AI gives away Rs 20cr/yr profit

MUMBAI: The ailing carrier Air India has handed over its profitable 'aircraft ground handling' business in Thiruvananthapuram (TVM) airport and a part of the revenue earned from it to a private company in the name of a joint venture. Air India used to earn Rs 40-45 crore a year from the business, but with this move the earning is down by 50%.

The term aircraft ground handling refers to services such as loading/unloading cargo, bags and food containers; cleaning cabin, towing the aircraft etc. Till May end, Air India and its fully-owned, low-cost subsidiary, Air India Air Transport Services Ltd (AIATSL) carried out the ground handling jobs for flights operated by nine foreign airlines in TVM. "In the first week of May, AI informed its southern station that its TVM ground handling contracts have been novated to Air India-Singapore Air Terminal Services (AI-SATS) with retrospective effect from April 1,'' said a source. AI-SATS is a private 50:50 joint venture company. So when AI's ground handling contracts are novated to AI-SATS, the revenue earned by the national carrier goes down to 50%.

Another detail is that about a month before his retirement in July, one of the AI general managers (finance) brought out an order to transfer the ground handling revenue earned by AI-AIATSLin TVM in the months of April and May to AI-SATS. Documents with TOI show that AI-AIATSL provided ground handling services for these nine airlines till May end and AI-SATS took over only in June. "So the AI billing section based in Mumbai was surprised to see this order. It adds up to Rs 7-8 crore,'' said a source. Air India responded to all but this particular query.

The move is questionable on several other counts as well. Firstly, AI handed over its ground handling contracts to AI-SATS under the guise of the new ground handling policy, even though the said policy does not apply to TVM airport. More importantly, the move goes against AI's financial restructuring plan, which were submitted to the government by the ailing carrier when it sough financial aid. Under these plans, AI touted its ground handling business as a profit-making centre and proposed to hive off the business to its fully-owned subsidiary AIATSL in order to boost profits. The proposal was cleared by the Cabinet Committee of Economic Affairs on April 12. AI's plan to give away a part of its ground handling pie to AI-SATS, like done in TVM airport, does not feature in these plans. AI spokesperson said that TVM was given to AI-SATS under the ground handling policy. He did not elaborate why the decision which was contrary to the airline's turn around plan was taken.

The move to hand over ground handling contracts held in TVM to AI-SATS has been in discussion since December 2010. "A few AI board members mooted the proposal and it was never questioned why should TVM be given up to AI-SATS in a hurry though the airport was not under the new ground handling policy," said an airline top official. Rohit Nandan, chairman and managing director of Air India is also the chairman of AI-SATS board. Other than this two out of five members on the AI-SATS board are AI directors.

http://timesofindia.indiatimes.com/business/india-business/AI-gives-away-Rs-20cr/yr-profit/articleshow/16304500.cms

Airports Authority of India lesson on how to shut down an operational runway

MUMBAI: The audacious move by a group of officials from Airports Authority of India (AAI) and ministry of civil aviation to de-commission Juhu airport's secondary runways began in May last year.

This week, Times of India had carried a report on the issue. After AAI decided to shut down the secondary runway, it started issuing no-objection certificates to builders allowing them to increase the height of the buildings that stood in the approach path of the said runway.

Juhu has two runways, a main runway and a smaller secondary runway. If Juhu airport's secondary runway 16-34, is permanently shut down, as being planned by AAI, there will be serious repercussions. ``That is because Juhu airport is located less than two kilometres away from the huge and busy Mumbai airport and runways of both these airports are almost similar in their lay-out, which in turn means that, there are norms to be adhered to for use of Juhu airport's runways,'' said a source.

Simply put, what it means is that, if Mumbai airport, for some reason, is forced to suspend flight operations on its main runway and use its secondary runway 14-32, then Juhu too can only use its secondary runway 16-34. ``Juhu will not be not allowed to use its main runway in such a situation. That is to prevent the overlap of approach paths of aircraft landing in Juhu and Mumbai,'' the source added. In short, the Juhu airport should keep the secondary runway aliveif it has to avoid disruptions to flight operations.

