Travel agents to down shutters today on commission woes

Bang in the middle of the peak summer travel season, more than 2,600 travel agents across the country will down their shutters on Tuesday to press for a 5% commission for the airline tickets they sell through their travel agencies. The travel agents say the commission was their right which was being denied.The Travel Agents of Association (TAAI) has approached the Aviation Ministry for what they say ‘right for commission’ from airlines, but their requests and representations have gone unheeded.“How are we suppose to do business if we are not paid our legitimate commission for providing our services (booking air-ticket)? If we shut shops for a day maybe the government and airlines will realise how important our services are,” said Rajji Rai, advisor to TAAI and chairperson of Swift Travel International.Earlier foreign airlines had reduced their commission from 9% per ticket to mere 1% which had severely affected the business of travel agents.  Travel agents had started charging a transaction fee on tickets ranging between `350 and `10,000 per ticket. But earlier in January the Supreme Court banned agents and airlines from charging the transaction fee.Agents pointed out that while in Australia, Japan and even Nepal and Sri Lanka airlines offer commission to travel agents, in India they have stopped paying tour operators as the government has the not helped the industry on this.In 2008 and 2009, travel agents stopped ticketing for Jet Airways and Singapore Airlines as these airlines refused to pay commission to the travel agents. Around 16 airlines, including British Airways, Lufthansa Airlines, Air Canada, Swiss International Airlines and Singapore Airlines (SIA), don’t pay commission to airlines after moving to zero-commission regime in 2008. Many travel agents then also stopped ticketing for these airlines as well. But the collective ‘boycott’ brought them under the lens of the Competition Commission of India. In October 2011, CCI had imposed a fine of `1 lakh each on three travel associations — Travel Agents Federation of India, TAAI and IATA Agents Association of India (IAAI) — for violating provisions of the Competition Act.Through their one-day stir they are also seeking transparent airfares.  “Consolidated airfares should be charged with all the basic essential necessities of the consumer like tea, coffee, insurance, change of dates etc. met,” points out a TAAI member
http://newindianexpress.com/business/news/Travel-agents-to-down-shutters-today-on-commission-woes/2013/05/07/article1578357.ece
 

Lenders recovered Rs 1,000-cr dues from Kingfisher: SBI chairman

A consortium of banks, led by the State Bank of India (SBI), has recovered Rs 800-1,000 crore from debt-ridden Kingfisher Airlines, and is in the process of recovering the remaining dues of about Rs 6,000 crore.“Kingfisher Airlines recoveries are going on. Total recoveries for banks are more than Rs 800-1,000 crore,” SBI Chairman Pratip Chaudhuri told reporters today. The consortium of 17 banks has an exposure of about Rs 7,000 crore to the airline, which remains grounded for over the last six months. SBI’s exposure is highest at Rs 1,600 crore, followed by Punjab National Bank and IDBI Bank at Rs 800 crore each. Bank of India and Bank of Baroda have an exposure of Rs 650 crore and Rs 550 crore, respectively.“We are making all efforts. We have treated this loan 100 per cent provided for. It does not mean that we are not going after assets. We are going after all assets. The company’s shareholding, real estate, personal assets, all is targeted,” Chaudhuri added.Banks have the brand of Kingfisher and shares of United Spirits as collateral which could get them about Rs 500 crore.The consortium also has a residual right over the securities held by Srei Infrastructure Finance, which comes to about Rs500 crore.Earlier in March, Finance Minister P Chidambaram came down heavily on wealthy promoters not servicing bank loans in the garb of their company making losses. He had asked banks to take firm action against such wealthy promoters of sick companies to recover their dues.Asked about transmission of the 25 basis points cut in the repo rate by RBI last week to customers, the chairman said it was not possible in the near term. “With the repo rate cut, we don’t get savings because our total repo borrowing is Rs 20,000 crore. So, if you reduce rate by 25 basis points, the saving will be Rs 50 crore. Total advances are to the tune of Rs 5 lakh crore which comes to one basis point,” he said, and added had there been a cut in cash reserve ratio, it would have would have provided room for cut.The country largest lender had last reduced its base rate in January to 9.70 per cent from 9.75 per cent. On merger of five SBI associates with the parent company, he said it would be considered in July-August, in consultation with the government.“Economic logic for a merger is as strong, as earlier we have merged the two associate banks; those banks have benefited, SBI has benefited, the country has benefited,” Chaudhuri said.
http://www.business-standard.com/article/finance/lenders-recovered-rs-1-000-cr-dues-from-kingfisher-sbi-chairman-113050600673_1.html

