Jet Airways: The dark horse

Improved passenger loads and higher yields help company post a profit

The performance of Jet Airways in the June quarter shows the demand-supply conditions have helped the airline post good numbers. Against a net loss of Rs 198 crore that analysts were expecting, the airline surprised with a net profit of Rs 24.7 crore.

It’s been a strong quarter operationally for the airline as passenger loads and yields improved beyond expectations. Jet Airways posted a revenue jump of 32 per cent on a standalone basis to Rs 4,710 crore, while consolidated revenues (including JetLite) stood at Rs 5,270 crore.

Analysts say the airline has managed to post a profit of 24.7 crore against a loss of Rs 123 crore in the year-ago period. As load factors improved, the operating costs also came down, helping the company book profits.

In the quarter, the airline’s seat factor improved by 420 basis points to 82.7 per cent from the year-ago period. The total number of revenue passengers carried also improved by 19.5 per cent year-on-year to 4.86 million. Average gross revenue per passenger, too, rose by 10 per cent to Rs 8,090.

The company improved its marketshare in the first quarter of FY13 to 27.9 per cent from 25.5 per cent in the corresponding period last year.

Aviation analyst Rashesh Shah of ICICI Securities, says, “We were expecting yields to improve by six-seven per cent. However, the company posted a much stronger rise in yields. Strong operating performance has helped costs, as a percentage of sales, (to) come down, too. This should continue for a few more quarters if the demand-supply conditions remain tight, even though we see passenger traffic declining.”

The company has not only benefited from the capacity cuts seen by the industry but also improved its own efficiency. While it has rationalised loss-making routes on the one hand, its total number of domestic departures has risen by 14 per cent to 37,330 in the quarter.

On the back of strong load factor and robust demand, the airline has managed to expand margins in the domestic and international operations. Operating margins in the domestic operations stood at 15 per cent compared to nine per cent in the year-ago period, while operating margins in the international business stood at 17 per cent against 11 per cent in the year-ago period.

While the current demand-supply dynamics is likely to be beneficial for the company, rising fuel prices and a weaker rupee are major concerns. The airline believes that competitive pricing could also impact revenues in the coming quarters.

http://business-standard.com/india/news/jet-airwaysdark-horse/482301/

Rise in other income sees Jet post Rs 36-cr profit

Naresh Goyal-owned Jet Airways, which accounts for a share of 27.9 per cent of the Indian aviation market, on Friday stumped the street, as it posted a profit of Rs 36 crore for the quarter ended June. This follows five quarters of losses.

Broking houses had estimated the airline would post a loss of about Rs 150 crore

The profit resulted from an increase in other income, which stood at Rs 124 crore, against Rs 40 crore in the year-ago period. This included profit on sale and leaseback of aircraft amounting to Rs 52 crore. The company also benefited from growth in passenger numbers and an increase in yields. This helped the company offset the negative impact of the rupee’s depreciation against the dollar, high aviation turbine fuel (ATF) costs and foreign loans.

Chief Executive Officer Nikos Kardassis said, “Despite having a natural hedge because of our US dollar denominated-earnings, we had to recognise foreign exchange losses of Rs 17,030 lakh ($30.6 million) for the quarter on account of such exchange rate fluctuation.”

He added Jet planned to strengthen its balance sheet by reducing the debt burden by about $400 million during the financial year through various initiatives. “We have completed the sale/sale and leaseback of two aircraft and two engines in the first quarter of 2012-13. During the second quarter, we intend to complete transactions for another eight to nine narrow-bodied aircraft. This would help reduce balance sheet debt and release cash,” Kardassis added.

Though crude oil prices have come off the highs of about $120 a barrel and now stand at $100-$105 a barrel, this has not helped much due to the depreciation of the rupee, which rose from 24.4 per cent in the first quarter of 2011-12 to Rs 55.6 in the first quarter of 2012-13. This had also put pressure on dollar-denominated costs, said a company statement.

The airline’s performance in the quarter has put worries regarding the aviation sector’s performance to rest, at least for now. Jet Airways’ stock on Friday closed 0.69 per cent higher at Rs 374 on the Bombay Stock Exchange.

Goyal welcomes FDI, says open to equity dilution
Jet Airways Chairman Naresh Goyal has welcomed the government’s proposal to allow foreign airlines to invest in India. Goyal said he was open to diluting his own equity in the airline. Goyal holds 80 per cent in the airline through Tailwinds Limited, a foreign-registered company. He has been seen as a strong opponent of foreign direct investment (FDI) in aviation.

On the sidelines of the company’s annual general meeting in Mumbai on Friday, Goyal said Jet Airways was an Indian company and he was a non-resident Indian, hinting the government’s norms on allowing FDI in aviation did not debar his airline from seeking a strategic partner.

On equity dilution, he said, “So far, as it stands, we will be controlling. If the sentiment improves and the overall situation improves, I will have an open mind to dilute, but have control over the company.” He, however, clarified he wasn’t immediately seeking a foreign airline partner.

