Air Kerala set to get wings again

Cochin International Airport Limited (CIAL), the company which operates Kochi International airport, is planning to enter the airline services by launching a separate company.
The director board at a meeting held on Saturday revived the proposal to commence an independent airline and entrusted its managing director, VJ Kurian, to submit a feasibility report in four months.

Air Kerala, the proposed airline, would commence operations in association with the Kerala government and would have a preliminary capital base of Rs 200 crore.

Chief minister Oommen Chandy and chairman, CIAL, informed that a company — Air Kerala International Services Limited — was already formed a year ago for the purpose.

The objective is to provide provide budget airline services to NRKs (non resident Keralites) mainly in the West Asia region. According to official statistics, 3 million Keralites are working abroad, of which 2 million are in the Gulf Corporation Council (GCC) countries.

CIAL plans to mobilise the initial capital by issuing shares to the NRIs, especially from NRKs. Special privilege cards would be issued to the shareholders and CIAL would give concessions in the airport-based charges for the new company.

It was during the regime of the last UDF government (2001-06) that the plan to launch an airline for Kerala was mooted. But the Centre had turned it down as according to the existing provisions, a minimum fleet size of 20 aircraft and an experience of five years in the domestic sector are required for permitting an Indian carrier to operate international services.

A clause that stands in the way of Air Kerala’s hopes is the Gulf routes that the new airline intends to take up are currently reserved only for Air-India and Indian.

Kurian also informed direct services from Kochi to the US and Europe would commence soon. Talks were on with international airlines like Lufthansa, British Airways and Air France. CIAL had offered concessions in landing and parking charges for one year for these airlines. The companies had cited lower number of passengers in the business class from Kochi as the main hurdle in commencing direct services these countries.

http://www.business-standard.com/india/news/air-kerala-set-to-get-wings-again/485858/

Air India gets its first Dreamliner

The advanced Boeing 787 Dreamliner of Air India touched down at Delhi's IGI Airport today, ending an over four-year wait of the struggling national carrier to add this next-generation airplane in its fleet.

The plane, painted in red and yellow livery of Air India, landed at the main runway of the airport at 1705 hours and was given water-cannon salute as it taxied to the bay.

After parking, a small religious ceremony was conducted to welcome the aircraft in the presence of Air India CMD Rohit Nandan and senior Civil Aviation Ministry and airline officials.

"It was a very smooth flight. It has a very quite cabin and there is much less fatigue (for the pilot). It is both a pilot and passenger friendly airplane," he said.

Air India, which ordered 27 Dreamliners six years ago, would get two more of these planes in the next few weeks. A total of eight of them would arrive by March next year, including five by December, while the national carrier would get six more in the 2012-13 fiscal.

The aircraft would ultimately become the mainstay of Air India's global operations and is key to its turnaround plan.

For Air India, the plane has been configured to have 256 seats -- 18 full-flat Business Class seats and 238 in Economy. It features a host of sophisticated technologies, including mood-lighting inside the cabin and large LCD display screens for in-flight entertainment.

For the next two months, Air India would use the B-787s to operate on select sectors like Delhi-Dubai, Delhi-Kolkata, Delhi-Bangalore and Delhi-Amritsar for the crew to practice more landings and take-offs. So far, a total 65 pilots have been trained to fly this plane.

The mid-size plane has four variants, with the longest -range one capable of flying over 15,000 kms non-stop.

By December, Air India would introduce these aircraft on new long-haul sectors like Melbourne and Sydney, apart from the older ones like Japan, Middleast and several European destinations.

A top official of its manufacturer Boeing recently described the aircraft as "the fundamentally right aircraft for Air India's turnaround plan".

The plane, made of carbon composite material, is light- weight and is considered less of a fuel guzzler. Boeing claims the plane consumes 20 per cent less fuel compared with the similar-sized B-767s, thereby lowering flying costs.

The first batch was supposed to be delivered in September 2008 but design and production issues at Boeing delayed deliveries.

According to Boeing, the aircraft was ready for delivery in May but it got delayed over finalisation of compensation agreement between Air India and the aircraft manufacturer. The agreement deals with the compensation to be given by the US aircraft major for almost four-year delay in deliveries.

Air India was the world's second carrier to have placed orders for this aircraft. Delays in clearing of the agreement and in the plane's deliveries to Air India, made it the fifth airline to get it.

