Air India is world's third least safe airline: Report

WASHINGTON: Air India has been rated world's third least safe airline after China Airlines and TAM Airlines, according to a report from a website that monitors plane crashes around the world. 

India's national carrier is ranked 58th among 60 listed airlines by Hamburg based Jet Airliner Crash Data Evaluation Centre (JACDEC). 

Finnair is now the world's safest airline, followed by Air New Zealand, Cathay Pacific and Emirates, according to JACDEC Safety Ranking 2012. 

None of the top nine ranked airlines had lost an aircraft or had a fatality during the 30-year period, but many had also not been active for the full 30 years. 

Not one North American carrier made the top 10 list, but none of them made the bottom 10 either. 

The centre calculates its annual rankings based on aircraft loss accidents and serious incidents over the past 30 years. The resulting index relates that information to the revenue per passenger kilometer (rpk) earned by the airline over the same period. 

There were 496 fatalities on commercial passenger flights last year, according to the report, two fewer than in 2011. 

The most significant involved a Dana Air flight which crashed in Nigeria, killing 169 people, and a Bhoja Air flight which crashed in Pakistan, killing 127. 

A total of 30 planes were destroyed and there were 44 "hull losses", or aircraft write-offs, one less than the previous year. 

http://timesofindia.indiatimes.com/business/india-business/Air-India-is-worlds-third-least-safe-airline-Report/articleshow/18179387.cms?

No infrastructure, airlines unable to import fuel

KOCHI: Though almost a year has lapsed after the Centre decided to permit airlines to directly import aviation turbine fuel (ATF), none of the airlines has been successful in importing ATF so far.

The Centre had taken the decision after the cash-strapped airlines' clamour that ATF accounted for about 50% of their operational cost in the domestic sector.

They had claimed that direct import of ATF would bring down their operational cost by at least 20% to 22% as they can then avoid paying sales tax which hovered around that level.

Some states had raised concern that the decision would affect their revenue streams. Kerala was levying about 29% sales tax on ATF and had generated Rs 58 crore revenue last year. The finance departmentwas estimating that this might shoot up to nearly Rs 69 crores in the current fiscal, considering the growing demand. There were fears that the decision to permit direct ATF import would derail these estimates.

However, the aviation companies had to go slow on the proposal when they realized that the costs involved in building up the storage and transport network for ATF might offset the gains from direct importing. The decision of the oil firm to not share their infrastructure also added to the challenge before the airlines.

"As far as we know, none of the airlines could import ATF so far,'' a spokesman for the Indian Oil Corporation (IOC) told TOI here.

Kingfisher was in the forefront of the campaign for direct import of ATF, but the subsequent developments made it impossible for the airline to pursue its demand.

Five airlines, Air India, Kingfisher, SpiceJet, Indigo and Go Airlines, had obtained permission from the Director General of Foreign Trade (DGFT) to import ATF.

"We are not pursuing the proposal now, as we don't have the infrastructure (tankers, pipelines for transportation, refuelling facility at airports) for import of ATF. We were hoping that we will be able to save 20% of operational cost in the domestic sector, if we import ATF directly. Now, we have to find some solution to the infrastructural constraints for ATF import.

We have not altogether abandoned the proposal, though,'' an Air India top official said.

The spokesperson for SpiceJet said the airline was still exploring the possibility of the importing some quantity of ATF.

"We are waiting for some more documents to be obtained from the government for importing ATF. We may not be able to meet the whole of all our ATF requirement through import. But We still

want some quantity so that we can have practical insight into infrastructure challenges of importing ATF,'' she said.

Indigo spokesperson said the airline officials don't want to share anything at this stage on their ATF import plans, while an official of Jet Airways said they had not even applied for ATF import recognizing its practical constraints.

http://timesofindia.indiatimes.com/city/kochi/No-infrastructure-airlines-unable-to-import-fuel/articleshow/18216063.cms

Japan eased safety standards ahead of Boeing 787 Dreamliner rollout

Tokyo: Japan's government stepped in to give Boeing Corporations now-grounded 787 Dreamliner and its made-in-Japan technology a boost in 2008 by easing safety regulations, fast-tracking the rollout of the groundbreaking jet for Japan's biggest airlines, according to records and participants in the process.

