IndiGo adds capacity, drops fare on Dubai route

Other airlines may follow suit

Its raining discounts on the busy Mumbai-Dubai route. Low cost airline IndiGo is offering return fares which are priced  20-25% lower than rivals kick starting a fare war on the route.

Mumbai-Dubai is the busiest international route from India with 91 weekly flights  between the two cities and around 21, 000 seats on offer. It was the fourth busiest route from Dubai (behind London, Doha and Kuwait) in 2011. Delhi stood at ninth place.

Currently Emirates offers the highest capacity with 35 weekly flights and 11819 seats on Mumbai-Dubai route.  Jet has four daily flights while IndiGo and SpiceJet have a flight each.  IndiGo is adding its second daily flight on the route from March and has dropped  fares is about 20-25% less than rivals.

IndiGo's competitors like Emirates and Jet Airways are offering return fares around Rs 17,500-18,000.  In addition Jet is selling return tickets at around Rs 16,000 through certain travel agents and that fare is not available for sale with all agents. It is likely to lower its fares further  to compete with IndiGo on this route. It is also offering discounted fare for one way travel to attract labour traffic.

"There is round the year passenger demand for Dubai. People are looking for shorter and cheaper holidays and Dubai and Bangkok are amongst top preferences. Air fares to Dubai are also less while tickets to Singapore and Hong Kong cost around Rs 30,000 or more,'' said Tina Kanuga, Director, Bathija Travels. She added that the competition on the route is much more intense with thirteen daily flights at present. "IndiGo is offering fares around Rs 14,000 and this will induce other airlines to reduce fares." 

According to Dubai Airports, India is  Dubai International’s single biggest country destination in terms of passenger numbers. "The passenger traffic between Dubai and India continued to show robust growth during the past year, with total passenger traffic rising 7.4% year on year to 7.34 million passengers in 2012. Traffic was bolstered by the introduction of SpiceJet which added new flights from Delhi, Mumbai, Kochi and Ahmedabad to Dubai. Air India Express, Indigo and Emirates also added new flights and destinations during the year, Dubai airports said.

http://www.business-standard.com/india/news/indigo-adds-capacity-drops-faredubai-route/204697/on

Minister rebuffs AI concerns on Jet-Etihad deal

Air India’s concerns over the Jet-Etihad deal have found no favour with the civil aviation minister, Ajit Singh.

In a letter to Civil Aviation Secretary K N Srivastava, Air India Chairman and Managing Director Rohit Nandan had raised concerns over the potential threat to the airline from the Jet-Etihad deal. When contacted, Srivastava declined to comment.

Naresh Goyal-promoted Jet Airways is expected to soon announce a deal of 24 per cent stake sale at over $300 million to Abu Dhabi-based Etihad Airways. The airline’s senior management will meet Commerce Minister Anand Sharma and Singh tomorrow morning.

In the letter, written in December 2012, Air India had expressed concerns that allowing investments by foreign airlines would hurt the interests of domestic airlines and prevent Indian airports from developing into international hubs. It added that Jet’s flights to Abu Dhabi could be used to carry passengers from India headed for the US and Europe, two government officials said on condition on anonymity.

Singh told Business Standard, “Jet Airways is an Indian carrier. It can fly from any place in India to Abu Dhabi. We cannot control the city pairs or restrict its number of flights.”

Curiously, the minister’s views are in variance with that of the officials in his ministry. According to sources, there has been a buzz among ministry officials that Air India’s interests should be taken into consideration, even if the Jet-Etihad deal goes through.

According to Singh, the decision to allow foreign direct investment in aviation has been taken in overall interest of the sector and not for a particular airline. So, there is no reason for any airline to complain about it now, he said, adding that it will lead to betterment and growth in the sector and management expertise. Once the skies are open, airlines should be ready to face competition, Singh added.

Currently, Jet Airways flies from two points in India and Etihad flies out from 10 points in India to Abu Dhabi. Etihad Airways has already utilised over 85 per cent of its bilateral rights and the civil aviation ministry is not in favour of granting further bilaterals to West Asia carriers till the Indian carriers exhaust bilaterals from their side.

Etihad has minuscule market share compared to other big Gulf carriers such as Emirates and Qatar, which rule the West Asian market. It has a fleet of 67 aircraft, which is nearly a third of Emirates and half of Qatar. In India, too, with less than 2 per cent of the international market, it is a minor player compared to Emirates (over 13 per cent share) and Qatar (over 5 per cent). Etihad has 52 weekly flights to and from India, which is way below Emirates (185 flights) and Qatar (95 flights).

Experts believe that the Jet-Etihad deal would help Etihad to bypass the limitation of bilaterals. Moreover, Jet needs money to fund expansion and cut debt after several years of making losses.