The airlines which have inducted and are already operating this aircraft are Japan's All Nippon Airways, Japan Airlines, Ethiopian Airways and Lan Airlines of Chile.

http://www.indianexpress.com/news/air-india-gets-its-first-dreamliner/999833/3

Kingfisher Airlines' auditors suggest stronger internal audit system

NEW DELHI: The auditors of debt-ridden Kingfisher Airlines have said the air carrier needs to strengthen its internal audit systems and have raised concerns over numerous issues including delayed or no-payment of dues.

Making some serious observations about the books of accounts of Kingfisher, the auditors in their report for 2011-12 have said the company has prepared its financial statements on a 'going concern' basis, despite its net worth having been completely eroded.

"The appropriateness of the said basis is inter-alia dependent on the company's ability to infuse requisite funds for meeting its obligations, rescheduling of debt and resuming normal operations," said the auditors' report, which form part of Kingfisher Airlines' Annual Report 2011-12, being sent to shareholders ahead of their AGM on September 26.

Kingfisher's net loss more than doubled to Rs 2,328 crore in 2011-12, from Rs 1,027 crore in the previous year.

Its total long-term borrowings stood at Rs 5,695 crore as on March 31, 2012, down from Rs 6,306 crore a year ago. Besides, it had short-term borrowings of Rs 2,335 crore at the end of 2011-12, up from Rs 604 crore as on March 31, 2011.

For these loans, the airline has used as security all its movable assets, trademarks, 'goodwill' of the company, credit card and other receivables and a mortgage on Kingfisher House.

The airline has said it expects the government to relax overseas investment norms to allow foreign airlines to pick up equity in domestic players, which would widen its access to equity capital and potential to induct strategic partners.

However, the auditors have drawn shareholders' attention to a number of issues in their report and have gone ahead to say that "the company's internal audit system needs to be strengthened to make the same commensurate with the size and nature of its business."

The auditors have also said that they found adequate internal control procedures for inventory purchases, given the management's view that a large number of purchases are of a special nature without any alternative quotations available.

They observed that it did not notice any continuing failure to correct any major weakness in internal controls, but "internal controls in respect of sale of services and purchase of fixed assets (were) to be strengthened."

The auditors further said the company has defaulted in repayment of loans and interest to banks and financial institutions.

"Delays were noticed in payment of interest and principal on several occasions during the year (2011-12), while putting the estimated unpaid overdues to banks and institutions at about Rs 780 crore as on March 31, 2012. Besides, interest aggregating to over Rs 51 crore for the calendar year 2011 were due to debenture holders as on March 31, 2012."

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/kingfisher-airlines-auditors-suggest-stronger-internal-audit-system/articleshow/16323061.cms

Air passenger carrying slender loris arrested

A passenger on the way to Dubai from Bangkok via Delhi was detained by the Central Industrial Security Force (CISF) personnel along with two co-passengers at the Indira Gandhi International Airport here on Sunday after one slender loris, a nocturnal primate, was found concealed in his under-garment.

Another slender loris was found in a dustbin inside the terminal. The suspect and his two co-passengers were questioned by the police.

Saudi Arabian nationals Al Dhaheri Hamad, Al Shamsi Mohammed and Al Shamsi Rashid arrived at Delhi airport from Bangkok around 12.30 p.m. and were on their way to board another flight to Dubai when a CISF personnel during frisking detected a slender loris concealed by a passenger.

“Another slender loris was found in a dustbin,” said an airport official.

Subsequently, the CISF officers contacted wildlife experts and alerted the local police, which arrived around 5 p.m. “Investigations are under way to find out whether a case of cruelty towards animals or any other offence is made out against them,” said the official, adding that carrying an animal on a flight is not allowed.

http://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/article3879729.ece

Aranmula airport: hartal in Pathanamthitta on Wednesday

The Thiruvaranmula Paithruka Grama Karma Samithi and the Palliyoda-Pallivilakku Samrakshana Samithi have called for a day-long hartal in Pathanamthitta district on Wednesday in protest against the alleged indifference of the government to their demand to withdraw the proposed Aranmula airport project and the Sabarimala Master Plan project from the Emerging Kerala-Global Connect meet to be held in Kochi from Wednesday to Friday.

A joint statement issued by Karma Samithi president K. Haridas and Samrakshana Samithi convener P. Induchoodan said the decision to observe a hartal on the opening day of the three-day investors’ meet was taken with the support of various socio-environmental and cultural organisations.