The concessions by an advisory panel to Japan's transport ministry reflected pressure from All Nippon Airways and Japan Airlines and a push to support Japanese firms that supply 35 percent of the 787 from the carbon-fiber in its wings to sophisticated electrical systems and batteries used to save fuel, people involved in the deliberations told Reuters.

"I believe the request for the changes came initially from the airlines. Ultimately, it was a discussion of measures to lower operating costs for the airlines," said Masatoshi Harigae, head of aviation at Japan's Aerospace Exploration Agency, one of the outside advisers who urged the eased regulatory standards.

There is no suggestion that easing regulatory standards contributed to the problems facing the Dreamliner, idled around the world after a string of malfunctions ranging from fuel leaks to battery meltdowns. There is also no evidence to suggest that continuing the mandate for more frequent manual inspections for new aircraft, including the Boeing 787, before 2008 would have helped catch signs of trouble earlier.

The looser regulations did not specifically address the risk of the Dreamliner's powerful batteries catching fire, the risk that safety investigators have zeroed in on in recent weeks.

But the steps taken by Japan's Civil Aviation Bureau in 2008 underscore how the deep commercial ties between Boeing and its Japanese suppliers and the backing of ANA and JAL helped build support for an easing of certification standards, based on a review of meeting records by the advisory panel released by the Ministry of Land, Infrastructure and Transport and comments from three of the seven experts who participated.

ANA and JAL declined to comment, deferring questions on regulatory standards to aviation officials and the ministry.

"We have not brought down our standards in comparison to other countries. This was a pragmatic revision," Tatsuyuki Shimazu, Chief Air Worthiness Engineer at the Civil Aviation Bureau, said.

Ongoing probe

Earlier this month, ANA was forced to make an emergency landing on a 787 domestic flight after a battery overheated and partially melted, triggering smoke alarms in the cockpit. The probe into that incident may take weeks or months as investigators still lack basic data to understand what went wrong, people involved have said.

In the meantime, the indefinite grounding of the Dreamliner has raised costs for both ANA and JAL and threatened to push back plans both carriers had for growth and new routes based on the new aircraft, analysts have said.

After three meetings by a panel of industry and policy experts that concluded in March 2008, Japan's transport ministry said it would adopt 40 proposals to streamline regulations surrounding new aircraft. At the time, the ministry said the easier regulatory standards were designed in part to "quickly realize the benefits from the introduction of the 787."

ANA, the Dreamliner's biggest customer, and JAL committed to buy the first 787 in 2004, helping Boeing kick-start orders for the futuristic plane. Both subsequently increased their orders, with ANA planning to eventually fly 66 Dreamliners.

"At the time there was a lot of confidence in the aircraft. It was a discussion of measures to lower operating costs for the airlines," said Harigae.

Japan's government agencies often convene blue-ribbon panels of outside experts to review regulatory policy changes, as the transport ministry did for aircraft safety rules in 2007.

Quicker turnarounds

Changes endorsed by the aviation group, including 40 revised safety guidelines, were presented as an effort to bring Japan into line with the framework of regulations in other markets, including the United States. At least five recommendations in the advisory report benefited the 787. Four mentioned support for the Dreamliner directly.

Three of the rule changes dealt with abbreviated testing and approval of pilots who had been cleared to fly the Boeing 777 and were preparing to switch to the 787. "It (787) is highly innovative and its safety is also advanced, but it's also very similar in design to the 777," said Kinya Fujiishi, an aviation journalist who sat on the panel. "This is why we thought it would be fine to revise the rule."

Another approved rule change exempted Boeing's new jet from the need for detailed inspections by ground crew after each landing that would have meant higher costs - and longer delays - for the airlines with each flight. Participants said the panel concluded such checks were not needed because of the Dreamliner's sophisticated on-board diagnostic system.

