Ajit Singh sets up panel to suggest cost-cutting measures in Air India

Civil aviation minister Ajit Singh has constituted a five-member Committee, headed by Prof. Ravindra H Dholakia, Professor of Economics and Public Systems, IIM, Ahmedabad, to suggest various measures for cost cutting and optimal utilisation of resources in Air India.

Other members of the committee are Dr. Prabhat Kumar, joint secretary, ministry of civil aviation, Rajesh Agrawal, director finance, ICRISAT, Hyderabad, S Mukherjee, ex-director commercial and inflight services, Air India, Nasir Ali, joint managing director, Air India. Nasir Ali will also act as a member secretary of the committee.

Although, the committee has been asked to submit its report in two months, it has also been asked to give immediate/interim recommendations without waiting for final report, so that these can be implemented in Air India immediately without any loss of time.

The committee's terms of reference include analysis of all 'Heads of Expenses' of Air India in the light of best practices adopted by various other airlines in the world  examination and analysis of various measures, including cost-cutting, adopted by other 'turned around' airlines in the past  and identification of various loopholes in the existing structure and functioning of Air India leading to wasteful expenditure, and also to suggest measures for plugging such loopholes.

Further, the committee will analyse various cost components and identify those expenses and costs, which can be abolished immediately, or reduced in phases or curtailed after sometime in future.

It will also analyse the inventories of spare-parts and suggest a system of Optimal Inventory Management and disposal of obsolete/ excess inventories. It will critically review the expenses on overseas offices including the manpower deployment and suggest measures to reduce such expenses, will analyse the ATF utilisation by Air India and suggest measures to reduce/optimize ATF utilisation in the background of best practices followed by other airlines.

The committee will also analyse all other factors, which are adversely affecting the financial health of Air India and suggest plan for removing such factors. The chairman & managing director and other officers of Air India have been directed to provide all assistance to the Committee.

Recently, while reviewing the functioning of Air India, Ajit Singh expressed his grave concern on the projected net shortfall of Rs. 404 crores per month by Air India.

Singh told Air India that without cutting redundant costs and optimally utilizing resources, it will be difficult to meet this shortfall, and year wise financial projections which are envisaged in the Financial Restructuring Plan (FRP), approved by the Cabinet. As per FRP, Air India is supposed to be EBITDA positive by the end of the financial year.

http://www.hindustantimes.com/News-Feed/SectorsAviation/Ajit-Singh-sets-up-panel-to-suggest-cost-cutting-measures-in-Air-India/Article1-984401.aspx

Delhi airport staff held for stealing $2,500

NEW DELHI: A sanitation employee of Delhi International Airport Limited was arrested for stealing a China-bound passenger's $2,500, a security official said Thursday. 

"Shankar Paswan, who was engaged by DIAL for cleaning the terminal, was arrested Dec 28 (2012) and handed over to police," said an official of the Central Industrial Security Force, which has been entrusted with airport security. 

Paswan was arrested after scanning the CCTV footage, he said. 

The theft took place Dec 28, 2012, around 1pm when businessman Mohammed Istakhar, a resident of Muzaffarnagar in Uttar Pradesh, flew for Guangzhou in China. 

On reaching China, Istakhar informed the Delhi airport authorities that someone had stolen his envelop containing $2,500 at the IGI Airport. 

CCTV footage showed that Paswan stole the envelop from the food court and he was arrested the same day, the CISF official said.

http://timesofindia.indiatimes.com/city/delhi/Delhi-airport-staff-held-for-stealing-2500/articleshow/17874743.cms

Hyderabad-Muscat flight runs out of fuel midway, lands in Mumbai

NEW DELHI: Is jet fuel becoming so expensive that airlines are no longer able to afford tanking up their aircraft with the required amount for a journey? An aircraft that recently took off from Hyderabad for an over three-hour flight to the Gulf found itself running low on fuel barely after reaching Mumbai—less than a third of the total distance it was supposed to travel nonstop. It then made an unscheduled refuelling stop there.