“Today, I do not need (FDI). Tomorrow I may need. There is nothing permanent in business,” he said.

Goyal said the direct import of aviation fuel being pursued by other airlines was not practical, as oil companies were not sharing infrastructure. He added the current yields would sustain and lean passenger growth was a temporary phenomenon.

Jet Airways has a debt of $2.4 billion and is looking to repay about $400-500 million through sale and leaseback deals. The airline would also add new routes in the Gulf sector. However, it wouldn’t add any international destination.

Jet Airways’ fund requirement for this year stands at about $180million, chief executive officer Nikos Kardassis said. “This is only to improve the balance sheet, so that the debt to equity ratio improves and our interest cost comes down,” Goyal said. So far, the company has not succeeded in raising cash through equity shares or foreign currency convertible bonds.

http://www.business-standard.com/india/news/rise-in-other-income-sees-jet-post-rs-36-cr-profit/482338/

DGCA should have dedicated vigilance officer, says CVC

NEW DELHI: Directorate General of Civil Aviation (DGCA), the aviation regulator plagued by rampant corruption and malpractices, should have a dedicated chief vigilance officer, the Central Vigilance Commission told the ministry of civil aviation a few days ago. CVC also decried the ministry's decision to appoint an IAS officer as both the chief vigilance officer (CVO) of DGCA as well as the chief executive of Pawan Hans.

In the wake of CVC objection, the ministry moved out the IAS officer from DGCA last week, leaving the aviation regulator without a vigilance officer, when almost two dozen of its senior officials are facing disciplinary proceedings.

According to sources, CVC wrote a few days ago to the ministry objecting to the fact that Anil Srivastava, IAS, who is the CMD of Pawan Hans, was also acting as the CVO of DGCA. "An operator (Pawan Hans) cannot also look after the vigilance function for the regulatory body," a source said, quoting CVC.

Another source pointed out that the ministry's decision to appoint Srivastava as CVO of DGCA was bizarre also because he handled administration and financial matters of DGCA, as joint DG.

In the wake of the CVC observations, the ministry moved out Srivastava from DGCA last week, leaving the regulator with a defunct vigilance department.

CVC has also been writing to the ministry repeatedly about the need to have a dedicated CVO for DGCA, sources said. The last time DGCA had a CVO was when Samir Sahai, the CVO of Pawan Hans, was also given the concurrent charge of vigilance in DGCA in May 2011.

Sahai, along with the last DGCA Bharat Bhushan, struck down on several malpractices, recommending a series of disciplinary actions against many DGCA officials. Sahai was divested of the DGCA charge abruptly. Later, the ministry also moved out Bhushan as DGCA despite the Cabinet Committee on Appointments extending his tenure.

At least 21 senior DGCA officials are facing vigilance inquiry of various kinds. CVC has recommended major penalty, which could include dismissal from government, against eight of them.

http://timesofindia.indiatimes.com/india/DGCA-should-have-dedicated-vigilance-officer-says-CVC/articleshow/15347806.cms

CCEA gives go-ahead to Air India for Boeing 787 Dreamliners delivery

NEW DELHI: The government today gave a go-ahead to Air India to induct the much-awaited Boeing 787 Dreamlinersinto its fleet but would conduct separate negotiations on the issue of compensation for failure of the aircraft to meet performance guarantees.

The Cabinet Committee on Economic Affairs approved the proposal of Civil Aviation Ministry, at a meeting this evening, and allowed Air India to take delivery of 27 Boeing 787 aircraft after signing the Delay Compensation Settlement Agreement, an official release said.

The issue relating to compensation for failure to meet performance guarantees has been delinked from the Delay Compensation Settlement Agreement, which shall be negotiated separately by an Empowered Group of Officers after actual evaluation of the performance of the delivered B-787s, the release said.

These aircraft were scheduled to be delivered between September 2008 and October 2011, but due to certain design and production issues the deliveries were delayed.

Now, these planes are scheduled to be delivered between June, 2012 and March, 2016.

While the Empowered Group of Officers would negotiate the performance standards of the Dreamliners separately, the Law and Justice Ministry would examine and endorse the enabling legal provisions and aspects of the negotiations, the release said.

Three of these latest long-haul planes, painted with Air India logo and livery, are ready to be flown to India from Boeing plants in the US. The list price of the Boeing 787 is about USD 190 million although what an individual airline pays varies in terms of the order.

With their induction, Air India plans to expand its international operations soon, including mounting new non-stop flights to Australian destinations.

However, the plane would be flown for the first few weeks on domestic sectors to help the already-trained pilots to further train themselves on landings and take-offs of this next-generation flying machine that is made out of composite materials. The aircraft is billed by Boeing to be more fuel efficient than all other planes.

The orders for 27 Dreamliners were part of the overall order placed by Air India in 2005 for 68 Boeing aircraft. The total deal at that time was worth about USD 8.1 billion.