JAL said it still performs checks between 787 flights because it is still required to do so after international routes. ANA said it checks domestic 777 and 787 flights although rules no longer mandate them to perform these.

At the same time, the revised rules opened up potentially lucrative trans-Pacific detinations to ANA and JAL with the Dreamliner sooner than previous standards would have allowed. Changes shortened the time needed to win approval - known as Extended-range Twin-engine Operational Performance Standards (ETOPS) - to fly two-engined jets on routes distant from emergency airfields.

But production and design snags meant ANA, even so, had to wait until 2011 for its first Dreamliner.

Deep ties

In 2009, a bilateral agreement between Japan and the United States provided further support for the Dreamliner to enter service in Asia. That pact allowed aviation officials in Tokyo to certify the airworthiness of the U.S.-built jets based on testing mostly approved by the Federal Aviation Authority (FAA).

In 2007, the FAA cleared Boeing's use of a potentially flammable battery in the Dreamliner because Boeing's design was expected to contain any potential fire and divert smoke and fumes away from the passenger cabin.

Japan's support for the Dreamliner reflects how closely integrated the nation's aerospace industry has become in Boeing's supply chain, experts say. "If the 787 prevails all over the world it's good for Japanese industry, so the government wants to support it," said Hajime Tozaki, an aviation policy specialist and professor at Tokyo's Waseda University, who was not part of the 2008 review.

Japanese companies led by Mitsubishi Heavy Industries Limited maker of the wartime Zero fighter, build a third of the Dreamliner including its wings. With each succeeding Boeing model, Japanese suppliers have deepened their involvement from supplying parts for the 747 jumbo jet to becoming full-fledged, risk-sharing partners with the US aircraft builder.

The stake of Japanese suppliers rose from less than a fifth for the 767 to a quarter for the 777 and 35 percent for the 787. As many as 22,000 aerospace jobs at 65 firms in Japan are pegged to Boeing's fortunes, Boeing estimates.

After years of trying, Europe's Airbus has failed to drive a wedge into Japan's ties to Boeing, which in the past decade has won more than 80 percent of Japan's aircraft orders.

Potential damage

For now, Japan is sticking by Boeing with some even calling for a more conspicuous government support for the 787.

"I didn't feel there was enough (government) effort to promote the 787," said Hiroyasu Hagio, a former JAL pilot who represented flight crews in the 2008 review as head of the Japan Aircraft Pilot Association. He added: "In other countries it's normal for countries to aggressively get involved in sales."

The two big Japanese carriers remain committed to putting the 787 at the core of their fleet planning and say there has been no change to their order plans.

But there are signs the Dreamliner's problems have strained ties between Japan and Boeing. Last week, US diplomats met Japanese officials in Tokyo to discuss the political and economic fallout from the Dreamliner's grounding.

"If Boeing intentionally and politically puts the losses on to Japanese companies, the damage for Japan will be huge," said Isao Iijima, a political adviser to Prime Minister Shinzo Abe.

http://www.ndtv.com/article/world/japan-eased-safety-standards-ahead-of-boeing-787-dreamliner-rollout-323048

ANA Sees Minimal Impact From Dreamliner Grounding

TOKYO—An executive from the airline most affected by last week's grounding ofBoeing Co.'s BA -0.39% 787 Dreamliner jets said the impact on its profits so far is minimal, and that it shouldn't see a significant dent in its bottom line even if the halt in flights continues through the end of February.

All Nippon Airways Co. 9202.TO -1.67% already has a contingency plan to deal with the potential prolonged delay in the resumption of the state-of-the-art jets.

But, "we think the impact isn't so big that we will need to implement" measures to undertake a fundamental review of route and fleet strategies, Shinzo Shimizu, an ANA senior vice president, said in an interview.

These are the first remarks made by an ANA executive on the company's business outlook since two separate incidents with Boeing's flagship 787 prompted the world-wide grounding of all 50 of the aircraft starting on Jan. 16.