This unprecedented situation was witnessed on Thursday, December 27, with Oman Air's flight WY232 that was winging its way from Hyderabad to Muscat and was supposed to reach there in three hours and thirty five minutes. But it ended up taking a refuelling stop in Mumbai—which is about 45 minutes flying time from Hyderabad!

Top ATC officials, who say the Oman Air aircraft had flown about 180km out of Mumbai and was over the Arabian Sea when it decided to land at the megacity, are baffled at what they term is possibly the first of its kind fuel emergency ever reported in India. The Directorate General of Civil Aviation (DGCA) is examining this incident because of its serious implications.

According to global norms, aircraft are supposed to carry fuel to meet these requirements: make it from origin to destination; divert from destination to an alternate airport in case of a problem at the former and hover at both destination and alternate airport for up to 30 minutes.

Oman Air admitted that the pilots of its nonstop Hyderabad-Muscat flight (WY 232) on December 27 had requested to land in Mumbai for refuelling. But it said the pilot did so as the flight's alternate airport Sharjah was not available to it.

"In this case, the destination airport was Muscat, Oman, and alternative airport was Sharjah, UAE. However, whilst following the flight plan on route to Muscat, the captain identified that Sharjah was no longer legal as an alternative airport even though he had adequate fuel for the flight to land at the destination. In line with Oman Air's policies of always operating above safety standards, the captain rightfully decided to divert to Mumbai... it was done to ensure rigorous safety compliance even if the chances of dependence on the additional safety measure were remote," said Usama Karim Al Haremi, Oman Air's head of corporate communications and media.

However, top ATC officials here are sceptical of the explanation given by Oman Air and blame the airline for this mid-air fuel shortage. "If Sharjah was not available as the alternate airport, why did Oman Air file for there in the first place? Airlines can have second alternates also. Most importantly, if the aircraft had fuel to fly till Muscat, it could have gone there and then declared a fuel emergency to land at any of the numerous airports dotting the region. Dubai and Abu Dhabi are not too far either. We suspect some other reason for this fuel shortage," said a top ATC official, seeking an inquiry by the DGCA so that the aviation regulator of Oman could then be contacted with the right reasons.

The official added that either miscalculation in fuel required for the journey and then tanking up the aircraft or a technical snag seem more likely to have caused this situation.

http://timesofindia.indiatimes.com/india/Hyderabad-Muscat-flight-runs-out-of-fuel-midway-lands-in-Mumbai/articleshow/17878419.cms

Jet admits to stake sale negotiations with Etihad

NEW DELHI: Jet Airways on Thursday officially admitted it was in stake sale talks with Abu Dhabi-based Etihad Airlines. Aviation ministry top brass, which is being regularly briefed by Jet management, says Etihad is likely to pick up to a 24% stake in a deal valued between Rs 1,500-1,800 crore. They say the deal is likely to be announced in the next fortnight. 

"Jet and Etihad are in a discussion regarding a potential investment by the latter in the former.. these discussions have commenced recently pursuant to the liberalized FDI policy which permitted foreign investment in the shares of an Indian airline. The discussions are in progress but no terms have been firmed up at present. Various structures are being explored by the legal and commercial teams and care being taken to ensure that all the Indian regulatory requirements are fully complied with," Jet said in a filing to the BSE. 

"By its very nature, there cannot, at this stage, be a firm time line as to the progress of these negotiations, considering the complexity of trans-national transactions such as this, and the complexity of the legal requirements of the regulatory structure. Since no agreement has been reached with Etihad as yet, no regulatory approvals have been sought at present. An appropriate announcement shall be made upon finalization of the terms of the investment with Etihad as per legal and regulatory requirements," the filing added. 

Aviation ministry top officials say that while Vijay Mallya's grounded Kingfisher is also eying an investment from Etihad, Jet is likely to be chosen by the Gulf carrier. At close of trade on Thursday, shares of Jet Airways were up 4.70% at Rs 607 on the BSE. In intra-day, the stock surged 6.74% to Rs 619. On NSE, the scrip settled at Rs 608, up 4.79% from its previous close. 

http://timesofindia.indiatimes.com/business/india-business/Jet-admits-to-stake-sale-negotiations-with-Etihad/articleshow/17879227.cms

AI to redeploy part of Northeast fleet on lucrative routes

Move after the North Eastern Council failed to make viability payments to the carrier

With Alliance Air, subsidiary of Air India, withdrawing its flights from seven Northeast airports, including those in Tezpur, Lilabari and Shillong, following non-payment of funds by the North Eastern Council (NEC) from January 1, plans are now to redeploy the 60-seater ATR turboprops on profitable routes. However, Alliance Air will be operating from Guhawati, Silchar and Imphal.

