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Providing state of the art transition through Indian skies

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APPROACH

Emerging Global ANSP       

2.8 Million Sq/NM 4FIRs 11 Enroute centres 124 airports 26 Radars ADS-CPDLC- Oceanic surveillance ASMGCS- Ground surveilalnce

UNDER IMPLEMENTATION  GAGAN(SBAS), GBAS  Additional Radars to achieve 100 per cent coverage  ADS-B - to complement/ supplement radars  Tower Automation - 38 airports  Central ATFM  Consolidation of enroute centres

Creating infrastructure for aviation with global approach


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EDITOR-IN-CHIEF’S NOTE

A good step

I

t’s all very well to hold a Guinness World Record for evacuation, but it doesn’t add much value to your bottom-line or your flight schedule. After all, you are pulling out aircraft from pre-defined routes, juggling the same resources, stretching it and not getting paid anything extra for it. Of course, as a humanitarian gesture — what Air India did before Operation Desert Storm in evacuating Indians from Iraq and Kuwait — is unparalleled. Maybe they had no option then, since they were the only ones available (apart from Indian Airlines). But in the two decades since then, Indian aviation has undergone a seminal transformation: four airlines fly abroad and one more is preparing to go overseas, the number of aircraft in the country has quadrupled and quadrupled and quadrupled. But Air India continued to be the carrier that was literally at the beck and call of the government each time there was a crisis or emergency — be it the tsunami or the Kargil war, AI was at the forefront of the operations. It is, therefore, perfectly in order that the flights to Libya are being mounted by a combination of airlines, including the private sector carriers. Of course, they have been none too happy with the decision of the Civil Aviation Ministry, but they have no option. The government fiat to requisition aircraft (post the 26/11 fiasco when the commandos were rooting at Palam for several hours) leaves them with no option. Hopefully, this pragmatism will extend further and AI alone will not be asked to add ‘political’ flights to their schedule that helps no one. One good

CRUISING HEIGHTS March 2011

IN THE SERVICE OF THE NATION: Air India responded to the humanitarian crisis by ferrying out Indians trapped in Libya.

example is the Amritsar-Toronto AI flight that has been discontinued because of poor loads with a non-stop Delhi-Toronto 777. Amritsar’s MP and Punjab politicians have been at it nonstop for months wanting to get the flight reinstated. Thank God, the Ministry found a way out because of the sheer weight of the 777 taking off from Guru Ramdas Airport with a full load, was well nigh impossible. Now, nobody would ask a Jet or a Kingfisher to undertake this exercise. Simply because Naresh Goyal and Vijay Mallya will say ‘no’ to any such proposal. So, why do this to the Maharaja? After all, if the national carrier has to get going, it must be allowed to function professionally. The Libya intervention is a good first step. Now for the next…

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HIT IT TO THE TOP — WITH I T

p41

The aviation industry in the world has realised the importance of IT systems but there is still a hesitancy to upgrade or migrate to more advanced technology. More often than not, the excuse is paucity of funds. CRUISING HEIGHTS takes a look at the progress that IT has made in the world of aviation and the Indian players on the scene.

H C Tiwari

airport have fuelled an interest in exploring low-tech alternatives that appeal to people who fear new fullbody scanners exposing them to harmful radiation and invading their privacy. "Animals' noses are always a good solution, and the mice don't see you naked," says Bruce Schneier, who runs the blog Schneier on Security. What's more, mice beat dogs for their olfactory talent.

3:33 PM

H C Tiwari

From pat-down to rat-down You don't want mice in your house, but in the airport they could be a lifesaver! Listen for the snuffling of sniffer mice as you pass through security in an Israeli airport. Israeli scientists say they have found a way to harness the power of mice to bolster airport security. The mice are part of a bombdetecting unit created by Israeli start-up company BioExplorers, based in Herzeliya, which claims that trained mice can be better than full-body scanners and intrusive pat-downs at telling a bona fide passenger from a terrorist. Eran Lumbroso who conceived the mouse-based explosives detector, says how it actually works: along one side of an archway, a detection unit contains three concealed cartridges, each of which houses eight mice. During their four-hour shifts in the detector, the mice mill about in a common area in each cartridge as air is passed over people paused in the archway and through the cartridge. When the mice sniff traces of any of the eight key explosives in the air, they are conditioned to avoid the scent and flee to a side chamber, triggering an alarm. Recent bombings at Moscow

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NEWS DIGEST

p14

A peek into the airlines industry shows how Jet Airways has adapted to perfect itself into a full service carrier from its low-cost version while Kingfisher retains the number two slot in the domestic market Plus: Will the new Civil Aviation Minister Vayalar Ravi allow the A380 to land in India?

CRUISING HEIGHTS March 2011

CELEBRATIONS

p38

The Indian Civil Aviation Centenary Year celebrations took off when the people who contributed to the progress of the aviation industry in the country were felicitated at a public function. A report on the kick-off to the Indian Civil Aviation Centenary Year and the awards that were handed out to aviation veterans.


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contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST

CRUISING HEIGHTS Volume V „ No 11

Editor-in-Chief

CARGO JOTTINGS

K SRINIVASAN

p59

Managing Editor

In the world of cargo, Aramex strengthens its presence in South-east Asia; Singapore develops a new air cargo hub; Finnair's Asian cargo operations get a big boost with its eastward expansion plan and much more.

SNIPPETS

TIRTHANKAR GHOSH Group Consulting Editor

R KRISHNAN Consulting Editor

CHOCKS OFF

p66

p36

When it comes to aviation industry, the government's entire focus seems to be on throwing good money on a bad proposal like revival of Air India. In so doing it has overlooked the demands of AAI to build airport infrastructure.

NANDU MANJESHWAR Deputy Editor

PC SINGH Special Correspondent (Mumbai)

ROOHI AHMAD Copy Editor

ASHOK KUMAR Editorial Coordinator

LAKSHMI SINGH Sub-editor-cum-reporters

JASLEEN KAUR, PUNIT MISHRA Design

RUCHI SINHA, MOHIT KANSAL, SHIV

Wondering what's happening with airlines and air service providers? We bring you a wide spectrum of domestic and international updates that will keep you informed about plans, performances, initiatives and special deals.

Picture Editor

PRADEEP CHANDRA Photo Editor

HC TIWARI —————————— Publishing Director

ROHIT GOEL Form IV (See Rule 8)

Director (Admin & Corporate Affairs)

CRUISING HEIGHTS

1. Place of Publication 2. Periodicity of Publication 3. Printer’s Name Whether Citizen of India? (If foreigner, state the country of origin) Address

: : : : :

New Delhi Monthly K. Srinivasan Yes Not Applicable

:

4. Publisher’s Name Whether Citizen of India? (If foreigner, state the country of origin) Address

: : :

4C Pocket-IV, Mayur Vihar, Phase-I, Delhi-110091 K. Srinivasan Yes Not Applicable

5. Editor’s Name Whether Citizen of India? (If foreigner, state the country of origin) Address

: : :

:

4C Pocket- IV, Mayur Vihar, Phase-I, Delhi-110091 K. Srinivasan Yes Not Applicable

:

4C Pocket- IV, Mayur Vihar, Phase-I, Delhi-110091 : 4C Pocket- IV, Mayur Vihar, the Phase-I, Delhi-91 1. Renu Mittal 2. K. Srinivasan

6. Name, Address of individuals who own newspaper and the partners or shareholders holding more than one per cent of the total capital I, K. Srinivasan, hereby declare that the particulars given are true to the best of my knowledge and belief. Date: 1st March, 2011 sd/K. Srinivasan Publisher

RAJIV SINGH

BACK PAGE

AVIATION CENTENARY CELEBRATIONS OFF TO A FLYING START

March 2011  ` 90

www.cruisingheights.in

WANTED: A MID-COURSE CORRECTION IN POLICY TO CATALYSE INDIAN AVIATION

6

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Have you ever heard anybody going on a holiday trip to frigid, perilous and the most-isolated region of the world? Well, AirAsia X's CEO, Azran Osman Rani, made a trip to Antarctica, spent time with the penguins and learnt about the fascinating research projects which are undertaken there. Find out what else he did there.

Cover Design: Ruchi Sinha

CRUISING HEIGHTS March 2011

Asst. Manager (Subscription)

JAYA SINGH (Mob. 9650433044)

Executive Director

RENU MITTAL For advertising and sales enquiries, please contact: +91-9999919071, 9810030533 Editorial & Marketing office:

Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 Tel: +91-11-41033381-82 All information in CRUISING HEIGHTS is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code. The publisher will not be liable for any loss caused by any delay in publication, error or failure of advertisement to appear. Owned and published by K Srinivasan 4C Pocket-IV, Mayur Vihar Phase- I, Delhi-91 and printed by him at Nutech Photolithographers, B-240, Okhla Industrial Area, Phase- I, New Delhi-110020.


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PERISCOPE

Grievance redressal

“There are diverse opinions between Air India unions and Indian Airline employees. I am trying to iron out the differences. We will address and resolve issues but it will take a while.” VAYALAR RAVI, Civil Aviation Minister, on the problems being faced by Air India and Indian Airline employees.

Honest assertion

“More market penetration is required and, at the same time, all stake-holders, including airports, catering service-providers and the government should come forward and make low-cost operations viable.”

CAPT GR GOPINATH, on the troubles being confronted by the low-cost carriers in India

LETTERS TO EDITOR

INTER Globe’s domestic airline IndiGo has turned around the Indian aviation sector by ordering 180 new Airbus aircraft, worth $15 billion as illustrated in the story Jai IndiGo! A mega start to the year (January, 2011) thus making it India’s largest low-cost carrier. In fact, cofounders Rakesh Gangwal and Rahul Bhatia has taken IndiGo to a new high. As both quoted, “Ordering more A320s was the natural choice to meet India’s growing flying needs. The opportunity to reduce costs and to further improve our environmental performance through the A320neo was the key to our decision.” Dhananjay Kumar, Dhanbad

The story End of an innings! (January, 2011) was worth reading. Indeed, Praful Patel’s tenure as a Civil Aviation Minister has been eventful. Under his leadership, India’s aviation sector has experienced tremendous development but as well as some ups and downs. India has become top aviation market in the world, thanks to the painful efforts of Praful Patel. His long innings in the ministry raked some remarkable results. As the writer stated: “Praful Patel earned the distinction of being a Civil Aviation Minister but not of Air India as it was with his predecessors who obsessed with the Maharaja.” Rahul Rajat, Jaipur

Look ma, I can fly (January, 2011) was very interesting to read. As a matter of fact, Capt. Bavicca Bharathi has bring laurels to the nation. She is the world’s youngest commercial licensed Pilot and Commander, which itself speaks volumes about the young lady’s determination and fortitude. In addition to it, Bavicca is a multi-talented person in painting, music and dance. Also, she passed Grade 5 Piano from Trinity College, London. She is truly an inspiration and her contribution would be remembered for a very long time. Her devotion towards her profession is truly exemplary and calls for bigger recognition. Hemant Pande, Bilaspur

On the right path “With T3 operations going live this financial year, the ASQ ratings have improved immensely. IGI is the only airport in the country with 25-40 mppa and this is a great honour for us. The ratings will help discerning passengers choose the airport they want to travel out of.” PS NAIR, Chief Executive (Corporate) for airport sector, GMR Group, on the improvement of ASQ ratings by IGI Airport.

Pressing the button

DINESH A KESKAR, President, Boeing India, expressing his point of view on the delivery of jets.

Chaos and confusion “The turnaround plan is not something which could be implemented over three months or six months. It’s a complete three-year plan. As part of this, several steps have been taken and further steps need to be taken consistently. The government wants us to improve.” GUSTAV BALDAUF, former COO, Air India, on the turnaround plan of Air India

All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin (East), New Delhi -13, OR mail to cruisingheights@newsline.in.

8

“We have a long-term outlook for India. In the next four to five years, we have orders to deliver 107 aircraft, including Dreamliner jets. Our aim is to deliver 10 aircraft a month by 2013. We cannot comment at this stage on how many we will deliver this year.”

CRUISING HEIGHTS March 2011

Flying high on growth “Qatar’s EBITDA growth was 47 per cent year on year and in this fiscal will carry about 16 million passengers, about 1.5 million more passengers than 2009-10.” AKBAR AL BAKER, Qatar Airways’ Chief Executive, on Qatar’s future growth graph


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Comfort zones

½

½

½

½

Upper-Class Clubhouse: Virgin Atlantic Airways’ lounge at London’s Heathrow airport. Apart from elite sitting and eating facilities, it is also well equipped with a TV room, a pool table, an observation deck and a roof garden. Satellite Golden Lounge: Malaysia Airlines’ Lounge at Kuala Lumpur airport comes with a sauna, relaxation room, massage chairs, prayer rooms and massages at reasonable prices. First-Class Lounge: Lufthansa’s lounge at Munich airport has reclining chairs, a comfort area and an attractive wining and dining areas. There are jacuzzis in the spacious bathrooms. Japan Airlines’ international lounge at Tokyo’s Haneda airport ensures ultimate comfort for passengers, especially for those waiting to board late-night flights. It is also equipped with massage chairs, relaxation area and space for business

COLD STATS

Airline lounges are oasis in the desert for people who spend half of their time in the air or at airports. Lounges not only offer sanity and semblance of the comforts of home for frequent fliers but also provide the opportunity to unwind between meetings, to freshen up after an all-night flight and to rest and refuel during a layover. Frommer’s Travel Guides recently selected the top lounges worldwide based on a number of parameters like facilities, quality and variety of food, sitting and room comfort, scope for recreational activities, wi-fi, etc. ½ The Wing: Cathay Pacific Airways’ facility at Hong Kong airport is the top choice in the list. A library, a 32-seat restaurant and five individual rooms equipped with showers, toilets, relaxing deck chairs come with The Wing.

LOOKING GLASS

Indian aviation clocks a century in the air! It is time to fly high...

Taking a dig “During his (Baldauf’s) time, Air India has slipped to No. 4 (in market share), which means you have taken no effective measure to increase revenue and productivity.” JITENDER BHARGAVA. Former Executive Director, Air India, on the performance (in market share) of the national carrier.

Not an easy task “Operating two of the busiest airports (Mumbai and Bengaluru) is a challenging task, yet holds immense potential in the coming years.” GV SANJAY REDDY, BIAL Managing Director, on managing two of the busiest airports.

CRUISING HEIGHTS March 2011

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Off the Record

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OFF THE RECORD

PPP AT OXFORD here is plenty to do for secretaries once they retire. Ask Madhavan Nambiar and he'll tell you. The good man was off to Oxford soon after the launch of the centenary celebrations in Delhi — where he was seen in the company of another ex, Ajay Prasad — to give a lecture on PPP (public-private partnership). The Civil Aviation Ministry has been at the forefront of these ventures having undertaken landmark PPP ventures at Delhi and Mumbai airports (in fact, Prasad drove the entire process through Praful Patel).The present Secretary, Dr Zaidi, was the Joint Secretary who undertook the nuts and bolts operation of that entire process. By the time he is finished with the government, he would have enough material to add another PhD to the one he holds in Science!

BUZZ...ZZZ...NEWS..

Photo: H.C. Tiwari

www.businessworld.in

T

KING OF GOOD TIMES: Vijay Mallya enjoying a vacation in one of his yachts.

Cruise control in Sri Lanka For those of you who don’t know, here is a nugget. Vijay Mallya owns a 50 per cent stake in Deccan Lanka through Air Deccan, the company he bought from Captain Gopinath. In February, Mallya went to Sri Lanka to update himself on his business and take a quiet holiday with his wife and mother. Mallya and his family flew into Colombo on his personal jet, boarded the Indian Princess luxury yacht, said to be one of the largest private yachts in the world, and sailed to Galle where they spent three days before returning and flying out of Colombo.

Come late and be off-loaded Know Deepa Das Munshi? Well, she is a Congress MP and wife of former Union Minister and Congress leader, Priyaranjan Das Munshi. The lady was not allowed to board a Kingfisher flight to Delhi on February 20 for “arriving late”— a claim she vociferously denied. “Passengers are supposed to report for boarding 90 minutes prior to departure. In the case of VIPs, the time limit is 45 minutes. The flight was to depart at 8.55 pm. The MP arrived when the gates of the aircraft were being shut around 10 minutes prior to departure. That is why she could not be accommodated,” a Kingfisher official told The Telegraph. The MP got into an argument with the airline officials, who refused to accommodate her on the flight. They offered her a ticket on the flight to

Delhi the next morning but Deepa refused. “I will personally complain to my fellow MP Vijay Mallya (the owner of the airline) when I meet him in Parliament tomorrow,” she added. Now we wonder if indeed she complained to Mallya and what did the good man have to say to her. Two other MPs too got a taste of life when coming late after Air India flight IC-415 flew to Patna without taking them on board. Both the JD (U) MPs sat on a dharna at Terminal 3 at Delhi. The MPs, Sushil Kumar Singh and Kaushalendra Singh, were on dharna. The beauty is the duo, checked-in at the airline counter on time and took their boarding passes, but did not turn up at the Deepa Das Munshi boarding gate despite repeated announcements calling out to them, the sources said. The doors of the plane were closed 10 minutes before the scheduled departure time. “As the MPs, after checking in, did not turn up at the boarding gate, they were declared ‘gate no show’,” an AI spokesperson said. They travelled to Patna the next day.

Trump’s new toy Donald Trump will soon fly in extra comfort as he takes to the skies in his new Boeing 757 airplane. Trump

Madhavan Nambiar

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DO YOU HAVE BAGGAGE FOR SORTATION? www.vanderlande.com


Off the Record

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OFF THE RECORD

BYE BYE BAULDAF ow, how did a savvy man like Gustaf Bauldaf make such a fundamental mistake as that interview to the Indian Express? No one knows, but Bauldaf himself has been telling all (who would care to listen to him) that he was led up the garden path by the OSD to the Air India CMD, Captain Sandeep Marwah. Now the story, as recited by Bauldaf goes something like this: Sandeep, with whom he is hugely friendly, egged him on to talk tough so that the right message is sent to the government. And, it was the good captain who set up the interview with the Indian Express correspondent at the Safdarjung Airport office of Air India. “I spoke frankly and freely in the hope that the right message would be relayed, but instead I get the hard knocks,” Baudaf is believed to have told friends. He is most angry with Captain Marwah, the man who ‘fixed’ the interview. Insiders at the newspaper, though claim that the interview was done out of Mumbai. Maybe? But why is Bauldaf claiming it was out of Delhi?

N

Gustav Bauldaf

BUZZ...ZZZ...NEWS.. recently confirmed he had bought a 757, which he said is about twice the size of his other plane, a Boeing 727. Much as Trump declines to talk money, reports are that he bought the 757 for about $100 million from Microsoft’s co-founder Paul Allen. “I bought a great airplane,” Trump said simply. “It’s being retrofitted and will be in service in about a month.” It’s not yet known whether the plane is being tricked-out with the gold-plated features and sumptuous upholstery that Donald Trump adorn Trump’s 727. “It’s a big plane,” Trump acknowledged. “We’ll see what happens.” Trump did offer one detail about his new airplane: It’s quiet a gift to his parttime neighbours on the island. “It’s one of the quietest airplanes there is,” Trump said. “I did that for the benefit of Palm Beach.” As for the old 727, that plane has been for sale since 2009 with no takers thus far. The asking price back in 2009 was $8 million. But Trump’s airplane broker recently sent an email, saying the owner had purchased a “replacement aircraft” and that “all reasonable offers” would be considered for the 43-year-old plane. Aviation sources say the plane is old, guzzles gas and is loud, although Trump said he had the plane altered to comply with the highest stage of noise reduction. Trump said he might still keep the 727, which has gold-plated sinks, two conference tables, a master bedroom and seating for 24 passengers. Trump, a real estate tycoon and star of his own TV show, The Apprentice, says he’ll make a decision in June about whether to seek the Republican presidential nomination.

Goodbye Barbara BA’s only female Concorde pilot — a former hairdresser-turned-Captain was the first-ever woman to pilot the aircraft — Barbara Harmer passed away in late February. In 1992, Barbara was selected for Concorde training. Her first historic Concorde flight in 1993 qualified her as the first female pilot to fly Concorde, and made her world famous. Public scrutiny was intense, with Barbara

12

CRUISING HEIGHTS March 2011

becoming a celebrity. She took fame in her stride, and flew Concorde for a number of years. Barbara moved upwards to become a Captain on other aircraft in the BA fleet and retired as a skipper on the Boeing 777. However, it was in the air at 60,000 feet and at 1,350 mph that she felt most at home. She admitted that she was lucky and extremely privileged as there were very few Concorde crews. After all, not everyone gets to impress the “rich and famous” to the point of spontaneous applause. Actor Tom Cruise, himself a qualified pilot, didn’t restrain his appreciation as he sat with Barbara on the flight deck and watched her “grease” Concorde onto the ground at JFK.

Temperamental Faye And here is a lovely nugget from the New York Post where a flight attendant reveals how an airline crew took revenge on Faye Dunaway. The crackling Oscar-winning actress acclaimed for her riveting performances in Bonnie & Clyde and Chinatown, has long had a reputation for being a Hollywood diva with a temper to boot. But a flight attendant who dealt with Dunaway in the 90s has revealed Faye Dunaway that screaming and shouting won’t get you far. Talking to the New York Post, the stewardess revealed that such was Dunaway’s bad reputation within a particular US airline that in an unprecedented move (incidentally, the only time the stewardess had heard of this), the airline’s top management forbade anyone to give Dunaway an upgrade, whatever the circumstances. In one incident, the actress flew into a rage at JFK airport after repeatedly being refused an upgrade on a flight to London. According to the stewardess: “She was screaming at everyone and saying, ‘Don’t you know who I am?’ To wind her up even further, the crew sat Dunaway at the front of the coach section where it was obvious that the first-class section in front of her had plenty of spare seats. Apparently, the actress was so enraged by this that she refused to eat.”