Travel agents fear move will lead to drop in commission

Travel agents have opposed the civil aviation ministry’s decision on unbundling some services, fearing a further drop in commission. Last week, the government allowed airlines to charge separately for meals, preferred seats, luggage and use of lounges, among others.The Travel Agents Association of India (TAAI), which has called its 2,800-odd members to observe a voluntary shutdown tomorrow, is opposed to the government move. According to association members, the agents in Mumbai alone sell air tickets worth over Rs 100 crore a day. The agents, who are at loggerheads with airlines on the issue of commission, feel the move would hurt them further.“We have no issue with airlines charging for insurance or a sandwich, but should be included in the basic fare. There has to be one base fare without any break-ups,” said Jay Bhatia, chairman (west region), TAAI.While the European airlines do not pay a regular commission, Air India and Jet Airways pay one per cent on basic fare and fuel surcharge. Productivity bonus is only paid on the basic fare. The agents fear commission amount would drop further if unbundling of services is allowed.The agents are demanding airlines pay them five per cent commission and drop the plan to reduce weekly payment cycle from 15 days to seven days. Also, the agents are demanding restoration of transaction fee, which they collected in lieu of commission, for selling low-cost airline tickets.“Over 70 per cent of tickets, which are sold now, are non-refundable. We face the passenger brunt, while airlines collect cancellation charges, date change fees,’’ said TAAI member Nasrulla Tejani.
 “The airlines are cutting their marketing arm. Reducing the payment cycle would make it difficult for agents to take care of administrative expenses. The travel agents community will perish and we do not want that to happen,’’ association chairman Iqbal Mulla said.
http://www.business-standard.com/article/companies/travel-agents-fear-move-will-lead-to-drop-in-commission-113050400636_1.html
 

DGCA to set norms to cap paid-for seats in flights

The Directorate General of Civil Aviation (DGCA) is looking at framing regulations to cap the number of preferential seats airlines can offer in a flight. The move comes after the civil aviation ministry decided to allow Indian carriers to charge passengers for add-on services like their foreign counterparts.“Customers should have the choice to opt in for preferential seats. Besides, the middle seat in an aircraft cannot be termed a preferential one. There would be a cap on the number of preferential seats an airline can offer in a flight,” a senior DGCA official said, requesting anonymity. “We are looking at framing some regulations which would be in line with international norms.”Industry estimates indicate while internationally, around 10 per cent of capacity is earmarked preferential in airlines, in India, if window and aisle seats are put up for pre-booking in lieu of a specified fee, two-thirds of in-flight capacity can yield ancillary revenues.In a move which is expected to improve the operating costs of airlines, the ministry had allowed Indian carriers to unbundle certain services and charge these separately. The airlines would have to submit the details of various charges for such services. DGCA will monitor that the fees are not altered unlike air fares for flights.The decision is expected to open up additional revenue streams for airlines — from check-in baggage, use of lounges by economy class passengers for a fee, carriage of sports or musical equipment, etc.While airlines have welcomed the dismantling of regulatory control, opinion has been divided on whether the decision would result in spiralling upwards air travel costs. Some experts have held that since 80-85 per cent of an airline’s operational expenses are fixed in terms of fuel costs, airport charges, salaries payable to crew members and payments made to aircraft leasing companies, there is little room left for airlines to lower base fare despite the ministry’s decision to unbundle services.“Base fares are likely to reduce with the unbundling of services, but not substantially since a significant portion of airlines’ costs are of a fixed nature. Airlines would recoup the reduction in base fare through increase in ancillary revenues. Lower base fares may attract some traffic from road and rail to air. The bigger takeaway is the fact that the ministry is stepping away from intrusive fare control and letting market forces play their part,” says Amber Dubey, partner and head-aviation at global consultancy KPMG.Civil aviation minister Ajit Singh, however, has maintained that permitting airlines to unbundle services would help airlines lower base fare for the price-sensitive traveller and at the same time offer add-on services to more discerning customers at a cost.Neil Mills, chief executive officer, SpiceJet, said: “It’s a welcome step, but we have not taken any decision yet. In an ideal environment, base fares should come down in the industry, but it would take some time.”Interestingly, the announcement has come days after Malaysian low-cost carrier Air Asia applied for commencing air services in the country. Air Asia relies heavily on ancillary revenues from check-in baggage, preferential seats, in-flight entertainment and meals, while keeping its base fare low. Indian airlines had earlier started pre-booking seats for a charge about three years back, but had stopped upon a directive from DGCA in early 2012.The decision to allow airlines to unbundle services was taken in line with a report formulated by Nathan Economic Consultants — ‘Economic Regulations to Airlines : Ticket Pricing in India’. The report had batted for unbundling of services “since it has become a necessary aspect of exercising more control over operational costs and running a successful airline”. According to travel technological solutions firm Amadeus, airlines globally are said to have generated around $36.1 billion in ancillary revenues in 2012.
 GIVING A BOOST?
* Civil aviation ministry had allowed Indian airlines to unbundle certain services and charge them separately
 * The move is expected to improve airlines’ operating costs. To open additional revenue streams for airlines — from check-in baggage, use of lounges by economy class passengers for a fee, carriage of sports or musical equipment
 * Airlines would have to give details of various charges for unbundled services
 * DGCA would monitor such that the fees are not altered, unlike airfares
http://www.business-standard.com/article/companies/dgca-to-set-norms-to-cap-paid-for-seats-in-flights-113050600783_1.html
 