Here is a time-line of how most of the AAI officials, baring one, made out a misleading case so as to close down the secondary runway of Juhu airport permanently.

May 06, 2011: JMS Negi, the then AAI executive director submits a report that says that secondary runway 16-34 of Juhu airport cannot be used in any combination with runways of Mumbai airport. It implies that secondary runway is of no use. However, Juhu's secondary runway will be the only runway that can be used if Mumbai uses its secondary runway. Pilots, airtraffic controllers (ATCOs) corroborate this.

May 06, 2011: Negi report is accepted by the Appellate Committee, headed by a joint secretary of civil aviation ministry. This Committee approves grant of NOC for buildings around airports for which builders want more than permissible heights.

30 May, 2011: AAI's executive director, planning in an intra-office note says ``it has plans to build a new apron and terminal building at Juhu and does not envisage operationalisation of runway 16-34.'' This despite the said runway being operational all the while.
6 June, 2011: AAI general manager, NOC sends a letter to Regional Executive Director saying that ``it has been intimated by planning directorate that runway 16-34 is non-operational''. Proposes that runway be used as a helicopter night parking stand.
31 October: AAI joint general manager (air traffic control) in a letter to general manager (western region) says de-notification of runway 16-34 will adversely affect operations at Juhu.
December 2011: DGCA carries out an inspection of Juhu airport. Both runways are in use during the inspection.
February 2012: DGCA grants license to Juhu airport on the condition that the runway 16-34 is resurfaced as it is in bad condition. AAI agrees and sets itself a deadline of December 2014.
23 August: AAI general manager (aero, western region) in a file noting says that since runway 16-34 is going to be shut down, any work on it should be carried out only after it is de-commissioned. There are plans to downgrade the runway to be used as a taxiway and to park aircraft, his note says.

http://timesofindia.indiatimes.com/city/mumbai/Airports-Authority-of-India-lesson-on-how-to-shut-down-an-operational-runway/articleshow/16299781.cms

Takes delivery of its first Boeing 787

Air India took delivery of its first Boeing 787 commercial widebody airplane on Thursday at Boeing Co's final assembly plant after a months-long dispute between airline and manufacturer over compensation for a four-year production delay.

Three white 787s trimmed with red and orange Air India colours were parked at the Boeing plant near Charleston, South Carolina and ready for delivery at the end of May. Delivery was held up for months while Air India and Boeing worked out a compensation settlement and waited for Indian government officials to approve it. Terms were not disclosed.

The Dreamliner was also at the heart of a recent Air India pilots' strike. In July, about 500 Air India pilots ended the almost two-month strike over exclusive rights to fly the Dreamliner.

The striking pilots had demanded that their colleagues from the former Indian Airlines, the domestic state-run carrier that merged with Air India, not be trained to fly Dreamliners because they worried it could hurt their own career prospects.

Boeing said Air India is the fifth airline in the world to take delivery of a 787 Dreamliner. The ailing airline has ordered 27 Dreamliners in all.

"I am sure Air India and their customers will be thrilled to experience the revolutionary features on the 787, an airplane that will be the key focus of the airline's turnaround plan," said Dinesh Keskar, senior vice president of Asia Pacific and India Sales for Boeing Commercial Airplane, in a statement.

The airplane delivered today was built in Everett, Washington and flown to South Carolina for delivery.

"The 787 will allow Air India AIN.UL to open new routes in a dynamic marketplace and provide the best in-flight experience for our passengers," said Rohit Nandan, Air India Chairman and Managing Director.

Made primarily of lightweight carbon fibre materials, the new 787 is lighter than standard aluminium widebody jets. It is the first mid-size airplane capable of flying long-range routes, enabling airlines to open new, non-stop routes preferred by the travelling public, Boeing said in a statement.

Air India's Dreamliner is equipped with 18 business class seats and 238 economy class seats. The airplane is scheduled to fly to New Delhi on Friday.