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NEWS DIGEST

INFRASTRUCTURE

NEWS THIRUVANATHAPURAM GETS A NEW TERMINAL

LONG OVERDUE : Dr. Manmohan Singh addressing at the inauguration of the New International Terminal Building, at Trivandrum Airport, in Kerala.

The new international terminal of the Thiruvananthapuram Airport was recently inaugurated by Prime Minister Dr Manmohan Singh. The new terminal had been demanded by city residents for a long time. Following persistent demands from the State, the Airports Authority of India (AAI) prepared a master plan that envisaged a new international terminal, a domestic terminal, a new air traffic control station and a cargo complex. The State Government has so far acquired 30 acres of land, where the new international terminal has come up and it will have to acquire a further 80 acres where the new domestic terminal, air traffic control station and cargo complex would be set up. The Prime Minister had laid the foundation stone for the new international terminal on November 1, 2006. Constructed at a cost of Rs 290 crore, the terminal with state-of-the-art facilities, is spread over 32,200 square metres. The facility can handle 1,600 passengers at a time and has an annual capacity to handle 18 lakh passengers. It has 30 check-in counters with Common User Terminal Equipment (CUTE) facility for easy transit of passengers, 14 immigration counters, two Customs counters and four security check counters in departure. There are 12 immigration counters and nine Customs check counters for arriving passengers. The new terminal is nearer to the city by about four kilometres compared to the old one.

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JET SWINGS WITH ‘SWING INVENTORY’ et Airways seems to have perfected (Quarter three) Q3 (October-December the art of scaling to a full service 2010) figures. With the lean patch carrier and convert a part of its setting in from March 2011, domestic fleet overnight into a low-cost carrier. traffic may see a downside as is the Yes, we literally mean the case every year. The aircraft it flies moves problem this year may seamlessly from being full get accentuated by the service to LCC — back and fleet expansion plan of forth! When recession competing carriers in the gripped the Indian aviation domestic skies. sector in the second half of Using its quick 2008, Jet Airways, which had overnight conversion a low-cost arm JetLite, expertise, Jet Airways launched Jet Konnect in May has decided to convert 2009 as yet another version one-third or 33 per cent Naresh Goyal of a no-frills carrier. of its full service flights When the economy into economy once again began to do well, it added a few or to be which would mean replacement of its precise eight premium-class seats in Jet business-class seats by economy seats. Konnect flights in order to differentiate This may give the airline an additional between a normal no-frills economy- 25 per cent seats though the yield per class and business-class seats. By aircraft could come down by nearly 12 September 2010, when the uptrend in per cent. domestic traffic became a fact, Jet Since the cost of looking after Airways reconverted most of Jet economy passengers is cheaper than Konnect flights into full service. business class, and based on higher This paid the airline rich dividends load factors Jet expects to maintain its — evident from not just traffic data but revenue stream. Incidentally, this also the bottom line as evident from its quarter, which extends to the next fiscal (from March to May or even part of June each year), usually sees air travellers opting for low-cost carriers or low fares. Jet Airways COO Sudheer Raghavan described the conversion of the twin-class plane into a singleeconomy class as ‘swing inventory’. Jet Airways had removed those economy class seats from its aircraft and replaced them with business-class seats, which are wider and with a much wider seat pitch. Aircraft manufacturers tell us that it takes approximately eight hours for Jet Airways to reconfigure its full service business-class seats in a Boeing 737-800 into economy-class seats, which it will do overnight without disrupting its flight schedule during the day. In terms of financial performance, Jet Airways’ net profits during Q3 rose by 11.7 per cent to `118 crore compared to Q3 a year ago. Jet benefitted from the 15 per cent-plus growth in passenger growth and also conversion of its low-cost carrier into full service and rupee denominated Sudheer Raghavan debt to dollar denomination. During

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AVIATION EXPO TO SHOWCASE BUSINESS OPPORTUNITIES The third International Exhibition for Airport Technology, Equipment and Services for the Indian aviation industry is slated to begin on March 8, 2011 at the Bombay Exhibition Centre, Goregaon. The two-day show will bring together many of the world’s leading suppliers of airport equipment, technology and services to India, the ninth largest aviation market in the world. The Indian market exudes tremendous opportunities for businesses that assist in building and maintaining aviation infrastructure. While the AAI (Airports Authority of India) is set to spend more than US$ 1.02 billion towards modernisation of non-metro airports in the years to come, it is also planning a city-side development of 24 airports across the country. Additionally 11 new green-field airports have been identified to reduce passenger loads on existing airports. All these developments have presented an opportunity to private players to showcase their products and benefit from the business opportunities offered by the Indian airport infrastructure. Inter Airport India 2011, will be inaugurated with an address by Ajay Prasad, Chairman Inter Airport Advisory Council and Former Secretary, Ministry of Civil Aviation, Government of India. The organizers of event has also invited members from the Ministry of Civil Aviation as well as the AAI Apart from the high-tech products and services that will be displayed, the exhibition will focus on several hardhitting issues that the aviation industry is confronting in the form of panel discussions addressed by the who’s who of the industry. The event also presents a unique proposition for networking with industry professionals. Among the discussions that have been slated are those on multiple runways at the airports, planning for multi airport systems, developing airport hubs in India, developing Greenfield airports, role of private players, the impact of technology on “greening” airport environment and air side safety. There will be a number of products and services on display among which will be ground support equipment, aircraft maintenance equipment, aircraft refuelling equipment, IT & Communication Equipment, and much more.

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Q3 2010, year-on-year basis, its revenues rose by 20 per cent to `3515 crore. Revenue during Q3 2009 was `2936 crore. By December 2010, Jet had converted debt of about `2000 crore out of its total debt of `13000 crore into dollar denomination. This helped it save 5 per cent in interest cost. The savings as a result is estimated at `130 crore per annum. In the quarter ending December 2010, domestic operations increased by 6.3 per cent and yields by 16 per cent. EBIDTAR (earnings before interest, taxes, depreciation, and amortisation) a variable for operational performance rose by 17.4 per cent year-on-year to `851 crore. While its domestic operations rose by 21 per cent, that of its international operations increased by 27 per cent. However it was on domestic operations that Jet registered higher revenues, yields, etc. This was evident from the rise in fuel cost which stood at `1096 crore as compared to `887 crore in Q3 2009 — an increase of 24 per cent. The rise in fuel cost was on account of both dearer fuel cost and increased consumption due to increase in flight operations. Of the 24 per cent increase in fuel expenses incurred by the carrier, 12 per cent was due to increase in aircraft flying hours and 12 per cent due to cost of fuel itself. As for managing its debt, Jet Airways has applied for equity dilution with the Government and informed that promoter equity (read Naresh Goyal) should not be included as part of FDI in the carrier. Jet Airways has a fleet of 97 aircraft which connects 47 domestic and 24 international destinations each day. In the next five years it plans to increase its fleet to 142 aircraft. It proposes to induct 49 aircraft during this period. To cash in on international traffic, Jet has decided to replace its A330 aircraft on medium and long-haul

CRUISING HEIGHTS March 2011

routes like Mumbai-Hong Kong, Delhi-New York, Mumbai-New York with bigger Boeing 777-300 ERs. As an immediate measure it is also leasing Boeing 737-800s for use in domestic sector. Jet Airways had leased its three Boeing 777s to Turkish Airlines. This lease expires in October 2011 and these aircraft will replace the A 330s on the route mentioned above. Jet Airways is looking to expand its network in several European cities. The airline also wants to launch direct non-stop service between India and US, which could be either from Delhi or Mumbai to New York. The airline has applied to the Ministry of Civil Aviation seeking permission to start direct non-stop India-US service. Jet has already got temporary permission to fly Delhi-Milan. But Jet is keen to join Alitalia’s network within Italy, which will also enable it to connect other European cities from Italian cities. Its request, however, is pending renewal of the Air Services Agreement (ASA) between India and Italy. Once the ASA is sealed, Jet would like to fly daily to Rome from New Delhi and then use Italy as a base to connect other European cities. At present, Jet uses Brussels as its European Hub. The airline has also got approval from the government to start New Delhi-Amsterdam service from the winter schedule of 2011. Overall, in Q3 2010, the airlines’ domestic load factor was 77 per cent and its international leg had load factors as high as 86 per cent. Taking the nine months of April-December 2010, Jet clocked loads of 76 per cent in the domestic sector and 80 per cent in the international sectors. It hopes to maintain the same load factors in the current quarter January to March 2011 which incidentally is the fourth quarter or Q4 ending fiscal 2010-11.


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REGIONAL AVIATION SECURITY CONFERENCE HELD The Civil Aviation Ministry recently hosted a Regional Aviation Security Conference at Delhi. The conference was attended by delegates from Afghanistan, Bangladesh, Bhutan, India, Malaysia, Maldives, Mauritius, Nepal, Pakistan, Saudi Arabia, Singapore, Sri Lanka, United Arab Emirates (UAE), Thailand and also by representatives of International organizations, ICAO, IATA, ACI, European Union, Australia, Transport Security Administration (USA) and United Kingdom. Raymond Benjamin, Secretary General, International Civil Aviation Organisation, attended the conference along with John S Pistole, Administrator, TSA, and Turki Bin Faisal Al Saud of Saudi Arabia. Addressing the inaugural session of the conference, Union Civil Aviation Minister Vayalar Ravi expressed solidarity with the ICAO resolution and also assured to extend technical cooperation to neighbouring countries in enhancing security standards. He also highlighted that aviation security had been identified by ICAO as one of the three major strategic objectives. He said that India had “noted that during recent times ICAO is instituting organisational reforms to increase its effectiveness and efficiency to enable the organisation to face new challenges of technological, economic, social and legal nature. Member States of ICAO have greatly benefitted from the modernised aviation security standards laid by ICAO which are audited and enforced across the globe. Through audits and technical assistance, ICAO has provided a basic platform to build a robust aviation security framework. We wholeheartedly welcome these measures and commit to extend necessary support to ICAO in implementing these reforms.”

SETTING THE AGENDA: The Union Minister for Overseas Indian Affairs and Civil Aviation, Vayalar Ravi lighting the lamp to inaugurate the Regional Aviation Security Conference, in New Delhi.

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A MIXED BAG FOR THE KING OF GOOD TIMES

RAISING THE BAR: Kingfisher head Vijay Mallya taking feedback from passenger inside Kingfisher plane.

ingfisher Airlines can have the psychological satisfaction of retaining the number two slot in the domestic market after Jet Airways and its low-cost arm JetLite. While in January 2011, the total domestic air traffic rose to 4.93 million compared to 4.08 million in January 2010, the lowcost carriers — SpiceJet, IndiGo and Go Air — ate into the market share of full-service carriers Jet Airways, Kingfisher Airlines and Air India (domestic) compared to what it was a year ago. In the case of Jet, it came down to 24.8 from 25.2 per cent and for Kingfisher Airlines it was down to 19.5 per cent from 22.2 per cent. Air India remained a losing proposition with its market share dropping to 15.8 per cent compared to 18 per cent in January 2010. IndiGo saw its market share again jumping to third position with 19.2 per cent from 15.3 per cent a year ago while that of SpiceJet rose to 14.3 per cent from 12.2 per cent. These figures show that while Jet Airways along with JetLite saw a 0.4 per cent fall in its market share year-onyear (that is January 2011 over January 2010), the drop in the case of Air India was 2.2 per cent. However, the biggest drop was in the case of Kingfisher from 22.2 per cent in January 2010 to 19.5 per cent in January 2011 or a fall of 2.7 per cent. While such a drop in market share and hence passenger numbers

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CRUISING HEIGHTS March 2011

must be a cause for concern to the fullservice carriers, the fall would hurt even more Kingfisher Airlines considering that its 14 A320s are still on the ground. In all probability, a few of them could be air-borne by end-March 2011. But that will be a time when the domestic air traffic market is skewed largely in favour of really lowfare carriers, if not low cost. What could further cause for concern for Kingfisher Airlines are the prospects of declining yields as the next four months beginning March are usually a time when fares have to go down to fill up planes. It was in this context that we had mentioned Jet Airways strategy to increase the share of low-cost or lowfare economy seats in its fleet. As far as Kingfisher Airlines is concerned, its problem could get accentuated further because even as it is, the share of lowcost or low-fare arm in its fleet is as high as 62 per cent and is set to rise. Maybe Vijay Mallya, promoter of Kingfisher Airlines, has understood the monetary pains of offering world-class product in India where people are literally looking for value for money and reliable connections based on good on-time performance that IndiGo has managed so far to provide. As on January 2011, Kingfisher Airlines had a fleet of 66 aircraft comprising A 319 (3); A 320 (23); A 321 (8); A 330-200 (5) and ATR-72 (27).


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ß NEWS GLOBAL

CHINA TO HAVE MORE THAN 220 AIRPORTS BY 2015

China will add more than 45 airports over the next five years, bringing the total to more than 220, the country’s aviation regulator said. The government will invest 1.5 trillion yuan ($A227 billion) in the aviation sector in the period to 2015, according to a statement from the Civil Aviation Administration of China. Air travel is developing rapidly in China amid a booming economy. China is in the midst of a major airport expansion, planning four major hubs in the country and developing aviation links to its poorer and more remote regions in the far west.

ROLLS-ROYCE CONTRACT WITH EMIRATES

Rolls-Royce has sealed a US$2.2 billion engine servicing contract with Emirates Airline, its second deal in three months with the Dubai carrier. The work will cover Rolls-Royce engines on Emirates’ entire fleet of 70 Airbus A350 aircraft due for delivery later this decade, and comes as manufacturers increasingly look to after-market sales and maintenance support to increase revenues. It will also provide a boost to RR after its civil aerospace division reported a 20 per cent fall in profits for last year, in part due to last November’s Trent 900 engine failure on a Qantas Airways Airbus A380.This contract brings the airline’s entire Rolls-Royce powered fleet of 128 aircraft under TotalCare arrangements, Emirates said. The new contract for A350 engines comes months after RollsRoyce won a $1.2bn contract with

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During Q3 (October-December) 2010, Kingfisher registered a sales turnover of `1658 crore and a net loss of `253 crore as compared to Q3 2009 when it registered a turnover of `1352 crore, and a net loss of `419 crore. Year-onyear basis, while its capacity deployed came down, the number of passengers it flew, rose. But purely in terms of operational parameters, Kingfisher made operational profits in Q3 2010. However, taking all the three quarters so far (April-December) in the current fiscal 2010-11, its net loss yearon-year basis came down by 37 per cent to `671.88 crore compared to `1076 crore in the first three quarters of previous fiscal 2009-10. Even though its losses were coming down, it needs to be pointed out here that Q3 2010 was the sixteenth quarter when the airline was making losses. This very well illustrates the uphill battle Mallya is facing. For instance, in Q3 2010, its interest outgo rose by 23.63 per cent to `339 crore and ATF prices rose by 21 per cent to `540 crore. In the last 18 months, interest payments eroded 21 per cent of its revenues — compared to 10 per cent for SpiceJet. But ATF price was equal for all carriers and, hence, cannot be taken as a special factor for Kingfisher alone. Mallya, who never misses to tell the

passengers on board that they are his guests, has now decided that the meals served so far free on board, in his lowcost option Kingfisher Red, must be paid for. The comment we had made earlier in this story that Indian travellers typically look for value for money is something even Mallya feels is the right choice. The continued grounding of 14 aircraft is likely to have caused Kingfisher a loss of `80 crore during Q3 2010 alone. Meanwhile, Kingfisher Airlines corporate debt restructuring has been approved by RBI and banks concerned and a master debt recast agreement was signed at the end of December 2010. Its debt was `7000 crore. Consequent to that, the consortium of banks have agreed to convert 30 per cent of their outstanding loans into either equity or preference shares and accordingly share capital was issued to those banks. The other component of the debt recast related to moratorium and extension of repayment schedule. There is a complete moratorium for two years that is till end 2012 after which there is a seven-year ballooning repayment where in year three and four the repayments are only five per cent of the outstanding. The third component of the debt restructuring was the cut in average interest rate from 14 per cent to 11 per cent.

BIG TIE-UP: British Airways CEO Willie Walsh announcing partnership with Kingfisher Airlines.

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If all these are combined with 30 per cent reduction in principal, Kingfisher Airlines could expect over 40 per cent reduction in interest liability over the coming years. The main promoter company, UB Holdings, has converted its loans totaling `735 crore into equity as part of the CDR and has also given guarantee to the bankers. However, his other plan to raise US $350 million dollars through the GDR route seems to have got stuck because of the serious fall in the share price of Kingfisher Airlines. Earlier, he had planned to raise the GDR in March 2011 but with the share price approaching below `40 by the end of February 2011, this seems a difficult probability. The offer price of GDR is determined on the last two weeks average ruling price. Though falling airline scrip values is not unique to Kingfisher (Jet and SpiceJet have also nosedived), it is just that Mallya is the most keen to raise money through this route. Should the offer price be lower than the last two weeks average it would mean buying loss by the subscribers of GDR? It is becoming imperative for the management to breathe financial discipline into the airline. Mallya is now being forced to abandon his high thinking — high living attitude, at least as far as his airline offerings are concerned. Earlier, his dream was to buy A 380 and A 350 to fly to every conceivable part of the world. Now, it is certain that Kingfisher Airlines may cancel its orders placed for acquiring A 380s and A 350s or possibly swap them for A 320s and A 330s.

According to Kingfisher CEO Sanjay Aggarwal, the super jumbo and the A 350 purchase plan was under review. With Kingfisher planning to join OneWorld Alliance with British Airways as lead partner by end 2011, Mallya’s carrier does not need ultralong-haul aircraft any more. While it ordered the purchase of 5 A 380s, in 2006-07, it deferred the deliveries from 2011 to 2014 and now it appears that the deal will be cancelled and replaced by deliveries of A 320s and possibly A 330s. In fiscal 2011-12, Kingfisher is planning to take on lease nine aircraft, which include six A 320s, two A 330s and one ATR 72. This is besides the 14 aircraft grounded due to problems with their IAE engines. These are being progressively repaired and should be available for commercial operations from March 2011 onwards. Its leased aircraft will, in all probability, join from October 2011 coinciding with the winter schedule and also the airline joining OneWorld. It seems certain now that Mallya’s desire of flying to every part of the world will not happen. Sanjay Aggarwal, the other day, was heard saying that the airline will focus more on increasing its domestic presence and OneWorld Alliance will help do that both in terms of passengers going out of India and those coming into India. The question is with a 2.7 per cent fall in its domestic market share during January 2011 and still continuing, how far will it go on increasing the low-fare segment in its overall full service offering in the Kingfisher brand?

Sanjay Aggarwal

CRUISING HEIGHTS March 2011

Emirates, for Trent 700 engines powering 27 Airbus A330s and Trent 800 engines powering 21 Boeing 777s. EasyJet shareholders revolt over directors’ pay EasyJet shareholders refused to endorse directors’ pay, including the remuneration of former Chief Executive Andy Harrison, marking the latest round in an ongoing battle between easyJet founder Stelios HajiIoannou and the budget airline. At easyJet’s annual general meeting, at least two institutional shareholders sided with Haji-Ioannou, who has previously voiced his grievances about the pay package awarded to former CEO Harrison, and the vote to endorse executive remuneration was rejected by a majority of 51.5 per cent. Harrison was to get a payout in excess of a million pounds through consultancy, bonus, etc. The failure to endorse directors’ remuneration has no practical consequence, but signals the level of dissatisfaction many shareholders have over the company’s payout to directors last year. Haji-Ioannou described Harrison’s pay as “deplorable”. “The Board of easyJet acknowledges the concern expressed by some at the retention arrangements made in respect of Andy Harrison,” easyJet’s chairman Michael Rake said. “These arrangements were a one-off and agreed in unusual and difficult circumstances. Referring to Harrison’s remuneration, Haji-Ioannou said in a letter to Rake published on easyGroup Holdings Ltd’s website: “I was not consulted on this package, either as a director or as a shareholder,as is customary with major shareholders.” In an email to Dow Jones Newswires, Haji-Ioannou said the word ‘consulted’ is “the euphemism used by the old boys network in the city when obtaining approval from major shareholders in advance of a pay

Michael Rake

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deal to avoid the embarrassment of the public vote.”

NO A380 AS YET

ATR: NO 90 SEATER ATR has ruled out a decision this year on whether to pursue an enlarged, 90seat version of its regional turboprop family. The manufacturer’s main focus in 2011 is certification and delivery of its modernised 72-600 variant, Chief Executive Filippo Bagnato told Flight Global. While no US customers were included in ATR’s 80 orders for 2010, the manufacturer believes market forces in North America are strengthening its case, particularly against regional jets. Operators “can’t make money with a 50seat jet” on routes shorter than 350nm,

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says Bagnato. He adds that the two-class configuration and forward passenger door option on the ATR 72-600 are “what we’ve done first to be prepared for the North American market — it is the main driver of this new configuration”.

JAL: BYE BYE 747 The world’s largest 747 operator, Japan Airlines (JAL) has completed its final two flights with the jumbo — from Honolulu to Narita and Okinawa to Narita. During a span of 41 years, JAL was the largest Boeing 747 operator, which the oneWorld member operated with more than 100 aircraft.