Still, ANA's route shuffling and customer loss highlight how some of Boeing's key customers are losing money each day the 787 grounding continues.

U.S. and Japanese regulators and safety investigators have been working for more than a week to detect the root causes and to find corrective action to resume the 787 service. The U.S. Federal Aviation Administration and Japan's Civil Aviation Bureau as well as the airlines hope to bring the plane back in the air as soon as they are convinced the aircraft is safe. But regulators say they are stumped about the cause of the battery failures.

ANA took the hardest hit among global airlines, as it owns the largest number of Dreamliner jets, at 17. The Tokyo-based company uses more 787s for its domestic flights than international flights with 60 flights a day, or 8% of the company's total daily domestic flights. It flies six or eight 787 international flights a day.

A total of 398 domestic flights will be canceled by the end of the month since Jan. 16, affecting 53,400 passengers because of the halt of 787 operations.

However, Mr. Shimizu said his company won't lose as many customers as the numbers show. More than half of the passengers have rescheduled their flights to those before or after the canceled ones for the same day.

ANA also looks to minimize cancellations to 20-30, a third to half the 60 daily flights, by taking alternate jets on other services to 787-routes and bringing online planes that are supposed to go on maintenance but still can fly safely.

"There hasn't been any big impact at the moment," Mr. Shimizu said.

The executive in charge of corporate planning stopped short of how long the carrier can operate before seeing a tangible damage to its profits with its 787 service kept on the ground.

But, for example, he still expects no big impact even if the suspension drags on until the end of February.

The final decision on the need of a strategic shift in its routes and fleet will be made when corrective action is determined to put Dreamliners back in the air, the executive said.

Once such an action plan is set by regulators, it will be clear how soon the company will be able to get its fleet back online, he added.

A launch customer encounters a string of teething problems with new aircraft. But the grounding of all 17 planes was something that the company had never expected, Mr. Shimizu said.

Still the latest fuss won't change ANA's orders for a total of 66 Dreamliners by the end of March 2022 and the relationship with the U.S. aircraft maker, the executive said.

His biggest concern is about customer trust in the aircraft.

"I have a strong hope that customers understand how the plane becomes safe again and can fly" with the aircraft again when the service resumes, Mr. Shimizu said.

http://online.wsj.com/article/SB10001424127887323375204578267190253780124.html?mod=googlenews_wsj

Maldivian to fly to Hanimaadhoo

Maldivian, the national carrier of Maldives, will commence twice-a-week direct flight operations from the Thiruvananthapuram international airport to Hanimaadhoo and back from February 3.

The flight operations to the third international airport in Maldives, Hanimaadhoo (HAQ), come in the wake of certification of the international airport from February 2, airline sources told The Hindu . The flight operations to the destination are in addition to the daily flights from here to Male airport using A-320 aircraft.

The third international airport is in the north-most end of Maldives Island and close to Thiruvananthapuram. The flying time to Hanimadhoo will be 45 minutes. (It is 55 minutes to Ibrahim Nazir International Airport. The third airport, Gan international airport, is in the south end).

The flight operations on Thursday and Sunday will use DH 200 and DH 300 aircraft. The aircraft can accommodate 37 and 50 passengers respectively. The airline would deploy aircraft as per demand. The new service would increase seat capacity in the sector to 354.

On both days, the Q2 708 flight will depart from Hanimadhoo at 1.15 a.m. local time. In the return direction, Q2 709 will depart from here at 3.30 a.m. to arrive Hanimadhoo at 4.15 a.m. local time.

Maldivian has launched its exclusive holiday division, Maldivian Holidays, to cater to the requirements of tourists to the island nation, sources said.

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/maldivian-to-fly-to-hanimaadhoo/article4347263.ece

Airport: warning against land conversion

Cultivation in the paddy fields (puncha) of Aranmula and Kurunthar was badly affected since the past 10 years due to water logging following the illegal conversion of land and a natural stream in the name of a proposed private airport, Assistant Director of Agriculture has said in a report to the Principal Agriculture Officer.