Two months after Air India Board finalised the compensation agreement with Boeing for a four-year delay in the planes' delivery, a Group of Ministers, headed by then Home Minister P Chidambaram, on July 25 gave its nod to it and sent it to the CCEA for approval.

The government and the airline refused to reply to queries on the amount of compensation to be paid by Boeing on grounds of confidentiality of the agreement.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/ccea-gives-go-ahead-to-air-india-for-boeing-787-dreamliners-delivery/articleshow/15342584.cms

Air India gets CCEA nod on Dreamliners

Cabinet Committee on Economic Affairs to allow airline take delivery of 27 Boeing 787 aircraft

New Delhi: The Cabinet Committee on Economic Affairs on Friday decided to allow Air India Ltd take delivery of 27 Boeing Co. 787 aircraft after signing the so-called delay compensation settlement pact, or DCSA.

Compensation for failure to meet performance guarantee has been delinked from DCSA, which will be negotiated separately by an empowered group of officers after evaluation of the performance of the delivered/inducted planes, also called the Dreamliner. The law ministry is expected to examine and endorse the enabling legal provisions. Air India will benefit from the induction of the state-of-the-art planes, an official note said.

Air India plans to replace its Boeing 777 aircraft with Dreamliners on long-haul routes. Scheduled to have been delivered between September 2008 and October 2011, the planes were delayed due to design issues and may reach before March 2016.

CCEA also approved an increase in the minimum support price for arhar and moong dal at Rs.3,850 per quintal, up Rs.650, and Rs.4,400 per quintal, up Rs.900, respectively. The Cabinet Committee on Infrastructure approved the inclusion of extension, renovation and modernization of projects that envisage the restoration of lost potential of 200,000 ha, which will make them eligible for 90% central funding.

http://www.livemint.com/2012/08/03231234/Air-India-gets-CCEA-nod-on-Dre.html

Jet Airways posts Rs 25 cr profit in Q1 after losses for five consecutive quarters

MUMBAI: Jet Airways, India's largest airline, ended its five consecutive quarters of losses with a modest profit of Rs 24.70 crore for the June quarter, aided by higher fares, sale and lease back of aircraft and amortisation of forex losses.

The airline upped its passenger revenues by 19.5%, riding on firming of yields on domestic network as competitors stopped selling tickets below cost. Jet is the second listed airline company to return to the black after SpiceJet announced a profit last week. Cost control and revenue improvement helped Jet post profit, the airline said.

Jet's promoter and chairman Naresh Goyal attributed the enhancement of revenues to a brand merger of JetLite (erstwhile Air Sahara that was acquired by Jet) and JetKonnect (Jet's new product offering in 2009), mooted in 2011 and formalised in 2012.

Addressing shareholders of Jet at its AGM in Mumbai on Friday, Goyal said: "This combined (brand) with the introduction of premier class on additional JetKonnect flights has helped improve our revenues and made us more competitive in the low to moderate fare segments and also expanded our presence in the premier segment."

It reported forex losses of Rs 70 crore this quarter. Analysts such as KRIS Research CEO Arun Kejriwal were, however, not impressed. "They are trying to ride on the sentiments currently prevailing in the sector that there is a turnaround with one bed-ridden competitor."

Despite reporting a growth of more than 10% in the number of passengers travelling by its airline for the current quarter, the Jet chairman warned of challenging times ahead for airline companies in the country as the taxes (specifically air turbine fuel) and levies (airport charges) and service tax are mounting by the day. The soaring cost overheads adversely impact any attempt by the airline companies to better performance.

Analysts are aware that the turnaround by SpiceJet and Jet has come about without reining in costs. Says Kejriwal: "All other numbers do not give comfort and until a dramatic fall in operating costs happen, the future (for airlines in India) continues to remain uncertain."

On account of tariff hike by the Delhi International Airport, Jet said it would incur an additional cost of Rs 55 crore annually. "Airport charges have diminished and negated any positive impact on airline balance sheets," Goyal said.

"I would like to strike a note of caution on the high tax levy on air turbine fuel and sincerely hope that it may be rationalised. Together with steep airport levies, airline balance sheets have been adversely impacted. This is the burden neither the airline nor out passengers can afford to bear any longer," said Goyal.

"Aviation should not be treated as luxury, it is essential to economic growth of the country," he advocated.

http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-analysis/jet-airways-posts-rs-25-cr-profit-in-q1-after-losses-for-five-consecutive-quarters/articleshow/15346445.cms?

Jet Airways posts 36.4 crore net profit after 5 quarters of loss

Mumbai: After being in red for five quarters in a row, Jet AirwaysGroup flew back into the positive terrain with a net income of Rs 36.4 crore in the June quarter on the back of higher yields and cost management.

The country's largest airline had posted a net loss of Rs 123.2 crore in the same period last year.

Jet Airways today said the profit would have been much higher had it not been for the huge forex losses on account of the falling rupee which resulted in an outgo of Rs 170.3 crore.