Air India to cut free baggage limit to 15 kg from 20 kg

Air India has cut the baggage allowance for most economy-class fliers becoming the to take advantage of the recent government move to allow airlines to charge separately for various services. According to the new rules, which go into effect from next week, the airline will now allow an economy class passenger to carry only 15 kg against 25 kg. Baggage in excess of 15 kg will be charged at Rs 200-250 a kg. At present, the excess baggage rates (beyond 25 kg) varies, depending on the length of the journey.
Price points
Members of Air India’s frequent flier programme will be allowed an additional 10 kg of check-in baggage on domestic flights free of cost. The business class allowance stays at 35 kg. Explaining the concept, an Air India official said the airline has more than 14 price points for economy tickets on domestic flights. The new rule is likely to apply to some 10 of these price points, the official said, declining to specify how many of the over 40,000 passengers flown by the airline daily will be affected by the changed rules. The new checked-in baggage rules will apply to tickets sold after a date to be notified by the airline. Air India is also likely to start charging for preferential seating, though no date has been set to implement this.
Other airlines
The response of other domestic airlines was not immediately known. However, going by past practice, they should follow suit. Excess baggage charges account for about Rs 100 crore of Air India’s revenue, with about 5 per cent of the passengers paying excess baggage rates. The implementation of the decision initially by Air India and eventually by other airlines will see the airline industry increase the revenues from other income. Globally, it is not uncommon for airlines to earn 10-15 per cent from ancillary revenues. At present, for domestic airlines, the earning from ancillary revenues, as a proportion of total revenues, in percentage terms is in single digit.
http://www.thehindubusinessline.com/industry-and-economy/logistics/air-india-to-cut-free-baggage-limit-to-15-kg-from-20-kg/article4689181.ece

Pawan Hans may enter commercial airline business

State-run helicopter operator Pawan Hans is planning to enter the commercial airline business offering regional connectivity and has already received a go-ahead from its board, a top official has said.The New Delhi based firm, however, is yet to decide on the business model and the timeline for the proposed venture, the official said.The country's largest helicopter company, which slipped into the red in the 2012 fiscal, has managed to turnaround with a Rs 7-8 crore net profit (unaudited) in the past fiscal on account of higher efficiencies and cost-cutting."Pawan Hans has a mandate from its board as well as the government to go for fixed wing aircraft operations. That is a very challenging opportunity for us," Pawan Hans Chairman Anil Srivastava, who is also a joint secretary in the Aviation Ministry said.Srivastava said plans are in line for the regional connectivity policy, which envisages providing regional air connectivity to support traffic at larger airports.The government is in the process of finalising a policy to promote the regional air connectivity and increase air services in the hinterlands, which is expected to be announced in the next three months."So, Pawan Hans, in anticipation, intends to play a vital role in the segment. We want to make use of the smaller airstrip lying across the country," Srivastava said.There are 290-odd airstrips in the country. Of these, some are operational while most of them are unused.Srivastava, however, said a concrete plan for the company's proposed move is being worked out, adding, "Details such as operation model, fleet size/type of aircraft or whether to go in for scheduled or non-scheduled services are to be finalised."On investment that would be required for entering commercial aviation, Srivastava said: "The first thing is to develop the skills which are required (to run an airline).Financial resources are not critical if the company has the skills to manage the business." "We are operating (as a chopper operator) in a highly competitive market through the open bidding system. We are competing with private operators and are doing well without any government grants."The company has the strengths, but we have to develop our strength and skills in the areas of fixed wings planes (operations)," Srivastava said.One should take the jump but with preparations, he added."The company was in a bad shape in FY12 with a loss of Rs 10.35 crore. But we are happy to say that we have sort of turned around with a net profit of around Rs 7-8 crore (unaudited)," Srivastava said.Attributing the profitable balance sheet to increasing efficiencies of the existing resources, coupled with a series of cost-cutting measures, Srivastava said, "The measures resulted into a net saving of around Rs 9 crore last fiscal."Even a Parliamentary panel in its report tabled last Friday had said a budgetary support would help the state-owned chopper firm in its expansion plans.
"The committee finds that as against the projected demands of Rs 5 crore under the plan, Pawan Hans was not able to get any budgetary support," the Parliamentary standing committee on transport, tourism and culture headed by CPM leader Sitaram Yechury said in its report."The committee feels that necessary budgetary support, if given to Pawan Hans, it can take up its capacity building and skill development/expansion projects without delay. The committee feels that the company should expand its business beyond off-shore operations and present itself as a viable air service provider in unexplored tourist destinations," the report said.
http://businesstoday.intoday.in/story/pawan-hans-may-enter-commercial-airline-business/1/194693.html