They alleged that Chief Minister Oommen Chandy and Industries Minister P.K. Kunhalikutty had adopted an indifferent attitude to their plea to exclude the controversial airport project from the proposed meet. The government’s gross neglect of the people’s interests and the environment was reflected in the inclusion of the Aranmula airport as a key project in the district profile published on the meet website, they said.

The Chief Minister’s promise that only environment-friendly projects would be included in the meet had been proved hollow, they alleged.

The statement called for whole-hearted support of the people for the dawn-to-dusk hartal by keeping all shops closed, striking work, and hoisting black flags in every nook and cranny of the district in the interests of protecting biodiversity-rich wetlands, paddy fields, and the natural stream leading to the Pampa.

BJP extends support

In a statement here on Sunday, V.N. Unni, Bharatiya Janata Party district unit president, said the party would extend active support to Wednesday’s hartal in Pathanamthitta.

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·  Protest against including project in investor meet

·  Chandy’s promise proved hollow: Samithis

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/article3879918.ece

Kannur’s airport dreams may be delayed

The commencement of work on the fourth airport in the State in Kannur is likely to be delayed following the row over the selection of the project consultant and the subsequent resignation of the managing director (MD) of Kannur International Airport Limited (KIAL).

Special Officer for Kannur airport and MD of KIAL V. Thulasidas has submitted his papers in the wake of an adverse media report against him and his colleagues following the cancellation of the consultancy agreement with Mumbai-based STUP Consultants Pvt Ltd.

The agreement signed with STUP, appointing it as the project consultant, was cancelled after it was found that the RFP (request for proposal) conditions had been violated by the Indo-French consortium.

Mr. Thulasidas, former chairman and managing director of Air India, submitted his resignation to Minister for Ports and Airports K. Babu after announcing that fresh bids would be invited for selecting the project consultant.

He has also written to Chief Minister Oommen Chandy citing the reasons for his decision.

COST FACTOR

Sources told The Hindu that the project consultant agreement for Rs.14.3 crore was signed with STUP after a transparent bidding process and as per the guidelines of the Planning Commission when Cochin International Airport Ltd. (CIAL) had demanded Rs.105 crore for the same.

Though a decision on the resignation will be taken only this week, the sudden developments will affect the work on the airport.

STUP has already approached the High Court of Kerala challenging the cancellation of the agreement with KIAL.

Sources said the government was putting pressure on Mr. Thulasidas to continue in the post as it wanted to use his expertise in the aviation field.

The resignation of Mr. Thulasidas and decision to call for fresh bids to select the project consultant will come up at the board meeting scheduled in Kochi on Tuesday.

The cancellation of the agreement came after it was found that STUP was blacklisted by the Punjab Infrastructure Development Board when it submitted bids for the Kannur project.

In May, KIAL had asked CIAL to revise the detailed project report (DPR) in the wake of the technical flaws in the DPR. Sources said this had invited the wrath of the CIAL. CIAL was entrusted with the task of preparing the DPR after the Airports Authority of India failed to give the report in time.

Sources said CIAL was yet to submit the revised DPR. With all this, the plans to operate the first flight from Kannur by 2014 had run into rough weather.

http://www.thehindu.com/news/states/kerala/article3878168.ece

Air travel may get costlier as Air India mulls fare hike due to costly fuel

NEW DELHI: Air travellers in India may have to face yet another hike in fares.

The new management at Air Indiais not afraid of losing passengers due to fare hikes as airline CMD Rohit Nandan hinted at more price revisions to absorb spiralling costs incurred by the airline.

Its peers with larger market shares in terms of passengers carried, such as IndiGo and Jet Airways, still wait for cues from Air India on fare pricing. Air India is ranked fourth in terms of market share, but by virtue of its stranglehold in terms of routes it serves and the number of aircraft at its disposal, the national airline is still able to dictate pricing trends in the domestic sector.

"If the fuel prices go up further, the carrier will not shy away from passing costs on to the passengers," Nandan told ET. Nandan is emboldened by the high loads that the airline has witnessed in the past few months, in spite of expensive air tickets.

Its load factors (number of occupied seats versus total seats in an aircraft) also saw improvement in June at 71%, while in July, which is a lean month for air travel, loads are at around 65%, similar to the rest of the industry, in spite of higher fares.

"If we don't pass on fuel costs, we won't break even," reasoned Nandan when asked if the carrier could increase ticket prices further.

Air India and its peers have gained considerably from Kingfisher Airlines' financial trauma, which forced Vijay Mallya-promoted airline to ground most of its 60 odd aircraft, barring 11 that still fly. KFA's depleted fleet gave pricing muscle to the rest.

