Air India Express to acquire 14 additional aircraft

KOCHI: Air India Express(AIE) will acquire 14 Boeing 737-800 aircraft in the next four to five years, jacking up its fleet strength from 21 to 35.

Announcing the acquisition plan at a joint press conference here on Wednesday, chief operating officer Ansbert D'souza and deputy chief operating officer Captain Puspinder Singh said the decision to get the new aircraft was taken as part of the Rs 30,000 turnaround plan approved by the civil aviation ministry for Air India as a whole.

The airline is yet to take a call on whether to go in for leasing or buy the aircraft. The airline's current fleet comprises 17 owned and four leased aircraft.

The AIE raked in Rs 1,700 crore in revenue last year and with the proposed 57% hike in services, it is expected to touch Rs 2,000 crore this year. Faced with acute criticism on cancellation of flights, particularly in the Kerala-Gulf sector, the officials said the airline would ensure schedule integrity and promptness in departures. "The top management will directly monitor the steps needed for maintaining schedule integrity and to ensure that the flights take off on time," D'souza said.

Pointing out that nearly 60% of AIE operations are based out of the three airports in Kerala and the one in Mangalore, they said the airline's investment in Kerala and Mangalore was Rs 3,600 in aircraft alone. The AIE would base four aircraft in Kozhikode and three each in Kochi, Thiruvananthapuram and Mangalore.

"Another Rs 100 crore has been invested in the hangar facility in Thiruvananthapuram. This aircraft Maintenance, Repair Overhaul (MRO) facility will be able perform 'C' checks of aircraft (after 6,000 hours of flying) in a few months' time. It is waiting for DGCA approval to start brakes assembly production," they said.

http://timesofindia.indiatimes.com/city/kochi/Air-India-Express-to-acquire-14-additional-aircraft/articleshow/16761771.cms

Air India Express plans massive expansion

Identifying large-scale operations in Kerala, the Air India is planning huge investments for the expansion of Air India Express in the state. The state is going to be the operational hub of Air India Express, said Anshert D’souza, chief operating officer, in a meeting held on Wednesday.

“Air India Express which started in 2005 with  just three flights has a fleet of 21 aircraft today,” D’souza said. “Out of the 21 aircraft, 10 will be deployed exclusively for the Kerala operations, and three for Mangalore” he said. With the 13 aircraft altogether, they hoped to operate 119 flights to the Gulf sector. The investment for the operation is around `3,600 crore, he said.

“There was a huge outcry from Kerala on the  cancellation of flights to the Gulf sector in the summer schedule. The new winter schedule has added more flights to the Gulf chiefly to compensate for the same, and also to meet the growing demand in the sector as well as the  festival seasons,” Capt Pushpinder Singh, deputy chief operating officer, said.

Michael V Joseph, station manager, said that a number of seats have been added in the winter schedule from Kerala to the Gulf, which will be effective from October 28. From Kochi, around 2,595 more seats would be added to the   3,515 seats of the last summer schedule. From Kozhikode, 2,312 seats would be added to 4,995 of the last summer schedule, and from Thiruvananthapuram, 1,480 more from 2,683 seats last summer.

Singh assured the customers of undisrupted flights from Kerala to the Gulf. There will be no chance for complaints regarding intermittent flight cancellations, he said.

 “New pilots have been recruited, and their training is going on in full swing. Not only the pilots, the crew required to carry on the operations have also been recruited and trained. Air India has recruited local people  for its ground work at Kochi, Kozhikode and Thiruvananthapuram,” Singh said. He added that the passengers need not be confused over the fare. “Air India is the

only airline that offers competitive fares for Kerala passengers, especially to those going to the Gulf. The fare would remain the same,” he said.

He also mentioned about the expansion works going ahead in Kerala. “With an outlay of `70 crore, two state-of-the-art hangars have been set up in Thiruvananthapuram,” he said.

“The maintenance, repair and operations(MRO)  which has been set up in Thiruvananthapuram is aimed at improving the operational facilities.  Wheel production, which had been carried out in Mumbai and Hyderabad earlier would now be done in Thiruvananthapuram, and the work is progressing in full swing now. Twenty-five engineers with sufficient technical and operational skills have also been transferred to Thiruvananthapuram,” he said.

MRO at Thiruvananthapuram is all geared up to start the assembly production of brakes. In a few months’ time, it would also be able to conduct ‘C’ checks (done every 6,000 hrs) for  aircraft at Thiruvananthapuram.

“All these plans are awaiting approval from the Directorate General of Civil Aviation,” Singh said.