The report, submitted in October last, categorically states that nearly 95 ha of the fertile paddy fields in Aranmula and Kurunthar have turned waterlogged areas following the earth-filling of the paddy fields by a private party for the proposed airport project.

The report also says Valiyathode, a natural stream that has been functioning as a natural flood escape route between river Pampa and Aranmula puncha, too has been converted by the private party.

The Agriculture Officer also submitted reports to the higher authorities on February 28 and July 14, 2008 and on January 23, 2009, detailing the threat posing the paddy sector in Aranmula due to the hazardous land conversion. However, no effective step was taken by the authorities concerned.

AICC member flays it

Criticising the controversial airport project, Peelipose Thomas, All-India Congress Committee member and former member of the State Planning Board, has alleged that the government should take stern action against the violation of various key rules and Acts that have taken place in the name of the private airport project.

Mr. Thomas alleges criminal indifference on the part of the authorities concerned towards the violation of as many as eight very important Acts, including the Prevention of Corruption Act-1998, for the Aranmula airport project.

The Cabinet decision to take 10 per cent equity in the controversial airport project could be seen as an attempt to whitewash the irregularities and violations that has taken place at Aranmula and to protect the culprits, he alleges.

V.S. Vijayan, former Biodiversity Board chairman, said, “Farmers claim they can produce nothing less than five tonnes of paddy a hectare from the Aranmula puncha, if the present area of 1,457 ha is converted back into a cultivable state. The total production will come to 7,085 tonnes annually, and by fixing the procurement price at Rs.15 a kg, the the paddy will fetch Rs.10.63 crore. And, if it is organically produced, the total worth can be just double, nearly Rs.21 crore.”

The impact of filling and raising the paddy land and wetland area for the airport does not confine only to the earmarked 400 acres, Dr. Vijayan says.

It stretches beyond, affecting all the wetlands and paddy fields over the 3,500 acres, as there is complete blocking of water movement, he says.

The government should, therefore, not give exception, under any circumstances, for converting paddy lands and wetlands under the Kerala State Paddy Lands and Wetland Conservation Act, 2008. The provision for exception for public purpose will not be applicable here, he adds.

---

·  Paddy cultivation hit at Aranmula and Kurunthar

·  Report cites

water logging of

paddy fields

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/airport-warning-against-land-conversion/article4349919.ece

Nightmare for AI as Dreamliner investigation may take time

Final word on when the aircraft could take to the skies again would come from the U.S. FAA

With the U.S. National Transportation Safety Board (NTSB) on Friday giving enough hints that investigations into the grounding of B-787 Dreamliners could take some time, Air India’s dream of a turnaround with this latest state-of-the-art Boeing fleet could turn into a nightmare with all its six Dreamliners likely to remain grounded for weeks or even months.

A transcript of the briefing by the NTSB, available with The Hindu , indicates that fire erupted in the Boeing 787 Dreamliner in Boston earlier this month due to thermal runway and short-circuiting in the lithium-ion battery. “Here are findings to date. Fire was present. There are signs of thermal runaway and of short-circuiting,” theNTSB chairman Deborah Hersman told reporters in Washington. All the 50 Dreamliners operating around the world, including the six owned by Air India, were grounded after the Boston incident. Thermal runaway is an uncontrolled chemical reaction between electrolyte and electrode that occurs at high temperatures and is uncontrollable, she said.

Ms. Hersman refused to give a deadline for by when the investigations would be wrapped up. However, the NTSB said the order to ground the Dreamliners had come from U.S. Federal Aviation Administration (FAA) and any final word on the aircraft taking to the skies again would have to come from them only.

In a related statement, Boeing welcomed the progress being made in the investigation. The regulatory and investigative agencies in the U.S. and Japan have dedicated substantial resources to these investigations, and we appreciate their effort and leadership, it said in a statement. “Boeing continues to assist the NTSB and the other government agencies in the U.S. and Japan responsible for investigating two recent 787 incidents.”