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CRUISING HEIGHTS March 2011

frequencies to fly into and out of India — be it the Gulf carriers or European — their demand for bringing the A 380 has been consistently resisted. To say that it is because it will finish Air India is simply unacceptable as it is being finished even otherwise without the Super or the Jumbo. Maybe it will finish the private Indian carriers foreign forays is very much possible. The latest to seek permission was Air France that wanted to bring in its A 380 but its discussions with the officials in the Ministry of Civil Aviation evoked no response. With rising traffic from India to various parts of the world, Air FranceKLM, Europe’s largest carrier, has planned big for India operations over the

Vayalar Ravi

H.C. Tiwari

ill the A 380 fly into India or not? That is a big question, which will remain unanswered at least during the tenure of the new Civil Aviation Minister Vayalar Ravi, who obviously cannot be expected to enter an area where even his famous predecessor and completely pro-active Praful Patel feared to tread. From every dimension that one looks at the management versus workers issues, Ravi is certainly and ideologically far removed from his predecessor and since Patel saw any move to allow foreign carriers to fly in A 380 on commercial flights into India as a serious danger, how can we expect the trade union-friendly Vayalar Ravi to agree? True, the A 380 flew into India on two occasions. Once in the heady days of Indian aviation and also his own, Vijay Mallya, promoter of Kingfisher Airlines, summoned an A 380 and flew scribes, babus and others on a joy ride from Delhi to Mumbai. It was to show what he could do with A 380. There were also some suggestions that the traffic between Delhi and Mumbai was huge as evident from it being the world’s fifth most dense route that even a Jumbo — if not the Super Jumbo — will fit the size. Mallya only wanted a Super before a Jumbo. Again in March 2010, on the occasion of India Aviation in Hyderabad, an A380 flew in from France and landed majestically at the now not-for-commercial-use Begumpet airport. The important visitors at the show got a chance to see the plane landing and its insides on a conducted tour. With air traffic again picking up and with foreign carriers getting so many


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IATA

NEWS TRAFFIC UP, BUT BUMPS AHEAD

The International Air Transport Association (IATA) has announced international scheduled traffic results for January showing an 8.2 per cent increase in passenger traffic and 9.1 per cent growth in air freight compared to January 2010. “We begin the year with some good news. January traffic volumes are up — 8.2 per cent on January 2010 and 2.6 per cent on December. With most major indices pointing to strengthening world trade and economic growth, this is positive for the industry’s prospects. But we are all watching closely as events unfold in the Middle East. The region’s instability has sent oil prices skyrocketing. Our current forecast is based on an average annual oil price of $84 per barrel (Brent). Today, the price is over $100. For each dollar it increases, the industry is challenged to recover $1.6 billion in additional costs. With $598 billion in revenues, $9.1 billion in profits and a profit margin of just 1.5 per cent, even with good news on traffic 2011 is starting out as a very challenging year for airlines,” said Giovanni Bisignani, IATA’s Director General and CEO. By January 2011, air travel volumes were 18 per cent higher compared to the low point reached in early 2009 and some eight per cent above the prerecession peak of early 2008. Air freight in January was 39 per cent above the low point reached at the end of 2009 and some six per cent above the prerecession peak of early 2008. Freight has, however, fallen two per cent since its May 2010 peak at the height of the re-stocking bubble. “As if the rising price of oil was not challenging enough, governments are increasing the cost of mobility with a growing contagion of taxes. In 2010 the industry was hit with billions of dollars of new or increased taxes in the UK, Austria and Germany. Now we see South Africa and Iceland planning increases. Governments need to improve their finances and restart their economies. Mobility is a catalyst for

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next two years. Air France-KLM, which scrapped flights from Chennai and Hyderabad at the height of the global economic recession in 2008-09, now wants to upgrade its presence in high traffic density routes to Europe from Delhi, Mumbai and Bengaluru to its hubs in Paris and Amsterdam. It is currently using Airbus A 330 and A 340, which it wants to replace soon with bigger Boeing 777 (remember even Jet Airways wants to do that from India). Eventually, Air France-KLM wants to deploy its A 380 on this route that will enable it to suck at one go 555 passengers out of an Indian city like Delhi or Mumbai and transfer them to its two hubs for onward worldwide distribution. Even before this combine broached the subject of bringing in the A 380, Lufthansa discussed the possibility of flying in an A 380 to various Indian cities early last year. It may be recalled that Lufthansa as a virtual lead partner of Star Alliance went an extra mile to get Air India inducted as a member of the alliance. On any day, any passenger by Lufthansa will tell you that all its flights from Frankfurt to Delhi and Mumbai (Boeing 747 Jumbo) goes full and so does the reverse flights as well. But Lufthansa’s request was still being looked into. And even before Lufthansa made attempts, it was Emirates which has placed the largest order for A 380s with Airbus Industrie, that explored the possibility of flying into India A 380. Incidentally, it has nearly 190 flight frequencies to India each week and an Air Services Agreement to fly 52000 passengers each week. Through its hub in Dubai it is flying thousands of Indians to the US and Europe. It is now only a question of time before other Gulf or Middle Eastern carriers like Etihad and Qatar may seek approval to bring in their A 380s to India to ferry them across the world. Just imagine for a moment that should an A 380 each from the above-mentioned airlines — Emirates, Lufthansa, Air France-KLM, Qatar and Etihad besides, of course, Singapore Airlines — were to connect India with their home hubs for onward connection, what will happen to Indian carriers like Air India, Jet Airways, Kingfisher and new entrants, SpiceJet and IndiGo. It seems instead of Air India objecting, these other private carriers will lobby against the invasion by the A 380. The Ministry of Civil Aviation officials told us that the entry of A 380 cannot be prevented for all times and it is bound to CRUISING HEIGHTS March 2011

enter India in about a year or two. Even within India, there is lobbying from airport operators, mainly the private ones, and, perhaps, soon from state-owned Airports Authority of India as well to seek the entry of A 380 as it will mean higher landing and parking charges as these are determined by the weight and space. But the resistance being seen in India against the entry of the biggest bird from resident Indian carriers is no different from foreign carriers in other parts of the world. As the global economy revived even the mighty mega carriers of the west expressed serious concern at the huge pace at which the Gulf and Middle Eastern carriers were acquiring aircraft and transporting passengers across the globe even as the domestic population was nowhere near the size of the passenger traffic they were handling. Recently, Canada refused permission to Emirates to mount additional flights to Montreal and Toronto as these were important traffic points for Indians both in terms of arrivals and departures. In other words, Canada wanted to protect this important corridor for its own carriers. It is not for nothing that Air Canada entered into a code sharing agreement with Jet Airways to connect its passengers from London to India till such time that it begins taking delivery of the much-delayed Dreamliner Boeing 787. With the advent of A 380s in about a year or two, should the foreign carriers successfully mount pressure on the Indian government, then it could mean a world of difference to flying Indians. But that also has its flip side. If the ASA does not get amended, then these foreign carriers will be forced to fit the existing rights to the size of A 380 and in that event there is every possibility that the frequency that is being offered now may be disturbed. If such a disturbance happens, then it would mean lesser business and also lesser air traffic and navigation charges unless the charges are jacked up sharply.


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economic growth. Governments must understand that taxing air transport out of the range of price sensitive travellers and businesses makes very little economic sense,” said Bisignani. IATA’s forecast for 2011 was made in December 2010 and anticipates an industry profit of $9.1 billion or a 1.5 per cent net profit margin on $598 billion in revenues. This is based on an average annual oil price of $84 per barrel, a demand increase of 5.3 percent, flat cargo yields and a 0.5 percent increase in passenger yields. IATA will revise this forecast in the beginning of March.

LOWEST ACCIDENT RATE EVER The 2010 global accident rate (measured in hull losses per million flights of Western-built jet aircraft) was 0.61. That is equal to one accident for every 1.6 million flights. This is a significant improvement of the 0.71 rate recorded in 2009 (one accident for 1.4 million flights). The 2010 rate was the lowest in aviation history, just below the 2006 rate of 0.65. Compared to 10 years ago, the accident rate has been cut 42 per cent from the rate recorded in 2001. A hull loss is an accident in which the aircraft is destroyed or substantially damaged and is not subsequently repaired. “Safety is the number one priority. Achieving the lowest accident rate in the history of aviation shows that this commitment is bearing results. Flying is safe. But every fatality is a human tragedy that reminds us of the ultimate goal of zero accidents and zero fatalities.

We must remain focussed and determined to move closer to this goal year-by-year,” said Giovanni Bisignani, IATA’s Director General and CEO. In absolute numbers, 2010 saw the following results:2.4 billion people flew safely on 36.8 million flights (28.4 million jet, 8.4 million turboprop); 17 hull loss accidents involving westernbuilt jet aircraft compared to 19 in 2009;

26

y end-March 2011, Kalanithi Maran’s acquisition of SpiceJet would be nearly nine months old, though officially it is much shorter. His occupying the decisive cockpit of SpiceJet airlines clearly conveyed the message that: there shall be no confusion as to who is the boss and how the airline should be run. This was in sharp contrast to the total indecisiveness that marked the previous management. Both in its earlier avatar as Modiluft and subsequently re-branded as SpiceJet, it had too many cooks who spoiled the show. Otherwise, there was no reason for the second LCC of India (first was Captain Gopinath’s Air Deccan, which was swallowed by Kingfisher Airlines promoter Vijay Mallya, who has been suffering from indigestion since then) SpiceJet to have been left behind in the air race by the third LCC and leader IndiGo. The CEO of Spice and old Flydubai hand Neil Raymond Mills and the airline’s CCO Samyukt Sridharan have voiced the same views to the media at different places. Mills said SpiceJet would benefit from a clear direction that is being given by Kalanithi Maran who holds nearly 39 per cent stake in the LCC. Samyukt Sridharan told newsmen during a conference on LCCs in

B

Singapore that there was a clear management direction now, which was missing earlier. Obviously, Sridharan should know about it as he was a witness to many of the management upheavals during the pre-Maran days. Things began to drift especially after WL Ross invested and his men got into both the board and the management (CEO) cockpits. It seemed like they were keen to protect his investment, which unfortunately came when the aviation industry worldwide plunged into a serious crisis following the global economic slowdown and sky-rocketing crude oil prices. This took away more than two years of Ross’s post-investment dreams and also those of other investors including the original promoter Bulo Kansagra. All the old occupants of the Board including Ross representatives, Ajay Singh and Kansagra are out. There is a brand new team which is headed by Maran and his wife, Kavery, on his side. The one old face, if one could say that, is Samyukt Sridharan who obviously is the man who knows too much and more. We are told that during the preMaran days, very often Board meetings would witness situations where certain representatives would find themselves losing their voice despite being present in the meeting. Now, all of that is behind

THE MARAN MANTRA FOR SPICEJET

Neil Raymond Mills

CRUISING HEIGHTS March 2011


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and Maran is sincerely believing that the time has come for him to compete directly with the perceived LCC leader in India: Rahul Bhatia’s IndiGo. In any case, as for other full service carriers, be it Jet Airways, Kingfisher Airlines and Air India, their debt servicing is certainly taking away much of the management’s time. In that context, the statement of Neil Mills that SpiceJet being a debt-free company had numerous advantages. Obviously, this has manifested itself in the quick decision, like placing orders for 30 Boeing 737-800s and 30 Bombarider Q 400 (15 firm and 15 options) all worth nearly $ 3.5 billion in list prices. If one may recall, just two years ago, the then SpiceJet CEO Sanjay Agarwal (who has since moved over to Kingfisher Airlines) had been publicly stating that SpiceJet was keen to expand but was evaluating if it should go in for either a Boeing or an Airbus fleet. If we are to believe our sources, he even circulated a request for proposals suggesting that Spice would be acquiring nearly 80 narrowbody aircraft. In between, he said SpiceJet was keen to acquire another LCC and that time rumours were floating that he would take over GoAir even though Wadia, its promoter, was not keen to sell it. All that is the past, as the new management has begun to write Spicejet’s history afresh. Financially speaking, during the third quarter of the current fiscal 2010-11 ( that is from October-December 2010 or Q3 2010), SpiceJet recorded a turnover of `830 crore as against `642 crore in Q3 2009 and `640 crore in Q2 2010. But its net profit for Q3 2010 was down at `94.45 crore compared to Q3 2009 net profit of `108 crore. This was due to a tax liability (Minimum Alternate Tax or MAT) of `23.51 crore. This was notwithstanding the fact that the airline flew 33 per cent more passengers during Q3 2010 compared to Q3 of 2009. The airline, during the last quarter, also recorded load factors of 87.8 per cent clearly implying that domestic air travellers were clearly wanting value for money. At the beginning of 2011, SpiceJet had 25 Boeing 737800s/900 ERs in its fleet ,which is likely to increase to 32 by the end of the year. During the current calendar year, it will receive four more B737-800s, which will complete the order for 30 such aircraft placed before the launch of SpiceJet as an LCC in August 2005. So, what happens its old orders are completed? Yes, that is where Maran is now driving his officials to prepare for: a big expansion. While it is well known

that he placed orders for 30 Boeing 737800s (all firm) and 30 Q400s or Bombardier (15 firm and 15 options), what is not generally well known is the leasing plan of Maran. SpiceJet has already tied up leases for 7 Boeing 737800s due for delivery in 2012 and another 8 Boeing 737-800s for delivery in 2013. So when 2014 dawns, his order for 30 brand new Boeing 737-800s announced during the visit of US President Barack Obama will begin to happen as deliveries will run from 2014 through 2019. What we have been hearing is that Maran is getting ready to place another mega order for at least 50 Boeing 737800s as he feels he will be able to beat his competitors in their own game. Speculators tell us that the lease market in the last year or so has become tight and lease rentals have shot through the roof. Air India’s attempts, for instance, to get A 330s could not materialise on time as no plane was available. Even in the case of Boeing 737-800s being leased by SpiceJet it was something that Naresh Goyal’s Jet Airways had been eyeing but Maran beat Goyal in his own game. As for his plans to start regional services, the delivery of Bombardier Q400s is scheduled to begin in June 2011 and by June 2012 the airline will receive 15 Q 400s. As part of the contract with Canadian firm Bombardier, SpiceJet will have to inform the manufacturer if it will convert its options of 15 Q 400s into a firm order within five months of the first batch of three or four QA 400s that will begin to fly in by June 2011. As per plans, SpiceJet proposes to deploy at least 10 of the regional aircraft in the South Indian market with Chennai probably as the base. The remaining five will be used for East and North Indian operations with bases there as well. The regional routes SpiceJet proposes to fly will be between metros and non-metros and also between two neo-metros. The airline is keenly watching the upgrade of AAI’s 35 nonmetro airports in the country. According to official statistics, traffic from nonmetros is expected to rise to 45 per cent in less than a decade from the present 30 per cent. The 15 per cent jump over 10 years may seem slow but what needs to be factored in is the even faster growth in the six metros.What Samyukt Sridharan said puts it in perspective: “By 2013, SpiceJet will have a fleet of 72 aircraft and operate 500 flights a day.” This is what Jet Airways flies each day. CRUISING HEIGHTS March 2011

94 accidents (all aircraft types, Eastern and Western built) compared to 90 in 2009; 23 fatal accidents (all aircraft types) compared to 18 in 2009; and, 786 fatalities compared to 685 in 2009; IATA member airlines outperformed the industry average with a Western-built jet hull loss rate of 0.25. That rate is equal to one accident for every four million flights. The IATA Operational Safety Audit (IOSA) became a condition of IATA membership from April 1, 2009. All 234 IATA member airlines are now on the IOSA registry. The IOSA registry is open to all airlines and it currently consists of over 350 airlines. “The numbers tell the story. In the first full year after the IOSA became a condition of IATA membership, the accident rate for IATA carriers has never been so low. The data confirms that IOSA is helping to drive safety improvements around the world.” said Bisignani.

VISION 2050 A total of 35 global strategic thinkers associated with the air transport industry gathered in Singapore for IATA’s Vision 2050 initiative on 11-12 February. The initiative was launched at IATA’s Annual General Meeting (AGM) in Berlin, Germany, last June. After a decade dominated by crises, Vision 2050 will use the window of opportunity provided by two consecutive years of industry profitability (albeit weak) to look ahead to where the air transport industry should be in four decades and discuss near term objectives to achieve the vision. The 35 participants benefitted from the inspirational leadership of Singapore’s Minister Mentor Lee Kuan Yew and the competitive expertise of Harvard University’s Professor Michael Porter. The Vision 2050 results will be reported to IATA’s next AGM in June 2011. “Aviation is a unique industry. In 2011 we expect to generate almost $600 billion in revenues with the burden of $205 billion in debt. The industry’s activity is critical. Aviation supports 32 million jobs and facilitates the global village by supporting $3.5 trillion in economic activity. Our commitments to tackle climate change are the most ambitious of any global industry. And we are the safest mode of transport. But our margins are pathetic — just 0.1 per cent over the last 40 years. This is not sustainable,” said Giovanni Bisignani, IATA’s Director General and CEO.

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The right stuff, all the time, on time

Welcome to Cruising Heights C RUISING H EIGHTS has been part of the Indian aviation scene for many years now. In this period, we have established a name for quality reporting and analysis on issues relating to every aspect of the aviation business. One of the first true aviation magazines of the country, C RUISING H EIGHTS was started with the idea of supporting professionals in the airline business to make informed choices on a variety of subjects—from ground handling to cargo to airport development—all of which are transforming the Indian aviation scene in mind-boggling ways. We also target the general reader—the educated Indian who is keen to be an informed Indian—to know what's happening in the aviation business. Published twelve times a year, C RUISING H EIGHTS reports in depth on all facets of the aviation and aerospace environment in the country and also as events affect us from overseas. Dedicated news and regular feature sections in each issue on airlines, airports, policy and personalities.



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The right stuff, all the time, on time

Welcome to Cruising Heights C RUISING H EIGHTS has been part of the Indian aviation scene for many years now. In this period, we have established a name for quality reporting and analysis on issues relating to every aspect of the aviation business. One of the first true aviation magazines of the country, C RUISING H EIGHTS was started with the idea of supporting professionals in the airline business to make informed choices on a variety of subjects—from ground handling to cargo to airport development—all of which are transforming the Indian aviation scene in mind-boggling ways. We also target the general reader—the educated Indian who is keen to be an informed Indian—to know what's happening in the aviation business. Published twelve times a year, C RUISING H EIGHTS reports in depth on all facets of the aviation and aerospace environment in the country and also as events affect us from overseas. Dedicated news and regular feature sections in each issue on airlines, airports, policy and personalities.



Join our aviation loving family…

AVIATION CENTENARY CELEBRATIONS OFF TO A FLYING START

March 2011  ` 90

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The right stuff, all the time, on time Get your copy today. Call 91-011-41033381 Mob.: 9650433044 WANTED: A MID-COURSE CORRECTION IN POLICY TO CATALYSE INDIAN AVIATION

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NEWS DIGEST he Willie Walsh-headed International Consolidated Airlines (IAG) announced a profit in its inaugural results. The group, which was formed by the merger of British Airways and Iberia, said operating profit for the quarter to December 31, 2010, was €6 million, compared to an operating loss of €114 million in 2009. IAG began trading on the London and Madrid stock exchanges on January 24, 2011 — the day Walsh and an initial team of 50 staff — many of whom transferred from the subsidiaries — took to new desks on a single floor at Heathrow’s World Business Centre offices. In an interview to Flight Global, Walsh was confident, peppy and expansive. “The way we see IAG impacting on BA and Iberia is partly about co-ordination, but also, where necessary, control,” he says. “This will ensure that what the two airlines do — and if we scale it what the other airlines do — is in the best interests of the single economic entity and the single set of shareholders. “The aim is straightforward: to have a fully coordinated network that maximises passenger flow between BA and Iberia, focussed on feeding Iberia’s Madrid network into Latin America and the BA routes to North America and Asia from Heathrow. “Iberia’s Latin American network is second to none, so by consolidating BA and Iberia we can cover key markets and allow Iberia to strengthen Madrid Barajas as the natural hub for Europe to Latin America, while BA turns its attention more to Asia,” says Walsh. “It fits very well. We can focus on Latin America from Madrid and on Asia from Heathrow, while maintaining the very strong network BA has into North America,” he adds. However, in parallel, the plan is to grow the group through the addition of more “like-minded” partners, which is why “scale-able” is the buzzword chief executive Willie Walsh repeatedly uses when explaining his vision for IAG. It was the need for this core capability that has shaped the group’s structure and led to its somewhat unimaginative name, as well as what stopped Walsh from achieving his original ambition of remaining in charge at BA when he became boss of IAG. “Right from the start of negotiations between BA and Iberia, the tie-up was seen as the starting point, rather than the end-game,” he says. “One of the challenges I set when we were discussing the structure was: Does it work when we scale it?” This also drove the decision to adopt a

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LEADING THE CHARGE: Under the leadership of Willie Walsh, International Consolidated Airlines has done well to record profits.

PROFIT TO BEGIN WITH, WALSHSTYLE neutral name for the parent company, which Walsh sees as important if more partners are to be enticed into the fold. “We’ve recognised the significant value of the brands and we want to be able to retain the brands of potential future partners without creating any conflict,” he says. “We’re not seeking to gain synergies through creating a single airline,” Walsh says. “We recognised that while on paper you might see synergies, it is incredibly difficult and the history of aviation is littered with the failures of people who tried to combine different cultures into the same airline — even markets like the USA, where they tend to speak the same language.” Willie Walsh has been open about IAG’s intention to expand through more partnerships, but emphasises this will only be possible with airlines that share his views on consolidation. For this reason, he quickly dismisses the notion that fellow OneWorld airline Qantas, with which BA had previously held merger talks, is one of the names on his famous “list” of potential IAG partners.”I don’t CRUISING HEIGHTS March 2011

believe Qantas is like-minded in its view towards consolidation at the moment. They have a different strategy. They’re happy they can access the growth in Asia through their Jetstar subsidiary,” he says. Airlines on the IAG wishlist have all the obvious qualities: strong brands, financially sound — or can be made so — and strong positions in key markets. “We aren’t ruling out a low-cost option within the group so we’re talking about ultimately creating a multinational, multibrand organisation, which could contain a low-cost brand,” Walsh says. “It’s no secret that we’ve been interested in bmi(British Midland International), but largely because of its slot position at Heathrow rather than the brand,” he says. “Similarly, when I look at Virgin, what I see are slots at Heathrow and I suspect anybody looking at Virgin sees it that way, because if it is someone from within the industry, then I don’t see that they’ll want to retain the Virgin brand, particularly a brand that is intrinsically linked to a personality.” Speaking about the long-term health and sustainability of the global airline industry, given its poor track record in recent years, Walsh says, “With all of the challenges we face, everything points towards consolidation... My view is that in Europe you’ll have three large airline groups — IAG, Air France-KLM and Lufthansa — but you’ll also have Ryanair, easyJet and Air Berlin and they will probably continue to consolidate. In the USA there has been consolidation and there’s probably going to be more, so you’ll have, say, five large airlines there. The same will happen in other regions.”