The NEC finances Alliance Air’s operations each year through viability gap funding (VGF) of Rs 50 crore to 60 crore, in line with a memorandum of understanding between the two .

Confirming the development, the civil aviation minister, Ajit Singh, said, “As the NEC has refused to fund this amount in the future, Air India has decided to withdraw its flights from the Northeast.” While Alliance Air filed its VGF estimates in September last year for the grant of Rs 52 crore and Rs 55 crore for 2012 and 2013, respectively, the amount has not been paid to it, sources said.

The airline had been operating on the assumption the funds would soon be made available

According to the route dispersal guidelines of the ministry of civil aviation, an airline is required to ply 10 per cent of its total capacity to the Northeast, J&K and Lakshadweep.

However, Air India is the only domestic carrier deploying 20-22 per cent of its capacity to the region. Even after the withdrawal of flights, Air India would still be plying 17-18 per cent of its capacity on these non-viable routes, much above the limit of the policy requirement, according to an official.

NEC intends to attract private carriers at a cheaper subsidy. It had concerns on Air India’s rising fares and punctuality of flights, said the official.

Air India has made clear to NEC it would be needing four-five months to resume operations in case it was asked to do so.

Private carriers do not fly to the interior of Northeast. It could not be confirmed from the ministry if any private carrier had shown interest in plying on these routes.

The ministry is working on the regional connectivity of Tier-III and -IV cities. It has also opened an Essential Air Safety Fund to plug the losses of airlines plying on non-viable routes.

http://www.business-standard.com/india/news/air-india-to-redeploy-partnortheast-fleetlucrative-routes/497704/

Jet confirms stake sale talks with Etihad

The carrier yet to seek regulatory nod

Jet Airways is yet to seek regulatory clearance for its proposed partnership with Abu Dhabi-based Etihad Airways, the airline informed the Bombay Stock Exchange today. The statement is also the airline's first formal admission of negotiations with the Gulf airline.

"Since no agreement has been reached with Etihad as yet no regulatory approvals have been sought at present," Jet said.

A top functionary from the Civil Aviation Ministry on Wednesday said the deal between the two airlines will be concluded in 10 days with Etihad picking up 24% stake for Rs 1,500-Rs 1,800 crore. Naresh Goyal owns 80% in the airline through Isle of Man-based Tail Winds Ltd.

"The discussions are in progress but no terms have been firmed up at present. Various structures are being explored by the legal and commercial teams and care being taken to ensure that regulatory requirements are fully complied with," the airline said.

It said giving a timeline for conclusion of the deal was difficult considering the complexities.

Jet Airways stock was up 4.89% at Rs 607.95 at close of trade on Thursday.

Etihad has been in negotiations with both Jet Airways and Kingfisher for the last couple of months. Etihad executives have visited offices of both the airlines for due diligence and inspect the facilities. Last month, Kingfisher board decided to cap foreign institutional investment in the airline at 3% to make room for possible investment by Etihad.

Kingfisher has been pinning hopes on Etihad investment as it will help it to revive its operations which have been suspended since October. The airline's operating permit expired on December 31. Etihad did not give comment for the story.

http://www.business-standard.com/india/news/jet-confirms-stake-sale-talksetihad/201427/on

Jet Airways finally confirms stake sale talks with Etihad Airways

MUMBAI: After intense speculation for several months, India's largest airline by way of market capitalisation - Naresh Goyal-promoted Jet AirwaysBSE 1.84 % - on Thursday confirmed that it is in talks for a stake dilution with Abu Dhabi's Etihad Airways.

