstwhile international arm are on an agitation protesting various management decisions including offering training on the Boeing 787 to erstwhile pilots of Indian.

The Minister announced that Air India currently has 90 trainee pilots, of whom 60 are undergoing training and will be available for regular flights in the next 4-5 months. “Air India has also decided to recruit from the domestic and international market,” he said.

Air India officials indicated that the airline will look to hiring about 100 co-pilots. The Minister said that Air India was carrying about 26,000 passengers a day on its domestic flights, which is about the same as was at the start of May before the agitation started. “On the international flights, the airline is carrying around 11,000 passengers a day,” Mr Singh said.

http://www.thehindubusinessline.com/todays-paper/article3498534.ece