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AERO INDIA 2011

WHAT A

SHOW!

The recent Aero India 2011 show was one that could not have been missed. The biggies of the aviation world were all at Bengaluru — ready with their aircraft and wares — to woo the country’s military bosses for the biggest-ever order: 126 MMRCAs. A diary…

75,000 business visitors, 200 business meetings The publicity wing of the Defence Ministry (organizers of Aero India 2011 along with the Confederation of Indian Industries), summed it up succinctly when it said: “Despite an India-Australia ICC World Cup warm-up match in Bangalore, over 75,000 visitors thronged Aero India 2011 venue on Sunday…” “We issued three lakh RFIDs (Radio Frequency Identity Devices) and still could not meet all the demand,” Wg Cdr M D Singh, Joint Director, Defence Exhibition Organisation, said on the huge demand for passes to the show. From the very start, Aero India 2011 preparations were catered to be the biggest so far. Given the increasing popularity of the show that offers serious business opportunities and platform to forge partnerships, Aero India expositions in future will undoubtedly remain an important destination for all aerospace industries of the world. There were nearly 75,000 business visitors and around 200 business-to-business meetings held.

EXUDING CLASS: A fighter aircraft on display at Aero India 2011.

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AERO INDIA 2011 Record breaking show Aero India 2011 was the one show that the aviation community in the country was waiting for. Indeed, the five-day show was worth the wait since this time around, it created records in terms of its size and content. The organizers of the latest edition, in fact, got requests for 1.75 lakh general visitors, a lakh more than the 2009 figure. Since it began — first as Avia-India in 1993; the name was changed to Aero India in 1998 — the show has grown in strength. The growth was noticeable in 2007 when the exhibition area rose sharply from the 18,000 sq mt mark in 2005 to 30,000 sq mt in 2007, 44,000 sq mt in 2009 and 75,000 sq mt in 2011. There were 675 exhibitors — almost a 100 more than the 581 in 2009. Of these, the number of international participants was 380 while there were only 295 domestic ones.

Chart topper Topping the list of participating companies were the 63 from the USA followed by 43 from France, 42 from Germany, 41 from UK, 25 from Russia, 22 from Italy, 17 from Belgium and 13 from Israel. The number of domestic and international aircraft that were seen at Aero India was 93. In Aero India 2009, the number was 67. Add to that were eight country pavilions and 63 chalets. One of the major attractions was the exhibition set up by the Indian Space Research Organisation (ISRO). According to reports, there was a 62 per cent increase in flight, static and flight-cum-static display by civil and military aircraft over 2009.

Bull flight Nine performances over five days! That was the stunning feat of the four-member Flying Bulls Aerobatic Team from the Czech Republic comprising Machova, Miroslav Krejci, Jiri Veprek and Jiri Sallar, who have logged more than 35,000 flying hours. With their amazing ‘mirror flying’ and other manoevures, the Bulls were the darlings of the crowds. “We have been completely blown away by the response of the crowds. The team has been cheered on from day one and this has motivated us to perform at the highest levels. The crowd and the fans had been great and we can’t wait to return and perform for everyone again,” said Martin Nepovim, the team manager of the Flying Bulls. Among the cheering crowds were celebrities that included Bollywood star

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CRUISING HEIGHTS March 2011


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EXUBERANT AMBIENCE: Vignettes from the Aero India 2011.

Gul Panag, actor Dino Morea, singer Lucky Ali, cricketers Sunil Joshi and Lalchand Rajput and tennis player Somdev Devvarman. And our own Surya Kiran team displayed their capabilities leading Flying Bulls team leader Radka Machova, to say: “It is always great to meet a young team of flying professionals who share the same passion. We had a chance to watch them and were very impressed with their performance. There is a lot of potential in India for aerobatics, so hopefully more Indians will take to aerobatic flying.”

The fight for 126 The acrobatics and the displays apart, Aero India 2011 was all about business. The spotlight was on the Medium weight Multi-Role Combat Aircraft (MMRCA), a $12 billion contract. There were a number of contenders and each was keen to outdo the other to impress the Indian defence experts. In addition to that was the keen public relations exercise that included taking celebrities on flights. Among the countries that were vying for the 126 MMRCAs was the USA with its Boeing’s F/A-18 Super Hornet and Lockheed Martins’ F-16. Among the others were MiG Corporation’s MiG-35, Saab’s Gripen NG, Dassault’s Raphael and the four-nation European consortium’s Eurofighter, Typhoon. Industrialist Ratan Tata flew the F-18 and actor Shahid Kapoor piloted the F-16. US Ambassador to India, Timothy Roemer, was one such celebrity. He flew the F-16 Super Viper fighter and described the flight as “magic” and “a dream come true”. Another US official who took a flight on the F-18 Super Hornet was US Assistant Secretary for State for Political-Military Affairs, Andrew Shapiro.

Tejas shows off in its first outing Tejas, the country’s first supersonic multirole combat aircraft and light combat helicopter (LCH), made their appearance in the skies for the first time. Though the Tejas has been on view at two past Aero Indias, it had never taken part in manoeuvres. The LCH, considered to be the world’s smallest military aircraft with a single seat, is among top eight aircraft in the world in technological design and performance terms and won ‘wows’ from all those who saw its performance in the skies. CRUISING HEIGHTS March 2011

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AERO INDIA 2011

Eurocopter shows its class

Curtain call The outing by the IAF’s aerobatic team, Suryakiran, was the last. Reason: The HAL HJT-16 Kiran Mk-II jets the team members were piloting was being sent to the IAF training centres. From now onwards, the team will be flying the British Hawks. However, their next flight would probably not take place in the next edition of Aero India 2013 because the planes will only be ready after a year and the pilots would take one more year to train in them. The Kirans last flight began at 4.17 pm, when the nine planes took off in threes. Covering 13 minutes, the Kirans bowed out. It had been a 15-year-long journey since they flew for the first time at the Aero India in 1996. That show stole many hearts. There were vertical flights, loops, crosses and formations. The show came to an end with the trademark Bomber manoeuvre where all nine aircraft came together in a dive and at the last moment, peel away in different directions. The Surya Kiran team was formed in 1996 as a six-aircraft team, with Wg Cdr Kuldeep Malik VM, VSM, a former Thunderbolts member. By 1997, the Surya Kiran team was expanded to nine aircraft.

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DAREDEVILRY AT ITS BEST: (Top) Red Bulls acrobatic team; and, (above) the Eurocopter stall that saw a lot of action. All Aero India 2011 photos courtesy Ministry of Defence

Aero India was especially significant for Eurocopter, as it is in the race for the largest helicopter deal - the contract for 197 reconnaissance and surveillance helicopters by the Ministry of Defence. CRUISING HEIGHTS March 2011

For leading helicopter manufacturer Eurocopter — that has strong links with India — Aero India 2011 was a successful outing where it saw several contracts for civilian helicopters being signed. Its static display of the AS550 C3 Fennec played host to several dignitaries, who were greeted by Lutz Bertling, President and CEO of Eurocopter Group. Eurocopter has a partnership with Hindustan Aeronautics Limited (HAL) and Pawan Hans Helicopter Limited. In fact, HAL is a key element of Eurocopter’s global supply chain, producing shipsets of airframe components for its Ecureuil/Fennec helicopters. Aero India was especially significant for Eurocopter, as it is in the race for the largest helicopter deal — the contract for 197 reconnaissance and surveillance helicopters by the Ministry of Defence. The final decision is expected to be announced by the middle of the year but Eurocopter spared no resources in ensuring that the proposed rotary-wing aircraft for the contract, the AS550 C3 Fennec, was displayed at the airshow. The Fennec was the only military helicopter on display and was the centre of attention for national and international delegations as well as the general public. Bertling hosted several top bosses among who were the Minister of State for Defence, MM Pallam Raju; Chief of Army Staff, Gen VK Singh; Deputy Chief of Army Staff, Lt Gen JB Singh; and Deputy Chief of Air Staff and Air Marshal R.K.Sharma, amongst many others.Eurocopter also announced several civilian deals: five units of the AS350 B3 helicopters were sold to three Indian customers that will be delivered within 2011.„


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Looking at the whole picture! R Krishnan

The government seems to be obsessed with Air India. As a result, its priorities have become lopsided, comments R Krishnan. While it continues to provide life-saving monetary assistance to Air India, it has refused to meet the demand of the Airports Authority of India to build airport infrastructure. he Economic Survey for 2010-11 tabled in Parliament made an important observation. While it hailed the 19 per cent rise in passenger traffic to 51.33 million in the calendar year 2010 compared to 43.3 million in 2009 and greeted the potential for high traffic growth, the Survey expressed reservations at the exceptionally high cost environment and high prices of ATF which it felt could derail the growth in the aviation sector. The Economic Survey is compiled and largely written by babus in the Finance Ministry after securing details from the concerned ministries. The Finance Ministry is also the nodal point for some the important cost issues like excessive duties on ATF and service tax. Sales tax is, however, levied by state governments. At a time, when we are hearing that India will transit to a common goods and services tax, there is no indication that elements that are unnecessarily boosting aviation-related cost will be moderated. Unlike elsewhere in the world, MRO operations in India tend to be costlier because of the service tax element as well as higher duties on the consumerables. The mindset — that civil aviation is only for the rich — needs to be erased completely or else we will end up killing an industry that has a great economic multiplier effect. The other day, the Prime Minister was heard saying that the government had largely succeeded in job creation and also created conducive atmosphere for employment generation. But when it comes to the aviation industry, the entire focus is on throwing good money on bad proposal like revival of Air India. The last we heard from its management — based on a report it got from its numerous consultants — was that the Maharaja would need a one-time financial support of `17,500 crore to tide over its never-ending crisis. It seems like a special demand for yet another Rajiv Gandhi National Rural Employment Guarantee Scheme. This flies in the face of the government’s many pronouncements that India needs billions of dollars for infrastructure development. When it came to meeting the peripheral demand of the state-owned Airports Authority of India (AAI) — compared to Air India — to build airport infrastructure in the 35 non-metros

T

I think the government has got all its priorities wrong. If it were to back AAI, it will pay it back much richer dividends in the very near future 36

CRUISING HEIGHTS March 2011

quickly, the same Finance Ministry has refused to yield. For instance, the Railways can be allowed to raise tax free bonds and huge plan support, but AAI is not allowed to raise tax free bonds to fund airport development. This is after taking away all its best airports where all its money was. I am not getting into an argument as to whether privatization or largely private and minor public in the PPP format is good or not. I am sure our readers understand the basics of economics. We had a time from 2005 to 2007 when the aviation industry grew at more than three times the GDP growth before the global economic meltdown put brakes on it. However, in calendar year 2010, the growth in passenger traffic, a barometer of the aviation industry’s health as well as potential, at nearly 20 per cent showed that it was nearly two and a half times that of the GDP growth. We are now told that the new fiscal 2011-2012 could see economic growth clocking between 8.75 per cent to 9.25 per cent. Assuming that the GDP growth is nine per cent and applying the same two and a half times growth logic, will we see a 27 per cent growth in passenger traffic? It may not happen this time because of the same fears — high cost environment and high prices of ATF as the Economic Survey said while discussing the possibility of India’s aviation story getting derailed. I think the government has got all its priorities wrong at least in the aviation sector. If it were to back AAI even with half a measure compared to AI, it will pay it back much richer dividends in the very near future in the form of widening and deepening the reach of India’s civil aviation industry and encourage more Indians from Tier II and Tier III cities and towns to fly. Look at Bengaluru. Nearly two decades ago, it was emerging slowly as a global IT centre which it has become today. Now, it is slowly emerging as an important centre for aviation-related activities. You just need to look at the numerous proposals for flight academies, air crew and pilot training, technical institutions dealing in avionics and aircraft-related engineering, etc. And all along we thought, it would be either Mumbai or Delhi which would hog the limelight. May be this is true in terms of traffic but to ensure higher spread of that traffic, we may need more Ben-


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galurus to emerge: which means conversion of Tier I cities to near-metros by providing world class connectivity that the AAI could now do as part of its survival in an increasingly competitive environment. Let me now turn to the other aspect of the Economic Survey’s own fears relating to the derailing of the aviation sector. The possibility of this happening could be the airlines’ own making as it happened during the previous boom from 2005 to 2007. At that time, the aviation industry saw huge induction of capacity that became a liability after demand vanished due to recession and high fares induced by high oil prices in 2008. The number of air passengers in 2007 was 42.9 million which fell to 40.8 million in 2008 and rose slightly to 43.3 million in 2009. In 2010, it rose to an all-time high of 51.53 million with an increase of nearly 20 per cent. Seeing such a huge growth, we are hearing that most

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as well as earn to pay for the planes and still be left with some profits. There is the GDP growth factor that could deliver new passengers or increased first time travellers. There is yet another element that influences the airline industry fortunes namely the increased flow of FDI leading to greater economic activity mainly manufacturing related. What we have seen in 2010 was a complete downturn in FDI and much of it is now going to countries in South East Asia or elsewhere. If foreign investors feel the India story is not happening as it was and the government thinks it will deliver nine per cent GDP growth largely based on service industry, then even the aviation industry could be in disturbance in the calendar year 2011 and fiscal 2011-2012. Even if oil prices come down — hopefully once peace is restored in the Gulf — there is no guarantee that it will come down to acceptable levels. There is wide speculation that oil prices

COSTLY FUEL: The growth of the country's aviation industry could suffer setbacks due to rising fuel costs; and (inset) Finance Minister Pranab Mukherjee

domestic carriers are going for major fleet expansion. In the next one year — or 2011 alone — one may witness induction of 35 to 50 aircraft, mostly narrow body A320s or B737s. For instance, SpiceJet is talking of at least eight aircraft, IndiGo 14 aircraft, Jet Airways and JetLite about eight aircraft, Kingfisher Airlines nearly 12 (those that were grounded because of engine trouble and few whose lease rentals could not be paid), GoAir between three and four aircraft, Air India at least five, if not more, A320s and Air India Express at least four B737-800s that could also be used on the domestic leg. Seeing the way fuel prices are rising, it will become difficult for airlines to keep fares down. If fleet capacity is progressively increased then it may mean higher Available Seat Kilometers (ASKM) compared to the demand determined by Revenue Per Seat Kilometer (RSKM). Obviously, the revenue has to increase if the airlines want to meet their cost

this time may come down to not less than $90 a barrel and in two years could rise to $120. The people who are fighting the regimes in some of the oil-rich countries come to govern, they could have a different take on what the oil prices should be. Today, one is dealing with one kind or one dictator. Tomorrow, it will be a different story. Though this will impact all nations, its impact on countries like India could be harsher. So, instead of conveying the fears that are well known, the government needs to survey its own actions and perform a midcourse correction to catalyse Indian aviation and not be obsessed with Air India alone. „ (Veteran journalist and long-time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.) ¾ This column was written before the Budget was placed in Parliament. Even so, it pays scant regard to aviation.

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It was an occasion to remember: a comparatively young nation celebrating a hundred years of aviation. A grateful nation remembered all those stalwarts who had contributed to making the industry what it is. irports all across India had a special glow on them on February 18. On that landmark day, tasteful illumination marked the completion of 100 years of Indian civil aviation. The day also marked the commencement of Civil Aviation Centenary Year. The first chapter of Indian aviation was penned on February 18, 1911, by French pilot Monseigneur Henry Piquet, who flew a Humber biplane from Allahabad to Naini, just across the Yamuna River, and back, covering a distance of about 10 km. He carried nearly

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6,000 letters, many of which were addressed to King George V of England with ‘First Aerial Post’ as the postmark. This was also considered to be the world’s first airmail service. One year later, in 1912, the first domestic air route between Karachi and Delhi became operational. The service between the two cities was operated by the Indian State Air Services with the Imperial Airways (a UK-based airline). In 1915, to expand the horizons of the aviation industry, Tata Sons Limited started regular airmail services between Karachi and Madras (now Chennai). They also founded Tata Airlines, which was rechristened Tata Air Services in 1938 and then Tata Air Lines, the same year.

CELEBRATING AVIATION: (Top) Snapshots from the inaugural function of the Indian centenary celebrations; (bottom) various personalities receiving citations for significant contribution to Indian civil aviation on the occasion.

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On October 15, 1932, JRD Tata flew a single-engine aircraft from Karachi’s Drigh Road Aerodrome to Bombay’s Juhu Airstrip via Ahmedabad. The aircraft continued to Madras via Bellary, flown by former Royal Air Force pilot Nevill Vincent. Tata Air Lines did not, however, survive for too long after the end of World War II. On July 29, 1946, it became a public limited company called Air India and the government acquired 49 per cent stake in it, making it the country’s designated flag carrier. Air India operated its first international flight on June 8, 1948, from Bombay to London. Speaking during the inaugural of the Centenary Celebrations of Civil Aviation in India, Civil Aviation Minister Vayalar

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Ravi said: “Today, India is considered to be one of the safest countries in terms of civil aviation. Recently, the Federal Aviation Administration (FAA) of America even cited India as a role model in the Asia-Pacific region.” In order to retain this position and to assure all travellers the guarantee of safety, the Minister said: “It would be necessary to redefine the parameters of regulation. We are already looking into this matter and considering to restructure the DGCA into a more comprehensive system, which works well above international standards,” he pointed out. “One of the biggest challenges before us was to lend renewed vibrancy to public sector undertakings like Air India and Airports Authority of India.” he added. Ravi also paid tributes to the pioneer of Indian aviation: JRD Tata, who obtained the first pilot’s licence issued in India and also founded the first commercial airline which later became Air India. Tata also launched India’s first international carrier — Air India

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AVIATION ENTHUSIASTS ALL: (Above) A section of the gathering listen intently to the speech of the Civil Aviation Minister. (Below) Civil Aviation Secretary Nasim Zaidi (second from left) with Boeing’s India head Dr. Dinesh Keskar (extreme left) and AI CMD Arvind Jadhav(second from right).

JRD Tata obtained the first pilot’s licence issued in India and also founded the first commercial airline which later became Air India.

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international and later when the government took over, he was appointed the Chairman of Air India in 1953, a position which he held for 25 years. Amongst the other pioneers remembered were: „ First Indian woman pilot Sarla Thakural; „ Air Marshal Aspy Merwan Engineer who won the Agha Khan Trophy for being the first Indian to fly from London to Delhi in a Gypsymoth aircraft; „ Senior flight purser of Pan Am flight 73, Neerja Bhanot, for her exemplary courage displayed after the plane was hijacked. She was killed in 1986 while saving the lives of three children from bullets; „ Former Orissa Chief Minister and an avid aviator Biju Patnaik. After being entrusted to evacuate Sutan Sjahrir, the Prime Minister of Indonesia, during the country’s struggle for independence from the Dutch rule, he flew to Java and brought him from Java islands on his own Dakota; „ Ravi also paid tribute to industrialist and Chairman emeritus of Raymonds Group and a former Sherriff of Mumbai Dr Vijaypat Singhania. Singhania holds the world record for highest altitude gained travelling in a hot air balloon; „ Air India for its services to the nation; „ DGCA for its signal contribution in regulating Indian airspace; „ Captain Saudamani Deshmukh for helping women get into the cockpit; „ GVK and GMR for their seminal contribution in PPP partnership; and, „ The Aeronautical Society of India for its role in spreading greater awareness „ on the complex issues of aviation.


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nt ortant compone p im t s o -m le g and ATF, the sin is what keeps in t a ra h b T . n a IT m is u h d rl e o w Other than th portion of the sful flight in the e s rg e c la c a u s y, a ry d e v To e g. that is behind pecialists, as sinesses soarin s u b IT e n n li ia ir d a In e y b th d ped the carriers an siness is develo u b n o ti ia v a e th —————4 — — technology for — — — t. h found ou Tirthankar Ghos Being a part of our (IATA) members’ business gives us a unique opportunity to lead relevant and global industry change. Simplifying the business is a good example. In 48 months, we converted the world to e-ticketing, bringing convenience to travellers and over $3 billion in annual cost savings to airlines. The scope of Simplifying the business has now grown to over $18 billion in annual cost savings. This includes everything from self-service options that empower passengers to more reliable baggage management, and an e-freight programme to eliminate paper processes in the cargo business. The most recent success was the near 100 per cent conversion to bar coded boarding passes, which we achieved at the end of 2010. These are just a few examples of IATA’s unique role.”

— GIOVANNI BISIGNANI

IATA’s Director General & CEO, at the Council on Foreign Relations, Montreal

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helpless world watched in awe on September 11, 2001, as 19 Al-Qaeda terrorists hijacked four commercial passenger jet airliners and crashed two in the twin towers of the World Trade Center in New York. The hijackers crashed the third airliner into The Pentagon in Arlington, Virginia, just outside Washington, D.C. while the fourth plane crashed into a field near Shanksville in rural Pennsylvania after some of its passengers and flight crew attempted to retake control of the plane, which the hijackers had redirected toward Washington, D.C. to target either the Capitol Building or the White House.