Last Monday, Air India hiked fuel surcharge by Rs 150 on domestic flights of up to 1,000 km and by Rs 250 for longer ones. It hiked fuel surcharge for international flights by $15 for a one-way ticket and by $30 for return tickets.

This is in sharp contrast to the airline's approach last year when the old management decided to slash fares by 20-30% in the January-March quarter in order to garner passenger traffic, which continued till year-end until Kingfisher Airlines withdrew substantial capacity from the market due to financial problems.

Typically, the entire airline industry follows suit when Air India increases or slashes airfares. Consequently, the entire industry had piled on heavy losses because of under-pricing of air tickets, especially in the face of soaring fuel prices.

"The Indian airline industry still needs to hike fares by 3-5% in order to break even," Dinesh Keskar, Boeing's senior vice-president for Asia Pacific and India said.

Industry experts think that increasing fares to cover costs is a sensible strategy. "Air India is beginning to think in a commercially competitive manner and I hope there is no external intervention to influence its commercial strategies. We are seeing a strategic shift from a pricing model that prefers leadership even while incurring loss to a cost-recovery pricing, and that is a positive development," Centre of Asia Pacific Aviation (CAPA) South Asia CEO Kapil Kaul said.

"Given the narrow margins, Indian carriers have no options but to pass on the fuel price hike to passengers. This will naturally impact traffic volumes. The corporate sector is restricting air travel for its employees and tourists are choosing international low-cost destinations over domestic ones. Airlines are banking on the upcoming winter season. Higher fares will hurt that too," says Amber Dubey, Partner and Head-Aviation at global consultancy KPMG.

Air India, in the past few months, has improved on many important parameters. AI's On-Time Performance (OTP) has reached 85% (perhaps its best ever and among the highest in the industry), its cash losses have come down to 38 crore in the June quarter versus 530 crore in the same quarter last year and it turned in a cash profit for the first time in 60 months in the month of June at Rs 48 crore.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/air-travel-may-get-costlier-as-air-india-mulls-fare-hike-due-to-costly-fuel/articleshow/16330911.cms?curpg=2

Air India's Rs 30,000 crore revamp stuck in red tape

NEW DELHI: Nearly six months after the Cabinet approved Air India's Rs 30,000-crore financial restructuring plan, the package has hit an air pocket with the finance ministryholding back sovereign guarantee amid indications that it would seek fresh commitments from the national carrier.

The delay has already meant that National Aviation Company, which flies under the Air Indiabrand, has had to extend its non-convertible debenture (NCD) issue and may be forced to rework some of the calculations which were done at the start of the year.

Aviation sources fear that the restructuring may get expensive as the loss-making public sector company is dealing with higher debt servicing costs. A sovereign guarantee helps in reducing the interest cost as the risk of default is taken over by the government. Despite several attempts, Air India chairman and managing director Rohit Nandan could not be contacted on the phone over the weekend.

A financial and operational reengineering is being pushed by the civil aviation ministry as Air India is saddled with accumulated losses of Rs 20,000 crore and debt of Rs 43,000 crore, which is being restructured.

As part of the package, after receiving the guarantee, Air India was to issue NCDs or bonds of Rs 7,400 crore to banks, LIC and EPFOto retire existing high-cost loans. This is in addition to bank loans of Rs 11,000 crore which have already been restructured. But for the past few weeks, the finance ministry has not moved on the proposal.

Even the decision to rework the aircraft loans of Rs 19,000 crore is stuck due to indecision in North Block.

It's been over a year since the financial restructuring programme started, initially with bank loan restructuring. In April, the cabinet committee on economic affairs (CCEA) was forced to step in after the finance ministry raised the red flag over the loan restructuring by banks saying the lenders would be crippled by a Rs 10,000-crore hit. Subsequently, after meetings between civil aviation minister Ajit Singh and Pranab Mukherjee, then finance minister, the plan was reworked and guarantees and upfront equity infusion were included.