Etihad can feed in passengers seamlessly from Abu Dhabi across the country by using Jet Airways’ wide coverage of over 53 cities in India. Similarly, Jet could bring in passengers from Indian cities to Abu Dhabi, from where they could travel to any destination in West Asia and Africa where Etihad has excellent connectivity.

Jet Airways can also leverage Etihad’s strong presence in Europe by bringing in Indian passengers through Abu Dhabi. Jet currently operates only to Brussels, Milan and London in Europe on its own and connects 14 cities through code-share agreements with Brussels Airlines and Thalys. On the other hand, Etihad has a huge network in Europe.

It directly flies to over 17 destinations and through its elaborate code-share agreements with around 13 airlines, offers seamless connectivity to over 88 cities.

The India-North America market is also one of the largest and most lucrative in terms of business. Jet Airways currently flies only to Newark and Toronto and through its code-share with United and Air Canada, offers connectivity to all key markets in North America. But Etihad can provide an alternative to Indian flyers. It can fly seamlessly from Abu Dhabi to Chicago, New York and Washington, apart from Toronto.

http://business-standard.com/india/news/minister-rebuffs-ai-concernsjet-etihad-deal/500574/

Jet seals wage pact with ground staff

Jet Airways, facing some headwinds on the labour front, has given a wage hike of up to Rs.18,000 to its around 7,500 ground staff, sources said on Wednesday.

The decision comes amidst reports of its pilots meeting in Delhi on Friday to discuss wage hike and long-pending arrear issues with the management.

The Naresh Goyal-promoted airline, which is on the verge of closing a stake sale deal with Etihad, had already signed a tripartite agreement with one of its employees unions, the All India Jet Airways Officers Association, they said.

“The salary hike, which is effective retrospectively from April, 2011, is in the range of Rs.10,500-18,000 a month across categories,” a union leader told PTI here.

The wage agreement is expected to benefit around 7,500 ground employees that include reservation staff, cargo, cabin and ground service.

The settlement with the management was reached after intense negotiations over 20 months, sources said, adding that, “it will be effective till March next year (2014).”

http://www.thehindu.com/todays-paper/tp-business/jet-seals-wage-pact-with-ground-staff/article4363234.ece

AI to hive off ground handling, MRO units

Air India has announced plans to hive off its ground handling and maintenance, repair and overhaul (MRO) subsidiaries with effect from February 1 to trim its workforce and to run these units as separate companies.

The ground handling units, Air India Air Transport Services Limited, would undertake ground handling activities and it would also provide service to other carriers.

The MRO subsidiary, Air India Engineering Services Limited, would undertake engineering maintenance, repair and overhaul activities for Air India’s fleet as well as for other carriers. More than 14,000 employees would be shifted to these two companies.

http://www.thehindu.com/todays-paper/tp-business/ai-to-hive-off-ground-handling-mro-units/article4363228.ece

Complete airport work by February 15, says official

The State government has set a target to complete the road connecting State secretariat and Biju Patnaik Airport by February 15.

Issues relating to completion of the road leading to the airport, internal road to old terminal building, construction of pavements, shifting of electric poles, lighting of roads towards airport, installation of transformer and sub-station and laying of underground pipe for 24 hours water supply was discussed in detail at a high-level meeting chaired by Chief Secretary B. K. Patnaik here. According to government sources, executing agencies have been asked to complete all infrastructural projects relating to new terminal buildings within a month.

At the meeting, steps taken for checking bird and dog menace, disposal of garbage, deployment of traffic police and shifting of slaughter houses from the vicinity of airport were reviewed.

Special secretary of General Administration department Niten Chandra, Tourism Secretary Ashok Kumar Tripathy, Secretary Works S. K. Ray, and Director of Biju Patnaik Airport S. Kumar attended the meeting.

http://www.thehindu.com/todays-paper/tp-national/tp-otherstates/complete-airport-work-by-february-15-says-official/article4363934.ece

Airport to be made an aviation hub

Immense scope in maintenance, refuelling areas: Venugopal

The Union Ministry of Civil Aviation is working towards making the Thiruvananthapuram international airport an aviation hub to take advantage of the immense opportunities in aircraft maintenance and refuelling, Union Minister of State for Civil Aviation K.C. Venugopal has said.

He was addressing a press conference here on Wednesday after handing over the certificate of the Director General of Civil Aviation (DGCA) to Air India Chief of Engineering H.R. Jagannath to commence the ‘C’ check of aircraft at the Maintenance, Repair, and Overhaul (MRO) facility of Air India Charters Limited (AICL), a fully-owned subsidiary of the Air India, in the vicinity of the airport here.

Describing it as a ‘milestone’ in the aviation history as the capital had become the fourth city in the country to be on the MRO map, Mr. Venugopal said the MRO would soon start the groundwork to get the approval of the European Aviation Safety Agency (EASA) and later the Federal Aviation Administration.

