British Airways to increase frequency from Hyd, Chennai

Move will translate into additional 200 seats per week each from Hyderabad, Chennai

British Airways is planning to add one more flight each from Hyderabad and Chennai to London from March. It currently operates five flights a week each from these two cities.

The expansion in the route network will translate into an additional 200 seats per week each from Hyderabad and Chennai, said Christopher Fordyce, regional commercial manager (South Asia), British Airways, while addressing the media here.

With this, the total number of flights being operated by the airline from India will go up to 47 per week. Currently, BA operates from Mumbai, Chennai, Delhi, Bangalore and Hyderabad.

"We are looking at expanding our operation in the growth markets with major focus on giving better customer experience, increasing technology and adopting new menus in the flight," he said. 

'India an expensive market'

According to him, India is a significantly costly place to run an airline. "Major factors include increase in fuel cost, rise in airport fee and other related costs in the aviation sector," he said.

Stating that high aviation costs in the country had impacted the airline's profitability, he, however, said they were less impacted than the competitors due to the company's plane structure. 

The airline though sees India as a growth market. India was the second largest market for the British Airways after the United States. "Globally, there is a slowdown in the aviation industry, while India, being a large market, was somehow protected from the macro scenario," he said.

http://business-standard.com/india/news/british-airways-to-increase-frequencyhyd-chennai-/196770/on

Air India Gains Share,Flies Ahead of SpiceJet to 3rd Spot

Amid a steep decline of 15.7% in domestic passenger traffic,Air India clawed back some of its lost ground to garner a market share of 20.8% in October.Indigo,Jet Airways and SpiceJet improved yields and also gained market share after Kingfisher Airlines licence was suspended.Air traffic in October fell sharply to 45.55 lakh passengers compared to 54.01 lakh in the same month last year despite the onset of the festival season,with analysts pointing at exorbitant fares as the principal factor for the decline.In the first ten months of the calendar year,passenger traffic fell 2.5%.Low-cost carrier IndiGo led with a 27.8% share in October though the Jet Airways-Jet Konnect combined managed to narrow the gap.Naresh Goyals airline carved a 24.7% share from 23.8% in September.SpiceJet inched to 19.1% up from 18.5% in September.Jeh Wadias GoAir reported a market share of 7.6%.In what was a fruitful month for airlines,passenger load factors improved sizeably for airlines in October compared with September.Indigo reported the highest load factor of 77.2% followed by Air India with 74.7%.SpiceJet and GoAir reported loads of around 70%.Though JetLite had passenger load factor of around 70%,its full service carrier Jet Airways reported the lowest among its peers at 67.5%.Air India was the biggest gainer in October.The domestic passenger data for the last six months shows consistent increase in the market share of Air India,a PIB release said.It rose from 16.2% in May 2012 to 20.8% in October 2012.For the months of June,July,August and September 2012,the market share of Air India was 16.8%,18.2%,18.2% and 19.3%,respectively.

http://mobileet.timesofindia.com/mobile.aspx?article=yes&pageid=5&sectid=edid=&edlabel=ETD&mydateHid=22-11-2012&pubname=Economic+Times+-+Delhi&edname=&articleid=Ar00502&publabel=ET

SpiceJet not mulling sale: Sun CFO

S.L. Narayanan, the group CFO of Sun, downplayed reports that a sale of airline SpiceJet in on the cards after Kalanithi Maran and his wife, Kavery Kalanithi, resigned from the board of directors of Kal Airways, the holding company of SpiceJet. The media-to-aviation Sun group is headed by Mr Maran.

Mr Maran quit Kal Airways to only reduce the number of directorships he holds, Mr Narayanan told NDTV in an exclusive interview, saying potential stake sale talks are not even at an exploratory stage.

Kal Airways along with Marans (in their personal capacity) hold over a 48 stake in the listed airline.

The Marans quitting the Kal Airways board does not mean a potential sale, Mr Narayanan clarified.