Following the CCEA meeting milestones such as occupancy, on-time performance, fleet utilization and rationalization of employees' pay structure were put in place after deputy chairman Planning Commission Montek Singh Ahluwalia and P Chidambaram, who was then home minister, flagged the issue. The revamp will cover the airline's debt till 2021.

http://timesofindia.indiatimes.com/business/india-business/Air-Indias-Rs-30000-crore-revamp-stuck-in-red-tape/articleshow/16330221.cms

Kannur airport MD Thulasidas steps down

Thiruvananthapuram: Kannur International Airport Limited (Kial) vice-chairman and managing director V Thulasidas has stepped down from his posts.He has not given any reason for the surprise move.
The appointment of consultants for the Kannur airport project has been an irksome issue.Kial had rejected an offer from Cochin International Airport Limited (Cial) to act as consultants.Kial,then,had identified STUP Consultants but the move was cancelled since the agency was blacklisted by two states.Kials director board will meet on Tuesday in Kochi and is expected to take a decision on floating new tenders for selecting consultants.

http://mobilepaper.timesofindia.com/mobile.aspx?article=yes&pageid=1&sectid=edid=&edlabel=TOIKRKO&mydateHid=09-09-2012&pubname=Times+of+India+-+Kochi&edname=&articleid=Ar00107&publabel=TOI

Jet Airways: Living to fight another day

BL Research Bureau:  

When the going gets tough, the tough get going.

So, what did the country’s largest airline Jet Airways do to beat the severe blues in the aviation sector last fiscal? A lot, says its annual report for 2011-12.

Forced to battle on multiple fronts – high cost of fuel and infrastructure, depreciating rupee, elevated interest rates, economic slowdown, overcapacity in the domestic market and phew! fares which did not keep pace – the airline battened the hatches and undertook stringent cost control measures.

Cost cutting

It struck off loss-making routes and redeployed aircraft to more profitable routes. It renegotiated contracts with vendors, pruned agent commissions, and reduced headcount.

Also, the company’s interest expenses decreased 13 per cent in 2012, thanks to conversion of working capital loans from rupees to forex denomination, and also due to some loan repayments. On the income front, the airline increased ancillary revenues.

It also resorted to sale-and-lease back of some of its aircraft and engines to aid cash flows.

Besides, it sold the development rights of its leasehold property at Bandra-Kurla Complex in Mumbai to raise funds. The results showed.

While passenger income grew 19 per cent in 2012, the airlines’ revenue from excess baggage increased 63 per cent and its non-operating revenue grew 83 per cent.

branding

On the marketing and branding side, Jet Airways consolidated its low fare offerings – JetLite and Jet Airways Konnect – under the JetKonnect brand to enhance brand recall.

Low fare capacity accounted for 64 per cent of the airlines’ domestic seats in 2012, up from 59 per cent in 2011.

The airline seems to have placed its bet on the fortune, lying at the bottom of the pyramid, especially during difficult economic times.

JetKonnect is India’s largest low fare brand, says the annual report.

Now, that’s quite something for an airline which began as and is still often categorised as a full-service network carrier.

social media

Adapt and survive seems to be the guiding principle. Besides, Jet Airways latched on to the social media bandwagon to increase “customer touch points”.

The airline had 568,324 Facebook fans and 12,650 followers on Twitter as on March 2012

http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3878695.ece

Air India gets Dreamliner after 4-year delay

New Delhi, Sept 8:  

On Saturday, Air India became the fourth global airline to induct the world’s newest passenger aircraft, the Boeing 787, known as the Dreamliner.

The first of the 27 Boeing 787s that the airline is to induct, touched down at the IGI airport here around 5 p.m. after an over eight-hour flight from Frankfurt. On touch-down, the aircraft was given a traditional water cannon salute with fire tenders standing on each side of the runway spraying the aircraft as it taxied down the runway.

Delayed landing

Soon after landing, the aircraft taxied to remote bay 91 and once the engines were switched off, a small puja was done, attended by Air India’s Chairman and Managing Director Rohit Nandan, and other airline staffers.

Air India should have been the second global airline after Japanese carrier ANA to take delivery of the aircraft.

However, for a variety of reasons, including the recent pilots’ agitation and the Government panel taking time to decide on the compensation that Air India should receive for the over four-year delay in delivery of the aircraft, the Dreamliner landed only on Saturday.

Fond Memories

For at least one member of the crew, Captain Amitabh Singh, the touch-down of the 787 aircraft gave a sense of déjà-vu. Captain Singh was part of the operating crew that flew non-stop from Seattle to Delhi on the first Boeing 777 that the airline inducted in 2007.

The Boeing 787 has 256 seats, including 18 full flat-bed seats in business class and 238 seats in economy. The aircraft has a capacity to fly between 5,130 and 6,610 nautical miles.

Jet Airways is the only other Indian carrier to have ordered the aircraft.

http://www.thehindubusinessline.com/todays-paper/tp-economy/article3875151.ece