However, a 148 per cent jump in Ebitda(earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) to Rs 825.5 crore against Rs 333 crore a year ago, cushioned the impact of forex loss.

This also saw its Ebitdar margin nearly double to 16.1 per cent from 8.9 per cent.

The consolidated group revenue grew by 31.4 per cent to Rs 5,274.8 crore during the period driven by a 10 per cent growth in domestic traffic, while the industry growth was a paltry 1 per cent during the quarter.

The domestic yield for Jet Airways rose 8.9 per cent, the same for JetLite rose 43.2 per cent.

Commenting on the turnaround, Group Chief Executive Nikos Kardassis said, "Fuel cost increase and depreciation of the rupee against the dollar weighed heavily on the industry's profitability.

"In fact, ATF price rose by 13 per cent in the quarter y-o-y, against a rise of just 3 per cent in the previous quarter. Overall the fuel cost rose 25.8 per cent to Rs 1,967.4 crore from Rs 1,563.7 crore."

He further said though crude has fallen from the highs of USD 120 a barrel and now range between USD 100-105, benefits of the same have not accrued due to the fall of the rupee, which dipped from 44.70 in Q1 of FY12 to 55.615 in Q1 of FY13, a loss of around 24.4 per cent, putting pressure on our dollar-denominated costs.

"Going forward, we do not expect any major capacity increase given the delivery schedules of airlines in the sector," Kardassis said.

The markets reacted positively and shares of Jet Airways closed higher by 0.69 per cent at Rs 374.05. The company scrip had touched intra-day high of Rs 388.60.

System-wide ASKM (average seat per km) rose by 10.4 per cent to Rs 1,028.5 crore, while system-wide RPKM (revenue per km) rose by 16.3 per cent to 850.2 crore.

The system-wide seat factor jumped to 82.7 per cent against 78.5 per cent. Profit before tax stood at Rs 33.3 crore against a loss of Rs 156.8 crore.

http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/jet-airways-posts-36-4-crore-net-profit-after-5-quarters-of-loss/articleshow/15338137.cms

CCEA nod to induct Boeing 787 Dreamliners

The government on Friday gave a go-ahead to Air India to induct the much-awaited Boeing 787 Dreamliners into its fleet but would conduct separate negotiations on the issue of compensation for failure of the aircraft to meet performance guarantees.

The Cabinet Committee on Economic Affairs approved the proposal of Civil Aviation Ministry, at a meeting this evening, and allowed Air India to take delivery of 27 Boeing 787 aircraft after signing the Delay Compensation Settlement Agreement, an official release said.

The issue relating to compensation for failure to meet performance guarantees has been delinked from the Delay Compensation Settlement Agreement, which shall be negotiated separately by an Empowered Group of Officers after actual evaluation of the performance of the delivered B—787s, the release said.

These aircraft were scheduled to be delivered between September 2008 and October 2011, but due to certain design and production issues the deliveries were delayed.

Now, these planes are scheduled to be delivered between June, 2012 and March, 2016.

http://www.thehindu.com/news/national/article3723286.ece

AI, AIE to operate 56 more flights

To bring down airfares and help NoRKs in Gulf

Air India (AI) and its low cost carrier Air India Express (AIE) will operate 56 more flights from Thiruvananthapuram, Kochi, Kozhikode and Mangalore airports to the Middle East from Saturday.

This is to bring down the airfares that had gone up and to restore the services that were curtailed during the 58-day strike by pilots of the national carrier owing allegiance to the Indian Pilot’s Guild.

The move was aimed at clearing the rush of the Non-resident Keralites working in the Middle East and planning to come home during Ramzan and Onam, an AI spokesman told The Hindu .

Apart from the additional flights, the authorities were working on crew and route management schedules so that the flight schedules in Kerala and Mangalore were restored to the ‘pre-strike’ period by September 21, he said.

The move was expected to drastically bring down the airfares that had been hiked by private and foreign carriers from Middle East to Kerala. Of the 56 additional flights, 50 would be operated by AIE.

The no-frills airline’s additional flight in the Thiruvananthapuram- Dubai- Thiruvananthapuram sector would be on August 8, 15 and 13. In the Thiruvananthapuram-Sharjah-Thiruvananthapuram sector, it would be on all Saturdays from August 4 to September 15, and in the Thiruvananthapuram-Abudhabi-Thiruvananthapuram sector, it would be on August 30, the spokesman said.

From Kochi

The Kochi-Dubai-Kochi additional flights of the AIE would be on August 8, 15 and September 9, the Kochi-Abudhabi-Kochi flight on August 26, and the Kochi-Dubai-Kochi flight on August 18, he added.

From Kozhikode

In the Kozhikode-Dubai-Kozhikode sector, the AIE flights would be on August 18, 25, September 1, 8 and 14.

The flights in the Kozhikode-Doha-Kozhikode sector would be on August 26, September 2 and 9, in the Kozhikode-Kochi-Kuwait- Kochi- Kozhikode on September 5, and in the Kozhikode-Abudhabi-Kozhikode sector on August 16.