In a communique to stock exchanges, the airline said: "Jet and Etihad are in a discussion regarding a potential investment by the latter in the former, these discussions have commenced recently pursuant to the liberalised FDI policy which permitted foreign investment in the shares of an Indian airline. The discussions are in progress but no terms have been firmed up at present."

Jet has been consistent in the past not to ascribe any credence to reports stating that those media reports are 'speculative'.

The proposed deal, sources told ET, is in the works and is likely to be announced by the end of this month. The Jet-Etihad deal was first reported by ET in its September 19 edition. The proposed deal will need several regulatory hurdles to be sorted out from both sides.

The investment from Etihad, if it happens with Jet Airways will be first such investment made by a foreign carrier after the government last year allowed international carriers to invest in Indian aviation companies.

According to a source, the Mumbai-office of law firm Amarchand Mangaldas & Suresh A Shroff & Co (AMSS) is advising Abu Dhabi-based-Etihad Airways for the proposed deal and Clasis Law is representing Jet. "AMSS has got the mandate and the law firm is going through the due-diligence of over 150 documents," said a person privy to the deal.

The source said that Jet is likely to get a huge premium for the strategic deal as the airline is being valued at Rs 7,875 crore. Its current market capitalisation is about Rs 5,239 crore.

"The talks are for the minority stake of around 24% for close to $350 million, which will value the company over $1.5 billion," the same person said.

This valuation essentially means that Jet will get a deal that will be about 53 times of its current EBITDA levels of Rs 148 crore for March 2012. Jet's projected EBITDA for financial year 2014 is about Rs 1,874 crore. Jet's shares are trading at Rs 606.85 a share, gaining 4.70%, or Rs 27.25 a share on Thursday. If the deal fructifies with Etihad, the UAE airline will have to cough up a 50% premium to that price.

"It is essentially a strategic alliance so whatever Etihad ends up paying will be based on an assumption of a significant improvement in the EBITDA levels over two to three years' time," explained an investment banker.

The investment by Etihad, according to a person privy to the deal, would be made through a dilution of Naresh Goyal's stake (who holds 80%) in Tail Winds, the holding company for Jet Airways which is registered in Isle of Mann. But that mode of transaction could not be exactly ascertained as sources said that there is a possibility of a deal which will have some form of equity in the form of compulsorily convertible debentures, a deal structure that was done at the time of an investment made by US billionaire investor Wilbur Ross in budget airline SpiceJetBSE -0.42 %.

But Jet also said that the current transaction is exploring various structures of the deal and no finality has been reached and therefore a firm timeline cannot be assigned to the transaction.

"Since no agreement has been reached with Etihad as yet, no regulatory approvals have been sought at present. An appropriate announcement shall be made upon finalisation of the terms of the investment with Etihad as per legal and regulatory requirements," Jet added.

It is to be noted that while Etihad was still negotiating with Jet, it also opened doors for a dialogue and investment possibility with Vijay Mallya-promoted Kingfisher Airlines that is currently grounded and not flying as its air operating permit has expired on December 31 and not renewed by the Indian regulator as it was not convinced of the revival plan submitted by the airline to the authority.

Sources at the civil aviation ministry said that in all probability a deal with Jet is on the cards and Jet would only talk when a deal is signed and that has not essentially happened right now. "This is the reason why Jet is saying the deal has not been concluded as yet," said a civil aviation minster official.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/jet-airways-finally-confirms-stake-sale-talks-with-etihad-airways/articleshow/17878706.cms?curpg=2

Jet Air, Etihad in talks for stake sale; 24% could change hands

New Delhi: Jet Airways confirmed on Thursday it was in talks with Abu Dhabi-based Etihad Airways for a potential stake sale though terms have not been finalised. “Various structures are being explored by the legal and commercial teams and care is being taken to ensure that all regulatory requirements are fully complied with,” the airline said in a filing to the BSE.

“By its very nature, there cannot, at this stage, be a firm time line as to the progress of these negotiations, considering the complexity of transnational transactions such as this, and the complexity of the legal requirements of the regulatory structure,” the company said.