It is a most promising future that Anshert D’souza has laid out for the passengers from  Kerala. Air India will deploy 14 more aircraft for its operations from Kerala,  spending `2,000 crore.

“The expansion which will happen in four to five years’ time will need another 3,000 employees,” he said.

http://newindianexpress.com/cities/kochi/article1294290.ece

Kingfisher CEO asks staff to return to work

New Delhi: Kingfisher Airlines Ltd chief executive Sanjay Aggarwal on Tuesday made an appeal to employees, asking them to believe in the carrier and return to work.

“We need you to help us to have any chance of getting back to normalcy. DGCA (the drectorate general of civil aviation, the sector’s regulator) has issued us a show cause notice due to disruptions which resulted in inconvenience to traveling public. Without all of you, without exception, coming back to work, we will have no way forward. We have currently announced suspension of operations until October 12th and sincerely hope that we will able to present a viable plan to DGCA to allow us to resume operations on 13 October,” Aggarwal said in a email to employees late Tuesday.

Aggarwal said, “During these months, UB Group has continued to support the airline by infusing over Rs.1,100 crore in the airline in the last six months. We will work relentlessly to get fresh investment into Kingfisher Airlines in the next few months. For that we need your support and your patience. We are aware it is a big ask but no potential investor will put his money in an airline that is not operational; neither will our esteemed guests come back to us unless we commence operations soon. This does not mean we will not remit salaries during these months,” he said adding he understands, “the pain that all of you and your families have gone through over the last year due to delay in payment of salaries, we can only tell you in utmost sincerity that this situation pains us immensely too.”

Policy changes are showing some hope, he said,

“There are positive developments that give us confidence in our future plans. The revenue authorities have lifted the freeze on some of our accounts that will allow access to some of our bank accounts immediately. The Consortium of Banks are equally anxious to see us resume operations. We are in constant dialogue with our fellow team members who are striking work, to arrive at a viable solution so that we can restore operations to work towards our future. Also, post the announcement by the Government of India permitting Foreign Direct Investment in domestic airlines by foreign airlines, the dialogue with potential investors has gathered momentum. Even non-strategic investors are showing interest in investing in Kingfisher Airlines, which is a good sign,” Aggarwal said.

The carrier was earlier issued a guidance by DGCA not to sell tickets.

http://www.livemint.com/Companies/dvV8C6flDYNwvIhaUeZyxH/Kingfisher-CEO-asks-staff-to-return-to-work.html

Kingfisher Airlines' CEO wants staff to start work on Oct 13, silent on issue of pending pay

NEW DELHI: Close on the heels of the aviation regulator asking Kingfisher AirlinesBSE -4.80 %to stop selling tickets until its revival plan is approved, CEO Sanjay Agarwal has written a desperate letter to employees.

"Given the pain that all of you and your families have gone through over the last year due to delay in payment of salaries, we can only tell you in utmost sincerity that this situation pains us immensely too," the letter begins.

However, the letter does not include any details on if, and when employees will be paid salaries - which have been delayed since March 2012. It also does not offer any statement from the airline's promoter and chairman Vijay Mallya.

In the letter, Agarwal has beseeched employees to rejoin work so that Kingfisher Airlines can resume operations from October 13. The letter was sent on a day when ET that the airline had opened ticket bookings (in violation of regulations) on its website from October 13, even though it is yet to respond to sector regulator DGCA's show-cause notice asking why its license should not be cancelled.

"Without all of you, without exception, coming back to work, we will have no way forward. We have currently announced suspension of operations until October 12th and sincerely hope that we will able to present a viable plan to DGCA to allow us to resume operations on October 13th," Agarwal says.

Sent to employees on Tuesday night, the letter ends, "We have come this far, and we have to still go further. I earnestly urge you to not to lose hope at this crucial juncture."

Agarwal's communication highlights Mallya's absence, and its tone is markedly different from the sterner language of an earlier communication the KFABSE -4.80 % chairman had sent to striking employees.

On August 9, in an open letter to employees, Mallya said, "If a section of our colleagues feel that their actions (not flying) are justified and that they know best, they can elect to leave our company.

But such threats and disruptive actions are not acceptable..." "If some colleagues feel that I will be pressurised by flight cancellations, they are wrong. Instead, I will stop my own support as a few are effectively holding the entire company to ransom," Mallya had added.