From Mangalore

The Mangalore-Kozhikode-Abudhabi-Mangalore additional flight of Air India Express would be on August 31 and the Mangalore-Kozhikode-Dubai-Mangalore flight on September 7.

As the airline faces shortage of crew, the AIE would not operate additional flights from Kerala to Dammam in Saudi Arabia.

To overcome this and to cater to the high demand for seats from Kerala to Dammam, the budget airline would operate flights in the Mumbai-Dammam-Mumbai sector on all Tuesdays and Fridays from August 21 to September 14, the spokesman said.

The airline would offer connections from Thiruvananthapuram, he added. AIE would also operate additional flights every Thursday till September 13 in the Chennai-Dubai-Chennai sector.

The AI would operate flights in the Kochi-Riyadh-Kochi sector on Wednesday and Friday and in the Kozhikode-Riyadh-Kozhikode sector on Tuesday, Thursday and Sunday from August 9. In addition to this, the airline had commenced flights from Delhi to Seoul, Hong Kong, Osaka and Newark.

Connection flights had been provided from Thiruvananthapuram and Kochi for these international fights, the spokesman said.

More flights of the national carrier were on the offing and flight to Melbourne would be kicked off with the launch of the Dream liner, he added.

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/article3725645.ece

Boeing Snags Airbus Buyer With Two Asia Deals for 94 Jets

Boeing Co. (BA) reached agreements to sell 94 of its single-aisle 737 planes to Asian carriers, including an accord with a Singapore Airlines Ltd. (SIA) unit that has an all- Airbus SAS fleet.

SilkAir, Singapore Air’s regional arm, said today it committed to buy 54 737s, including 31 of the new Max 8, while a China Southern Airlines Co. (1055)unit ordered 40 737-800s. The deals’ list value is $8.3 billion, from which the carriers typically would get discounts

“It is a big positive for Boeing that they have managed to get the confidence of Singapore Airlines,” said Ahmad Maghfur Usman, an analyst at OSK (Asia) Securities in Kuala Lumpur. “Going forward, Singapore Air will continue to order Boeing.”

The deal is a boost for Boeing as the Chicago-based companyand Airbus revamp their narrow-body models to compete in the biggest segment of the global aircraft market. Boeing has amassed more than 1,200 orders and commitments for the Max since the jet’s 2012 unveiling, of which 649 were firm as of July 31.

SilkAir’s purchase will be tallied on Boeing’s orders and deliveries websiteonce the transaction is confirmed, according to a statement from the planemaker.

Boeing rose 1.1 percent to $72.81 at the close in New York, joining a rally in broader U.S. indexes. The shares had fallen 1.9 percent this year through yesterday.

SilkAir Expansion

The 737 accord, which also includes purchase rights for another 14 aircraft, will more than double SilkAir’s fleet by the end of 2021 as rising wealth spurs travel in Asia. The carrier now has 21 planes from Airbus’s A320 family, with three more due to be delivered by the end of next year.

“It’s quite an aggressive order,” said Ahmad. It also suggests that SilkAirmay take over most of Singapore Air’s operations within Asia, he said. The main Singapore Air unit may then fly only a few of the most-important regional routes besides its long-haul service, he said. The main unit has both Airbus and Boeing planes.

The new Boeing planes, which will begin arriving in 2014, will be used to expand capacity and replace older aircraft, SilkAir said.

“We continue to see very strong growth within the region and these new aircraft will position SilkAir well,” the unit’s Chief Executive Officer Marvin Tan said in a statement. The carrier undertook “detailed evaluations and extensive negotiations with both Airbus and Boeing” before placing the order, he said.

Xiamen Airlines

Xiamen Airlines, which is 51 percent-owned by ChinaSouthern, will receive its 40 Boeing planes from 2016 to 2019, according to a statement. The carrier is China’s only all-Boeing operator, with 81 planes, according to its website.

The 737 Max, which is due to enter service in 2017, will be more fuel efficient than the current model after upgrades that will include new engines. Airbus is making similar alterations for its A320neo, which is due to begin commercial flights in 2015.

Airbus has previously sold the A320neo to all-Boeing operators. Norwegian Air Shuttle ASA ordered 100 neo planes in January, ending its reliance on Boeing. The carrier ordered 122 737s at the same time. PT Garuda Indonesia’s Citilink unit also last year placed an order for 25 A320s, including 10 neo planes, to replace its fleet of 737s.

http://www.bloomberg.com/news/2012-08-03/singapore-air-unit-to-add-54-boeing-737s-ending-all-airbus-fleet.html

Defibrillator to save people from sudden cardiac arrest installed at airport

Automated External Defibrillator (AED) costing Rs. 1.5 lakh to save the lives of those who suffer from Sudden Cardiac Arrest (SCA) was installed at the Coimbatore Airport on Thursday as part of the project to Save a Life by the Rotary Club of Coimbatore and Philips Medical India to install these machines in public places.