AirAsia chief Tony Fernandes to visit India

AirAsia chief Tony Fernandes will visit India shortly and might meet civil aviation ministry officials, amid reports that the government has raised certain queries on their application seeking official nod to launch AirAsia India operations.
 "I will come to India soon and you can ask me all the questions," Fernandes told PTI in a text message. AirAsia India, which last month received Foreign Investment Promotion Board approval to set up a joint venture airline, has applied to the civil aviation ministry for a no-objection certificate (NOC) to launch its operations in the country.In the new airline, AirAsia will hold 49 per cent stake, Tata Sons 30 per cent, and Arun Bhatia of Telestra Tradeplace the remaining 21 per cent.On receipt of the application, the Ministry recently raised questions on AirAsia India not providing the names and nationalities of its chairman, chief operating officer, chief executive officer (CEO) and chief financial officer. The names were required for mandatory security clearance by the home ministry, before an NOC is granted.The promoters can approach aviation regulator Directorate General of Civil Aviation for their flying licence only after the company receives the NOC from the ministry. Fernandes said "no comments" when asked about the questions raised by the ministry. He had earlier tweeted that the AirAsia India Board had approved and appointed a CEO for the proposed carrier, but did not identify the person. Civil Aviation Minister Ajit Singh had also suggested on Friday that the proposed airline would save time if it named the CEO of the company soon.
 "I saw in the papers that the CEO's name was not there. So, asking that is really helping them because they have to go through the security clearance. If they reply, that will save time later on, otherwise it will pull on," Singh had told reporters in Delhi. "If we get all the required data, it should be cleared very soon
http://www.business-standard.com/article/companies/airasia-chief-tony-fernandes-to-visit-india-113050600025_1.html

DGCA moots cameras in cockpits

New Delhi: Following several stories of shocking behaviour of pilots on duty,an alarmed aviation regulator is planning to make it mandatory for airlines to have cameras in cockpits.In the most recent violation,Air India pilots allegedly allowed air hostesses to be in their seats and get a crash course on how to fly a plane during a Bangkok-Delhi flight.In another shocker,an Air India plane landed in Mumbai without ATC clearance.The Directorate General of Civil Aviation is seriously deliberating having cameras in the cockpit in the interest of flight safety as pilots would know they are under watch.This proposal was earlier floated by the International Civil Aviation Organization and now our flight standards department is working on it, said a highly placed official.DGCA officials anticipate opposition.Airlines will oppose it on the ground that it will mean extra expense for them both in terms of purchasing equipment and then the recurring cost of downloading the content and maintaining records.Pilots would oppose it as they would be constantly under electronic watch.Despite this,the aviation regulator is favorably inclined to the plan.It wants cameras to act as a deterrent for irresponsible behavior inside the cockpit that could imperil flight safety.On long flights,it is common for one pilot to take a nap for some time after telling the other to stay alert and wake him/her if the other person is also sleepy.The camera will ensure that both do not doze off at the same time or do the kind of stuff that has been reported recently, said sources.While the plan details are being worked out,the DGCA brass is keen that airlines should download camera recording after a fixed time period and keep it for some time.In almost all cases where crew is at fault,the airline or crew itself does not report the incident for some hours.They always wait for the plane to do some moreflights so that the cockpit voice recorder only has recordings of the last few flights and not the one where the incident occurred.This erases vital proof, admitted an official.
http://mobiletoi.timesofindia.com/mobile.aspx?article=yes&pageid=1&sectid=edid=&edlabel=TOIKRKO&mydateHid=06-05-2013&pubname=Times+of+India+-+Kochi&edname=&articleid=Ar00101&publabel=TOI

Reconsider Aranmula Airport project: Par panel

THIRUVANANTHAPURAM: The parliamentary standing committee on transport, tourism and culture, chaired by CPM MP Sitaram Yechury, has asked the government to reconsider the decision to construct the Aranmula airport as it violates the government policy restricting two airports within a distance of 150 km."The proposed greenfield airport at Aranmula in Kerala is 120 km from the Thiruvananthapuram airport and 90 km from the Kochi airport. Moreover, the two airports are brand new ones and there is no scope for saturation of capacity of these airports,'' the report said. "As per the policy specified for airport infrastructure, a greenfield airport may be permitted where an existing one is unable to meet the projected requirements of traffic or a new focal point of traffic emerges with sufficient viability. It can be allowed, both as a replacement to an existing airport or for simultaneous operation,'' it said. The committee said that it was informed that the government of India had granted in-principle approval in September 2012 for setting up the airport at Aranmula. "Around 905 acres of land is required, out of which, 600 acres has already been acquired. The total project cost is around Rs 2,000 crore,'' the report said.
http://articles.timesofindia.indiatimes.com/2013-05-04/kochi/39026259_1_aranmula-airport-greenfield-airport-kochi-airport

AI invites applications for 300 vacancies at Air India Air Transport Services Limited in Cochin International Airport Ltd