On the other hand, the bad news continues for Air India whose top management was hoping that this drama would end within days. However, with the investigators still probing various angles and the probe nowhere near completion, the national carrier is likely to face a tough road ahead. Officials in the Aviation Ministry and AI said, with all the six Dreamliners being grounded and Airbus 777s being used in various routes, their fuel bill went up between Rs. 30 to Rs. 50 lakh per day. Besides, it has also upset its utilisation schedules and marred the launch of new services to Dubai and Australia.

Though the cash-strapped carrier is talking about compensation for the commercial losses, the prolonged grounding of the Dreamliners is likely to push it into the red.

Air India is the only company to have ordered B787 along with Jet Airways. Apart from the six aircrafts already received, it was to receive two more by March this year besides another six until March 2014. As per the original delivery plan, the airline would have had a total of 14 Dreamliners in its fleet by March next year, a major factor in its turnaround plans.

Such has been the impact of grounding of Dreamliners that Air India has been forced to combine the Mumbai-Singapore and Chennai-Singapore flights in an Airbus 330. The Mumbai passengers to Singapore will now have to stop at Chennai, which many do not like. Air India has also had to cancel its five-times-a-week service between Delhi and Tokyo. But it has continued to serve the two overseas destinations through B 777 LRs on Paris and Frankfurt routes.

---

·  Final word on aircraft resuming flight will come from U.S. Federal Aviation Administration

·  Fire believed to have erupted in Dreamliner due to short-circuiting on thermal runway

http://www.thehindu.com/todays-paper/tp-national/nightmare-for-ai-as-dreamliner-investigation-may-take-time/article4352242.ece

Nightmare for AI as Dreamliner investigation may take time

Final word on when the aircraft could take to the skies again would come from the U.S. FAA

With the U.S. National Transportation Safety Board (NTSB) on Friday giving enough hints that investigations into the grounding of B-787 Dreamliners could take some time, Air India’s dream of a turnaround with this latest state-of-the-art Boeing fleet could turn into a nightmare with all its six Dreamliners likely to remain grounded for weeks or even months.

A transcript of the briefing by the NTSB, available with The Hindu , indicates that fire erupted in the Boeing 787 Dreamliner in Boston earlier this month due to thermal runway and short-circuiting in the lithium-ion battery. “Here are findings to date. Fire was present. There are signs of thermal runaway and of short-circuiting,” NTSB chairperson Deborah Hersman told reporters in Washington. All the 50 Dreamliners operating around the world, including the six owned by Air India, were grounded after the Boston incident. Thermal runaway is an uncontrolled chemical reaction between electrolyte and electrode that occurs at high temperatures and is uncontrollable, she said.

Ms. Hersman refused to give a deadline for investigations to be wrapped up. However, the NTSB said the order to ground the aircraft had come from U.S. Federal Aviation Administration (FAA) and any final word on the aircraft taking to the skies again would have to come from them only.

In a related statement, Boeing welcomed the progress being made in the investigation. “The regulatory and investigative agencies in the U.S. and Japan have dedicated substantial resources to these investigations, and we appreciate their effort and leadership,” it said in a statement. “Boeing continues to assist the NTSB and the other government agencies in the U.S. and Japan responsible for investigating two recent 787 incidents.”

On the other hand, the bad news continues for Air India whose top management was hoping that this drama would end within days. However, with the investigators still probing various angles and the probe nowhere near completion, the national carrier is likely to face a tough road ahead. Officials in the Aviation Ministry and AI said, with all the six Dreamliners being grounded and Airbus 777s being used in various routes, the airline’s fuel bill went up between Rs. 30 lakh to Rs. 50 lakh a day. Besides, it has also upset its utilisation schedules and marred the launch of new services to Dubai and Australia.

Though the cash-strapped carrier is talking about compensation for the commercial losses, the prolonged grounding of the Dreamliners is likely to push it into the red.