The machine was installed at the security check area in the departure hall of the Coimbatore Airport in the presence of Airport Director K. Peter Abraham, Project Co-ordinator J. Bala Venkat, Club President K.S. Balakrishnan, Secretary Gurpreet Singh, Project Chairman Sundaravadivelu and Philips National Director Jithesh Mathur.

Objective

One in 2000 Indians per year dies due to SCA.

Timely aid could save many lives and the objective of installing the AED was to empower a common man to do his bit to save a life.

Everyone was aware of Cardiopulmonary Resuscitation (CPR), which is an aid given physically while Ventricular Fibrillation is done using a device.

The device would generate an electric shock to the heart muscle to reverse the effects of ventricular fibrillation.

Rotary Club planned to instal 18 such machines at 10 places such as railway station, Collectorate and airport besides bus stand. On July 19, a device was installed on Platform No. 2 of Coimbatore Junction and another one at Coimbatore Collectorate. The third one has been installed now at airport.

At railway station, more than 60 staff had so far been trained to use the device and to save a life. On reviving the heart rhythm, the patient could be put on an ambulance for continuing the treatment while being rushed to the hospital.

Trained

On Thursday, nearly 40 persons belonging to various agencies operating at the airport were trained in using the machine. The project has drawn enormous response from Ganga Hospital, PSG Hospital, KMCH, GKNM, Indian Society of Critical Care Medicine – Coimbatore Chapter, Indian Society of Anaesthesiologist – Coimbatore Branch and Indian Red Cross Society.

Mr. Abraham said that the device would be of immense help in saving the life of a patient who suffers a cardiac arrest. He thanked the sponsors for the same.

He said that another machine at the arrival hall would be of immense help in ensuring instant and swift reaction.

http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/article3725409.ece

Air India gets Govt nod to take delivery of Boeing 787

New Delhi, Aug. 3:  

The Government has given its nod to Air India to take delivery of the Boeing 787 aircraft.

An official statement issued after a meeting of the Cabinet Committee on Economic Affairs states that the airline be allowed to take delivery of the 27 Boeing 787 aircraft after signing the delay compensation settlement agreement with the manufacturer.

The meeting also decided that the issue relating to compensation for failure to meet performance guarantee be “delinked” from the delayed compensation settlement agreement. This will be negotiated separately by an Empowered Group of Officers. The Ministry of Law and Justice would examine and endorse the enabling legal provisions/aspects of the negotiations.

Sources indicated that at the moment Air India will only receive compensation for the over four-year delay in delivery of the aircraft. Sources also said that this is not the first time that an agreement for compensation for failure to meet performance guarantee has been reached between the Air India and an aircraft manufacturer.

“The performance compensation cannot be decided in advance. The performance can only be measured when the aircraft joins the fleet and more than one aircraft has flown on several routes for a period of time,” an aviation analyst said.

A final time schedule for Air India to start taking delivery of the aircraft is likely to emerge by Monday. “Air India will have to tie-up final financing with banks and have it released before the airline gets the aircraft. It will also have to physically transport crew to the US to take delivery,” a senior official said.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3724055.ece

Jet Airways flies into profit zone with Rs 25-crore net in first quarter

Will increase frequency on certain routes, including Gulf

Mumbai, Aug 3:  

Jet Airways has posted a first-quarter net profit, as the airline earned higher income. Rationalisation of routes also appears to have paid dividends. The airline has been in the red for five quarters in a row. In the April to June quarter, the company posted a net profit of about Rs 25 crore against a net loss of Rs 123 crore a year ago.

The Mumbai-based airline, which operates in two segments — Jet Airways (premium segment) and Jet Konnect (low-cost) — said its results were boosted by a Rs 52-crore profit due to sale and lease-back of aircraft in the quarter. The results come on the back of peer, SpiceJet, posting a profit earlier this week. In the case of Jet, fuel costs increased about 26 per cent to about Rs 1,967 crore.

Falling rupee

Despite the decline in price of international crude, the gains were offset by a depreciating rupee. The airline also operated more aircraft on select routes, which increased the total fuel used. Fuel cost accounted for a little more than 45 per cent of the total expenses.

Revenue increased about 31 per cent to Rs 4,711 crore (about Rs 3,582 crore a year ago). International operations contributed about 56 per cent to the revenue, while the rest came from domestic operations.

Most airlines had increased ticket prices for domestic travellers earlier this year, after flight cancellations by the troubled Kingfisher Airlines and state-run Air India had passengers migrating to other airlines. This also contributed to Jet’s revenue. In the domestic segment, the airline had a market share of 27.9 per cent. “We will not add any new routes in the current financial year, but we will increase the frequency in certain routes like the Gulf,” Nikos Kardassis, Chief Executive, Jet Airways, said.