A day after one of Kingfisher Airlines employees' wife committed suicide citing financial stress as her husband was not paid for months; the DGCA sent a show-cause notice to the airline asking it to explain why its license should not be cancelled.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/kingfisher-airlines-ceo-wants-staff-to-start-work-on-oct-13-silent-on-issue-of-pending-pay/articleshow/16749688.cms

New aviation wing may monitor finances

The DGCA will concentrate only on technical and safety aspects

The civil aviation ministry is considering a proposal to set up a separate unit to monitor and analyse the financial position of airlines. That would take the function of monitoring airlines’ financial health out of the purview of the Directorate General of Civil Aviation (DGCA). The DGCA will concentrate only on technical and safety aspects.

The move has been mooted to put in place a system to pre-empt serious financial crises such as the one faced by Kingfisher Airlines. The crisis has led to the non-payment of salaries and dues. Civil Aviation Minister Ajit Singh said, “The financial position of airlines is definitely a concern — more so, with the recent crisis in the sector. So, we’ll form a separate unit within the ministry. The DGCA will look at technical and safety aspects and the new unit will analyse the financial angle.” He refused to divulge details, saying that would be premature.

Apart from financial analysis, the unit will analyse fares and yield management practices followed by airlines. The unit will put in the public domain details like how many tickets were sold in the various buckets of fares. The intention was not to regulate fares but to bring transparency, Singh said.

The data will be put up on the ministry’s website so that consumers know how many seats are being offered by an airline at what fares. Experts say the model being mooted by the ministry is somewhat similar to that in the US, where the Federal Aviation Administration (FAA) is the safety regulator. The department of transportation functions like a financial regulator. If an airline is in financial stress, the FAA increases surveillance on it.

Opinion is divided whether the government should look too closely at airlines’ finances. “I do not think this will make much difference. It will just be one more committee and probably one more slot to accommodate one more bureaucrat,” said aviation expert Mohan Ranganathan. Amrit Pandurangi, senior director, Deloitte, said the ministry should not intervene in the finances of airlines unless there was a safety issue. “Financial issues of airlines are best addressed by banks,” he said.

http://www.business-standard.com/india/news/new-aviation-wing-may-monitor-finances/489219/

Air India Rs 7,400 crore debenture issue gets government guarantee

MUMBAI: The government has agreed to provide an unconditional sovereign guarantee for a Rs 7,400 crore debenture issue by Air India, relenting finally to a request from the national carrier which needs the money to pay down previous loans.

The finance ministry, which had in the past held off from guaranteeing this debt unless it was linked to some performance milestones, has now agreed to an irrevocable and unconditional guarantee, which will help the loss-making, state-run airline raise funds at cheap interest rates.

The company said the bonds would have a tenure of 19 years and the coupon on them will be capped at 70 basis points (bps) over the yields on similar-duration government bonds.

One basis point is one hundredth of a percentage point.

"The proceeds of the debentures will be used to repay the short term working capital facility availed by Air Indiafrom the 19 banks," the airline said in a statement.

Air India was forced to defer the issue of these bonds twice in the past after the government had insisted it would offer a guarantee only it the company could meet certain performance milestones.

Without a government guarantee, the debt-laden airline could not have managed to secure a good credit rating from the ratings agencies, which would have made the pricing of the bonds unfavourable.

With a guarantee in hand now, traders do not expect any problems in the sale of these bonds.

"There is good appetite for government-guaranteed papers," said Paritosh Kashyap, head of debt capital markets at Kotak Mahindra Bank. "I wouldn't be concerned about the sale of these bonds...Some people may expect a certain pricing because of the size of the issue."

Air India officials will meet with the rating agencies to finalise credit ratings and the company is expected to announce the deadline for bids from merchant bankers keen to manage the issue by next week. According to merchant bankers, the company is yet to get the copy of guarantee from the ministry.

In April this year, 19 lenders had approved a restructuring plan for Air India.

The company was expected to receive capital infusion of about Rs 23,000 crore from the government, along with restructuring of Rs 22,000 crore worth of working capital loans.

A part of these loans were to be converted into long-term loans and part of it was to be repaid from the receipts from the bond sale.

http://timesofindia.indiatimes.com/business/india-business/Air-India-Rs-7400-crore-debenture-issue-gets-government-guarantee/articleshow/16763137.cms

Airport row: CPI wants Manmohan to explain

Cites BJP’s remarks on Vadra and the project

Citing BJP leader O. Rajagopal’s remarks on the links Congress high command and Robert Vadra had with the private parties behind the Aranmula airport project, CPI district secretary P. Prasad sought an explanation from the PMO and the Congress (I) on the matter.

Mr. Rajagopal had reportedly made the remark while inaugurating a public meeting here last week.

Citing the remark, Mr. Prasad said in a statement on Wednesday that the Prime Minister’s Office and the Congress(I) leadership needed to explain themselves for the “over-enthusiasm and undue interest” the Congress showed in the project.