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ADDED PUSH: The importance of IT systems in managing the airports in India can’t be underrated.

Soon afterwards, US President George Bush ordered stoppage of all commercial aircraft in the US. The nightmare for the industry had begun. Three days later, when the carriers were given the signal to start flying again, all hell broke loose. Reason: Operations problems arose from the disruption. Though airlines often face disruptions largely due to weather conditions, what happened on September 14 was unimaginable. While thousands of planes had been forced to land at airports they were not supposed to be in, the same was the case with pilots. Many described the situation as a “monumental problem”. The problem that all the airlines confronted was what is commonly termed as “crew pairing” that involves matching pilots, planes and crew with schedules and routes. Compounding the problem was the fact that airlines had a variety of planes in their fleets: 747s, 737s, MD80s, DC-10s and even a range of Airbus planes. In stepped information technology. Continental Airlines, for example, used CrewSolver and in around half an hour, it was able to resolve 1,600 problem pairings for its fleet of 737s and MD80s. CrewSolver, then a new technology, had been developed by Dr Gang Yu, a professor of management science and information systems at The University of Texas. Before that, pairing crew with aircraft was a task that was difficult to handle. According to reports, in 2001, CrewSolver saved Continental about $40 million. Fast forward to 2011. Virgin Blue, Australia’s second-largest airline, as well as the largest by fleet size to utilise the Virgin brand, saw its check-in system crashing — the second time in four months — resulting in delays, long queues of frustrated passengers. The critical bookings and baggage handling systems both crashed in a virtual re-run of the catastrophic computer failure

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Airlines around the world were opting for new generation technologies to manage their mission critical operations that would reduce their operating costs while optimising efficiency CRUISING HEIGHTS March 2011

of September 2010 and the crash included Virgin Blue’s heavily used web booking system. While the two instances highlight the importance of IT systems, the aviation industry around the world continues to remain conservative in its use of technology. The US airline industry was one of the first to usher in technology but somewhere down the years, it has been hesitant to upgrade its systems, according to analyst firm Forrester Research. As of 2010, many of the major airlines were still using computer systems that were introduced in the 1960s. Way back in the Sixties, the US airline industry started using computerised systems for reservations. The technology, incidentally, was developed for airline employees instead of customers. It was only later that it was adapted for customers. One of the major reasons, according to the New York Times, why US airlines have not upgraded to the latest technologies available is the paucity of funds. According to SITA, which also performs airline analyses, the airlines spent just 1.7 per cent of their total revenue on information technology, compared to typical expenditures of between 2.5 per cent and 3.5 per cent by other industries. SITA (originally known as the Société Internationale de Télécommunications Aéronautiques) is a multinational information technology company specialising in providing IT and telecommunication services to the air-transport industry. Founded in February 1949 by 11 airlines, SITA provided communications for the air-transport industry and was the first to handle data traffic in real time via a packet switched network over common carrier leased lines. Today, the company provides a range of IT solutions as well as infrastructure and communication services for the air transport industry, having evolved from its early days of providing only network services. Among SITA’s customers are airlines, airports, airfreight — international freight forwarders, travel and distribution — Global Distribution Systems, Governments, Aerospace, Ground Handlers and Air Traffic Control. Over the last few years, however, given India’s prowess in information technology, there are a few providers from the country that have led the world. There’s the Trivandrum-based IBS, the Mumbaiheadquartered Kale Consultants among others. Principally, all of them satisfy one purpose: facilitate aviation while cutting costs through technology. Said VK Mathews, Chairman and CEO of IBS, “Our solutions give airlines viable options to liberate themselves from the expensive


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“The business intelligence that an airline needs is not there” Vipul Jain of Kale Consultants on the way forward for IT specialists in the aviation industry What is it that moves Kale? No, I am not from the airlines business. I am an Engineer, after that I read my MBA and I worked with Tata’s for six years and then I co-founded Kale Consultants. Our wish was to make our mark in the global industry with ‘made in India’ software products. And in India we have got a lot of wellknown software services but there are really few software products. Somehow that’s been the thing that has really excited me: creating ideas and offering solutions. That’s been our vision. I think when you look at Kale, we have created products in the past for the banking industry and we have always been very successful in the domestic market. But it was around the year 2000 or so that we decided to focus around one industry vertical and that industry was the airline and the travel industry. Also our focus was to become leaders not just in India but globally. So I think, for the last ten years we have pursued that strategy with focus and a lot of dedication. Why did you choose the aviation industry to specialise in? What you realise is that if you are in the products business particularly — you need to have not just domain knowledge but you (also) need to have leading edge industry knowledge. And you need to keep investing in more products all the time. And that for a company of our size, you cannot do in more than one vertically. We chose the airline industry because when we looked at our strategy back in 1999, we felt that airlines, which is a global industry by its very nature, was the industry we chose to focus on. How has the growth been? In terms of customers, at that time we had six or seven customers. Now in

terms of airlines, we have 80-plus. In terms of our products that time, we were just new entrants. Today, I would say the industry recognition that we have is huge and in the areas we provide solutions like accounting solutions, etc. we are definitely the leader. I like to think that our products are considered to be the best products. We have come a long way and achieved what we really wanted to achieve which was to be recognised as one of the top players in the industry. And now when we move forward, we, of course, continue to maintain our leadership in the areas that we are in but we will also expand in the areas the industry offers. What are the factors that have kept Kale ahead? You have to be in the market with a product that is relevant to today’s environment. At the same time no product remains static: it has to be very high from the technology perspective and business process perspective. You have to have one eye very clearly on the future and at Kale we address that by talking to our customers. They can see what we are doing and what they are looking for. But we also work very

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closely with IATA, the industry’s international body and we are quite proud of the fact that we are associated with some of the top industry initiatives. Don’t you think that multiple IT systems retard progress? No, I think, you will always have multiple systems and that’s the way it should be. What is beginning to emerge is the fact that a lot of the interfaces are getting more and more standard. The other trend which I think is a very good trend is the fact that people are looking at outsourcing. That solves a lot of their noncore business problems. Earlier, one would buy technology for two or three things within the airline itself. Increasingly, airlines are saying, “OK, I’m just interested in the outcome. So I don’t need to do everything myself. I can outsource different parts.” So I think that is a great benefit to the airline because it allows the airline to be focussed on its core activity: flying. How are you working with IATA? For IATA, the theme has been simplifying the business because if you really want to reduce cost and move with greater speed, then you really need to create a software and say, how can I finish it better? One of the initiatives identified is the way airlines do settlement between themselves. You have to work with the industry because that is how change really comes about on a much wider scale. It is quite exciting for us to be associated with the initiative. And, of course, it’s a great recognition as the first Indian company, which has got to a stage where you have such wide industry acceptance and such respect to be given responsibility for an industry initiative. I also believe that Kale, in a few years, will be the largest back-office solutions provider to the industry in the world. We have the right synergy, which helps our customer. We are able to provide our customers with a more complete solution and also look at all the other areas of back office. If you look at the back office today in the industry, you will find a lot of inefficiency and a lot of costs. Today, the business intelligence that an airline really needs to be able to react to in this very challenging environment, is not there. I think it is a great opportunity for us to be innovative and actually look at streamlining all these processes.

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Managing T3 at the click of a mouse oday, most carriers allow passengers to check in from home or download boarding passes on their mobiles. But the problems that travellers faced this winter in US and European airports because of the snowstorms when flights were delayed or cancelled could have been cut down with technology. Unfortunately, most airlines are still trying to catch up with the technology that is available on smartphones. For the moment, however, a majority of airlines lean on computer systems that were built almost half a century ago that have been layered with updates upon updates. Result: they do not always communicate well with one another, or with passengers. So, there is a mismatch between when what the monitors at the airport show. However, even with new systems, there are glitches. Our very own T3 — the spanking New Delhi International

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Airport (DIAL) terminal — saw chaotic scenes towards the middle of December last year when the IT systems went on the blink for an hour. Result: the checkin and baggage handling systems collapsed. There are 173 top-of-the-line common use passenger processing systems (Cups) that ensures faster check-in formalities. The system uses a common software-and-hardware-driven platform, which integrates all the information at the airport, like the airline’s reservation system, the time of departures, and even the capacity at the waiting lounges. It is an intricate and complex process and apart from that initial glitch, there have been no more failures. Airports and airport operators around the country have been tying up with IT specialists to bring about higher levels of efficiency. As JV Ramamurthy, President and COO, HCL Infosystems Ltd, the integrator of the Airport Operation Control Centre (AOCC) for T3,

legacy systems that they have been using over the last 40 years.” Vipul Jain, Managing Director and CEO of Kale Consultants, made it quite clear why Kale is now among the top technology providers to the aviation industry: “You have to be in the market with a product that is relevant to today’s environment. At the same time no product remains static: it has to be very high from the technology perspective and business process perspective. So, you have to have one eye very clearly on the future and at Kale the way we address it is, of course, we keep talking to our customers. They can see what we are doing and what they are looking for. But we also work very

TOUGH NUT TO CRACK : Providing efficient IT solutions for cargo remains a challenge for IT companies

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pointed out, “Technology today touches lives at the most common places and it is commendable to see the steps been taken by authorities across the country to engage technology as an enabler and also a deterrent through state-of-the-art solutions for better efficiency and security for citizens.” HCL Infosystems’ IT system architecture of the AOCC has been seamlessly integrated in order to facilitate the highest level of airside operations, resources planning and allocation, terminal operations and security while allowing various departments to collaborate in real time. With the deployment of AOCC, HCL Infosystems became the only company in India with expertise in implementing both centralised and decentralised AOCC solutions for airports in the country as well as globally. Designed to cater to various operational and service requirements for daily airport man-

closely with IATA, the industry’s international body and we are quite proud of the fact that we are associated with some of the top industry initiatives.” Airlines around the world were opting for new-generation technologies to manage their mission critical operations that would reduce their operating costs while optimising efficiency. The aviation industry was being influenced by three major factors: worldwide growth — although not uniform in all regions — with a strong demand growth in Asia; changing customer expectations; and, new-generation airlines — like the low-cost models — redefining airline business. Mathews went on to add: “The true value addition of IBS is that we can tailor standard products to provide solutions that exactly fit airlines’ requirements, because IBS is also a software services company. Software services (system integration, customisation and even building bespoke solutions) is a major line of business of IBS. Airline customers see this as a differentiating strength of our offering.” Whatever the demand, the global recession dampened the aviation industry. While the sector is recovering, aviation experts feel that there are too many factors that could push the industry down: too many planes flying around, rising fuel costs, etc. To top it all, travellers often do not get the flights they want when and where they


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NOT A ROSY PICTURE: Terminal 3 of DIAL would not be world class were it not for IT management systems at the airport.

agement system, integrating 19 IT systems, among them are IBM and a host of others, to manage the terminal and also capable of viewing and monitoring operations of the airport for real-time inputs, the deployment integrates best practices of AOCC deployed in some of the most modern and advanced airports in the

want them. On their part, the airlines have devised ways to ride the ripples of the downturn: hedging fuel costs and offering passengers facilities at a cost. All this requires technology support and the legacy reservations systems are not able to do all that unlike a web-based booking system that, for example, can sell an onboard snack to a passenger and add the cost to the ticket. The search is on, therefore, for the ideal system that puts people, process and technology together. Take ticketing, for example. When Sabre was set up — American Airlines and IBM did that in the early 60s — it was the largest real-time data processing system. Since then, Sabre has become a $3 billion enterprise with thousands of customers. The Sabre software system spans across mainframe to Java technology and supports a variety of models — from traditional ticketing to the “unbundled” kind that adds a snack or extra luggage. Today, as it has evolved into an airline IT solutions provider, Sabre has been going for open systems and next-generation engines. The Sabre case is one where legacy systems are being constantly upgraded and new ones being set up. And that is where Indian specialists come in. Both Kale and IBS have been working with IATA in the ‘Simplifying the Business’ initiative as well as the Cargo 2000 project.

world like the Madrid and Barcelona Airports in Spain, Schipol in Amsterdam, Kuala Lumpur in Malaysia and Changi in Singapore. The T3 operation control centre has been designed to handle 34 million passengers annually. One of the other IT specialists that has been actively involved in DIAL is the

IATA has estimated that over 200 tonnes of invoices and supporting documents are being shipped between airlines around the world each year. CRUISING HEIGHTS March 2011

Indian subsidiary of Unisys Corporation. DIAL awarded Unisys India two contracts in September 2008: master systems integrator for the entire airport and systems integrator for the Terminal 3 project. As the master systems integrator, Unisys leveraged its expertise to advise DIAL on the organisation processes and roles, and to develop the standard operating procedures for the AOCC. Prabhakararao Indana, CEO — Airport Development, DIAL, said, “We have worked very closely with Unisys to implement the best ideas and solutions in the industry.” DIAL, in fact, has been at the forefront to adopt technology. At the end of October, 2009, quite a while before T3 opened, it tied up with Wipro Ltd, the country’s third-largest software firm, for a 10-year outsourcing contract to provide worldclass IT infrastructure and services. It also firmed up a joint venture to build and market technology for airports in India and overseas. The software specialist will build software applications, networks and security systems at T3.

Kale, for example, was chosen by IATA as the prime technology supplier for the development of its industry-wide interline settlement platform, the Simplified Interline Settlement (SIS) initiative. The SIS project aims to standardise, facilitate and expedite interline billing and settlement in the airline industry. This initiative, incidentally, consolidates IATA’s vision to streamline the interline settlement process and encapsulates other significant intitiative such as ‘First & Final’ (The First & Final Interline Billing Service provides accurate coupon values for Interline Billing and Settlement. The billed coupon values are validated allowing acceptance without audit, which eliminates the rejection process. Therefore, “First” time billings are “Final”), and the Electronic Ticketing and Weekly Settlement. Simply put, the SIS is aimed at the removal of paper from the billing and settlement process. IATA has estimated that over 200 tonnes of invoices and supporting documents are being shipped between airlines around the world each year to support the airlines’ interline billing and settlement process. The SIS initiative envisages significant benefits and cost savings for airlines; from reduction in paper, postage, and courier fees to reduction in manpower cost associated with invoice registration, document preparation, document sorting and

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V K Mathews, Founder and CMD, IBS, on how IT can help transform the aviation business, and his outlook for the future What is the vision that led you to set up IBS? More than the educational background, the experience in the aviation sector helped to set up the company. I also had the experience of setting up an IT company in Dubai which was actually set

“The core purpose of IBS is redefining businesses”

up as a joint venture of Emirates and SwissAir. The vision for that company was to provide IT solutions for the aviation industry. There was no IT company specifically for the aviation industry at that point in time — except for North America and Western Europe. The Chairman of Emirates had a vision to create the best airline in the world, and to realise that vision it was important to create a world class IT sector. So, I had experience of creating one of those. I had the potential to create something new then. If I had the capital to invest then I would have gone and done it myself. The experience that I had gone through then, helped me. But I also knew, what was missing in the sector. Since I am from the aviation sector, I also knew very well, what IT systems are available. I also knew very well what the limitations of these systems were. The limitation was that the systems were built and developed over the last 40 years. In a way, the aviation industry systems were truly legacy industry as a result of which, the airline and airline industry could not take advantage of the emerging technology. If you look at systems abroad, in a few countries, all of their systems were implementing technologies that were very old. The potential for using newer technology which supported the aviation industry was becoming necessary. And IBS was coming up to support with that kind of objective and India was also emerging in technology sharing. That’s why, IBS went ahead with its support. The important thing about IBS is, it used technology of next generation which no other country has. Over the years, since the time the IBS systems was set up, has your vision changed? Would you want all the airlines to work under one system? All airlines working under one system would be the ideal thing to happen. But when you broaden or sharpen your vision, what is important for us is not that all the airlines

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work under one system. What is of utmost importance is to envision where this industry is going to stand 40 years hence. With this kind of thinking, you will be ahead of the West. It takes several years to develop something and find a market for it. The actual materialisation or the realisation of the product takes several years from now. That’s how things work. What is particular to IBS success is the ability to influence the industry and direct the industry to a path which we believe is right and then give solutions to support. When we are in the business of IT, the core purpose of IBS is not building IT systems but redefining businesses. What that means is rebuilding technology in the systems that we use in operations, cargo, engineering or airlines, etc. and these systems obviously have to change as the technologies are changing very rapidly. One thing that will not change is that the pressure of the airlines, and the pressure of the business community to stay in competition. They will be continuously under pressure to change. Sometimes, it is necessary to change. The cargo business is continuously under pressure to change. And if we can be partners in facilitating that change, then we are in the business. For facilitating that change, it could be technology. The right strategy for IBS is to make the positive difference for the customer. If we continuously do that, then we are redefining business as it is our core purpose.With 13 years of operation, we have come up with the vision that we want to be the number one IT company in the world. One is to be able to state what we want to be, and the other one is the core ideology of values. In the next 10 years, it is going to be number one. What is very important is to visualise how the industry operates in the future. You need to be a prophet to see what the future is going to be. There is the Virtual Enterprise Concept, for example (see box: VK’s virtual airlines). How do you see the country’s position in these kind of services? The country has a major role to play and still has to grow. Thanks to IT, since we have all the capability to become the back office for the rest of the world as we are supported by a huge population in the working level age group.


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transaction-level reconciliation. This initiative will also drive faster revenue recognition and better financial information for airlines. The SIS solution will encompass Passenger, Cargo, and miscellaneous interline billings and entries to the IATA Clearing House (ICH) for settlements. The SIS project envisions: Q A completely paperless invoicing environment for prime billings and rejects for all carriers; Q Process enhancements for first and final carriers to enable billing and settlement automatically at the time of ticket lift; and, Q Integration of the Interline Data Exchange Centre (IDEC) passenger and cargo billing with ICH settlement on a weekly basis and expansion of the IDEC format to support more billing items, such as rejects. On the other hand, in 2010, IBS’ most successful year in its 13-year history in terms of software implementation at various customer sites, the company saw 55 successful ‘go-lives’ of IBS solutions all around the world — equivalent to over one per week throughout the year. Commented IBS chief VK Mathews, “Our solutions manage mission critical operations where the margin for error is nil. Implementing such systems call for a high degree of precision and skill; and successfully doing so in such large numbers is indeed a remarkable achievement. For IBS, it demonstrates several things... our ability to scale up, the confidence of the industry in us as a trusted partner, fulfilling our promise to deliver outstanding value and service. Beyond everything, it shows the commitment and dedication of our staff.” Perhaps, its biggest success story is iCargo, the new generation air cargo management solution suite that was co-developed with five major cargo carriers, called the Core Group of Influence (CGI). In the Japanese market, traditionally dominated by local players, iCargo emerged as the market leader when All Nippon Airways (ANA), Japan’s largest domestic airline, moved over to the iCargo platform to manage its entire cargo movement including all international commercial cargo operations. This implementation was the first localised version of iCargo in production with all communication and documentation in both Japanese and English. IBS had a hat-trick of iCargo implementations in the first week of October with three iconic customers in three different continents successfully cut over on three successive days. One of these, at TIACT (Tokyo International Air Cargo Terminal, Haneda) saw the launch of

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VK’s virtual airlines he more than decade-long involvement with IT in IBS has provided VK Mathews with a clear perspective of the aviation scenario in the country and the world. Not only does he have a clear understanding of the industry but he believes that the future would be totally different from what it is today. Of course, he foresees a number of opportunities for the IT industry in the new “changes” that will be seen in aviation — and they will be significant. He pointed out that while the world is fast moving towards decision-making that will be done with the click of a mouse, in aviation it will be moving passengers and cargo from Point A to Point B. Citing the example of cargo, Mathews said that in 2010, for example, only 20 per cent of cargo was actually moving while a large portion — in fact, 80 per cent — was waiting to be moved. That displayed the kind of inefficient handling of cargo. Simply put, that means that the cargo sitting at an airport warehouse would add to costs. The way out, according to the IBS chief, would be to utilise technology to reduce costs. However, Mathews hastened to point out that all over the world, airline CEOs were battling costs. It was time to look at the value. That can be done through his dream of creating ‘virtual airlines’. Today, multimillion-dollar

T

The prime reason for the existence of virtual airlines will be economies of scale. A few companies will operate aircraft instead of a number of companies flying smaller fleets. CRUISING HEIGHTS March 2011

aircraft, he pointed out, were not being utilised to their maximum because carriers “lack adequate technology support for optimisation and rationalisation of their usage”. “Should an airline,” he asked, “be involved in all the facets of passenger or cargo movement?” His answer: create ‘virtual airlines’. He believes that in the future there will be around a handful of global carriers, perhaps five of them, that will own and fly aircraft around the world for the airlines companies as we know them today. Each of these airline companies will book aircraft and run the services under their brand names. The prime reason for the existence of virtual airlines will be economies of scale. A few companies will operate aircraft instead of a number of companies flying smaller fleets. Also, the fact that brand names will be able to utilise the aircraft without possessing costly planes would provide a win-win situation for them. Another reason would be the judicious use of pilots from different parts of the world against the current practice where pilots have to be restricted to airline companies. Mathews said that for any business to make a mark — whether it is an airline, a freight forwarder or a travel operator — costs have to be flexible and that can be achieved through the virtual airline concept.

iCargo JTO. This multimillion dollar investment was carried out by IBS to cater to the unique needs of cargo ground handling in Japan. The latest to move over to IBS’ iCargo was South African Airways (SAA). The migration was a logical step for SAA, as a member of the Core Group of Influencers, involved with the evolution of the product since its formative stages. According to IBS, as a result of the twophase transition, iCargo has started to be used across the SAA network of 48 stations including 39 international locations. In addition to cargo, the year saw 14 airlines switching over to IBS’ solutions for managing passenger reservations, loyalty programme management, airline staff travel, crew management, MRO and fleet scheduling. IBS has also successfully closed 11 implementations in the non-airline space during 2010. The largest of these was an Energy Monitoring System

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COVER STORY

Photo courtesy:endangerededen.files.wordpress.com

AVOIDABLE: Passengers stranded due to cancelled flights at one of the airports in Europe.

for a Dubai-based conglomerate and the first phase of a reservation system at MSC Cruises, one of the world’s leading leisure cruise companies. IBS’ iDemand Gateway — an advanced distribution connectivity and reservation delivery platform — was adopted by leading names in the hospitality industry. During the period, IBS also completed successful implementation of iLogistics, its up-stream logistics solution suite at three operating companies of one of the world’s largest oil & gas companies. Gas companies apart, IT specialists have devised software that keeps the wheels of the aviation industry moving. IBS, for instance, has developed airport solutions that cover areas like Departure Control Systems (DCS), Ground Handling, Resource Management, and Baggage Services. These solutions manage the operations of some of the world’s busiest airports like Heathrow. Even small moves to usher in the latest technology bring in big savings. Bangalore International Airport Limited (BIAL) learnt that a change to the latest software got it hefty savings. BIAL wanted stronger operating system security features to keep its approximately 500 PCs (desktops and laptops) safe. The airport operator wanted a seamless mechanism for establishing connectivity to corporate data and resources for employees on the move. Additionally, it also wanted to boost employee productivity with features that promoted user efficiency. When it switched over to the latest system, the airport saved approximately US$ 2777. The amount may have been small but every little pays. Similarly, Mumbai International Airport Limited (MIAL), has a tie-up with

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IBS has also successfully closed 11 implementations in the non-airline space during 2010. The largest of these was an Energy Monitoring System for a Dubai-based conglomerate and the first phase of a reservation system at MSC Cruises. CRUISING HEIGHTS March 2011

leading global IT services and consulting organisation Tata Consultancy Services (TCS) for IT consultancy services along with implementation and management of the technology backbone at Chhatrapati Shivaji International Airport (CSIA). The agreement is in line with MIAL’s efforts to upgrade CSIA to international standards. The scope of services covers the entire airport value chain from operations to services. As part of its commitment to provide a world-class airport to the city of Mumbai, MIAL has initiated efforts to create a technology driven business environment to infuse efficiencies. This is facilitated and supported by the agreement with TCS. The last word, however, should go to VK Mathews. He said that around 90 per cent of IT companies spend huge amounts on R&D. These companies always diversify their products to stay ahead of competition. “However, attacking the right opportunity at the right time creates a significant difference in turning around fortunes. The last few years have seen a dramatic growth in the over-all global market,” he said and went on to point out that the growth story would continue with opportunities popping up across sectors. ‘Technology everywhere’ will be the buzzword around the globe and “diversification of service offerings will help achieve significant growth for companies”. According to industry pundits, there are two types of technology people. There are some who believe that this is the perfect time to invest and prepare for upcoming growth and there are those who won’t do anything. The last variety is the ones „ who tend to disappear.