Outlook

The company said it will bring down its debt burden by about $400 million this financial year. It has a total debt of $2.46 billion. The company said it would complete the sale and leaseback of 8-9 aircraft in the current quarter in a bid to “reduce debt and release cash.” On Thursday, the scrip closed at Rs 374.60, up 0.69 per cent on the Bombay Stock Exchange.

http://www.thehindubusinessline.com/todays-paper/article3724066.ece

SpiceJet chief scripts a turnaround

An airline chief executive’s job isn’t easy, especially considering the cut-throat competition, high taxes and the uncertain regulatory environment. Add to that owner and shareholder expectations, and the challenges seem endless.

When 39-year-old Neil Mills took charge of SpiceJet in October 2010, he obviously knew the hurdles ahead. Mills had the right credentials, having worked in low-cost carriers in Europe and Dubai for over a decade. Under him, SpiceJet grew, adding routes. But profits eluded the airline. That is, until now

Mills led SpiceJet to a profit of Rs 56 crore in the quarter ended June, the first profit after five quarters of loss. Market share rose from 17.1 per cent at the end of March to 18.6 per cent at the end of June. For the quarter ended June, the number of passenger rose 26 per cent, while revenue rose 51 per cent year-on-year.

According to HSBC Global Research, SpiceJet’s results were better than expected, owing to higher other income and lower-than-estimated costs. Some, however, attribute the turnaround to Kingfisher Airlines’ woes and the strike at Air India.
Before moving to SpiceJet, Mills spent 12 years in various management roles in EasyJet, one of the largest European low-cost airlines, and a year and half as chief financial officer in FlyDubai.
Mills brought to SpiceJet an approach that stresses on attention to detail. He also introduced measures to improve efficiency and minimise costs. “He has an eye for detail and data. At meetings, he invariably comes up with points that we overlooked,” said a SpiceJet executive. “He is focused on the bottom line all the time,” said another airline executive.
“Neil has performed well, considering the severe operating environment. After his entry, Neil and his team started a strategic review to turn around the airline and structure a new business plan, including urgently addressing the long-term fleet requirements of SpiceJet that were neglected by the previous ownership. I must admit SpiceJet didn’t have a serious business plan before Neil took charge,” said Kapil Kaul of the Centre for Asia-Pacific Aviation.
“However, a sustainable turnaround would take time, as the industry is faced with a very negative and hostile fiscal regime. This, coupled with a very ineffective policy and regulatory framework, makes his task extremely challenging. I will prefer to wait for consistent delivery of any turnaround before reaching any conclusion, but his efforts are showing results,” he added.
SpiceJet’s aircraft utilisation has risen to 12.5 hours daily. Company sources claim this is the highest among all domestic airlines.
The airline has also been able to cut costs, deciding to carry out maintenance checks at GMR’s facility for maintenance, repair and overhaul at Hyderabad, instead of sending the aircraft abroad. Upgrade of passenger reservation software (which reduces cost of ticket sales) and replacing older aircraft with new ones have also reduced costs.
Mills doesn’t prefer the words ‘cost cutting’, as he believes these have a negative connotation. “It is about bringing efficiency,” he says, adding, “The operating environment has been difficult. We were impacted due to competition selling below costs and heightened fuel costs.”
Under Mills, SpiceJet has also stepped into uncharted territory. For instance, importing aviation turbine fuel directly or deciding to fly to Kabul. The decision to fly to Kabul is, however, a gamble, as the Afghan capital is neither a market for leisure, nor one of corporate travel. In the domestic sector, too, SpiceJet has been forced to withdraw certain flights and shut stations like Nanded in Maharashtra because of poor traffic.
Mills, however, seems confident about the Kabul sector. The route would benefit Afghan traders and enable medical tourists from that country to visit India. “Instead of flying to the Gulf, they can fly to Delhi, which is closer,” he says.

http://www.business-standard.com/taketwo/news/newsmaker-neil-mills/482205/

Jet Airways extends gains ahead of Q1 earnings

According to an average estimates of analysts, the company is likely to post net loss of Rs 144 crore for the quarter ended June 2012

Jet Airwaysis trading higher by 2.2% at Rs 379, extending its 15% rally in past four-trading sessions, ahead of its first quarter financial results scheduled to be announced later today.
According to an average estimates of analysts, the company is likely to post net loss of Rs 144 crore for the quarter ended June 2012 against net loss of Rs 123 crore (Adjusted net loss of Rs 241 crore) in previous year quarter. The company's Q1 revenues are seen up 39% at Rs 4,938 crore against Rs 3,542 crore, on year-on-year basis.

The stock has outperformed the market by gaining 17% so far in the current week compared to 1.3% rise in benchmark Sensex, after SpiceJet posted an unexpected quarterly profit of Rs 56 crore for June quarter. Analysts on an average had expected a net loss of Rs 28 crore from the India's second-biggest budget airline for the quarter.

A combined around 1.23 million shares have changed hands on the counter so far on both the exchanges

http://www.business-standard.com/india/news/jet-airways-extends-gains-aheadq1-earnings/181355/on

Jet Airways charts new route

Jet Airways is venturing into the loyalty management business. It also plans to set up an academy to train cabin crew.