Etihad is expected to pick up a 24% stake in Jet for around R1,600-1,800 crore, valuing the carrier at about R6,259-7,511 crore. Jet’s market capitalisation as per Thursday’s share price is R5,242 crore. The scrip has risen 65% since the government relaxed rules on FDI in Indian carriers. The airline reported a net loss of R1,236.10 crore in 2011-12 on revenues of R14,815.91 crore.

“From Jet Airways’ perspective, the most significant advantage from a potential deal will be more equity and access to loan funds. The main benefit to Etihad could probably largely be from better traffic feed from India into Abu Dhabi,” a recent HSBC report noted.

Etihad Airways is the national airline of the United Arab Emirates fully owned by the Abu Dhabi government. After starting commercial operations in November 2003, it has gained a fleet strength of 67 aircraft (a mix of Airbus, Boeing, narrow-body and wide-body aircraft including six dedicated freighters) and plans to grow to 158 aircraft by 2020. The HSBC report noted that a key feature of Etihad’s strategy so far has been its strategic partnerships and code shares with airlines all over the world.

Jet and Etihad already have a code-sharing agreement, and a tie-up could see Jet emerging as more formidable rival to Air India, while Etihad would be able to offer greater competition to Dubai-based Emirates, which carries a big slice of traffic between India and the Middle East.

Jet losses have eroded its shareholders’ equity and the net debt as at the end of September 2012 was close to Rs 8,900 crore for the standalone entity; the group’s balance sheet debt is approximately Rs 12,000 crore. The group’s annualised interest expenses based on first half of 2012-13 are estimated at Rs 1,200 crore. Analysts point out the group is heavily leveraged and that the interest bill is rising due to the rising risk aversion of banks towards the aviation sector. Moreover, the depreciating rupee has resulted in a rise in interest costs on dollar-denominated loans. On a rough reckoning, an equity infusion of Rs 1,600 crore will lower Jet’s FY14E net debt to Ebitda from 6 times to 5 times and increase the interest coverage ratio from 1.8 times to 2.1 times, analysts estimate.

A civil aviation ministry official had said on Wednesday that for the consummation of the deal, Jet would have to restructure its shareholding pattern.

Currently, promoter-chairman Naresh Goyal holds his 80% stake in the airline through an overseas corporate body (OCB), Tail Winds Ltd, registered in the tax haven of Isle of Man. The airline would need to convert its Tail Winds ownership to London-based non-resident Indian Naresh Goyal’s name and would need FIPB approval for the same. The change in ownership structure would be required as Indian laws allow only 49% foreign investment in airlines and 100% investment by NRIs. Tail Winds is considered to be a foreign investment as the Reserve Bank of India has ended the concept of OCBs and considers such investments to be foreign investments.

If Etihad and Jet agree to a 24% stake sale, it would not trigger the takeover code which say that a company acquiring 25% and above in another listed firm, needs to make an open offer for another 26% of the equity. Since foreign investment in aviation is capped at 49% and such a provision could potentially result in the limit being breached, the government had said the investors would need to apply to the regulator for an exemption.

AIR LIFT

* Etihad is expected to pick up a 24% stake in Jet for around R1,600-1,800 crore

* Jet’s market capitalisation as per Thursday’s share price is R5,242 crore

* More equity, access to loan for Jet Airways; greater traffic from India for Etihad

* Jet-Etihad tie-up could see Jet emerging as more formidable rival to Air India

http://www.financialexpress.com/news/jet-air-etihad-in-talks-for-stake-sale-24-could-change-hands/1054285/0

5 man panel to suggest steps to revive AI

New Delhi: A committee was set up today to suggest measures to lower the high costs of Air India’s operations and improve utilisation of resources in line with best global practices to help the state-run carrier achieve the goals of its turnaround and financial restructuring plans. 

A five-member committee, headed by IIM-Ahmedabad’s Prof Ravindra H Dholakia, was set up by Civil Aviation Minister Ajit Singh after a review meeting of the ailing national carrier’s functioning.

Though the panel has been given two months to submit its report, it has been asked to give interim recommendations without waiting for its final report so that these could be implemented by Air India immediately, an official spokesperson said.