India, one of the fastest growing aviation markets in the world, offers tremendous growth opportunities to planemakers as more newly affluent Indians take to the skies. Boeing officials forecast passenger traffic to grow by 8.4 percent annually in South Asia, which includes India, and by 7 percent annually in China up to 2031.

Boeing Co raised its forecast for the Indian plane market earlier this month, saying the South Asian country would need 1,450 new aircraft worth $175 billion by 2031. "India will have the highest passenger traffic growth in the world, higher than even China's in the next 20 years," Keskar told reporters.

http://www.business-standard.com/india/news/takes-deliveryits-first-boeing-787-/485756/

Air India hopes to lift off as aircraft touches down

As the much delayed Boeing 787 Dreamliner makes an official touchdown, complete with a water cannon salute, in Delhi tomorrow to join Air India’s fleet, the ailing airline is working on a plan to regain its lost space in the international skies. While AI will not officially share its route plans for the 27 B-787 aircraft (at least three are expected this year), insiders and route planners say with its ability to fly optimally for 10 to 13 hours without a refuel, one destination is surely going to be Australia. According to airport data, as many as 550 passengers fly from Delhi to either Sydney or Melbourne through either Singapore or Hong Kong or other destinations every day, including a large student community. That is because there is no direct flight between the two countries. With indirect flights taking between 22 hours to as much as 38 hours to reach cities like Melbourne from Delhi, the Dreamliner would provide an attractive alternative, as well as command a premium, by doing the same for only nine and a half hours.   A DREAM TAKES WING What does the Dreamliner offer? Replacing 777 with 787 will lead to a cost saving of 25% Low-cabin altitude and lower pressure cabins will reduce passenger fatigue  Large-sized windows  Electronically dimmable window lights  18 J class and 238 Y class seats AI is also looking at leveraging the Dreamliner to expand its limited European connectivity. This is presently only to London, Paris and Frankfurt, helping European carriers and even Jet Airways (with a base at Brussels) to gain at their expense. Worse they are flying these routes with the B-777, long-haul aircraft optimised for 15-hour non-stop flying and requiring high load factors to break even. AI is looking at replacing these with the more fuel-efficient Dreamliners. It is also studying the potential in flying more routes such as those to Rome, Barcelona, Madrid or Milan. The Dreamliners would also provide new opportunities, such as connecting India to more destinations in China like Guangzhou and replacing the 777 to Shanghai directly. Similarly, in Southeast Asia, it could again fly to Kuala Lumpur, which it had stopped doing, and also connect to upcoming markets such as Hong Kong, Vietnam and Philippines. And, instead of flying to Tokyo on a 777, it could use the more efficient Dreamliner and cash on a growing market. AI insiders and airport planners say new markets are also opening in countries such as Kazakhstan and Uzbekistan, where there is a lot of business traffic. The African market provides another opportunity, with the Dreamliner making direct connectivity to places such as Nairobi possible.

http://business-standard.net.in/results/news/air-india-hopes-to-lift-off-as-aircraft-touches-down/485755/

Airport taxis, a law unto themselves

Several taxi drivers illegally park their vehicles in the service lane close to the old domestic and international terminals at the Chennai airport causing heavy traffic congestion, say commuters. Many of these drivers also charge excessive fares and cheat passengers but are not subject to any action by the police, airport users allege.

M. Srinivasan, who visited the airport last week to drop a relative, said he experienced a great deal of hardship while returning home. “It took me nearly twenty minutes to leave the airport because several taxis stationed in the service lane blocked the movement of other vehicles. Instead of directing the idling taxis to move, the police attempted to divert other vehicles,” he said.

Owing to this, he paid Rs. 60 as parking fare, though he had not parked his vehicle. As per the rules of the newly-introduced booth system in the airport, vehicle-owners must enter and exit the airport within seven minutes or pay Rs. 60 and Rs. 120 for non-premium and premium parking slots respectively.

