Bankers oppose Kingfisher Airlines' revival plan

Bangalore: A consortium of lenders, led by State Bank of India, Friday opposed ailing Kingfisher Airlines' plan to resume operations and insisted on "better commitments" from the carrier.

The meeting between lenders and the KFA management remained inconclusive as the bankers were "not impressed" with the revival plan, sources said.

The Kingfisher Airlines management submitted almost the same revival plan which was given to DGCA last month and this plan was not acceptable to most of members of the consortium, sources added.

The Directorate General of Civil Aviation (DGCA) has already stated it will hold talks with Kingfisher's creditors and airport operators before deciding on its application seeking permission to re-launch its services.

At the meeting held here, Kingfisher submitted that the parent UB Group will infuse Rs 650 crore capital in the airline company over the next 12 months.

However, sources said, lenders rejected this proposal and agreed to hold another meeting with the management of Kingfisher Airlines next week or before January 18 to work out "a more acceptable solution".

The next meeting will be held in Mumbai where lenders are likely to push for better commitment from Kingfisher Airlines, sources added.

SBI is the lead banker in the 17-lender consortium that extended Rs 7,000 crore loans to the now grounded Kingfisher Airlines. SBI alone has an exposure of Rs 1,500 crore to the carrier, which has not been serviced since January, 2012.

As per the revival plan submitted to DGCA last month, Kingfisher had said it would require about Rs 652 crore over the next 12 months for running its operations. These funds would come from the UB Group's resources as banks were unwilling to fund the cash-strapped airline.

Out of the Rs 652 crore that the airline would need to restart operations, Rs 120 crore would be needed to meet salary arrears for its employees.

Kingfisher Airlines CEO is understood to have informed DGCA that the salary dues would be cleared by giving two months' wages and back wages each month from the next month onwards.

In addition, funds would be required to refurbish the aircraft, including their engines. The airline's pilots would also have to undergo refresher training and medical tests before they can start operating flights again.

Kingfisher officials claimed that there were no dues against oil companies, barring interest payments due to HPCL.

The airline would have to meet the dues it owe to airport operators, including the Airports Authority of India (AAI) to which it has an outstanding of over Rs 250 crore. 

http://zeenews.india.com/business/news/companies/bankers-oppose-kingfisher-airlines-revival-plan_67478.html

Consultations on over draft note on restructuring Air India pay frame

Inter-ministerial consultations are on over a draft note on restructuring the pay structure of Air India’s pilots and cabin crew which is to be tabled before the Union Cabinet, official sources said on Friday.

On completion of these consultations, the Cabinet Committee on Economic Affairs (CCEA) would take up for consideration the proposal which is likely to save over Rs 320 crore annually for the ailing national carrier, they said.

The draft was based on the recommendations of Justice D.M. Dharmadhikari Committee, which had gone into issues relating to pay-scales and career progression to bring about integration and parity among the employees of the two erstwhile state-run airlines — Air India and Indian Airlines.

While the pay scales and allowances of the employees have been fixed in accordance with the Department of Public Enterprises (DPE) guidelines, those for pilots, engineers, cabin crew and technicians would be determined on the basis of the industry norms.

Since these issues fall beyond DPE guidelines, the approval of the Union Cabinet is required, the sources said.

Air India’s annual wage bill stands at about Rs 3,200 crore, of which Rs 1,750 crore is spent on wage and allowances for licensed category employees such as pilots, cabin crew and engineers.

Restructuring of allowances for the licensed staffers is estimated to save Rs 200 crore, while those for the non-licensed ones could save another Rs 120 crore, they said.

While Productivity-linked Incentive (PLI) for all staffers has been abolished from July last year, an important issue is to end the difference in the flying allowances for all categories of pilots (Commander, Captain and First Officer) between Air India and erstwhile Indian Airlines.

This issue was a major reason for the 58-day long strike by the pilots last year. The Dharmadhikari Committee had recommended that PLI should be replaced by Profit/Productivity Related Pay (PRP) to encourage efficient working of employees.

While PRP would be given only after Air India starts making profit, the sources said it would be determined on the basis of achievement of some key performance indicators like yield, aircraft utilisation, passenger load factor, on-time performance and revenue achievement.

There are indications that the flying allowances would be uniformly fixed for all pilots for a guaranteed 70 hours a month, in line with the pattern followed by domestic and international airlines.

Another proposal relates to the layover allowance for pilots, which is paid to pilots for stay at a foreign destination between two flights.

For cabin crew, the proposal is to give flying allowance at the rate of Rs 250-Rs 1,000 for a minimum 70 hours, while the engineers are proposed to be given emoluments comparable to industry standards, besides an additional component of up to Rs 1.5 lakh.

http://www.thehindu.com/business/companies/consultations-on-over-draft-note-on-restructuring-air-india-pay-frame/article4273203.ece

More trained pilots make flying during fog easy

New Delhi, Jan 4:  

Flyers have had a better time this winter as compared to earlier years. An increase of almost 12 per cent in the number of pilots trained to operate domestic flights in foggy conditions and better communication systems at airports around the country have meant less inconvenience for flyers.

Till December 31, 2012, the domestic airline industry had over 2,110 pilots capable of operating aircraft in Cat III conditions or in dense fog conditions compared to about 1,900 such pilots at the end of December 2011. CAT III conditions are said to prevail at an airport when visibility is under 500 m and not less than 50 meters.