THIRUVANANTHAPURAM: Air India has invited applications for around 305 vacancies in its wholly-owned subsidiary Air India Air Transport Services Limited (AIATSL) for carrying out ground handling (GH) activities at Cochin International Airport Ltd. (CIAL). The recruitment is in keeping with the Turn Around Plan (TAP) and Financial Restructuring Plan to infuse funds into Air India, which was approved by the AI Board in March 2011 and cleared by the Cabinet Committee of Economic Affairs in April 2012. AIATSL was formed in 2003 and started functioning at the Trivandrum Airport in 2004. However, Air India, contrary to the airline's Turn Around Plan, hived off its ground handling at Trivandrum International Airport to Air India SATS Airport Services Private Limited (AISATS) in May 2012 (with retrospective date of April 1, 2012) and around 10 of its employees transferred to Kochi AIATSL.
"Currently, Air India's GH team is facing stiff competition from other GH agencies such as WFS, which has eaten into our market share. They managed to take a few airlines from us such as Qatar Airways, Gulf Air and Kuwait Airways in 2009. We need to upgrade our performance levels and our services," said a senior AI official.
 AI's GH team currently handles Air India Express flights, AI (narrow and wide-body aircrafts), Saudi Airlines, Air Asia, Emirates and Silk Air. Around 700 staff from two outsourced agencies - Airawat Aviation and Immanuel Aviation & Cargo Services Pvt Ltd - are engaged in GH activities at Kochi for AI. The national carrier also has around 130 GH employees of its own, including those who have been transferred from Air India Charters Limited to AIATSL, when the TAP was operationalized.
Applications advertised on the AI career webpage says candidates chosen to perform ground duties at Kochi Airport will be offered a fixed-term contract for a period of three years, for the following posts: Senior Customer Agent, Senior Ramp Service Agent, Customer Agent, Junior Customer Agent, Ramp Service Agent and Ramp Service Agent (LG), Utility Agent-cum-Ramp Driver.
http://articles.timesofindia.indiatimes.com/20130505/thiruvananthapuram/39042181_1_air-india-express-kuwait-airways-qatar-airways

Air hostesses take control of AI flight as pilots take break

Mumbai: Two Air India pilots put the lives of 166 passengers on a Bangkok-Delhi flight in danger by taking a 40-minute break from the cockpit and getting two stewardesses to operate the plane in their absence.Their stunt almost ended in disaster after one of the stewardesses accidentally turned off the auto-pilot,forcing the pilots to rush back to their seats.
The incident took place 33,000 feet in the air on Air India flight AI 133 (an Airbus 321) from Bangkok to Delhi on April 12,which took off from Bangkok at 8.55am.Thirty minutes later,First Officer Ravindra Nath excused himself from the cockpit for a bathroom break and got airhostess J Bhatt to occupy his seat in his absence.According to the guidelines it is a standard procedure to ensure the presence of second person in the cockpit so that if the pilot is not able to operate the aircraft for some reason,the other crew member in the cockpit can immediately call for the other pilot.But what actually happened after this made a mockery of air safety, said a source in Air India,who did not wish to be named.
Minutes after his co-pilot left the cockpit,Captain B K Soni called another stewardess,Kanika Kala,and asked her to take his seat.Captain Soni spent a few minutes teaching the two stewardesses how to operate the aircraft
http://mobiletoi.timesofindia.com/mobile.aspx?article=yes&pageid=1&sectid=edid=&edlabel=TOIKRKO&mydateHid=04-05-2013&pubname=Times+of+India+-+Kochi&edname=&articleid=Ar00105&publabel=TOI

AirAsia CEO to clarify on Govt queries soon

AirAsia CEO Tony Fernandes will visit India shortly and may meet the Civil Aviation Ministry officials, amid reports that the Government has raised certain queries on its application seeking official nod to launch AirAsia's India operations.
“I will come to India soon and you can ask me all the questions,” Fernandes told PTI in a text message. AirAsia India, which had last month got FIPB approval to set up a joint venture airline, has applied to the Civil Aviation Ministry to get a No Objection Certificate (NOC) for launching its operations in the country. In the new airline, AirAsia will hold 49 per cent stake, Tata Sons 30 per cent, and Arun Bhatia of Telestra Tradeplace the remaining 21 per cent. On receipt of the application, the Ministry has recently raised questions on AirAsia India not providing the names and nationalities of its Chairman, Chief Operating Officer, Chief Executive Officer and Chief Financial Officer. The names are required for mandatory security clearance by the Union Home Ministry, before an NOC is granted.
The promoters can approach the Directorate General of Civil Aviation for their flying licence only after the company receives the NOC from the Ministry. Fernandes said “no comments” when asked about the questions raised by the Ministry. Fernandes had earlier tweeted that AirAsia India Board has approved and appointed a Chief Executive Officer for the proposed carrier, but did not identify the person. Civil Aviation Minister Ajit Singh had also suggested on Friday that the proposed airline would save time if it names the CEO soon.
“I saw in the papers that the CEO’s name was not there. So, asking that is really helping them because they have to go through the security clearance. If they reply, that will save time later on, otherwise it will pull on,” Singh had told reporters in Delhi.
“If we get all the required data, it should be cleared very soon,” Singh had said.
http://www.thehindubusinessline.com/industry-and-economy/logistics/airasia-ceo-to-clarify-on-govt-queries-soon/article4686059.ece