SpiceJet, India's second-biggest budget airline by market share, narrowed losses by 31.7 per cent in the July-September quarter, benefiting from massive cuts in capacity by troubled rival Kingfisher Airlines.

It still lost Rs. 164 crore in the quarter ended September 30, compared with a loss of Rs. 240 crore a year ago.

The company's auditors, however, said accumulated losses at the airline had fully eroded the net worth of the company as on September 30.

The company's ability to operate on a "going concern" basis is "significantly" dependent on establishing continued profitable operations and raising cash to meet short- and long-term obligations, the auditors said in a review report to the company.

Last month, SpiceJet chief executive Neil Mills said the airline is not in a hurry to mop up funds as it is paying all bills and salaries to its employee on time. "We have been looking at opportunities (funding) but we don't need it tomorrow. We are not desperate too much."

Stating that the carrier is open to investment from any quarters, Mr Mills said, "It could be with anybody. But it should make sense for us and our shareholders."

High jet fuel cost and airport charges are eating into industry's revenue, he said, but expressed hope the festival season may lead to higher load factor.

On SpiceJet's plan to directly import jet fuel (which currently accounts for nearly 50 per cent of operational cost) Mr Mills said the shipments would start as soon as the last `bureaucratic hurdle' is cleared.

The airline currently has a mix of Boeing 737s (36) and Bombardier Q400s (12) in its fleet of 48 planes.

http://profit.ndtv.com/news/corporates/article-spicejet-not-mulling-sale-sun-cfo-313563

Airlines refuse to fly Kozhikode-Thiruvananthapuram sector

THIRUVANANTHAPURAM: After SpiceJet pulled out from the Thiruvananthapuram - Kozhikodesector in July, not many airlines, including the national carrier, has shown interest to resume services between the two cities. State industries minister's office had even requested SpiceJet to ply at least a few flights a week during Ramzan. But airlines say the route is unprofitable.

"There is no point in using the sector that has less than 10% occupancy . Even if an airline wants to start a Thiruvananthapuram-Dammam flight via Kozhikode, it does not make sense to open the bookings for domestic passengers . It is not feasible to load a long-haul flight with short distance passengers," said the manager of an airline.

Abdul Lateef, who works in a company at Technopark, said he finds it difficult to make impromptu visits to his home in Kuttichira, due to a travel time of 14 hours. "I used to visit my parents at least twice a month but I haven't seen them since July. There are connecting flights to Kozhikode from the city, but the time taken is similar to a trainjourney," he said.

A travel agent said: "The cheapest option to reach Kozhikode is to flyAir India Express from the capital to Kochi that departs at 9.30 am and arrives at 10.20 am. The departure from Kochi is at 2.05 pm and the arrival time at Kozhikode is 2.55 pm. The total flight time is seven hours, including the check-in time of one-and-a-half hours. The ticket cost is Rs 4,000."

Connectivity to Kochi is better with daily flights from Thiruvananthapuram . Air India Express departs at 6:00 am and arrives in Kochi by 6.45 am and IndiGo departs at 6:30 pm and arrives in Kochi at 7:15 pm.

http://timesofindia.indiatimes.com/city/thiruvananthapuram/Airlines-refuse-to-fly-Kozhikode-Thiruvananthapuram-sector/articleshow/17322727.cms

SpiceJet to issue convertible bonds to promoter

SpiceJet will be raising additional funds through the issue of convertible debentures and / or warrants convertible up to a maximum of 52.177 million equity shares to the promoter of the company on a preferential basis.

The price will be determined as per SEBI ICDR (issue of capital and disclosure requirements) guidelines.

The news came after the close of trading hours on Wednesday.

During the day, shares of SpiceJet gained more than 7 per cent to close at Rs. 37.40 on the BSE.