To a query, Mr. Venugopal said his Ministry was yet to receive the report on the proposed Air Kerala mooted by the State government. The Ministry was for further development of the Thiruvananthapuram airport and land acquisition had to be taken up by the State government. On the proposed Aranmula airport, he said it was coming up in the private sector and the Ministry had no role in it. Mr. Venugopal said all formalities to provide tourist visa on arrival at the airport had been completed. It would be launched soon.

The airline had been asked to make reservation foolproof in the wake of recent complaints. The government had already given Rs.2,000 crore to Air India as part of the Rs.6,000-crore turnaround package and the remaining amount would be given soon. The Air India Express (AIE) had invited applications for the recruitment of 40 pilots, he said.

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·  Tourist visa on arrival soon at airport

·  Further development of airport proposed

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/airport-to-be-made-an-aviation-hub/article4363997.ece

Air India plans to sell and leaseback Dreamliners

Mumbai, Jan. 30:  

Air India has invited bids for the sale and leaseback of all its newly acquired Boeing 787 Dreamliner aircraft from prospective lessors by February first week, even as similar aircraft remained grounded across the world.

In all, 50 Dreamliners have been grounded across the world following a directive from the US Federal Aviation Administration (FAA) after a fire risk reportedly caused by a battery problem. The six Dreamliners in India have been grounded since January 17.

The airline has invited quotations from lessors on or before February 5 on a Request for Proposal (RFP) which said it “would sell the aircraft to the lessor and immediately leaseback them under an operating lease for a period of 12 years, with an option to extend it.”

The Indian carrier has received six Dreamliners and is expected to get one more this month. However, delivery of the seventh aircraft is expected to get deferred due to the prevailing problem. Despite this, it has invited bids for the sale and leaseback of seven of them.

Air India plans to sell all its Dreamliner aircraft to a lessor and lease them back to operate by paying monthly rentals, sources said. This is a common fund raising practice among airlines, sources added.

http://www.thehindubusinessline.com/todays-paper/tp-economy/air-india-plans-to-sell-and-leaseback-dreamliners/article4362272.ece

Emirates Group keen on making Chennai airport its hub

Airport capacity could go up to 40 million

Chennai, Jan. 30:  

The Emirates Group has shown interest in making Chennai airport as its hub.

“We are looking at this and are open to any airline for such an arrangement,” said V.P. Agrawal, Chairman, Airports Authority of India. In fact, the Emirates group is one of the biggest airlines in the Chennai airport for both passenger and cargo segments.

“With the newly built terminals and better sea connectivity, Chennai airport could become a hub mainly to connect the South-East Asian countries,” he told newspersons.

Airports in Hyderabad and Bangalore do not have the advantages that Chennai has, he said.

According to Agrawal, the Chennai airport’s capacity can go up to 40 million from the present 23 million, which will be enough till 2017-18.

In fact, the Centre for Aviation had given its recommendation to increase the capacity to 40 million. “We are looking at this and will take action soon,” he said.

On the user development fee at Chennai airport, Agrawal said that there would be a marginal increase but it will be lower than some of the private terminals.

The capacity of the airports in India is expected to reach 271.24 million passengers by the end of the 12th Plan, which will be adequate to handle the project demand of 268.44 million passengers up to 2016-17, says a press release.

At present five major airports are being operationaised under the private-public-partnership at New Delhi, Mumbai, Bangalore, Hyderabad and Kochi. The new terminal building is under construction at Mumbai airport and phase I for international operations is likely to be ready by August, while the second phase for domestic operations will be ready by August 2014.

http://www.thehindubusinessline.com/todays-paper/tp-economy/emirates-group-keen-on-making-chennai-airport-its-hub/article4362267.ece

New terminals at Chennai airport cost Rs 200 cr more: AAI

Chennai, Jan. 30:  

The Airports Authority of India (AAI) had to shell out an additional Rs 200 crore on the newly constructed international and domestic terminals at Chennai due to delay in completion of the project.

When the project was conceived in November 2008, the project cost was Rs 1,808 crore. This has increased to Rs 2015 crore, said V.P. Agrawal, Chairman, AAI.

Inauguration today

The airport will be inaugurated on Thursday by Vice-President Hamid Ansari in the presence of Tamil Nadu Governor S. Rosaiah and Chief Minister J. Jayalalithaa.

While functionally the new terminals are ready, it will take another month or so to start operations. There are a few issues to be sorted out with the airlines, he told newspersons.

The new terminals have a combined capacity of 1.33 lakh sq mt.

The handling capacity will increase to 16 million domestic passengers and 7 million international passengers from the present 6 million (domestic) and 3 million (international).

With the completion of the metro station, currently under construction, the complex will become of the unique ‘multimodal’ interchange hub of air, rail, road and metro connectivity, he said.

http://www.thehindubusinessline.com/todays-paper/tp-economy/new-terminals-at-chennai-airport-cost-rs-200-cr-more-aai/article4362266.ece