With improvements in Air India’s performance in recent months, the airline is likely to end this financial year with a positive cash flow or EBITDA positive. EBITDA (earnings before interest, taxes, depreciation and amortisation) is an approximate measure of a company’s operating cash flow.  Expressing concern over the projected net shortfall of Rs 404 crore a month, the Minister had recently asked Air India to cut redundant costs and optimally utilise its resources to meet the annual financial projections envisaged in the Financial Restructuring Plan (FRP).

Other members of the committee are Prabhat Kumar, Joint Secretary in Ministry, Rajesh Agrawal, Director Finance of ICRISAT, S Mukherjee, former Director Commercial and Inflight Services of Air India and Nasir Ali, Joint MD of the airline. 

It would go into the expenses, identify loopholes in the company’s existing structure and functioning leading to wasteful expenditure and recommend measures to plug them.  The panel would analyse the utilisation of jet fuel which accounts for 40 per cent of its total costs, as well as the inventories of spare parts and suggest ways to optimise fuel usage and inventory management. 

http://www.deccanchronicle.com/130103/news-businesstech/article/5-man-panel-suggest-steps-revive-ai

Panel set up to suggest steps for AI turnaround

A committee was set up on Thursday to suggest measures to lower the high costs of Air India’s operations and improve utilisation of resources in line with best global practices to help the state-run carrier achieve the goals of its turnaround and financial restructuring plans.

A five-member committee, headed by IIM-Ahmedabad’s Prof Ravindra H. Dholakia, was set up by Civil Aviation Minister Ajit Singh after a review meeting of the ailing national carrier’s function- ing.

Though the panel has been given two months to submit its report, it has been asked to give interim recommendations without waiting for its final report so that these could be implemented by Air India immediately, an official spokesperson said.

With improvements in Air India’s performance in recent months, the airline is likely to end this financial year with a positive cash flow or earning before interest, taxes, depreciation and amortisation (EBITDA) positive.

Expressing concern over the projected net shortfall of Rs.404 crore a month, the Minister had recently asked Air India to cut redundant costs and optimally utilise its resources to meet the annual financial projections envisaged in the Financial Restructuring Plan (FRP).

Other members of the committee are: Prabhat Kumar, Joint Secretary in the Ministry; Rajesh Agrawal, Director Finance of ICRISAT; S Mukherjee, former Director Commercial and Inflight Services of Air India; and Nasir Ali, Joint Managing Director of the airline.

It would go into the expenses, identify loopholes in the company’s existing structure and functioning leading to wasteful expenditure and recommend measures to plug them. — PTI

http://www.thehindu.com/todays-paper/tp-business/panel-set-up-to-suggest-steps-for-ai-turnaround/article4271141.ece

Kannur airport tenders this month

Contract is for earthwork, runway, and pavements of the proposed airport

Tenders will be floated this month for Engineering, Procurement and Construction (EPC) contract for the earthwork, runway, and pavements of the proposed fourth international airport of the State in Kannur.

The tenders, which will be floated by Kannur International Airport Ltd. (KIAL), will cover all civil and electrical works of the airport except infrastructure such as terminal building, Air Traffic Control tower and other ancillary structures, official sources told The Hindu .

Although it was initially decided to float only tenders for earthwork, the KIAL board meeting later included the runway and pavements in the EPC contract.

The KIAL is expecting the mandatory environmental clearance from the Union Ministry of Forests and Environment this month.

A public hearing, as part of the Environment Impact Assessment (EIA) for obtaining environmental clearance, was held in Mattannur on December 18. Around 150 local people participated in the hearing and everyone was in favour of the airport as it would generate jobs.

The report on the public hearing will figure in the meeting of an Expert Appraisal Committee under the Union Ministry of Forests and Environment.

The EIA study was carried out by the Delhi-based Environmental Engineer and Consultants Pvt. Ltd. and the Centre for Earth Science Studies. The Expert Appraisal Committee headed by its chairman Naresh Dayal is scheduled to meet this month-end and the clearance is expected soon, according to sources.

The airport is coming up in Keezhallur panchayat and Mattannur municipality at an estimated cost of Rs.1,130 crore.

Of the 2,000 acres notified for the airport project by the government, 1,278 acres have already been acquired.