Earlier Sun Group, on Wednesday, said its aviation venture SpiceJet needed capital for expansion and would explore options, including equity contribution from existing shareholders and raising debt, but promoters have no plans to sell their shares. The promoters currently hold 48.59 per cent in the equity capital of SpiceJet.

PTI reports:

The market capitalisation of the company has improved from Rs.1,660 crore on Tuesday to Rs.1,811 crore on Wednesday fuelled by the rally in the stock.

Sun Group Chief Kalanithi Maran and his wife Kavery Maran have resigned from one of the promoter entities of SpiceJet, triggering speculations about a possible sale of Maran family’s majority stake in the air carrier.

No stake sale

The group has, however, denied any plans for promoters’ stake sale in SpiceJet, saying it could consider various other options to raise capital to finance fleet expansion plans.

“We certainly need funds for fleet expansion and whenever there is an attractive opportunity (for partial stake sale), we will definitely look at it, but there is nothing on cards as of now,” Sun Group CFO S. L. Narayanan told PTI over phone.

Meanwhile, stocks of other airlines also witnessed good momentum ahead of the winter session of Parliament, which starts from Thursday.

Jet Airways on Wednesday ended the day at Rs.451.50 apiece, higher by 9.20 per cent.

The stock had hit a 52-week high during the day.

http://www.thehindu.com/todays-paper/tp-business/spicejet-to-issue-convertible-bonds-to-promoter/article4121557.ece

APERC’s aviation categorisation forces CPDCL to approach apex court

While the cash-strapped central discom is forced to reduce power tariff for aviation-related activities by way of a separate category since April, it is interesting to note that all the State-run airports were being charged under the ‘commercial’ category for the last five decades or more.

CPDCL officials inform that the consumers categorised under HT II (Others) - generally referred to as ‘commercial’ category-- are not strictly commercial consumers, as they include many public utility services such as bus stations, railway stations, and government offices, and till recently, airports.

“Creation of a separate category for aviation could lead to many other players from the service sector seeking similar concessions,” notes P. Rajagopal Reddy, the Director (Finance) of the discom. It is also notable that the creation of separate category has, behind it, a tireless pursuit by the GMR Hyderabad International Airport Limited (GHIAL) to have its 132 KV connection shifted from HT II (Others) to HT I(A) (Industrial) category, so as to avail the resultant tariff reduction.

The company’s petition to the APERC also cites a letter from the Ministry of Civil Aviation to the government here in 2008 recommending the category conversion. Unable to cut any ice with the CPDCL authorities even after a number of representations, the company has filed an appeal with the Appellate Tribunal for Electricity (ATE), and partially succeeded, by bringing pressure upon the APERC towards creation of a separate category. By then, the ATE had already been approached thrice by the Mumbai International Airport Limited (MIAL) - the joint venture arm led by GVK Group that manages the Chhatrapati Shivaji International Airport in Mumbai - with a similar petition seeking directions to the Maharashtra Electricity Regulatory Commission.

The ATE issued directions asking the commission to re-determine the tariff for the company, so that the commercial and aviation operations can be charged under two different categories. However, if no such segregation of loads is possible, the State commission could start a separate category and determine composite tariff clubbing both the activities.

Upon being approached by the GHIAL, the ATE, in July 2011, simply issued the same order to the APERC. However, rather than following its counterpart in Maharashtra which has kept the orders aside thrice in a row, the APERC has willingly created a separate category for the aviation activities forcing the CPDCL to resort to the Supreme Court for recourse.

CPDCL officials contend that the load segregation between aviation and commercial operations will go against the General Terms and Conditions (GTCs) which define that separate establishments should have distinct set-ups and staff, or owned or leased by different persons, or covered by different licenses or registrations.

Going by the GTCs, even if a consumer runs a grocery shop within the same premises as his home, the company charges him with commercial tariffs. “We charge even the bus stations and railway stations together with all the small kiosks within under the HT II (Others) category,” says Mr. Reddy, adding that the segregation of aviation loads will only set a precedent for many others seeking the same.