Illegal parking

Mumbai-based Garuda Aviation which manages the toll booths also faces many difficulties due to the illegal parking. “Often, we are not permitted to charge any of these taxis for parking and hence, we incur a huge loss. On an average, at least 100 vehicles get away every day without payment,” said an official of Garuda Aviation.

Most of these taxis charge a higher fare than the existing taxi services at the airport which include Fast Track Ltd., Aviation Express and Chennai Airport Prepaid Taxi Owners-Drivers Association.

“While we charge Rs. 450 for a trip to Anna Nagar, the ones who have parked illegally charge nearly Rs. 600 or so. People who are new to the city are easily deceived. The taxi-drivers park their vehicles in the service lane so that they can approach people before they come to us,” said a source at Fast Track Ltd.

Nearly 10-15 brokers wait in the service lane and help these taxi drivers get clients, he added.

“Difference in degree”

With passengers already irritated over what they see as the high fares charged by licensed taxi services, many are of the view that they invariably end up getting cheated.

“The difference is only in the degree. If we step out, the autorickshaw drivers also subject us to the same. It has become extremely difficult to get to the city from the airport at a reasonable price,” said a passenger.

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·  Taxis stationed in the service lanes keep blocking others vehicles, say commuters

·  Many of these taxis charge higher fare than the licensed services

http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/article3872906.ece

Aviation Ministry irked by Plan panel attending Emirates sponsored function

New Delhi, Sept. 7:  

The Ministry of Civil Aviation has taken a dim view of the Planning Commission participating in a function sponsored by the Dubai-based Emirates.

What has irked the Ministry is that a study was released at the event highlighting the economic benefits to India if the airline is allowed to operate more flights.

Sources told Business Linethat Minister for Civil Aviation Ajit Singh telephonically spoke to the Deputy Chairman of the Planning Commission Montek Singh Ahluwalia and conveyed the economic benefits that will flow to the domestic economy if airlines from India are also allowed to operate more flights.

The function was attended by Pronob Sen, Principal Advisor, Planning Commission.

With foreign airlines carrying more Indian passengers bound for international shores than Indian carriers, the grant of additional seats to foreign airlines has been a sensitive topic.

Airlines from India argue that most international carriers carry passengers from India not only to their home country but also onwards to different destinations around the globe. Indian carriers argue that Indian passengers being flown onwards from the home base of international carriers should ideally be flown by a domestic airline.

In 2008, Emirates was allowed to operate 54,200 seats per week, an addition of 23,000 seats a week. The airline currently operates 184 weekly flights to India.

In the study Emirates points out that allowing it to operate 80,000 seats a week into India or carry 6.16 million passengers annually would lead to a direct contribution to the Indian economy of $363 million and have a multiplier effect of $720 million.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3871650.ece

Air India gets ready to receive Boeing 787

To fly between Delhi and Chennai, Bangalore and Kolkata

New Delhi, Sept. 7:  

Air India plans to utilise the newly inducted Boeing 787 aircraft, which is India’s first, to operate regular flights between Delhi and Chennai, Bangalore and Kolkata.

The first of the 27 Boeing 787 aircraft is scheduled to arrive in Delhi on Saturday evening. The aircraft is likely to be formally inducted into commercial operations only after Prime Minister Manmohan Singh formally views it. The last time Air India inducted a new aircraft, a Boeing 777 in 2007, the Prime Minister had visited the airport and viewed the aircraft.

“The Boeing 787 will be operated as one of the existing commercial flights in operation. It may also be flown between India and Dubai with the first long-haul operations being to Australia some time later this year,” sources said.

At the moment it is not clear when the first commercial flight with the new aircraft will take off. Generally, after an aircraft arrives in India it has to be registered with the Directorate General of Civil Aviation before it can take to the skies. The registration process takes a few days.

The aircraft is also likely to be deployed on some of the existing Europe routes to which the airline operates. The airline hopes to receive four to five aircraft by December and have a fleet of eight 787s by the end of 2012-13.

http://www.thehindubusinessline.com/todays-paper/article3871662.ece