Air India is the only company to have ordered B787 along with Jet Airways. Apart from the six aircraft already received, it was to receive two more by March this year besides another six until March 2014. As per the original delivery plan, the airline would have had a total of 14 Dreamliners in its fleet by March next year, a major factor in its turnaround plans.

Such has been the impact of grounding of Dreamliners that Air India has been forced to combine the Mumbai-Singapore and Chennai-Singapore flights using an Airbus 330. The Mumbai passengers to Singapore will now have to stop at Chennai, which many do not like. Air India has also had to cancel its five-times-a-week service between Delhi and Tokyo. But it has continued to serve the two overseas destinations through B 777 LRs on Paris and Frankfurt routes.

---

·  Final word on aircraft resuming flight will come from U.S. Federal Aviation Administration

·  Fire believed to have erupted in Dreamliner due to short-circuiting and thermal runway

http://www.thehindu.com/todays-paper/tp-national/nightmare-for-ai-as-dreamliner-investigation-may-take-time/article4352219.ece

Air India to keep Boeing 787 grounded till February 17

New Delhi, Jan. 26:  

The six Boeing 787 aircraft in the Air India fleet will remain grounded till February 17. This means that the newest aircraft in the airline fleet will remain grounded for a month, as it was on January 17 that Air India had grounded its Boeing 787 fleet. Initially, Air India expected the 787 aircraft to be grounded for three to five days.

This will not be good news for Air India. The airline was looking at the induction and use of the Boeing 787 aircraft to turn around its financial fortunes. The aircraft was generating revenues of Rs 2 crore a day when it was in service. The airline grounded the aircraft after the Directorate General of Civil Aviation asked Air India to stop using the Boeing 787 till a problem with a battery on board had been sorted out.

fire risk

The Directorate General took the decision to ground the aircraft after US watchdog Federal Aviation Administration (FAA) pointed out problems with the battery. In a communication, the FAA said that as a result of an in-flight Boeing 787 battery incident earlier in Japan, it was issuing an emergency airworthiness directive (AD) to address a potential battery fire risk in the 787 and would require operators to temporarily cease aircraft operations. “Before further flights, operators of US-registered Boeing 787 aircraft must demonstrate to the Federal Aviation Administration that the batteries are safe,” the communication adds.

The batteries are being tested to find out what exactly caused the incident, after which the FAA issued an AD leading to all airlines globally using this aircraft to ground the Boeing 787. Currently, seven global carriers — All Nippon Airways, Japan Airlines, United, Air India, Ethiopian, Qatar Airways and Lan Chile — have the Boeing 787 in their fleet.

Air India has ordered 27 Boeing 787. The six aircraft in the fleet were used to operate flights from Delhi to Bangalore, Chennai and Kolkata apart from flights to Dubai, Frankfurt and Paris. The airline is now using other aircraft in its fleet to operate these flights.

http://www.thehindubusinessline.com/todays-paper/tp-economy/air-india-to-keep-boeing-787-grounded-till-february-17/article4348838.ece

Oriental Bank initiates steps to recover dues from Kingfisher

Invokes guarantee given by Airbus Industrie

New Delhi, Jan 27:  

Oriental Bank of Commerce (OBC) has initiated steps to recover the Rs 55 crore fund exposure it had to the grounded Kingfisher Airlines (KFA).

With the KFA account turning into non-performing asset (NPA) for the bank in the December quarter, OBC has now invoked a guarantee provided by the aircraft manufacturer, Airbus Industrie, it is learnt.

Unlike most public sector banks, which had, through consortium, provided working capital finance for this private airline, OBC had separately extended pre-delivery payment (PDP) financing for aircraft acquisition.

Two other public sector lenders had also extended PDP financing. PDP financing refers to financing of progress payments that a purchaser makes to a manufacturer while new aircraft are being built.

OBC had, through PDP financing, funded the initial advance for certain aircraft ordered by KFA.

There was no specific collateral obtained directly from the airline, but the funding was extended on the back of a guarantee furnished by the airline manufacturer, it is learnt.