City air cargo complex yet to take wing!

Nearly eight months after it went international, the Visakhapatnam Airport is not yet ready for international cargo exports. Red-tape is said to be coming in the way of airport development and unless something is done on a war-footing the development of the region will remain a cry in the wild.

Undue delay

The undue delay in commencement of round-the-clock operations and lack of facilities for export of international cargo is making new international airline operators as also cargo exporters to shy away from the airport.

There is a huge demand for air exports from the city.

The location of two ports – Visakhapatnam Port Trust and Gangavaram Port – in the city and two other ports at Kakinada indicate the tremendous export potential. In the absence of facilities to handle international cargo, the Air India flight to Dubai and the Silk Air flight to Singapore have been deprived of a chance to carry cargo to international destinations.

Modifications to the old terminal building to convert it into a cargo complex is estimated to cost Rs.50 lakh and the work for ground handling is ready.

The Airport Authority of India (AAI) Headquarters in Delhi has to place orders for procurement of equipment like scanners required by the airport.

E. Sai Pharma is exporting around 2 tonnes of drugs to Tokyo every week from the city. In the absence of export facilities from here, the company is transporting the material by road to Hyderabad and from there by air.

Customs clearance

“A Drugs Controller has to be posted at the airport for clearance of the drugs meant for export. Customs clearance for exports is not a problem for us as we are located in the SEZ and our material is cleared by Customs officials at the factory itself,” Sunil Lamba, Managing Director of E. Sai Pharma told The Hindu on Thursday.

“Silk Air is losing 2 tonnes of cargo a week due to the absence of dedicated cargo handling facility at the airport.

Urgent need

There is an urgent need to develop dedicated bulk cargo handling facilities,” says Rushikonda IT Parks Association vice president O. Naresh Kumar.

One can only hope that the Vizag-based export cargo doesn’t take wings from other airports.

---

·  There is a huge demand for air exports from the city

·  Modifications to the old terminal is estimated to cost Rs.50 lakh

http://www.thehindu.com/todays-paper/tp-national/tp-andhrapradesh/city-air-cargo-complex-yet-to-take-wing/article4125829.ece

SpiceJet gains on stake-sale buzz

Chennai, Nov. 21:  

The stock of SpiceJet jumped over 7 per cent on the BSE on speculation of a stake sale following the resignation of Kalanithi Maran and his wife, Kavery, from Kal Airways, one of the promoter entities of the airline.

However, the SpiceJet CFO was quoted by agencies as saying that Kalanithi Maran resigned from the board as he wanted to manage his time more effectively, and that this had nothing to do with selling stake in the company. But the stock retained the gains despite the clarification and over one crore shares changed hands.

Analysts point out that recent events in shareholding and board composition at SpiceJet do not suggest an imminent exit by promoters.

On the contrary, they seem to be aimed at consolidating promoter holding and control in the airline. Promoter stake in SpiceJet increased from 38.6 per cent as on September 2011 to 48.59 per cent as on September 2012. In April, S. Natrajhen (formerly with Sun TV and erstwhile COO of SpiceJet) was appointed whole-time director, designated as Executive Director. Similarly, R. Ravivenkatesh (also on the Sun TV board) was appointed a Director.

He acquired 16,000 shares (0.0033 per cent). At the AGM in September 2012, both were re-appointed, and Natrajhen was re-designated Managing Director.

In October, Kal Airways Pvt Ltd also released from pledge a portion of its shares in SpiceJet.

On the business front, things are looking up. Bank of America-Merrill Lynch, which raised a price target on the SpiceJet stock to Rs 46 (from the earlier Rs 42) said: “We expect SpiceJet to post healthy profits in Q3-FY13 on account of the holiday season.”