Incidentally, in 2008, there were just 781 pilots trained in CAT III landing procedures.

As in the past, the maximum number of CAT III trained pilots are with Air India (668) followed by Jet Airways (495) and then IndiGo which has 444 such pilots taking up the third spot.

But in the aviation industry, it is not only training of pilots but hardware on the ground such as the equipment to guide an aircraft and make it land in low or zero visibility conditions which ensures that passenger inconvenience is minimised during the foggy period.

Airports around the country have also started holding back aircraft from departing if weather at the arriving airport is inclement and there are chances that the flight may not be able to land.

“Apart from the increase in the number of CAT IIII trained pilots, airlines were asked not to schedule flights from airports that are generally affected by inclement weather during certain hours of the day to cut down on passenger inconvenience,” Director General of Civil Aviation Arun Mishra told Business Line.

But despite these endeavours, there have still been reports of delays and cancellations at Delhi airport.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/more-trained-pilots-make-flying-during-fog-easy/article4274067.ece

Jet Airways begins Mangalore-Dubai service

Mangalore, Jan. 4:
Jet Airways began the international flight operations from Mangalore to Dubai on Thursday. Jet Airways is the first private carrier to operate from Mangalore to Dubai.
Currently, the public sector carrier, Air India Express, operates flights from Mangalore to various destinations in West Asia.
Addressing presspersons on the occasion, Gaurang Shetty, Senior Vice-President (Commercial) of Jet Airways, said that the flight service between Mangalore and Dubai will help strengthen theconnectivity of Jet Airways from tier-II Indian destinations into West Asia.
He said that the inaugural economy class return fare of Rs 20,360 onwards is being offered on the Mangalore-Dubai-Mangalore route.
The airlines will operate direct flight from Mangalore to Dubai six times a week, he said.
Jet Airways currently operates daily direct flights to Dubai from Delhi, and four services a day from Mumbai.
He said that Mangalore was the third destination to be connected when Jet launched its operation in the domestic market on May 5, 1993.
Launching the service from Mangalore, Jayaprakash Hegde, Member of Parliament from Udupi, said that there is a demand from NRIs to operate flights to Saudi Arabia from Mangalore.
Shetty said that Jet Airways has also introduced ‘JetEscapes’ holiday packages for passengers travelling to Dubai for the Shopping Festival. These packages are for travel effective from January 3 to February 3.
Under this, the ‘bonanza’ holiday package starts from Rs 30,800, and the ‘extravaganza’ package from Rs 34,850.
He said both packages include return air travel in economy (inclusive of all taxes) class, airport transfers, 3-star hotel accommodation with breakfast, city tour and travel insurance.
The ‘Extravaganza’ package includes a ‘Dhow Cruise’ with dinner and desert safari with barbeque dinner for passengers.
J.T. Radhakrishna, Director, Airports Authority of India, Mangalore; Ajai Kumar, Chairman and Managing Director of Corporation Bank; M.R. Vasudeva, coordinator of Karnataka NRI Forum, Mangalore chapter, were present on the occasion.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/jet-airways-begins-mangaloredubai-service/article4274066.ece

IndiGo to start Chennai-Singapore daily, direct flights from March 1

Mumbai, Jan 4:  

IndiGo is to introduce daily and direct flights connecting Chennai with Singapore from March 1.

IndiGo will be offering introductory all-inclusive return fare of Rs 15,998 on the new flight.

The country’s largest airline with a market share of 27.3 per cent (as of November, 2012), IndiGo operates 373 daily flights, connecting 33 destinations.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/indigo-to-start-chennaisingapore-daily-direct-flights-from-march-1/article4274065.ece

Airlines told to refund excess fee to passengers

New Delhi, Jan. 4:  

It's a New Year bonanza for passengers flying from Delhi airport.

The Director General of Civil Aviation (DGCA) has said that the excess money collected as Development Fee should be refunded to those who had booked their tickets before January 1, 2013 but whose travel was on or after the New Year.

Fee cut from Jan 1

This follows the airport cutting the Development Fee for departing passengers by 50 per cent from January 1.

Now, each passenger taking an international flight out of Delhi airport pays Rs 600 instead of Rs 1,200 and a domestic passenger Rs 100 instead of the Rs 200 he had to pay earlier.

The airline watchdog has “directed” the airlines to refund this excess amount collected by them.

An Air India spokesman said that its passengers will have to go to the airline’s office and present the ticket, pointing out that an excess amount has been charged as Development Fee and the refund will be immediate.

“In the case of a ticket being issued by a travel agent, the agent will have to give the refund,” sources said.

An e-mail sent to major domestic airlines, including Jet Airways, SpiceJet and IndiGo, seeking comments on the DGCA’s directive remained unanswered. Delhi airport sees about 1.4 million passengers departing each day.

Payout for airlines

In effect, this means airlines operating out of Delhi may have to pay Rs 30 lakh a day to domestic passengers who travelled on or after January 1 but who had booked their tickets before the first of this month.

For departing international passengers, the payout would be Rs 90 lakh a day.

http://www.thehindubusinessline.com/todays-paper/airlines-told-to-refund-excess-fee-to-passengers/article4274055.ece