KFA was a standard account for Oriental Bank till the September quarter. But the grounded airline turned NPA for the bank as it could not service the interest liability, sources said.

Now, with the guarantee having been invoked and aircraft orders under the PDP facility sought to be cancelled, OBC is confident of recovering most of the dues in the next few weeks.

S.L. Bansal, Chairman and Managing Director of Oriental Bank, has said that the bank had not written off the exposure to KFA. “We have already initiated few steps and we are confident that our money will come back 100 per cent. We are not worried on that front”, Bansal said.

Meanwhile, OBC is all set to treat its exposure of Rs 150 crore to wind energy major, Suzlon Energy, as restructured advance in the current quarter.

This follows Suzlon Energy getting the Corporate Debt Restructuring cell’s nod for revamp of Rs 9,500-crore debt.

http://www.thehindubusinessline.com/todays-paper/tp-economy/oriental-bank-initiates-steps-to-recover-dues-from-kingfisher/article4351400.ece

BAE Systems to sell more howitzer guns, aircraft to India soon

Mumbai, Jan. 27:  

Almost two years after deciding to buy light howitzer guns from the US subsidiary of BAE Land Systems, the Indian Defence Ministry has initiated talks with the US Government to procure M777 light howitzers. The deal is likely to be inked before the end of March.

Under the contract, worth $700 million, the UK-headquartered BAE Systems is to deliver the guns as completely built units.

Direct deal

Speaking to Business Line on condition of anonymity, an official said this would be “a direct G2G deal (Government to Government) between India and the US and would be facilitated under the US Government's foreign military sales route.”

A rapidly growing Indian economy, Defence preparedness challenges and opening up of Defence production to the private sector have given the sector a major fillip.

The US Government had sent two units of the M777 to India for trials last year. The M777 howitzer is a 39-calibre towed artillery gun and weighs 4.2 tonnes. The official added that BAE Systems has supplied the M777 to Canada and Australia, besides the US.

India is a key international market for BAE Systems. It has been present in the country for 60 years and has an office in New Delhi.

The company has two joint ventures, one of them with Mahindra and Mahindra for land systems. On January 23, M&M and BAE Systems announced a strategic review of their joint venture. The other venture is with Baehal, that undertakes software engineering services for Defence companies.

In 2004, India inked a contract to buy 66 Hawk Advance Jet Trainers worth $1.63 billion from BAE Systems for the Indian Air Force. The deal included options for another 40 aircraft.

The second batch is being licence-built by Hindustan Aeronautics Limited (HAL) in Bangalore. The overall project cost is estimated at Rs 16,000 crore.

Potential third batch

“In 2004, the first batch of 66 Hawks was contracted, comprising some aircraft in fly-away condition and some built under licence by HAL. In 2010, there was the second batch with 57 aircraft.

With a total of 123 Hawks purchased by India as of now, BAE has received an RFP (request for proposal) for 20 more aircraft that could potentially make up the third batch,” said the official.

The aircraft, to be built by HAL, will fulfil the Air Force’s requirement for its prestigious aerobatic team. A 20-plane third order would bring India’s Hawk fleet to 143, making the country the world’s third largest Hawk operator, behind the US Navy and Britain.

Given BAE’s partnership with HAL, BAE is to “assist, enable and support the production line of the Hawk aircraft by HAL. The Hawk programme is progressing well. HAL is now manufacturing the aircraft,” said the official.

With India’s Defence industry set to become a hub for Defence business in the Asia region, the potential addition to the Indian fleet would take the number of Hawk aircraft ordered worldwide to over 1,000.

The UK Royal Air Force aerobatics team, Red Arrows, has used the BAE Systems Hawk since 1979.

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A third order for 20 aircraft would bring India’s Hawk fleet to 143, making it the world’s third largest Hawk operator, behind the US Navy and Britain.

http://www.thehindubusinessline.com/todays-paper/tp-corporate/bae-systems-to-sell-more-howitzer-guns-aircraft-to-india-soon/article4351453.ece