It also expects softer ATF prices to result in marginal benefits for SpiceJet.

http://www.thehindubusinessline.com/todays-paper/spicejet-gains-on-stakesale-buzz/article4120681.ece

Exemptions for Kannur airport

Thiruvananthapuram, Nov. 22:  

The Ministry of Defence has exempted the proposed Kannur international airport from ‘a couple of exacting’ conditionalities which helps the State Govern-ment’s cause, according to K. Babu, Minister in charge of the project. This became possible after Defence Minister A.K. Antony intervened in the matter, he said. Exemptions are applicable to conditions that demand that the airport company provide free of cost 10 acres of land for setting up a naval air enclave within the command area and inducting a nominee of Southern Naval Command on the board. Minister Babu had written to Antony requesting waiver of both these conditions. The required land may now be provided on long-term lease basis only. 

http://www.thehindubusinessline.com/todays-paper/tp-others/tp-states/exemptions-for-kannur-airport/article4124248.ece

Court orders probe into paddy field reclamation for Aranmula airport

Kochi, Nov. 22:  

The vigilance court at Kottayam on Thursday ordered an inquiry into reclamation of the paddy fields in Aranmula for a proposed airport project.

The court on a petition filed by Kummanam Rajasekharan, patron of Aranmula Heritage Village Action Council (AHVAC), has directed the Chief Vigilance Commissioner to conduct an inquiry and submit the report to the court before March 14.

Rajasekharan told Business Line that AHVAC had approached the court following inaction from the government on recommendations of the Commissioner of the Kerala Land Revenue Board against officials responsible for illegal reclamation of the paddy fields in the areas under their official jurisdiction.

About 52 acres of paddy field and part of a stream have been illegally reclaimed, he said.

A Chennai-based group is in the process of setting up of a greenfield airport in Aranmula at an estimated cost of Rs 2,000 crore by reclaiming paddy fields and wetlands in the area.

Genesis of controversy

According to environmental activists, the row over the proposed private airport project erupted nine years ago when the Kadammanitta-based Mount Zion Educational Trust proposed to set up of an airstrip as part of an Aeronautical Engineering course at its engineering college.

“The Trust had purchased a large extent of waterlogged paddy fields (puncha) at Aranmula and had illegally converted it by bulldozing a hill located on its boundary.”

A portion of the natural stream cutting across the Aranmula puncha and a vast expanse of the paddy field was also illegally converted by the private party in the name of the proposed airport project, they said.

Political leaders such as MPs and MLAx had appealed to the people to “adopt a realistic approach” claiming that an airport would “change the face of Pathanamthitta district.”

However, the public is against it and launched agitations under the banner of AHVAC, saying “setting up of the proposed greenfield airport on 500 acres of land” after evicting an estimated 3,000 families and reclaiming paddy fields would destroy many of the characters that had qualified it to become the heritage village.”

http://www.thehindubusinessline.com/todays-paper/tp-others/tp-states/court-orders-probe-into-paddy-field-reclamation-for-aranmula-airport/article4124245.ece

Dragonair may soon start flying daily from Kolkata to Hong Kong

Kolkata, Nov 22:  

Dragonair is likely to launch daily flights between Kolkata and Hong Kong in about six months’ time.

“We would love to increase that (frequency of flights between Kolkata and Hong Kong) But, I think, we will do it once we have the opportunity. Normally, for new operations we look at six months. We are hopeful of starting services from Kolkata before too long,” Patrick Yeung, Chief Executive Officer of Dragonair told Business Lineon Thursday.

The Hong Kong headquartered carrier — a sister concern of Cathay Pacific Airways — recently launched four days a week direct flights between Kolkata and Hong Kong.

The airline is running 158-seater Airbus A320 flights on the Kolkata—Hong Kong route. “So far, the loads on the flight have been fantastic. We have been operating nearly full from Kolkata,” Yeung added.