The airline’s gross revenue for 2011-12 rose 17 per cent to Rs 15,173 crore. However, it recorded a Rs 1,236-crore loss due to the tough operating environment. The airline has sought shareholders’ approval to set up a marketing services company to manage the airline’s and its shareholders’ loyalty programmes and set up a training school for cabin crew.

Kingfisher Airlines, which runs a training academy, had also proposed to outsource its loyalty programme (the frequent flier programme). Among global airline majors, Air Canada had hived off its loyalty programme in 2002.

Jet Airways and Kingfisher did not respond to email queries seeking comments.

Typically, outsourcing involves design, implementation and management of loyalty management programmes. This includes fixing reward points and ‘earn and burn’ programmes, managing records and mailing point statements and details on rewards. Loyalty management companies prepare an activity-based calendar and communication touch points, including special email offers on festivals, for clients.

Industry experts say the move could help Jet Airways clean its balance sheet. Companies that carry out loyalty programmes have to report the fair value of the liability of points to the company in the balance sheet. Outsourcing the process could mean transfer of the points liability to the new company, though it can be retained by an organisation.

“This helps in cleaning the balance sheet of the parent organisation and transferring the programme management and liability to the new company. Success for the new company depends on how well it is able to sell the programme currency to other partners and the arbitrage it can gain on issuance and redemption of points. It also depends on whether the partners align themselves to the programme brand, instead of running their own programme,” said Brian Almeida, managing director of Direxions Marketing, a leading loyalty management company.

Currently, Jet Airways manages its JetPrivilege frequent flier programme in-house. It also has several tie-ups with hotels, retail and lifestyle brands. Jet’s programme was designed and managed by Direxions Marketing for a few years. A Jet Airways executive, however, maintained the programme had always been run in-house.

The airline now plans to transfer its Jet Privilege programme to the proposed subsidiary company and in the process, transform the programme into a larger retail-based coalition loyalty programme to unlock commercial value. The marketing services company would initially be a 100 per cent subsidiary. However, the airline proposes to sell stake in the company later, shareholders were told.

Jet Airways plans to train its own crew by setting up an academy that would also train cabin crew aspirants and staff members of other airlines. This, too, would be a subsidiary of the airline.

http://www.business-standard.com/india/news/jet-airways-charts-new-route/482219/

AAI doubles charges for ground handling services across 60 airports

MUMBAI/NEW DELHI: In what's seen as another blow to airline companies, reeling under high operating costs, the government-owned Airports Authority of India (AAI) has more than doubled the charges for ground handling services across 60 of its airports.

In a letter sent on July 31 to all airlines, without any prior consultation, AAI informed that effective August 1, ground handling agencies will have to pay between 32%-36% of their revenues to AAI from the earlier 13%.

"These cost increases forced by the government and other airport operators at a time when we are already grappling with high fuel charges and other taxes are difficult to explain.

If airports keep on increasing fees, how can we be cost efficient? It will be impossible to offer value to consumers as we will be forced to seek higher fares, hitting growth," said an airline CEO who didn't want to be named.

Ground-handling services include check-in, baggage handling, cargo handling, aircraft cleaning, loading and unloading of food & beverages on aircraft, providing electricity back-up to aircraft while they are at airports, supplying water to the carrier, ferrying passengers to and from planes, and maintaining toilets.

This will further increase operating costs as the ground handling agencies, called third party ground handlers, will pass on the costs to airlines which in turn will pass it on to passengers, making an already high-priced market even pricier. Airlines are terming this unilateral increase unfair as it comes at time when there's a slump in growth and fares are already high, impacting demand.

AAI's decision to raise charges comes close on the heels of the largest private airport operator in the country, Delhi International Airport, increasing tariff by more than 344% at one stroke, causing outrage among airlines which have taken the issue to the courts.

Justifying the higher ground handling charges, AAI officials said they were forced to increase charges as it has designated three authorized agencies to carry on ground handling in 60 of its airports, including Chennai and Kolkata, as deemed necessary under the new ground handling policy.

The new policy aims to eliminate outsourced manpower and restrict the number of service providers operating at airports to improve service standards, safety and security.

But since airlines opposed the implementation of the new policy and challenged it in courts, contesting the government move in the Apex court, other unauthorised companies already providing services at airports cannot be prevented from doing so.

As a result, AAI says it was incurring revenue losses. To stem the losses, AAI floated tenders to appoint designated companies to provide ground handling services, along with unauthorized ones until there's status quo.

"We were having a loss of business as ground handlers were paying us less - about 13% of their total revenues. After floating tenders, we have arrived at market-discovered royalty of 32-36% of revenue that the designated authorities have agreed to pay us. Others would be required to match this rate," said an AAI official, preferring anonymity.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/aai-doubles-charges-for-ground-handling-services-across-60-airports/articleshow/15332901.cms