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CRUISING HEIGHTS MARCH 2011

AIR CARGO & LOGISTICS

MUMBAI AIRPORT

MOVES FOR

BETTER FACILITIES

THE CONSTRAINTS OF SPACE NOTWITHSTANDING, CARGO INFRASTRUCTURE IS IMPROVING — BUT NOT AS FAST AS THE CARGO COMMUNITY WOULD LIKE IT TO

MULTI MODAL WOES

ANGRY WITH THE COMPENSATION FOR THE LAND ACQUIRED BY THE COUNTRY'S YET-TO-BUILT MULTI MODAL HUB AT NAGPUR, FARMERS ARE UP IN ARMS

ANTI TRUST NOTICE TO AI AIR INDIA HAS NOTHING TO DO WITH UNFAIR TRADE PRACTICES IN AN ANTI TRUST CASE DATING BACK TO 1996-2006


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IATA predicts good times for air cargo IATA HAS predicted that air cargo industry will see a robust growth. International air cargo movement will reach 38 million tonnes by 2014, with growth in Asia-Pacific leading the way. IATA predicted: “Excluding the impact of the post-recession rebound in 2010, the consensus view for air freight is that it will stabilise at 5 per cent (growth each year) for the 2011-2014 period. This is slightly below the forecast growth in world trade of 6 per cent, suggesting a cautious outlook after the recession shock, and possibly some loss of market share to shipping.” The top five fastest-growing international

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freight markets between 2009 and 2014 would be Hong Kong (12.3 per cent), China (11.7 per cent), Vietnam (11.4 per cent), Chinese Taipei (11.3 per cent) and the Russian Federation (11 per cent), IATA estimated. By 2014, IATA foretold, the US would remain the largest international freight market, contributing some 8.8 million tonnes a year, followed by Hong Kong (5.4 million tonnes), Germany (4.4 million tonnes), Japan (4.4 million tonnes) and China (3.8 million tonnes). “The shadow of the global economic recession is expected to remain over parts of the industry for some time,” said Giovanni Bisignani, IATA’s Director General and CEO. “Sluggish growth rates in Europe and North America are not only the result of being mature markets. Lingering consumer debts, high unemployment and austerity measures will dampen growth rates. The focus of the industry continues to shift eastward. By 2014, Asia-Pacific will account for 28 per cent of global (air freight) volumes.”

“The most exciting thing that ever happened to the industry is the formation of Global Air Cargo Advisory group. I believe this is the perfect time for such a collaboration in order to have a unified voice in the industry that will not only tackle pressing issues with regulatory authorities worldwide, but also bring out the best practices from the respective organisations.”

) Issa Baluch Author of The Wheels of Commerce; former President of FIATA and Board Member of TIACA and Dubai Logistics City

TRENDS

THE INTERNATIONAL Air Cargo Association (TIACA) has got a new Chairman in Michael Steen. The move is being seen as a signal that TIACA will now be more involved in all aspects of air cargo. To begin with, the association will continue its participation in various political forums — both in Washington and in Brussels, Michael Steen and collaborate closely with global trade organisations as well as the global customs organisation. Among the others who are on the board with Steen are Oliver Evans, Chief Cargo Officer at Swiss International Air Lines and Jason Foote, VP, International Air Operations, UPS Airlines, as new board members. Looking ahead, Michael Steen has his hands full.Talking to industry publication, ACNFT, he said that the “new formation and success of the Global Air Cargo Advisory Group (GACAG) together with IATA, FIATA and the Global Shippers Forum will be a large part of TIACA's focus in 2011. The group will jointly address key issues such as security, global trade facilitation, e-freight and overall industry standards”. In addition, he also pointed out:“We will also intensify our industry affairs activities within TIACA itself.” TIACA plans to launch an air cargo education and developme-nt programme in close collaboration with the Federation of East African Freight Forwarders Association. Its 'air logistics network', which provides TIACA's members with a reference centre, has been functioning with useful links and information regarding practical regulatory and commercial reference tools. The associa-tion hopes 2011 will be a more productive year than the last one.

INDIA’S LOGISTICS technologies market is growing steadily, with the upswing in demand from the thriving logistics, retail, and manufacturing sectors, as well as government promotion, according to a new analysis from consulting firm Frost & Sullivan. Since the booming manufacturing and retail sectors are major users of new technologies, sustained demand from these areas is sure. For instance,Wal-Mart has made it mandatory for its suppliers to deploy Radio Frequency Identification (RFID). However, there are challenges. Although the prospects for the market look upbeat, there are some challenges. Technologies such as RFID, Warehouse Management Systems (WMS) and Transport Management Systems (TMS) are significantly expensive, making them unaffordable for a majority of end-users. This has deterred the growth of the Indian logistics technology market. The use of 2D barcoding is steadily rising, and 3D barcoding is expected to gain prominence in the near future. Participants in this space must target these lucrative areas and fine-tune their strategies to cash in on the opportunities that abound in this market.

Photocourtesy: www.blog.barcoding.com

TIACA gets going with Steen

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Nagpur hub hiccups continue

ne of the major questions that India’s planners have to confront concerns infrastructure development and resettlement of people, whose land is used. The other, of course, is that ageold war between development and environment. The international airport in Mumbai, for example, is unable to expand because the slums around cannot be moved or the people living in them resettled elsewhere. The latest problem has arisen in Nagpur, where the country’s first multimodal international air cargo hub Hitavada. Commenting on on to state that “a detailed (MIHAN) and Civil Aviation the MADC’s moves, the study of the project has led us Minister Praful Patel’s pet newspaper’s editor, Vijay to believe that under the project is being set up. Phanshikar, penned an open pretext of developing the Delayed by almost four years letter sometime ago. SEZ, a blatant loot is going — it was scheduled to be Addressed to the on of farmers’ precious land completed in 2008 — the Government of Maharashtra, by vested interests that are villagers all around the city’s Chief Minister, Deputy Chief aiming to make hundreds of international airport are up Minister, Ministers, crores of rupees after in arms because they have Legislators, and officials, the developing the property and been moved out to make letter said: “It is after a deep selling the same to interested place for the hub. To top it thought that we have opted buyers at shockingly high all, most of them complain to write this open letter to cost. In the process, farmers that they have been paid measly amounts by the Maharashtra Airport Development Company (MADC), responsible for the MIHAN project, that has started acquiring around 350 hectares from farmers and others. The MADC has acquired 3,313 hectares of land for the construction of the cargo hub and Special Economic Zone (SEZ). The total acquisition for MIHAN and SEZ would CAUGHT IN A TANGLE: The Nagpur hub is caught in a legal tussle be 4354 hectares of land that includes 183 hectares of land owned by the highlight a major issue to are left high and dry with government. A SEZ of 2086 correct a huge wrong being only a few pennies in their hectares — the largest multiperpetrated in Nagpur by pockets, by violating the law product SEZ in India will be way of the Special Economic that governs Special set up beside the airport. Of Zone promoted by Economic Zones.” 2086 hectares, 1472 hectares Maharashtra Airport The editor ends the note would be used by various Development Company asking the government to processing units and the (MADC). If we fail to act fast, conduct a thorough probe remaining 614 hectares will if we do not step in to stop into the SEZ land grab affair be for service sector units. the loot that has been going and even consider Their cause has been for a long time in the name of possibilities of launching taken up by a local and development, a mega scandal criminal proceedings against established newspaper, The will explode here.” He goes the guilty. On his part, the

The creation of the multi-modal hub in Nagpur is in the throes of a major crisis. Villagers, whose land has been acquired, have started demanding more money than they were paid. A report.

CRUISING HEIGHTS March 2011

Chief Minister of Maharashtra, Prithviraj Chauhan, has stated that the government would provide compensation, starting at around $10,000, to those farmers whose land had been acquired for the cargo hub. Whatever the outcome of the battle, air cargo stakeholders hold mixed views on MIHAN. Many have even gone on to question whether the project will be worth it or not. According to many, the government should come out with a clear date on when the project will be completed. Still others feel that the multi-modal hub concept at Nagpur will not work. Their reason: a far larger tonnage of cargo emanates from the west and the south of the country than the north and the east. If aircraft from all directions fly in to Nagpur for redistribution of cargo, there will be fewer planes from the north and the east to take back the cargo. There are, however, a number of cargo stakeholders who feel that the hub and spoke concept — akin to the one used by FedEx and UPS — would work well. If the economy performs as well as it has been doing, then Nagpur would do well as a hub. Then, of course, there are environmental concerns. Once the hub is fully functional, the number of planes taking off and landing could not only cause sound pollution but also environmental hazards. Praful Patel recently announced that Air India would soon set up an aircraft engine maintenance workshop for all its next generation engines. “All the next generation aircraft engines manufactured by General Electricals (GE) will be maintained at the Nagpur workshop in the Multi Modal International Passenger and Cargo Hub (MIHAN) in the city,” Patel said. „

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ir India never seems to come out of the quicksand of problems. On one hand, there are financial problems and on the other, dissension within the ranks of the top brass. To add to all this, the carrier’s cargo division has received a fresh notice for ‘unfair trade practices’. The notice has been served on the financially-strapped Indian national carrier by the US

government’s anti-trust department. The carrier, however, maintains that there is nothing to worry. Arvind Jadhav, the carrier’s Chairman and Managing Director, has, in fact, sent a note to the Ministry of Civil Aviation asking it to intervene with the US authorities. Word from Rajiv Gandhi Bhavan — that is where the Civil Aviation Ministry is — has it that it will, in turn, have to

approach the Ministry of External Affairs that would have to take up the matter at diplomatic levels. How and when the case will be settled is a matter of conjecture but Air India believes it is not involved. Contrary to reports, there is little possibility of the carrier paying a fine. In any case, a fine for the carrier, at this point of time, could turn out to be a heavy burden and one that it can ill afford. The primary reason for

IN THE DOCK: Air India cargo has received a fresh notice for ‘unfair trade practices’.

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Even as it flounders to find its wings, Air India cargo has been sent a notice for its apparent ‘unfair trade practices’ by the US Department of Justice. The case, dating back to the 1996-2006 period, involved a number of airlines, some of which had been fined and Air India was not one of them. Tirthankar Ghosh finds out the details.

CRUISING HEIGHTS March 2011

Air India’s CMD to apprise the Civil Aviation Ministry was prompted by the whopping fine China Airlines had to pay - a $40-mn penalty — after it was proved that the carrier had conspired to fix cargo rates for international air cargo shipments to and from the US. According to sources in Air India, the case is quite old and took place well before the Air India and Indian (Airlines) merged into what is now only Air India. The allegations stem from the formation of a cartel that decided on charges for handling, delivery and fuel surcharge at identical rates with other airlines. A notice on the website of the US Department of Justice’s anti-trust department pointed out that as a result of this investigation, 18 airlines and eight executives had been charged “in the Justice Department’s ongoing investigation into price fixing in the air transportation industry”. Air India sources pointed out that the investigations were done from 1999 to 2006. In 2006, several


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FACING SERIOUS CHARGES: Cargolux aircraft and (inset) Cargolux’s CEO, Uli Ogiermann has been indicted for conspiring to fix air cargo surcharges.

carriers were served with subpoenas for possible violations by them in air cargo pricing. On its part, Air India complied with the subpoena and forwarded all the documents to the investigators. Subsequently, a number of carriers were fined and “Air India was not one of them”. Since then, the Air India source said, “Air India heard nothing.” The latest notice came sometime in October 2010, according to the Air India source, when some international forwarders filed another complaint — perhaps, demanding why Air India had not been penalised. Even so, Air India maintains that in the period in question, Air India carried only belly cargo and its total volume was around 1.25-2.25 per cent of the entire quantum that the US anti-trust department has mentioned. In fact, the Air India source emphasised that the carrier had a very small cargo operation and there was no question of cartelisation. Perhaps, that is why Air India would like the matter to be resolved diplomatically and not through lawyers or the court which would not only be time-consuming but also financially taxing. It may be mentioned that

the US anti-trust department indicted last year a former executive of Japan Airlines International and two former executives of Nippon Cargo Airlines for participating in a conspiracy to fix rates for air cargo shipments to and from the United States. Among those who were charged were Takao Fukuchi, former president of JAL Cargo Sales, and Yoshio Kunugi and Naoshige Makino, both former senior executives for Nippon Cargo Airlines, with conspiring with others to suppress and eliminate competition by fixing and coordinating certain components of cargo rates charged to customers for international air shipments to and from the United States. The indictments followed charges against the top two executives at Cargolux, making CEO Ulrich Ogiermann the highestranking official so far to face individual charges in the global anti-trust investigation. The anti-trust case was also taken up by the European Union (EU) bringing to a close a four-year investigation that began with raids on airline offices on both sides of the Atlantic. In early November 2010, the EU fined 11 airlines $1.1 billion

for their role in a global cartel that colluded to fix air cargo rates. Air France-KLM, for example, was hit with the largest fine of $476 million while British Airways has to pay $145.6 million and Singapore Airlines $104.7 million. In the EU case, 11 airlines “coordinated their action on surcharges for fuel and security without discounts,” between 2000 and 2006. The Commission was said to give its decision in 2009, but the case was delayed as airlines claimed they could not pay the fines due to the slump in the air cargo market. The other airlines facing EU fines include Cargolux $112 million, SAS Scandinavian Airline System $98.3 million, Cathay Pacific $80 million, Japan Air Lines $50 million, Martinair $41.3 million and Air Canada $29.4 million. Australian airline Qantas and LAN Chile were both fined around $12 million. Lufthansa was found guilty of price fixing but escaped fines because it notified the Commission of the cartel and co-operated in its investigations. Air India, incidentally, had also been found guilty by the Korea Fair Trade Commission (KFTC) along with 20 other airlines in

CRUISING HEIGHTS March 2011

2010. According to the charges, the Commission found that 21 airlines had conspired to introduce fuel surcharges for air cargo to and from Korea between 1999 and 2007. The Korean commission followed similar investigations in the US, EU and Australia into cargo carriers setting fuel surcharges. In January 2000, seven airlines (Korean Airlines, Asiana Air, Air Hong Kong, Air India, Cathay Pacific Airways, Thai Airways International, Polar Air Cargo) agreed to start imposing fuel surcharge of 0.50 HK$ per kg from February 1, 2000, and consistently colluded to increase surcharge rates adjusting to oil price hikes. The commission estimated that these practices had cost exporters 6.7 trillion won in excessive freight charges. Although fines were imposed on a number of airlines ranging from 48.74 billion won on Korean Airlines Cargo (the penalty was reduced by more than half to 22.2 billion won because the airline cooperated in the probe voluntarily) to 131 million won on Qantas Airways, Air India was let off with only a warning. „

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onstraine d by lack of space, Mumbai International Airport Authority Limited (MIAL) has not been able to create world class cargo infrastructure at the Chhatrapati Shivaji Terminal Airport. Readers of CRUISING HEIGHTS might have read our report that appeared in the issue of October 2010 about the problems faced by forwarders and airlines at Mumbai. Since then, MIAL has been trying to improve the facilities. However, in the first week of October 2010, the clearing agent staff went on a flash strike and stopped work for two consecutive days. Post the agitation, the management of MIAL consisting of Rajeev Jain, President, MIAL and K Govindarajan, Vice-President, Cargo, MIAL, met with the air cargo trade in mid-October 2010 to find out the problems and the possible solutions. Soon afterwards, MIAL started monitoring the situation and all the demands were considered. The MIAL management accepted the trade request to do away with the entry charges for cargo vehicles, started work on widening the approach road to the cargo shed, changing all the forklifts to battery operated ones and also increasing their numbers, and installing some other minor but important features like air ventilators, exhaust fans and water coolers as well as providing a 25-tonne crane round the clock. Talking to CRUISING HEIGHTS, K Govindarajan assured, “Today, almost 50-60 per cent of the cargo congestion has been eased with the help of various measures like introduction of the incentive system and

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MIAL

takes firm steps removal of the token system, etc. This could only happen due to the effective supervision of the MIAL management and cooperation from the stakeholders that is the customs and the air cargo trade, who rose to the occasion.” Even so, enhancement of the infrastructure remains the prime concern. Although various reasons, like space congestion can

Air cargo stakeholders have been complaining about the infrastructure — or, rather the lack of it — at Mumbai airport. The situation has been improving, reports Roohi Ahmad, but not at the speed that those involved in the air cargo trade would like.

be cited for the slow progress, there has been some improvement since the last couple of months, according to freight forwarders. However, these forwarders hastened to add that MIAL has been taking time to get the wheels rolling. Dushyant Mulani, Member, Managing Committee, The Bombay Custom House Agents’ Association (BCHAA), is

CRUISING HEIGHTS March 2011

not satisfied, “As far as MIAL is concerned, they took over in May 2006. Since then, there has been an increase of 25 per cent in cargo volumes. However, as regards infrastructure development, there has been no increase in any warehousing and storage capacity. This is leading to tremendous congestion in loading/offloading of import/export cargo. Trucks have to wait for


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almost five to six hours. As one of the stakeholders at the air cargo complex (ACC), this really baffles me that in spite of repeated assurances from MIAL, why has there been no action as regards increase in warehousing/storage space?” There are several issues involved and MIAL is trying very hard to resolve them like attempting to remove the encroachment so that the roads that lead to the cargo shed can be widened to ease further congestion. Bharat Thakkar, Joint Managing Director, Zeus Air Services Pvt Ltd and Vice President, Air Cargo Agents Association of India (ACAAI) confirmed, “We can see the work happening but it is very slow. The pharma storage that has been ready for sometime now is yet to be commissioned to the trade and is not functional (at the time of writing).” The export congestion at the air cargo complex has gone down due to low exports and after the token system was done away with. The peak for exports is expected from midFebruary onwards. Although this is a very small step in itself, it has helped in easing the congestion to quite an extent. In fact, though congestion exists, the entry is quicker than earlier. MIAL is now vigilant and has ensured the availability of personnel for unloading cargo at all times. “The trade was assured that the unloading will be done within four hours and this is the case now unlike a few months back. Slowly things are progressing but certain restrictions, like space constraints due to 40 per cent encroachment at the CSIA, has hindered progress. MIAL is doing its best,” said Thakkar. He

“Slowly things are progressing but certain restrictions, like space constraints due to 40 per cent encroachment at the CSIA, have hindered progress. MIAL is doing its best.”

“Today, almost 50-60 per cent of the cargo congestion has been eased with the help of various measures like introduction of the incentive system and removal of the token system, etc.”