Meanwhile, Cathay Pacific is likely to begin its flights to and from Hyderabad from December 2 . The company will operate four flights a week to Hong Kong from the city. “By December 2, we will fly into Hyderabad,” Tom Wright, General Manager in charge of South Asia, Middle East and Africa operations of Cathay Pacific, said.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/dragonair-may-soon-start-flying-daily-from-kolkata-to-hong-kong/article4124190.ece

Air Indias Plan to Lease HQ Gets Poor Response

Weak response from private sector corporate houses to Air Indias proposal to lease out its seafacing HQ building at Nariman Point in South Mumbai has strengthened the case of its lenders and other public sector enterprises.Air Indias lenders,who had earlier planned to take up space in this iconic building,are keen to move in and formalise the transaction,said persons familiar with the development.Given this backdrop,the national carrier has extended the deadline for submission of bids for leasing space by nearly a month as big private players showed little interest,and most of the bids received so far have been from public sector enterprises.Air India,however,declined to comment on the developments.The bids for a total 159,000 sq ft space in this building,which were scheduled to be opened on November 3,have now been rescheduled to November 29.Property consultants attribute the lukewarm response from private sector companies to a few factors,including security deposits and the overall sluggish environment in the commercial realty market.In October,Air India started leasing out 12 of this 23-storey tower with November 3 as the last date for submission of interest.Each applicant was expected to pay an earnest money deposit of minimum.50 lakh per floor subject to a maximum of.1 crore.The airline had declared by then that it was shifting its HQ to New Delhi,and wanted to lease some of its floors.Bidders were expected to bid for a minimum floor with the airline saying that preference would be given to those who planned to occupy entire floors.Although Air India did not mention the base rental for the property,it said that higher floors would attract a floor rise of.5 per sq ft.According to property consultants,an escrow mechanism can be deployed if lenders finalise the lease transactions with Air India.Under this,lenders who pick up space through lease will deposit rent in an escrow account and Air India would pay interest on its loans from the same accounts.Office lease rentals in Nariman Point,Mumbais central business district,currently hover around.280-290 per sq ft.Office buildings here are not commanding the same premium as they did five years ago since most corporates are moving to newer commercial centers like the Bandra-Kurla Complex.

http://mobileet.timesofindia.com/mobile.aspx?article=yes&pageid=3&sectid=edid=&edlabel=ETBG&mydateHid=24-11-2012&pubname=Economic+Times+-+Bangalore&edname=&articleid=Ar00304&publabel=ET

Boeing team to inspect snags in Dreamliner fleet: Air India official

NEW DELHI: A team of Boeing engineers will be here next week to inspect snags in the swanky Boeing 787 Dreamliner aircraft which Air India is planning to deploy on Delhi-London route from December 2. 

"The Boeing team is coming to inspect and certify the Dreamliner planes as we have planned to deploy it on Delhi- London-Delhi route from December 2," an Air India official said. 

Air India has so far received three Dreamliners, out of 27 ordered, but one or the other aircraft is reported to be grounded at a time due to some technical snag. 

Though airline officials were concerned about the snags, they said these were "teething problems" which occur in new aircrafts. Even All Nippon Airlines, which was the first airline to take the delivery of the carbon-composite material-made Dreamliner aircraft, faced some problems, they said. 

The airline has planned to deploy the state-of-the-art plane on Mumbai-London-Mumbai sector, which is currently being operated with Boeing 777 aircraft. 

With Air India gaining its foothold in the domestic market in past few months, the airline had initially deployed the plane for important domestic routes so that pilots could become familiar with its landing and take-off.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/boeing-team-to-inspect-snags-in-dreamliner-fleet-air-india-official/articleshow/17357777.cms