House panel against hike in air traffic rights with Abu Dhabi

Pushing to protect India’s interests in regional aviation and of Indian carriers, a Parliamentary panel has recommended freezing of the proposal to increase air traffic rights with Middle- eastern regional hub of Abu Dhabi.The panel stating that the move to increase weekly seats under bilaterals from 13,330 to 36,670 ‘appearing’ to facilitate a recent deal between an Indian carrier selling stake to a foreign airline.Though the House panel did not name the parties involved, it was apparent that they were pointing out at the $300-million worth stake sale of Naresh Goyal-led Jet Airways to Abu-Dhabi-based Etihad Airlines.Sitaram Yechury, senior Communist Party of India leader and chairman of the Parliamentary Panel on Transport, Tourism and Culture also sought the Civil Aviation Ministry’s intervention into the matter and asking them to penalise Jet for selling three slots of theirs in London’s Heathrow airport.The panel reportedly said that the move would hamper prospects for Indian aspirations to be part of the regional aviation space and create a hub on the lines of Dubai and Bangkok.Yechury has asked the Aviation Ministry to  reconsider the agreement for bilateral with the UAE, which may be kept frozen at the current level of 13,330 seats.Terming the move to increase weekly seats as a ‘backhanded’ effort to tap into the markets here, the panel noted that this could affect  Air India carrier. The panel has always been of the opinion that Air India ‘must have the first right of refusal’ in any bilateral. The report called for opening of the bilateral only once the capacity of Indian carriers were increased.
http://newindianexpress.com/business/news/House-panel-against-hike-in-air-traffic-rights-with-Abu-Dhabi/2013/05/04/article1574066.ece
 

House panel: Shelve airport at Aranmula

The Parliamentary Standing Committee on Transport, Tourism and Culture has recommended reconsideration of the proposed airport at Aranmula on the grounds that it violates the government policy of not allowing a new greenfield airport within 150 km of an existing airport.The committee headed by CPM leader Sitaram Yechury, in its report, a copy of which is with Express, said, “The committee finds that the proposed greenfield airport at Aranmula is 120 km away  from Thiruvananthapuram and 90 km from Kochi, where there are international airports and  it ‘is violative of the government policy of not allowing an airport within 150 km’.
The report further stated that the international airports in Thiruvananthapuram and Kochi are new ones.
“The committee notes that the proposed Aranmula airport is violating the 150-km distance rule and the saturation, in terms of capacity, of nearby existing airports. The committee therefore recommends that the proposal for the construction of Aranmula airport may be reconsidered by the government,” the report stated.
Before coming out with the report, the panel asked for existing guidelines for setting up a second airport within an airport limit, and found that Chapter eight of Policy on Airport Infrastructure indicates that no greenfield airport will be normally allowed within an aerial distance of 150 km of an existing airport.A greenfield airport may be permitted where an existing one is unable to meet the projected needs of traffic or a new point of traffic emerges with sufficient viability.
http://newindianexpress.com/nation/House-panel-Shelve-airport-at-Aranmula/2013/05/04/article1574117.ece

Mini-jumbo war beckons as Boeing starts selling 777X

Boeing (BA.N) has started offering its long-awaited 777X long-range jet, paving the way for a 'mini-jumbo' war with European rival Airbus, industry sources said on Wednesday.
The move backed by Boeing's board means that the commercial aircraft division can begin taking orders for a revamped version of its top-selling wide-bodied jet, the 777, which could include folding wingtips and new engines from General Electric (GE.N).
Boeing declined to discuss the outcome of Monday's board meeting but said it was pushing ahead with the project to update the twin-engined jet, in service since the 1990s.
"We are taking the next step when it comes to engaging customers on the 777X," spokesman Doug Alder said. The company has "begun to discuss additional technical, pricing and schedule details with customers", he added.
Reuters reported on April 24 that Boeing was ready to go ahead with the project "within weeks", after one of its key customers, British Airways (ICAG.L), placed a $6 billion order for A350-1000 jets from rival Airbus (EAD.PA).
Until now, Boeing has enjoyed a virtual monopoly in the lucrative market for large twin-engined jets, boosting its margins, but Airbus has started challenging that position with its 350-seat A350-1000, due to enter service in 2017.
Boeing's response is a substantial overhaul in the design of the 777, expected to enter service around 2020.
BOOST FOR SUPPLIERS
People familiar with the matter said the Boeing board had approved the so-called "authority to offer", allowing sales to proceed. The people declined to be identified because they are not authorized to discuss actions of the board.
After attracting enough orders, Boeing would go back to the board for permission to start developing and building the jet.
If launched, the program would bring billions of dollars of business to suppliers of aircraft parts. In March, Boeing chose General Electric (GE.N) to develop the engines, renewing their exclusive partnership on the most recent 777s.
The 777X is a planned successor to the industry's most popular large twin-engined aircraft seating more than 300 passengers. The original 777 was introduced in 1995 and is the last new plane Boeing developed before the 787. Its most popular version is the more recent 777-300ER.
The 777X would compete from around the turn of the decade with the Airbus A350-1000 to carve up a potential market of at least 2,000 aircraft worth about $500 billion over 20 years.
The cost of the 777X development has not been disclosed but after industrial delays followed by a grounding of its 787 Dreamliner, Boeing will hope that upgrading a familiar jet costs significantly less than the $15 billion for an all-new aircraft."Boeing has been waiting to see what happened with the A350-1000, and the BA order clearly swung their decision," said Agency Partners analyst Nick Cunningham in London.
"It could be an awesome competitor, given the success of 777-300ER, but I suspect it will end up having most of the cost and risk of a complete new program."
Emirates, which runs the biggest fleet of 777s, is among those clamoring for the cost-saving 777X as early as possible.
Airbus says that its carbon-composite A350 is lighter and cheaper to run than the 777X, which will keep a metallic body. Boeing is expected to argue that an all-new wing and new engine will make the 400-seat 777X cheaper to operate per seat.
Industry sources say that Boeing has been offering the plane informally for months, while fine-tuning the design with focus groups of airlines and lessors. It has also been offering a stretched version of its 787 Dreamliner after a similar but unannounced board decision taken late last year, they added.
HEAD TO HEAD
Until this week Boeing had held off granting the formal "authority to offer" the 777X as it juggles the looming threat from Airbus with the need to avoid undermining the value of a large order backlog of existing 777s.
Now that the 777X is being offered to customers, the next move could begin within 12 months, making the end-of-decade timetable feasible, analysts said.
Timed to dominate discussion at the June 17-21 Paris air show, Boeing's decision allows the 777X to go head to head with the A350-1000 in contests at big hitters such as Japan Airlines (9201.T) or Gulf carriers led by Dubai-based Emirates.
After losing to Airbus on part of British Airways' fleet renewal plans, industry sources say that Boeing is already in informal talks to persuade the European airline to place a parallel order for the main model, the 777-9X.The 777-9X would have about 406 seats and a range of more than 8,100 nautical miles, aiming to leapfrog the 350-seat A350-1000, two sources briefed on Boeing's plans said.
It would have a new carbon-composite wing and folding wing tips to increase wing span without needing more parking space, which would incur additional airport fees. Boeing also is thought to be considering a smaller, longer-range 777-8X.
The head of Qatar Airways said on Wednesday that he would be "very interested" in both models.
http://www.reuters.com/article/2013/05/02/us-boeing-777x-idUSBRE94105120130502