— Bharat Thakkar

—K Govindrajan

also pointed out: “Previously we used to have meetings with them once a week but now it is going to be conducted once every month since the situation is slowly getting under control.” MIAL is also planning to move the current car parking from inside the air cargo complex to the opposite of CPWD quarters and the heavy cargo shed will ultimately be demolished. The export cargo section has seen more changes than the import cargo where the situation is more or less the same. Mulani added further: “It is imperative that Mumbai air cargo, which is the premier air cargo in the country in terms of tonnage, is suffering from congestion due to lack of focus by the MIAL management. The entire EXIM trade is suffering at Mumbai. We have been having meetings with MIAL regularly.” He

emphasised: “MIAL’s operational team headed by K Govindarajan is providing excellent support even beyond midnight. However, the same needs to be backed by infrastructure development.” MIAL offered an incentive system to the trade that included providing some discount to the trade if loads were cleared early in the morning. Earlier, the maximum amount of cargo clearance and import cargo deliveries were taking place late in the evening leading to more congestion. To uniformly distribute the operations, in December 2010, MIAL introduced an incentive system for clearance of cargo and import deliveries during the early hours of the day. According to reports from MIAL, the trade response to the move has been favourable. One of the most

CRUISING HEIGHTS March 2011

“As far as MIAL is concerned, they took over in May 2006. Since then, there has been an increase of 25 per cent in cargo volumes.” — Dushyant Mulani

important demands of the trade for import cargo was that the commencement of the 72-hour free storage must take place after the cargo is brought to the air cargo complex for importers to take immediate delivery and not start the 72 hours from the arrival of the flight. This request was made in view of the infrastructure constraint at the CSIA and to facilitate importers from not paying unnecessary import charges due to no fault of theirs. The decision from MIAL about this is still pending but has assured freight forwarders that the matter was on their agenda. The air cargo stakeholders in Mumbai hope that something will be done fast. As Bharat Thakkar pointed out, “Ours is a growing economy and to achieve double-digit growth, it is important that robust infrastructural facility is provided to the foreign trade.” „

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The Custom Software Migration from Version 1 to 1.5 in the Customs Icegate System at the Mumbai International Airport Limited threw up a lot of challenges for officials. Roohi Ahmad takes a look to find out how it was achieved.

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s this issue of CRUISING HEIGHTS goes to press, the glitches of the Customs Icegate System around the country should have been ironed out. But the process took a long time and began with the Custom Software Migration from Version 1 to 1.5 that started from Hyderabad in August 2010, and later in Bengaluru, Kolkata and Delhi and then took place in Mumbai (the Mumbai International Airport Limited — MIAL), created initial challenges at all the major airports across the country. The migration in Mumbai started from the December 24 last year and was completed in the subsequent three days. It created more backlog in imports in comparison to exports since the custom department allowed manual clearances. But the trade was offered demurrage waivers in view of the software slowing down the process that resulted in the delay of shipments. Air Cargo Agents Association of India

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Vice President Bharat Thakkar confirmed, "The airport authority of MIAL had been kind enough to waive the demurrage charges for airport

shipments that arrived after the migration started, as it was not the fault of the importers." However, the delay in obtaining printouts of export shipment Let

EXEMPLYFING CHANGE: Custom Software Migration from version 1 to 1.5 has been well received by the Mumbai Customs.

CRUISING HEIGHTS March 2011

Export Order (LEO) could not be obtained for several days due to the problem in the software. Though the system has not yet streamlined, the backlog has been reduced to quite an extent from around 3,600 tonnes in the initial phases. In version 1, all the systems were local; all the messages were processed locally and then sent to the centre at Delhi. However, version 1.5 is on an all-India server and everything is processed under one umbrella. It is also more scientific, has a centralised database and is more beneficial to the trade in the long term. It eliminates duplication of work and has more speed. Nailesh Gandhi, Chairman, EDI, added, "When there was a breakdown either in Delhi or Mumbai, it was an individual occurrence but now if the server is down, it happens all over India and is an all-India phenomenon." The Mumbai region first got its 1.5 version at Mulund around June-July 2010. After that, it was installed at the Mumbai


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Customs. Both these locations are quite small as compared to air cargo, which was an extremely challenging project for everybody including the system directorate, the customs, and the Customs House Agents. Since Mumbai faces a space constraint, even delays for half a day or a day results in congestion and chaos. It was extremely important to manage the whole project and execute it in a scientific way. The Bombay Customs House Agents Association (BCHAA) has been extremely active in this regard for more than 18 years. "I have been personally involved with this for the past so many years," said Nailesh Gandhi. "Since then the custom department also considers BCHAA as part of the team for such projects and such activities. A lot of installations have taken part all over India and a lot of them had a lot of

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challenges. Mumbai has a different style of functioning due to which we were not prepared to accept and face such challenges. So, for almost five to six months, we were studying each and every installation in India and kept listing out all the challenges and also solutions against them. We started educating each of the 1,300 BCHAA membersthat we have in Mumbai. We had training sessions called briefing sessions about what migration from Version 1 to 1.5 all about. We also briefed the members on what care and precautions we as agents need to take and what the customs need to do and what the custodians need to do. It created awareness, and then we roped in the custodians MIAL as to what advance action they need to take." From the beginning, MIAL was requested that there was a need for them to

create space and evacuate old un-cleared cargo. It also needed to have its housekeeping in place, add more manpower for supervision, control and get ready for delays in clearance for a couple of days. Mumbai had a team of Customs officers including, Matthew John, the Commissioner of Imports, Air Cargo; Rajiv Talwar, Commissioner of Exports; and, Rajendra Singh, Additional Commissioner, Electronic Data Interchange (EDI). These key officers executed the projects. At any other station, there were 95 per cent problems and only five per cent smooth functioning. Mumbai, however, was the exact opposite: it faced 15 per cent challenges and 8085 per cent smooth installation was experienced. During migration, all the systems were totally switched off for seamless transfer of data and there was no work. As

manual work would create chaos, it was not an option. The average time taken to migrate from 1 to 1.5 taken is around seven to 10 days. Mumbai had no capacity of delaying import-export for much time. There was a risk of the airport getting choked and the airlines having to bypass Mumbai and offload cargo at other cities. Since December 24 was close to a weekend with Christmas Day as a holiday, the period was chosen for migration. Gandhi further added, "We had a back-up plan and a second window in case of problems. We were aware of the kind of hitches we might face and how we were going to overcome them. On the first day of the implementation, there was a lot of documentation that was getting rejected. It was not due to the ignorance of the Customs House Agent or the airlines but mostly because of the habit of following a particular process and not



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CARGO

working according to the changed system. The failure in the acceptance of documents on the first day was 40 per cent. On the next day it came down to 40 per cent and by the third and the fourth day, it was around 10 per cent. This speed of success of the acceptance of the documents was the best in India. After a couple of days, we were in the process to start releasing the consignment." The major challenge was the printing of the documents. Talwar came up with short-term solutions, executed them and started working on long-term solutions simultaneously. So, without creating a chaos and adversely affecting the trade, one-by-one the challenges were eliminated. BCHAA formed a core team with six persons to address all migration issues. Gandhi was overlooking the whole process, as the Chairman of EDI, he was well acquainted with premigration, pre-EDI and pre-computerisation processes. He was also involved in technically designing the messages, the flow charts, the processes, and was aware of the bottlenecks and where the system might get stuck and what would be needed to be done on short-term basis. The custom department worked on the suggestions of the members. Teamwork between BCHAA, customs Delhi systems, MIAL, and the air cargo agents, who also played an important role, was the reason for the success of the migration. A team was created consisting of Nimish Desai, Rajesh Gosalia, who was overlooking the whole migration along with Gandhi, there was very specific team at the air cargo for migration comprising of Dushyant

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Mulani, Sanjiv Harale and Mani. This team worked at the ground level. Before the migration was announced till it was settled, these members were involved. Gandhi emphasises, "To some, air cargo may be a failure for 1.5 migration but keeping in mind the infrastructure constraint that we have, the flexibility that our system allows to deliver this project in these five days compared to any other installation, it was a grand success. The challenges that we face mainly were small glitches like shortage of hardware but that became a major issue for a few days. There was a serious problem of generation of printouts; our System Director from Delhi is trying to solve this on a permanent basis. Version 1.5 is a value-added product for the nation." Currently, 70 per cent of

them, they did not upgrade their system and did not keep their manpower ready; they did not do a research on what needed to be done. Duty payment became a serious problem. The level of frustration in the first week was due to printing issues. "Both these problems were known to us before migration, as far as printing is concerned, it was more of a local and partly a Delhi system issue, while banking was purely a local issue, which they did not gear up for the migration," informs Gandhi. State Bank of India and Canara Bank were involved. A lot is still to be done from the banking front, from the system side and from the Ministry, to be able to really utilise the benefit of 1.5. For printing, a short-term solution was devised; speed and fonts were major concerns. Now,

the problems have been resolved and 30 per cent attention and modification is still required. But these are not lying in the hands of the Commissioner locally; it is more on system designing and modification of the software etc. The product overall will benefit the clearance, and can change the dwell time. Another problem that the trade faced was banking that was not ready for migration and could not cope up with it. Despite trying to involve

there is a human intervention that was not the case earlier that has caused serious hardships. Human involvement is a local problem while system modification is Delhi problem. The local problems are being addressed by the Commissioner. "For me to sum up the challenges on the local side, shortage of manpower, printing and banking problems are the major cause of the visible problems of migration. The trade has been very helpful

CRUISING HEIGHTS March 2011

and co-operative and has reacted very positively to the migration. It has played a vital role in learning the process of the migration. We had sent circulars etc to the import community and the trade and we had requested the customers to delay their imports wherever possible, and delay or move their exports to some other place for 1015 days. The weather was on our side as their was excessive snowing in Europe during that period so a lot of imports had slowed down and we were able to remove a lot of old debt-cargo form the live space and put it in some other corner. So, we had more space to handle fresh cargo. We did a lot of reengineering of MIAL for the last one year purely from the migration point of view. So, all this incorrect processes of handling cargo that were prevalent were eliminated. We actually re-engineered the whole cargo handling. The airlines were pulled up strongly to see that whatever cargo was handed over to them in the night was cleared by the sunrise so that in the morning when the new cargo comes they give us live space. The pre-stacking area, where the cargo is unloaded and examined, must be available as soon as possible. Working in the night shift dividing the working hours, reorganising the manpower actually helped in getting ready for an expected delay in clearance, increase in the volume of cargo, so on and so forth. So, I think overall it was a very successful implementation," sums up Gandhi. Though there still exist some anomalies but, by and large, most of the issues have been resolved and in the near future, all other pending concerns would also be addressed. „


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CARGO JOTTINGS Flyington terminates A330 freighter order India’s Flyington Freighters has cancelled its order for 12 Airbus A330-200Fs, four years after becoming one of the type’s initial customers. The start-up carrier had been the first cargo operator to sign up to the new type when it ordered six in 2007, before doubling its commitment later the same year. Airbus’ latest order and delivery figures, covering January 2011, confirm the cancellation of a dozen A330 freighters, and the airframer no longer lists Flyington as a customer. Gross orders for 32 aircraft were recorded by Airbus in the first month of the year, including six A380s ordered by South Korea’s Asiana Airlines on January 6. Other agreements covered 12 A330-300s for lessor GECAS, as well as a pair for tour operator TUI Travel which will be used by France’s Corsair. Flyington’s cancellation brings Airbus’ net order total this year to 20. The airframer also delivered 33 aircraft over the month, including two A380s to Qantas.

Is TNT keen to take over Gati? Speculation is rife that Gati has been planning to sell a stake to a foreign strategic buyer. Among those named as the buyer is Dutch express distribution giant TNT. The acquisition moves to take over Gati is nothing new. Way back in 2005, TNT’s Indian arm had started talks. Around that time, while TNT was one of those interested in taking over Gati, there were others in the fray — among who were a few financial institutions. It was believed that TNT would buy up 21.26 per cent of the company. According to logistics business pundits, the Gati takeover would open up the whole of the country for TNT since Gati has grown manifold since it started. The company now has more than 3500

employees and a turnover of `745 crore. It covers 622 out of 626 districts in India and has more than 4000 vehicles on road including a fleet of refrigerated trucks, container vessels and world-class mechantronic warehousing facilities. Also the takeover would increase TNT’s market share. News about the possible takeover has gained strength from the fact that Gati is keen to restructure its business operations. It is believed that Gati is looking for an investor who would take a major stake in the company. Gati’s express

DEAL OR NO DEAL: Speculation regarding acquisition of Gati by TNT is doing the rounds in the air cargo fraternity.

delivery business, for example, accounts for more than 55 per cent share of its turnover. In financial year 2009, however, Gati saw losses due to inefficiency of the aircraft fleet it had leased from Indian (Airlines). While the losses saw an end to the tie-up Gati had with Indian (Airlines), in 2010, the company recouped its losses by closing down its courier business. If TNT is indeed in the fray, it is not alone. Among the others are United Parcel Services and Coffee Day Holdings through Tanglin Retail Realty Developments, that has taken a role in the logistics industry recently.

DACAAI holds second convention The Domestic Cargo Agents Association of India (DACAAI) held its second annual convention recently in Delhi. The theme of the meet was ‘Bringing Domestic Air Cargo in the Right Perspective’. The convention was inaugurated by Charan Dass, Joint Director General, Civil Aviation and Dinesh Kumar, Director, Airports Authority of India. Among those who attended the inauguration were terminal operators, airline representatives and other stakeholders. The convention was held at a crucial juncture: domestic air cargo has been growing at an astounding 20 per cent. It may also be mentioned that DACAAI was successful in stopping the collection of domestic cargo handling charges by the Delhi International Airport authorities. The association had moved the Airport Economic Regulatory Authority (AERA) against the levy of Terminal, Storage and Processing (TSP) charges, X-Ray screening charges among others by Delhi Cargo Service Centre Pvt Ltd (DCSC) and DIAL at the new terminal at IGI Airport. In its application, DACAAI had pointed out that all domestic airlines provided the warehouse and X-Ray screening facilities and the overall freight charges by the airlines were inclusive of the charges for these facilities. At the convention, therefore, the sessions covered issues that the association’s members faced at different airports across the country. The session culminated with elections for the Managing Committee for the year 2011. Among those who were elected office-bearers were: Arvind Nayak as President, Gaurav Ghuwalewala as Vice President, Suraj Agrawal as General Secretary, Inderjeet Sherawat as Joint Secretary

LOOKING FOR ANSWERS:DACAAI top brass at the inaugration of the second convention.

and Ananda Agarwala. In addition, the members of the managing committee were chosen: Amit Gulati, Amit Bajaj, Hari Nair, Sajjan Sharma, Raj Kumar Ghosh, Mario Jude and Ravijeet Sherawat. The second day of the convention began with a business session moderated by B Govindarajan, COO, Tirwin management, who apprised the audience about the dangerous goods regulations and cargo regulations. The session received overwhelming response from DACAAI members who were made aware about the pitfalls that can happen if regulations pertaining to the carriage of cargo by air are not understood. Among the other business sessions was one that was conducted by E Jones, GM Cargo Sales of SpiceJet.

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CARGO JOTTINGS FedEx completes acquisition FedEx Corp recently announced that its FedEx Express business unit has completed the acquisition of the logistics, distribution and express businesses of AFL Pvt. Ltd. (AFL) and its affiliate, Unifreight India Pvt. Ltd. (UFL). The acquisition further enhances FedEx Express international and India business offerings and continues a long-term commitment by FedEx to the growing Indian market. “FedEx continues to remain committed to facilitate the growth of Indian businesses globally. Our ongoing investments in the country are driven by our customers’ evolving demands, thus reinforcing the confidence of FedEx in the future of the Indian market. The acquisition of the AFL and UFL businesses has enhanced the leadership position of FedEx in the Indian express market and offers our customers access to a range of service options, including air express, domestic ground and value added-services such as warehousing, logistics solutions and 3PL,” said Hamdi A Osman, Senior Vice President FedEx Express, Middle East, Indian Subcontinent and Africa. “With this transaction, FedEx Express will now provide all international services for AFL and UFL customers, who will have direct access to the FedEx international air and ground network in more than 220 countries and territories worldwide, enhancing their business flexibility and speed to market,” added Cyrus Guzder, Executive Advisor to FedEx Express, India. Unveils editorial relationship with ESPNcricinfo: FedEx is supporting ESPNcricinfo's extensive Cricket World Cup coverage on a global level, and car marque Saab at a UKlevel, through sponsorship of the sites, which includes extensive coverage, ball-by-ball updates, scores and text commentary as well as recaps, interviews and player profiles from every match. FedEx has secured as a global commercial partner for all social media through the global launch of the FedEx Fan Network in preparation for the start of the Cricket World Cup. Conceived by ESPN's International Marketing Solutions group and offering fans an unparalleled social media experience during the world's most important cricket tournament, the FedEx Fan Network allows cricket fans to interact both with ESPNcricinfo's team of experts, and, other cricket fans around the world. Using a variety of social media tools including Facebook and Twitter, users are able to predict the outcome of each match, discuss and analyse the tournament with each other, rate their favourite players, vote on daily issues and sign up to receive daily email updates. TheFedEx Fan Network will run from early February 2011 through the end of the tournament in April 2011. "Cricket as a sport aligns well with our values at FedEx, as the key qualities for victory on the pitch - such as teamwork, trust and reliability are the same for world-class package delivery," said Raj Subramaniam, Senior Vice-President, Global Marketing, FedEx Services. "The FedEx Fan Network also reinforces our commitment to being one of the leading companies in the social media space - offering our customers the most up to date and insightful information for one of the key sporting events in the calendar at their fingertips."

Boeing hails successful 747-8 freighter flight-test Boeing successfully conducted the first flight of the fifth 7478 Freighter. The airplane, coded as RC523, took off from

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Paine Field in Everett, Washington, for a 3-hour, 30-minute flight before returning to Paine Field. The flight included a standard 2-hour, 30-minute “B1” flight profile that Boeing conducts on all production airplanes prior to delivery, plus an hour of engineering testing woven into the profile. This is the fifth 747-8 Freighter being used in the flight-test programme. Each SKY IS THE LIMIT: Boeing 747-8 Freighter flightairplane is used test spells good times for air cargo industry. for a specific set of tests, with this airplane focussing on functionality and reliability testing. The airplane will remain based at Paine Field throughout its test plan.

Finnair’s Asian cargo on a high Finnair’s Asian cargo operations got a big boost owing to its eastward expansion plan set into motion last year. Finnair’s cargo segment in the region grew by 41 per cent in January compared with the same period of 2010. “A pick-up in demand, particularly in traffic between Europe and Asia, and the ON THE GROWTH PATH: Cargo being impact of cargo airloaded in a Finnair aircraft. craft traffic launched in May last year are evident in cargo growth,” Finnair’s Chief Financial Officer Erno Hilden said. Earlier in 2010, the airline launched freighter flights to Hong Kong and Seoul in May after converting the last two MD-11s in its passenger fleet into freighter nfiguration.

National Airlines enters passenger market The US Department of Transportation has granted Michigan-based National Airlines international passenger charter authority, allowing the airline to transport people, property and mail for 25 years. Previously, National Airlines only used to operate all-cargo service. National Airlines is planning to offer passenger operations using a Boeing 757-200. Certification by the Federal Aviation Administration is currently underway. The carrier’s plan is to offer the passenger flights in addition to services using its fleet of DC-8 aircraft, freighter operations using 747-400s and 757-200 Combi services.”This authority represents a very significant milestone in National’s two-track strategy to augment and modernise our already substantial international cargo-carrying capacity with market-leading international passenger charter operations,” said National’s PresiBIG STEP: Entering the passenger market dent, Steven Harcould give a major boost to National Airlines. rison, in a state-

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ment. “Ours is an ambitious plan, and I’m extremely proud of our team’s world-class performance in safely bringing it closer to realisation.”

Aramex continues expansion drive Aramex, leading global provider of comprehensive logistics and transportation solutions, registered substantial expansion in emerging markets in 2010. The company strengthened its presence in Turkey, Malaysia, Bangladesh and Vietnam through a series of strategic acquisitions and partnerships. On the company’s expansion drive, Fadi Ghandour, Founder and CEO, said: “Aramex will continue pursuing expansion opportunities in Southeast Asia this year.” Significantly, net profits for Aramex’s fourth quarter, ending December 31, 2010, increased 11 per cent to Dhs55 million ($15 million) on revenues of Dhs580 million ($158 million), a 10 per cent increase on the fourth quarter of 2009. Full-year net profits, at Dhs204 million ($55.5 million), were also 11 per cent up on 2009. The company’s revenues increased 13 per cent on the previous year to reach Dhs2.21 billion ($601 million). The fourth-quarter result was “solid” and in line with growth rates during the previous quarters, Ghandour said. “We recorded high net income margins, an increased operating profit and revenue growth in key services across all the markets we serve.”

‘IATA and Singapore’ in strong tie-up The International Air Transport Association has eyes set on Singapore, pledging to work with the country’s government to boost aviation in the Asia-Pacific region. “The support that we will receive from the Singapore government under the agreement will enhance Singapore’s role as a regional hub and position IATA well to deliver its leadership priorities in the region,” said Giovanni Bisignani, IATA’s Director General and CEO, after signing a memorandum of understanding with Singapore’s Minister for transport. Previously, IATA had joined together with the country’s Nanyang Technological University and had agreed to support air transport management programmes at the university — an aviation programme management is being introduced this year and students can enroll in an MBA in aviation management in

2012. Continuing the partnership, IATA has also established scholarships to send up to 12 students to the programmes. Singapore is significant to IATA because it is located “between two of our fastest-growing markets,” Bisignani said, adding, “the government has a long history of understanding the economic benefits of aviation and supporting its profitable development.”