Air India woos passengers at T3 terminal with a visit to Taj Mahal

MUMBAI: Bolstered by a sequential rise in its market share in the past six months and a significant improvement in on-time performance, the state-ownedAir India is now wooing passengers with several attractive offers, including a trip to the iconic Taj Mahalfrom its T3 terminal, to further enhance the market pie.
The latest in the series is "stopover packages" at competitive prices, including a visit to the Taj.
Besides drawing more passengers, the latest effort also aims at promoting its T3 hub in the capital, which is being used by about 3,000 AI's transit passengers daily.
"The stopover package will enable passengers transfer-connecting on AI flights over Delhi to experience the city, with a range of accommodation on offer to fit all budgets," Air India said in a statement.
The domestic passenger data for the last six months show consistent increase in the national carrier's market share with the airline gaining 4.6 per cent between May and October, pushing the till recently No 1 operator Jet AirwaysBSE 12.41 % to the third slot with 20.8 per cent market share in October, after no-frills carrier IndiGo's 27.8 per cent.
Air India has established Delhi as its hub and it has designed its flight schedule in a manner that facilitates easy transfer connections at the T3, particularly from domestic to international flights and vice versa.
The packages offer the facility of web-based hotel booking, airport/hotel transfers and sightseeing options in and around Delhi, Air India said.
A range of hotels, from budget to 5-star category, located in and around the airport having made available under various packages, including the hotel located inside T3 itself, it added.
Besides, the stopover packages also offer 'day rates', which allows 'wash-and-change' facilities to the passenger at select hotels.
In addition, it also offers overnight stay rates inclusive of airport pick-up, breakfast & taxes with option to upgrade room, extended stay, day-use rates for 'wash-and-change' facility (4/6 hrs as per hotel rules), departure transfers, sightseeing as well as a day trip to the Taj Mahal, the release said.
http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/air-india-woos-passengers-at-t3-terminal-with-a-visit-to-taj-mahal/articleshow/17361964.cms

Rising airfares: Special cell in 15 days to monitor pricing moves by airlines, says Ajit Singh

MUMBAI: The steep rise in airfares by up to 50% this year has prodded the civil aviation ministry to set up a special cell to monitor pricing by airlines. 

To be set up within a fortnight, the cell will monitor airfares on a regular basis. The ministry will soon orderairlines to make public the pricing system under which airlines bunch tickets for sale, Civil Aviation MinisterAjit Singh told ET. For this purpose, a special cell within the civil aviation ministry will be formed over the next 15 days, Singh added. 

At present, there is no regulatory mechanism to monitor pricing mechanism of the airlines. However, theAirport Economic Regulatory Authority fixes airport tariffs in the country. The need for this authority was felt after airports were privatised in 2006. The ministry through this new cell would aim at fixing a reasonable and justifiable escalation in fares, the minister said. 

"Rising airfares are a major concern. While airlines are free to sell tickets on the basis of a demand-and-supply equation, there has to be a reasonable range in pricing. It cannot be Rs 5,000 on one day and Rs 50,000 on some other day," Singh explained. 

The minster, however, clarified that the government is not attempting to regulate fares and that the the airlines are free to determine fares based on market dynamics, but the government is concerned about the not-so-transparent bucket pricing followed by airlines. 

For monitoring, the government plans to get data on all the tickets sold by different carriers under varying price brackets and then analyse this data to give an indication of exactly how many tickets are sold under which price slab. 

"We would then arrive at a figure on what would be a reasonable fare and make it known to the public. This transparency will act as a deterrent to the airlines for randomly increasing fares," Singh said. "Once that range is decided, airlines will need to stick to that range and adhere to the bucket system," the minister added. 

He also pointed out that sectors like Delhi-Mumbai especially need to be monitored as fares are very steep on this corridor, touted to be among the busiest in the country. For instance, if booked a day prior to travel, an economy class fare on the sector can be as steep as Rs 36,000 one way. 

Aviation entrepreneurs like GR Gopinath who started first low-cost airline in the country came down heavily and voiced concerns about the high fares and very low pricing differential between fares of low cost and full service carriers, sometimes as narrow as Rs 500. 

"Airlines must sell higher number of tickets in the low-cost bracket instead of flying planes with loads of merely 70% and flying with rest of the seats empty. The high fares are a major deterrent for fliers currently," Gopinath had said during an aviation summit in Mumbai last month. 