Air freight markets slowed in March: IATA

Air freight markets weakened in March, eroding some of the improvement made toward the end of 2012, according to Air Freight Market Analysis of International Air Transport Association (IATA).
Global FTKs (Freight Tonne Kilometres) were down 2.3 per cent in March compared to a year ago. Although this is an improvement in February when air freight markets were down 7.2 per cent, after adjusting for the seasonal factors that have affected year-on-year growth comparisons over recent months, the trend shows the improvement in growth has stalled, the IATA report added.
 Asia-Pacific airlines experienced most of the weakness in the global trend. In March, Asia Pacific airlines’ FTKs fell 3.3 per cent compared to a year ago. And although there was an expansion month-on-month (0.4 per cent), there has been a three per cent drop in volumes in March compared with January, the report said. The cargo businesses of regional airlines have been negatively impacted by economic weakness of major trade partners.
 IATA said that important indicators of demand for Asia Pacific airlines’ freight are mixed. The region’s fundamentals do not point to a downturn.
“Although China GDP growth did not meet forecast expectations, first quarter expansion was still strong at well over seven per cent, and business confidence indicators continue to increase. On the other hand, major trade partner Europe continues to be hampered by weak economic growth and susceptibility to sovereign debt problems. The US economy is largely on track, but recent data have raised concerns over the strength of consumer spending, which is critical to supporting demand for air freighted consumer goods,” the report added.
http://www.thehindubusinessline.com/todays-paper/tp-logistics/air-freight-markets-slowed-in-march-iata/article4677895.ece

Etihad seeks nod of competition watchdog for Jet stake buy

Etihad Airways has formally approached the Competition Commission of India to seek its nod for its acquisition of a 24 per cent stake in Jet Airways. The deal is valued at Rs 2,054 crore. The application to CCI was made on Wednesday evening.
Meanwhile, according to reports, Jet has also sought Foreign Investment Promotion Board (FIPB) approval to sell 24 per cent stake in the company to the Gulf carrier.The deal was announced on April 25 making the buyout one of the first foreign investments in an Indian airline since ownership restrictions were liberalised in September 2012.
Interestingly, the deal is one of the first transactions in the airline sector to be notified to the Commission. Besides CCI, the deal has to be vetted by the Foreign Investment Promotion Board and the shareholders of the company.
 CCI will examine whether the deal creates a monopoly situation in the aviation industry.
 According to the terms of the deal, the equity sale between Jet and Etihad would increase the combined global strength to cover as many 140 destinations, providing direct foreign connectivity to Indian passengers from 23 metro and non-metro cities.
Also under the agreement, Jet and Etihad will explore joint purchasing opportunities for fuel, spare parts, and equipment among others.
Indian carriers including Air India and private sector airports in the country too have raised concerns about the deal. Airlines from India claim that India and Abu Dhabi did not need to exchange more air seats between each other as the existing air services agreement has not yet been fully utilised.
Airlines also allege that the tie-up between Jet and Etihad will see Indian passengers being diverted over Abu Dhabi on their journey onwards to US, Europe and Canada.
 According to the Competition Act, all high-value merger and acquisitions with combined turnover of Rs 4,500 crore or more need approval from the competition watchdog. Jet and Etihad expect the deal to go through in the next two-three months.
http://www.thehindubusinessline.com/todays-paper/tp-economy/etihad-seeks-nod-of-competition-watchdog-for-jet-stake-buy/article4677868.ece
 