A meeting was held with officials of over a dozen banks here on Thursday under the chairmanship of Minister for Excise, Ports and Airports K. Babu to discuss the funding of the land acquisition.

Special Officer and the Managing Director of KIAL V. Thulasidas was present at the meeting.

A consortium led by Hong Kong-based AECOM Asia Pvt. Ltd. and including AECOM India Pvt. Ltd. and CRISIL is the new project consultant for the project. Neil G. Bentley, managing director (Aviation) of the Hong Kong-based AECOM-Asia, recently visited the site to hold talks with project engineers. Sources said the Prime Minister’s Office (PMO) was monitoring the work’s progress.

Union Minister of State for Civil Aviation K.C. Venugopal had been asked to give monthly report on the status to the PMO.

---

·  Eco clearance from Centre expected this month

·  Airport is estimated to cost Rs.1,130 crore

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/kannur-airport-tenders-this-month/article4271578.ece

Jet Airways launches Mangalore-Dubai flight

Jet Airways has started flights from Mangalore International Airport to Dubai, said Gaurang Shetty, Senior Vice-President, Commercial, Jet Airways.

He was addressing a press conference here on Thursday to announce the launch of the flight before the inaugural flight, on a Boeing 737-800 with 170 economy seats. The flights were direct to Dubai from Mangalore six days a week.

Air connectivity

He said the flight would strengthen air connectivity from Tier II Indian destinations to the Gulf.

The airline had services to other cities in the Gulf from several other cities in India.

“Mangalore is the logical gateway to Gulf. Therefore, it is the launch pad for other points to the Gulf, depending on viability and timings,” he said.

It would consider connecting Mangalore to more cities in the Gulf depending on the demand.

The inaugural economy class return fare on the new flight (9W 532) was Rs.20,360 and travel was valid till March 31, 2013.

The one-way fare ex-India was Rs.10,101. The regular price would depend on supply and demand. Passengers would get in house entertainment, baggage allowance of 30 kg and frequent flyer points, he said.

The flight would depart at 8 p.m. and arrive in Dubai at 8.30 p.m. (local time) on Mondays, Wednesdays, Thursdays, and Sundays. On the return leg, flight 9W 531 would depart from Dubai at 11.30 p.m. on Mondays, Tuesdays, Wednesdays, Thursdays and Sundays and arrive in Mangalore at 4.30 p.m. the following day.

Day flight

The airline was starting a day flight for Mangalore-Mumbai-Mangalore this Friday.

It already had a Mangalore-Bangalore-Mangalore day flight.

http://www.thehindu.com/todays-paper/tp-national/tp-karnataka/jet-airways-launches-mangaloredubai-flight/article4271703.ece

Gopinath project, Air Kerala unlikely to get Govt nod

New Delhi, Jan. 3:  

The plans of the father of low-cost air travel in India, G.R. Gopinath, to re-launch a national airline and the Cochin Airport’s move to launch Air Kerala could be non-starters, senior Government officials have said.

Gopinath sold Air Deccan to Kingfisher Airlines in 2007. The sale agreement between the two airline promoters put a five-year restraint, which expires this month, on Gopinath from starting a national airline.

While officially the Government is “considering” Gopinath’s proposal, unofficially, senior officials point to a variety of reasons for not giving the nod, including slowdown in the industry, which has seen a fall in the number of passengers flown by domestic airlines, and the track record of the promoter in other aviation ventures.

“This is an industry that requires deep pockets. In the current scenario, a detailed analysis will have to be done to see whether another national airline is required,” a senior Government official said. Gopinath was not available for comment.

In the case of Air Kerala, the Government norms of an airline having to complete five years of domestic operations and having a fleet of 20 aircraft could derail the project. While earlier the Government was looking to tweak these norms, that proposal seems to have been put on the back-burner for now, sources said.

The Kerala Government was keen to start an airline that would operate between the State and the Gulf, thereby providing a cheaper alternative for people working in West Asia.