Passenger numbers, according to government data, too, shows a steep dip of 15% in October that otherwise kick-starts the travel season. Aviation experts, however, decry the move by the aviation ministry. Their contention is that the best interests of the consumers are protected by the market forces. The government should avoid regulating fares.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/rising-airfares-special-cell-in-15-days-to-monitor-pricing-moves-by-airlines-says-ajit-singh/articleshow/17366051.cms

Jet might get nod to join Star Alliance

The Naresh Goyal -promoted Jet Airways has reason to cheer, as the civil aviation ministry might give it permission to join the Star Alliance simultaneously with state-owned Air India. Earlier, the government wanted the Star Alliance, comprising 27 airlines across the globe, to decide positively on AI’s membership first.

Last year, Star Alliance had snubbed Air India. Despite the process of admission being in the final stages, the airline’s membership was put on hold because it did not meet certain conditions and all members of the Star Alliance had not approved Air India’s entry.

About Jet’s entry in Star Alliance, Ajit Singh, civil aviation minister, said in an interview with Business Standard , “We may consider about Jet’s entry in Star Alliance simultaneously with Air India. We will also be working on Air India’s entry in Star Alliance.”

ON BEING A STAR ALLIANCE MEMBER

Star Alliance Founded May 14,1997 Full members 27 Destination airports 1,356 Connecting countries 193 Annual passengers 678.5 million Founding airlines Air Canada, Lufthansa , Scandinavian Airlines, Thai Airways, United Airlines

Benefits Code sharing between two airlines (seamless travel for passengers). Convenient branding, facilitating travellers making inter-airline codeshare connections within countries Redeem miles: Faster mileage rewards by earning miles for a single account on several different carriers A wider range of airport lounges shared with alliance members

Competitor passenger alliance SkyTeam , Oneworld

Aviation experts said for AI’s entry in Star Alliance, the government can lean heavily on German carrier, Lufthansa, one of the founding members of Star Alliance. The ministry has also indicated that a lot of favours have been doled out to Lufthansa. In the Economic Editors’ conference held in September, Singh had said, “A lot of facilities have been given to Lufthansa to get AI into the Star Alliance. We almost made India an open-sky (operation) for them. Now, we will ask them to facilitate AI’s entry into Star Alliance.”

A senior ministry official told Business Standard, “Swiss and Austrian Airlines, Lufthansa’s partner airlines, which had earlier been acquired by Lufthansa, continue to function under bilateral agreements signed between India and the two respective countries. Lufthansa has not given the ownership figures for one of these airlines to the government.”

Lufthansa, the mentor airlines in Star Alliance for Air India, has maintained that more than one airline from a country can become a member of the Alliance, as was the case with airlines from China, Africa and Brazil.

Air India had earlier opposed Jet Airways’s proposed entry into the Alliance, alleging Lufthansa did not favour the state-owned airline, which the German airline denied.

An aviation analyst said, “If Jet Airways becomes a member of Star Alliance before Air India, it is likely to negatively impact the market share of Air India on international routes.”

Air India and Jet Airways are already neck-and-neck in the international skies. In the first part of FY13, the national carrier and Goyal’s airline had 15.80 per cent and 14.30 per cent market share, respectively.

Before Air India’s application was put on hold, it had paid ^10 million (about Rs 69 crore) since May 2008 to Star Alliance, as part of the joining fee.

Star Alliance is the largest of the three airline alliances in the world. The other two are SkyTeam and Oneworld. Star Alliance includes Deutsche Lufthansa, Air Canada, Singapore Airlines and Thai Airways International. A membership in the group ensures shared benefits to members and seamless travel to passengers. Facilities for Star Alliance member airlines are located close to each other at airports.

Common airport facilities, coordinated schedules, and a range of new technologies are also available to member airlines

http://www.business-standard.com/india/news/jet-might-get-nod-to-join-star-alliance/493672/