Clearence

According to Mr Prasad, the authorities of the Chennai-based KGS Aranmula International Greenfield Airport Limited had stated at a press conference in Pathanamthitta that Prime Minister’s Advisor T.K.A. Nair, had helped them a lot in getting the Centre’s clearance for the airport project.

It was an open secret that the private company had managed to obtain clearance from the Union Ministry of Environment by ‘misleading’ the authorities and with strong support from the politico-bureaucratic higher-ups in Delhi, alleged Mr Prasad.

Environment report

The Environment Impact Assessment report, submitted to the Centre, had not even mentioned that the land identified for the project involved paddy fields and wetland, he alleged. Mr Prasad said Prof P.J. Kurien, Deputy Chairman of Rajya Sabha; Anto Antony, local MP, and K. Sivadasan Nair, MLA, were acting as spokespersons of the private company.

The public ire against these people’s representatives in the village was so intense that they were unable to freely attend public meetings in Aranmula as earlier, he added.

According to Mr Prasad, a probe was needed into what prompted these public figures to extend blind and unconditional support to the controversial airport project when the entire village, which constituted their strong vote base, strongly opposed the project.

Chandy backing firm

Mr Prasad further alleged that Chief Minister Oommen Chandy, too, was out to protect the interests of the private company by consciously sidelining his promise given to the villagers for denotifying the nearly 2,500 acres of land in Aranmula that had been illegally notified as industrial area in February, 2011.

No right

The CPI leader said Mr Chandy had no moral right to continue in office, as he had purposefully misled even the State Assembly on his promise to cancel the denotification of the area.

He also alleged that the UDF government was making every attempt to legalise the irregularities and wrongdoings carried out by the private parties in the name of the airport project in Aranmula.

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/airport-row-cpi-wants-manmohan-to-explain/article3986786.ece

Travel agents contest Air India claim

Thiruvananthapuram, Oct. 10:  

Kerala Association of Travel Agents has contested Air India’s claim that it has launched more flights from the State to West Asian countries. A spokesman for the associa-tion said here that winter schedule of Air India Express effective October 28 does not feature 19 existing West Asian services being operated from Thiruvananthapuram and Kochi airports. These included 12 services from here and seven from Kochi, the spokesman said. Also, 11 services from Thiruvananthapuram and Kochi to Saudi Arabia had been withdrawn. Air India reserved its worst treatment towards Thiruvananthapuram. While Air India Express operated 48 services from Kozhikode and 33 from Kochi, there were only 21 from here, he said.

http://www.thehindubusinessline.com/todays-paper/tp-others/tp-states/article3985643.ece

Air cargo lobby body formed

New Delhi, Oct. 10:  

Various stakeholders of the air cargo industry — airlines, cargo terminal operators, freight forwarders — have got together to form a lobby body called the Air Cargo Forum India (ACFI).

“This forum will work as a catalyst to facilitate air cargo growth and work towards bringing economic efficiencies in the system. It will also collaborate with the Government for user-friendly policy and regulation,” said a release.

The forum aims to promote and facilitate development of world class air cargo infrastructure and bring about improvements in the industry in India. Achieving paperless transaction is one of the targets that the air cargo industry has set for itself.

It will also undertake specific and relevant research projects and technology demonstration for creating awareness among air cargo trade.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/article3985562.ece

Kingfisher taking bookings only after Oct 21

New Delhi/Mumbai, Oct. 10:  

Kingfisher Airlines is unlikely to start operations before October 21. While the airline’s operational department has sent a mail to its staff saying all flights are “cancelled till October 13/14,” Kingfisher’s Web site is accepting bookings from October 21. Earlier, the airline had hoped to start operations on October 4, but later extended the date to October 13.

Most online travel agencies that Business Line spoke to said that the airline wanted to start flying from October 21.

Incidentally, hours after a communication from the Directorate-General of Civil Aviation (DGCA) enquiring how could the airline accept bookings before replying to the regulator’s show-cause notice, the airline’s Web site stated that “all flights are subject to regulatory approval.” The DGCA has given the airline 15 days to reply why its licence should not be cancelled or suspended, as it has failed to maintain its schedule or pay its employees.

Meanwhile, Chief Executive Officer Sanjay Aggarwal has written to the employees asking them to return to work.

“Unless we can keep our operations going, we will not be able to rectify the situation. We need you to help us to have any chance of getting back to normalcy. Without all of you, without exception, coming back to work, we will have no way forward,” the communication stated.

http://www.thehindubusinessline.com/todays-paper/article3985539.ece