Minister of State for Civil Aviation K.C. Venugopal recently told Parliament that Cochin International Airport Ltd had worked out a project for starting Air Kerala as its subsidiary, as informed by the Kerala Government. He added that no formal proposal had been received by the Ministry.

http://www.thehindubusinessline.com/todays-paper/tp-economy/gopinath-project-air-kerala-unlikely-to-get-govt-nod/article4270361.ece

Panel to suggest cost-cutting measures for Air India

New Delhi, Jan. 3:  

A five-member committee headed by Ravindra H. Dholakia from IIM-Ahmedabad has been constituted to suggest measures for cost-cutting and optimal utilisation of assets of Air India. The committee has been asked to submit its report in two months and also give immediate and interim recommendations that can be implemented immediately.

The Committee’s terms of reference include analysis of all ‘heads of expenses’ of the airline in light of best practices adopted by various airlines globally.

It will also examine various measures adopted by other airlines globally, which have successfully completed a turnaround plan. The Committee will also identify loopholes in the existing structure and functioning of Air India leading to wasteful expenditure, apart from suggesting measures to plug such loopholes.

It will also analyse various cost components and identify those expenses and costs that can be abolished immediately, or reduced in phases or curtailed after sometime in the future.

Rajesh Agrawal, Director Finance, ICRISAT, Hyderabad is also a member of the committee which includes officials of the Ministry of Civil Aviation and a former Director of the airline.

http://www.thehindubusinessline.com/todays-paper/tp-marketing/panel-to-suggest-costcutting-measures-for-air-india/article4270391.ece

SpiceJet to link more cities in South

Mumbai, Jan. 3:  

SpiceJet is connecting Chennai and Mysore (via Bangalore) and Puducherry and Bangalore with direct flights.

The airline is also connecting Mysore with other metro cities such as Mumbai and Delhi while Puducherry will be connected to Mumbai, Delhi, Hyderabad and Kolkata.

Booking of tickets for these destinations are open and commercial flights will commence from January 14 and January 17, to Mysore and Puducherry respectively, the airline said.

For these routes, the airline would be deploying Bombardier Q400 aircraft. The aircraft can accommodate 78 passengers.

Mysore is the fifth destination of SpiceJet in Karnataka. Currently, the airline operates from Bangalore, Mangalore, Hubli and Belgaum. In its endeavour to connect more tier-II and tier-III destinations, SpiceJet is also connecting Puducherry with Bangalore.

SpiceJet, with 19.5 per cent of market share in the domestic market, currently operates more than 330 daily flights to 39 Indian cities and six international destinations.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/spicejet-to-link-more-cities-in-south/article4270386.ece

Jet Airways confirms stake sale talks with Abu Dhabi’s Etihad

Mumbai, Jan. 3:  

Jet Airways said on Thursday that it was in talks with Eithad Airways regarding a potential investment by the Abu-Dhabi based airline in the Indian carrier.

“Discussions have commenced recently pursuant to the liberalised FDI Policy which permitted foreign investment in the shares of an Indian airline. The discussions are in progress, but no terms have been firmed up at present. Various structures are being explored by the legal and commercial teams and care being taken to ensure that all the Indian regulatory requirements are fully complied with,” Jet Airways said in a filing to the Bombay Stock Exchange on Thursday.

This is the first time Jet Airways has confirmed a potential deal between the two airline companies. The shares of Jet Airways surged 4.70 per cent on the BSE on Thursday and closed at Rs 607. From October till date, the stock has risen 75.5 per cent. “Since no agreement has been reached with Etihad as yet, no regulatory approvals have been sought at present. An appropriate announcement shall be made upon finalisation of the terms of the investment with Ethiad according to legal and regulatory requirements,” the airline added.

According to reports, the deal is likely to fetch Jet Airways Rs 1,800 crore.

Code-sharing deal

Jet Airways and Etihad have a code-sharing agreement. “This deal will be profitable to both. Jet can gain larger market share, while Etihad will get a major exposure in India and also strengthen its position in West Asia,” said an aviation analyst.

The confirmation of Jet and Etihad’s talks has brought cash-strapped Kingfisher Airlines back to square one in its efforts to strike a deal with a foreign investor.

http://www.thehindubusinessline.com/todays-paper/tp-corporate/jet-airways-confirms-stake-sale-talks-with-abu-dhabis-etihad/article4270344.ece