Etihad's global network plans fuelled by Indian passengers

About 75 per cent of Indian passengers who flew Etihad Airways last year travelled to destinations beyond Abu Dhabi. This fact was highlighted by private airport operators while opposing the demand to enhance seat capacity on India-Abu Dhabi sector.The civil aviation ministry increased the weekly seat capacity on the route from around 13,000 to 50,000, brushing aside opposition from Delhi and Mumbai airports and airlines, including Air India. Airports had argued that allowing the increase would impact their potential as aviation hubs.
 The Association of Private Airport Operators (APAO) had pointed out to the government that 25.7 per cent of Etihad Airways passengers between India and Abu Dhabi could be categorised as origin-destination traffic, which means Abu Dhabi was the destination. The rest, 74.3 per cent, flew onward to other destinations in Europe, the US and other parts of world. (Click for table)
 Etihad relies far more than Emirates on onward traffic. In the case of Emirates, 45 per cent of its passengers from India can be categorised as origin-destination traffic and the rest as onward traffic.
 According to APAO, between March 2012 and February 2013, Etihad flew 680,000 passengers to and from nine cities in India, with an average load factor of 80 percent. Of which, 175,000 passengers were origin-destination travellers and the rest flew onward on Etihad's network. Among the airports, Kozhikode in Kerala had the least number of passengers going onward (42.5 per cent), where as 83-88 per cent of passengers from Mumbai, Delhi, Bangalore and Hyderabad flew onward beyond Abu Dhabi.
 "Indian airports are national assets and so are the traffic rights. So, giving away traffic rights to countries such as the UAE (United Arab Emirates) will have an adverse impact on Indian airports, Indian carriers and the nation as a whole,'' APAO wrote to the civil aviation ministry.
 Etihad did not respond to a query seeking comments.
 A National Council of Applied Economic Research  report on Emirates Airlines shows that in 2011-12, 47-68 percent of all Indian  passengers travelled beyond Dubai. Among the airports, Mumbai and Thiruvanthapuram had the least number going beyond (47 per cent), whereas 66-68 percent of passengers from Ahmedabad, Kolkata and Hyderabad flew beyond Dubai.The report  further said only18 percent of Emirates' onward traffic flew to destinations served by Indian airlines and that majority of its onward destinations had no direct flights from India. NCAER said thus Emirates sixth freedom traffic (onward traffic) posed little competition to Indian carriers.Delhi and Mumbai airports' fears unfounded, say Jet Airways sources
 The Jet-Etihad alliance will benefit passengers from metros as well as tier-II cities who will be able to fly direct to various points in West Asia, North Africa and Europe. "We will launch direct flights from Mumbai and Delhi,'' a Jet official said adding both the airports would benefit from the alliance. The airline plans to deploy wide-body airbus A330s and Boeing 777s from metros and use Boeing 737s from smaller cities.Currently about 28 million passengers travel west-bound from India (Europe, the US, Africa) and the traffic has been growing 11-13 percent. The west-bound traffic is expected to grow to 40 million over the next few years. "Currently, the share of Indian carriers in that market is less than 20 percent. We are developing the gateway in Abu Dhabi so that we are able to connect multiple points in India and extend our network to Europe and Africa'' the Jet official said.
The additional 37,000 weekly seats to Abu Dhabi adds up to 3.2 million seats a year and still would be less than 10 per cent of projected  passenger growth on west-bound routes. "We are not closing the door on any one's growth,'' the official added.
http://www.business-standard.com/article/companies/etihad-s-global-network-plans-fuelled-by-indian-passengers-113050200701_1.html

AI suspends pilots in mid-air fiasco

Air India suspended crew members and pilots involved in the midair fiasco which endangered the lives of over 166 passengers on board the Bangkok-Delhi flight on April 12.According to reports, the two government owned carriers have been involved in most the eleven worst crashes in the last four decades.The last crash was in 2010 when an AI 737-800 aircraft crashed in Mangalore killing 158 people on board.An inquiry into the incident has confirmed the ‘over-stay’ of cabin crew in the cockpit resulting in the suspension of those involved.However, the persons involved have denied that the cabin crew had been allowed to operate the aircraft in the absence of the commander and co-pilot.According to reports, the pilots put the plane on autopilot and put two crew members in charge who then accidentally switched off the autopilot control. The carrier has seen bad press due  to non-payment of salaries, mismanagement and mounting losses.
 http://newindianexpress.com/nation/AI-suspends-pilots-in-mid-air-fiasco/2013/05/04/article1574053.ece