DHL seals deal with Manchester United In one of the biggest logistics deals in the world of football, DHL became the official logistics partner of top English Premier League team Manchester United. The three-year deal will see DHL cover a array of logistics services for Manchester United — one of the most-supported teams in the world — in return for the opportunity to carry out consumer marketing on digital advertising perimeter boards, match-day programme, club website and selected events at Old Trafford. Phil Couchman, CEO of DHL Express UK & Ireland, speaking about the tie-up said: “We have tied up with a brand whose international presence mirrors our own. A major part of our business is to help businesses grow by extending them an efficient and effective international offer.” As part of the collaboration, DHL will team up with the Manchester United Foundation to develop a series of programmes to improve the lives of vulnerable young people in the local community.

BETTER DEAL: DHL deal with Manchester United has been touted as one of the biggest logistics deals in the world.

Singapore welcomes new Air Cargo Express hub

for the operator’s ease of access. Changi Airport Group (CAG) and the Civil Aviation Authority The direct airside access will ensure the smooth flow of of Singapore (CAAS) jointly announced the development of a cargo to and from the aircraft, thus shortening the processing new Air Cargo Express (ACE) Hub which is expected to time for transporting cargo. The facility will also allow access strengthen Singapore’s position as an air cargo hub in the to Singapore’s major expressways to enhance regional distriregion. The new ACE Hub will bution activities and express have a gross floor area of 26,277 courier services. The new facility square metres and will be locatwill also have a special on-site ed within Changi Airport’s free facilitation by the Immigration trade zone thereby supporting and Checkpoints Authority and the cargo and logistics needs of Singapore Customs for efficient air express companies. CAG will cargo clearance. “The ACE Hub handle the development and facility will enable our air cargo operations of the new facility, partner to cater for its future which is poised to be ready in expansion in Singapore and capithe first half of 2012. To support talise on long-term growth opporthe hub, CAG will spend more tunities from increasing intra-Asia than $25 million to build a new trade growth,” said CAG’s Chief WELCOMING CHANGE: An Air cargo hub like Fedex’s (in the airside infrastructure that will Executive Officer, Lee Seow picture) will usher in good times for air cargo industry of have two aircraft parking bays Hiang. Singapore.

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TRAFFIC DATA MARKET SHARE

Passenger traffic:

Airline-wise details of Market share of scheduled domestic airlines for the month of January, 2011 is as follows:

Up and up CAPACITY VS DEMAND

VARIOUS REASONS FOR CANCELLATIONS

Analysis of Capacity (ASKM) and Demand (RPKM) data on Year-to-Year basis indicates that trend of increase in both the capacity and demand continued in the month of January, 2011 also.

VARIOUS REASONS FOR PASSENGER COMPLAINTS

PASSENGER GROWTH Passengers carried by domestic airlines during January, 2011 were 49.36 lakh as against 40.88 lakh during the corresponding period of previous year thereby registering a growth of + 20.7 per cent .

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CANCELLATIONS The overall cancellation rate of scheduled domestic airlines for the month of January, 2011 has been 1.7 per cent. Airline-wise details of cancellations are as follows:

he year 2011 started with a massive growth in passenger traffic. Domestic airlines registered a staggering 20.7 per cent growth in passenger traffic in January this year from that of the last year. Analysis of capacity (ASKM-available seat kilometres) and demand (RPKM-revenue per kilometre) data on year-to-year basis indicates that the trend of increase in both capacity and demand continued from 2010 to January, 2011 too. IA in the month of January, 2011 were 49.36 lakh. It may be recalled that the total domestic passengers carried by the scheduled airlines of India in the month of December, 2010 were 52.13 lakh.

T

¾

The total domestic passengers carried by the scheduled airlines in the month were 49.36 lakh. The break-up for the month was: Air India (Domestic): 7.79 lakh; Jet Airways: 8.54 lakh; Jet Lite: 3.72 lakh; Kingfisher: 9.61 lakh; Spicejet: 7.05 lakh; Go Air: 3.15 lakh; IndiGo: 9.50 lakh.

¾

Airline-wise details of market share of scheduled domestic airlines for January 2011 was as follows: Air India (Domestic): 15.8 per cent; Jet Airways: 17.3 per cent; JetLite: 7.5 per cent; Kingfisher: 19.5 per cent; Spicejet: 14.3 per cent; Go Air: 6.4 per cent; IndiGo: 19.2 per cent.

¾

The seat factor of domestic airlines was: Air India (Domestic): 69.3 per cent; Jet Airways: 73.9 per cent; JetLite: 74.6 per cent; Kingfisher Airlines: 86.5 per cent; Spicejet: 82.6 per cent; Go Air: 83.3 per cent; IndiGo: 88.6 per cent. January 2011 also witnessed a decrease in seat factor as compared to previous month, primarily due to the end of the peak season.

¾

The overall cancellation rate of scheduled domestic airlines for the month of January, 2011 had been 1.7 per cent. The major cause of cancellation was weather.

¾

During the month, 1,296 passenger-related complaints had been received by the scheduled domestic airlines. The number of complaints per 10,000 passengers carried for the month was 2.7. Go Air recorded the highest numbers of passenger complaints while Air India (Domestic) was the lowest in terms of passenger complaints. Staff misbehaviour, lost baggage and refunds were primarily the reasons for most of the passenger complaints.

¾

The overall On-Time Performance (OTP) of scheduled domestic airlines for the month was 81.2 per cent. It has been found that majority of delays have been attributed to reactionary. Weather was second-biggest cause of delay.

PASSENGER COMPLAINTS DURING THE MONTH During January, 2011, a total of 1296 passenger-related complaints had been received by the scheduled domestic airlines. The number of complaints per 10,000 passengers carried for the month of January, 2011 has been 2.7. The airline-wise details are as follows::

SEAT FACTOR The seat factors of various scheduled domestic airlines in the month of January, 2011 are as follow:

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GLOBETROTTING

Damsel in distress

Free bird If you pamper your child to be a brat, someday that child might decide that airport security rules apply only to other people, and you in turn might have to bail him out. Edward T Hall III of Columbia University turned out to be one such chap — when he broke all barriers of airport security by hopping over the ticket counter of JFK airport; jumping onto the baggage belt, and wan-

dering around the tarmac. Ultimately, it took airport authorities about 20 minutes to find and arrest Edward. Earlier, Hall made it into the airport’s secure zone. Interestingly, Edward studies intertemporal choice with respect to environmental decisions as his profile on the Columbia University indicated.

A Chilean woman desperate to keep her boyfriend at home called in a bomb threat as his Iberia airline flight to Spain prepared for take-off. Francisca Galleguillos allegedly warned authorities about the wouldbe bomb, when her boyfriend was scheduled to depart from Santiago’s international airport to Madrid. Marco Arancibia, 39, was travelling to Spain to begin working on a cruise ship for eight months. Gal-

‘I will take this plane down’

Show me the way, please!!! n a bizarre incident, a pilot turned up so boozed at Heathrow that he didn’t know where he was supposed to fly his passenger plane. Following the consequences, he has been jailed for six months. It all happened when Pilot George La Perle was stopped by security officers because he was smacking of alcohol, Isleworth Crown Court was told. He told them he just had a few beers the previous evening and that he was scheduled to fly to New York. His destination was in fact Detroit. The 49-yearold was found to have four and a half times - the legal amount of alcohol for

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pilots in his blood. He also exceeded the less strict limits for driving a car. First Officer Le Perle, of Delta Airlines, who has 20-year flying experience, was due to be one of three pilots in the cockpit of the Boeing 767, with 240 passengers on board, the court was told. Flying regulations allow pilots a maximum of 20 milligrams of alcohol per 100 millilitres of blood — La Perle was found to have 89. It was later discovered that La Perle, from Boston, US, was an alcoholic. He pleaded guilty to performing an aviation function with excess alcohol. His counsel admitted that La Perle felt deep remorse. CRUISING HEIGHTS March 2011

A man on a flight to Florida caused the JetBlue aircraft to make an emergency landing after shouting. Kevin Theodore Simon, 45, was flying from San Francisco to Fort Lauderdale, when the pilot made the decision to make an unscheduled landing in Salt Lake City. Ultimately, FBI agents took Simon into detention and charged him with interference of a flight crew. Simon apparently became aggressive shortly after take-off when he was not permitted to buy headphones with cash as the airline only accepted credit card payments. When the crew members onboard Flight 278 refused to serve Simon alcoholic beverages, deeming him to be intoxicated, Simon ‘loudly complained’ that he was not drunk. His behaviour unnerved passengers and he was moved to a different seat in the aircraft. An attendant accidentally dropped something on Simon’s shoulder from an overhead compartment which caused Simon to become even more brutal. The flight attendant recommended that he call a toll-free number for JetBlue when Simon said he wanted to file a formal complaint. It is unknown what object had fallen on Simon. Simon then threatened the flight crew by saying he would follow them off the aircraft and ‘have their jobs’. “I will take this plane down!” he shouted repeatedly throwing a piece of paper.


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Performance in the air leguillos was arrested and transferred to a detention centre in Santiago. Flight 6830 was at the point of take-off when she called up authorities and made the false report. As a result, 312 passengers were evacuated. After the crew and passengers got down, authorities searched the plane and did not find any explosives. The passengers spent the night at a Santiago hotel and were booked onto a flight to Spain scheduled to depart on Monday night.

Mutiny on board A large scuffle on board a Ryanair plane to Canary Islands forced the police to remove more than 100 passengers from the plane. The disruption happened when low-cost Ryanair tried to charge one passenger extra for carry-on baggage and his friends aboard the plane mutinied. An Interior Ministry spokesman said the pilot was preparing for take-off at Guacimeta airport on the Lanzarote island resort for Charleroi, Belgium, when she radioed for police assistance. Of the 168 passengers, only 64 were allowed to reboard the flight. The rest had to find other carriers and some spent the night on Lanzarote. Ryanair confirmed the passengers “became disruptive and refused to comply with crew instructions” after a requirement to pay a gate bag fee “for outsized luggage”. The airline said that police had required the entire plane be offloaded and each passenger identified.

ATLANTA rapper B.o.B. surprised passengers when he treated them to an impromptu performance of his Grammy nominated hit single, “Airplanes”. The rapper was on-board recently, when a Delta Airlines flight attendant gave B.o.B, an official introduction over the intercom. “Flying with us today is sixtime Grammy nominee, B.o.B.

Today, we got special entertainment for you.B.o.B has graciously agreed to give us all very impromptu performance.” After B.o.B took over the microphone and began to rap along “Airplanes” as a member of entourage played it from an iPhone.

area hospital for a psychiatric evaluation. The Daily News took a look at Isabelle’s background, writing his Facebook pages lists as his hobbies shooting guns, riding motorcycles, Yoga and helping to maintain the freedom of this country and bring the Constitution back into focus.

Capt Drunk! THERE was high drama on a flight when a drunken passenger insisted on flying a plane. At the end of it all, the poor fellow had to be taken away by Egyptian security men who boarded the aircraft at Cairo international airport. In fact, the rider from a Gulf country entered the captain’s cabin and told the pilot he wanted to fly the aircraft after it landed in Cairo from Qatar, the Arabic language daily Kabar reported. “Taken aback, the pilot asked the 44-year-old passenger to leave the aircraft but he refused and insisted on flying it,” the newspaper said. “The pilot then radioed the security men who boarded the aircraft and carried the drunk passenger out,” the daily added without indentifying the passenger or the flight.

Punching hard

Stand-up flight

RECENTLY, on an American Airlines flight from Rio de Janeiro to New York, JFK, passengers interfered to overcome a man who punched a male flight attendant. The 63-year-old man went “berserk” on Thursday “after he found his path to the bathroom blocked by a beverage cart — kicking it over and punching a flight attendant in the stomach.” Thirty-six-year-old Ramiro Silos — one of the men that came to the attendant’s aid told The Daily News the unruly flier was “screaming something about his sons… The guy was big and he was screaming, screaming, screaming. I could not understand him. But when we took him down, we took him down hard.” The unruly flier, identified in multiple media accounts as Michael Isabelle of Framingham, Mass., was taken into custody by Port Authority police and turned over to a New York-

A six-foot-seven-inch man travelling from Chicago to Florida said he had to stand for the entire flight as he couldn’t fit into the seat. Brooks Anderson boarded a Spirit Airlines flight at O’Hare to spend Christmas in Florida. Once on board, he tried to “squeeze his knees under his chin” to fit in the airline’s coach seat. Anderson said the flight attendants wouldn’t let him stick his knees into the aisle, so he was forced, at first, to sit with them jammed into the tray table, an “incredibly painful” experience. He asked if he could stand after the flight took off. The man spent the remainder of the flight dodging people going to and from the bathroom. The airline has larger “big front seats” for customers who prefer more legroom for an additional $25. Interestingly, the airline did give Anderson an exit row seat at no additional cost for the return trip.

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DOMESTIC AIRLINES Powerful Jet JET AIRWAYS has been recently conferred as a Power Brand among leading corporate enterprises in India at a recent ceremony in New Delhi. The listing is an outcome of a perception-based survey conducted by ICMR along with the IIPM. The parameters are based on high recall value, brand awareness, brand image and perception, brand performance and brand association. The award has been constituted by Planman Marcom. Sudheer Raghavan, Chief Commercial Officer, Jet Airways said, “This recognition for Jet Airways as an Indian Power Brand is testimony of the growing emergence of our airline, as the preferred choice for guests travelling to and from the Indian subcontinent.” One more for Jet: Jet Airways was adjudged the winner of the Coveted Customer & Brand Loyalty Award 2011, in the Domestic Commercial Airlines Sector, for the fourth consecutive year at a gala award ceremony in Mumbai. The award was received by Sonu Kripalani, Vice President, Passenger Sales. The awards are the outcome of a combination of extensive Consumer Research undertaken in six Indian cities with a sample of 25,000 plus consumers aided by nominations received from organisations. 100 flights everyday: Enhancing its growing international network, Jet Airways announced the addition of two daily flights. With this addition, JA becomes the first private Indian airline to operate 100 daily flights to international destinations across the globe.

DC powerflies with Taj Air and BJETS POWERFLY, A significant collaboration launched by Deccan Charters (DC), Taj Air- the executive charter service of IHCL-and Business Jets (BJETS) launched a new agreement in the air charter industry. It has started operation and accepting bookings. The combined fleet will be available through various programs including ad-hoc charters and memberships, loyalty programmes

that extend across all three brands and the various Taj hotels. The booking process will henceforth be integrated, so the customer would be able to book any sector, any airline at any budget at a one-stop-shop.

Kingfisher Airlines launches 11 new flights IN ADDITION to the launch of eleven new flights on its domestic route network, Kingfisher launched an exciting offer aimed at incentivising fliers to take more flights in return of complimentary tickets. The new flights are from Delhi to various cities such as Patna, Ranchi, Srinagar, Guwahati, Imphal, Jaipur, Bhubaneswar and Amritsar. Commenting on the launch of these new routes, Executive VP Commercial, Mr. Manoj Chacko said, “The launch of these eleven EXPANDING WINGS: Kingfisher new flights will further Airlines strengthens its domestic route network by launching more flights strengthen our domestic route network and offer guests more flight options to choose from.” As part of the consumer offer launched by Kingfisher, all guests-who book and travel before April 10-will become eligible to receive free award tickets. Special medical fares launched: Under its Care Fares portfolio, Kingfisher Airlines launched Medical Emergency Fares (MEF). MEFs are designed for the benefit of guests travelling on account of a family medical emergency. To avail the 50 per cent refund on MEF, fliers will need to submit all specified documentation within 60 days of completion of their travel. The Care Fares by Kingfisher are special fares for special needs, and the existing range includes special fares for defence personnel, senior citizens and students.

Business aviation looks at growth

FOCUSSING ON FUTURE: Indian Business Aviation Expo held in New Delhi explored the latest developments in business aviation sector. Seen in picture is Naveen Jindal, MP, who was part of the event.

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TO EXPLORE the latest developments in the business aviation sector of India as well as prospects and challenges for the future, the second edition of Indian Business Aviation Expo (IBAE) was recently held in New Delhi. The expo saw business aviation’s top vendors, industry leaders and experts from around the world coming together at a crucial juncture: the market in Asia is emerging and is eager for information and products that can assist in the growth of the region as a strong economic leader. On the sidelines of the threeday event, Capt Karan Singh, Vice President remarked, “More than enabler, the event is the catalyst for the economy. Aviation is flourishing in other parts of the world and India just needs to adapt to those business models”. The IBAE 2011 is focused towards collating meaningful outcomes to sensitise the government on the sector’s readiness. With surging demand and shortage of aircraft, availability and potential of affordable flexi-travel options offered by charters and small aircraft, a new vista of opportunities has opened up. The other issues which were discussed were the availability of space at airports, permit approvals, funding options of business aircraft and legal implications. Following the robust industry opening, the event added to the delegates’ enthusiasm as Naveen Jindal, MP, recognised the need of the industry to work together, and announced Rs 25 lakh sponsorship for the Business Aviation Association for India (BAAI). The funds will be used to engage a dedicated CEO who would work for the cause of the sector’s growth in India.

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Smart MIAL KEEPING IN mind, the new age gadget-equipped fliers, Mumbai International Airport Pvt. Ltd. (MIAL) announced a revamped official website-www.csia.in with key feature of Mobile Airport Portal(MAP) application. This new application allows the fliers to access flight schedules and other important airport information. It’s the first Indian airport website to offer MAP application. In addition, the website will also enable visitors to request for sms and email updates of arriving and departing flights from the live Flight Information Display feature.

WEB MAKEOVER: Mumbai International Airport Pvt. Ltd. (MIAL) revamped its official website with key feature of Mobile Airport Portal (MAP) application.

GV Sanjay Reddy, Managing Director, MIAL said, “In this age of instant connectivity, an airport website is the first point of reference for any passenger or visitor. For the first time ever in India, visitors on the go can access and download live flight updates from the CSIA website.”

New VIP Lounge at BIAL TO ENSURE a smooth and hassle free airport experience to the passengers, Bengaluru International Airport Limited (BIAL) opened the airport’s new VIP lounge. Located on Level 1 of the terminal, the new lounge will cater exclusively to domestic and international dignitaries, while the one located on the ground floor will be for arriving dignitaries. Equipped with comfortable seating, Wi-Fi facility, televisions and flight information display systems, this lounge is operational 24/7 and can seat 20 guests at a time. G V Sanjay Reddy, Managing Director, BIAL, said, “As Bengaluru’s status grows as an attractive tourist and business destination, the number of high profile and eminent persons passing through our airport is also increasing.” Change of guard: President of BIAL, Marcel Hungerbuehler, will complete his tenure as his contract ends in March 2011. Consequently, Hari Marar, currently Director of Operations has been appointed as President, Operations, effective March 1, 2011. Also, Daniel Bircher, currently Head, Safety Office at the Zurich Airport, will take over from Hari Marar as Director, Operations at BIAL. Marar joined BIAL in September 2006 as the Head of Daily Operations COMFORT ZONE: Bengaluru International Airport Limited opened new and has 15 years of VIP lounge equipped with all the necesexperience in the service sary facilities. industry to his credit. Airport’s new portal launched: To establish BIAL’s online presence in South India, GVK Reddy launched the

airport’s completely revamped portal. Developed after research of the customer needs, business considerations, long term vision and scalability for future, the portal does not serve to be as a mere informative resource, but goes on to function as a digital travel concierge for its users. For this, the airport has partnered with multiple service providers. With precise content and clear representation of airport services, the portal is on par with international portals.

IndiGo hails 100 years of Indian Aviation CELEBRATING THE successful 100 years of the Indian Aviation Industry, IndiGo, with effect from February 16 this year, displayed the logo of the centenary celebrations on the 6E fleet of 34 Airbus A320 aircraft. To commemorate this milestone, ‘the year 2011-12’ has been being declared as the ‘Civil Aviation Centenary Year’. IndiGo will celebrate the occasion with the Indian aviation fraternity by displaying the logo on its fleet till February next year. Expressing his delight on the journey of Indian Aviation Industry, “Aditya Ghosh, President, IndiGo, Aditya Ghosh said, “It is an honour for us as a domestic carrier to be a part of the ninth largest civil aviation market and the fastest growing in the world. As country’s largest carrier, we feel privileged to be a part of this feat, and look forward to contribute into the overall growth of the domestic market, and take the Indian aviation Industry to newer heights.”

IGIA wins hands down DELHI’S INDIRA Gandhi International Airport (IGIA) has been awarded the coveted anna.aero Asia-Pacific Annie 2011 Prize: Airport with The Most New Non-Regional Routes. IGIA has been awarded for a net gain of four new MOMENT OF GLORY: Indira Gandhi destinations outside of International Airport has coveted the anna.aero nna.aero’s definition Asia-Pacific Annie 2011 Prize for expanding to of the Asia-Pacific new non-regional routes. region: Kandahar in Afghanistan (with Ariana Afghan Airlines), Kiev in the Ukraine (Aerosvit), Milan Malpensa in Italy (Jet Airways) and Toronto in Canada (Air India). “The importance of the anna.aero Annie Prizes are selected on the basis on science, statistics and evidence rather than merely the opinion of a panel of judges or votes,” said anna.aero editor Ralph Anker. Flavours of India at T3: International travellers will get an opportunity to take a piece of India through the ‘Mini India’ section at the duty free retail space of IGI Airport in Delhi. The entire collection of Indian products is titled as ‘Discover India’ section, which offers a balanced mix of products such as Indian teas, spices, souvenirs, sweets, handicrafts, handmade paper, herbal cosmetics, handmade wooden toys, ready to eat meals, cashmere shawls, and much more.

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INTERNATIONAL AIRLINES India’s favourite-Lufthansa TRAVEL ENTHUSIASTS and readers of a leading travel magazine, have chosen Lufthansa as the preferred airline for flights abroad. Outlook Traveller Award as ‘Favourite International Airline’ is based on the reader survey conducted by reputed firm, Nielson. “This award underlines how strongly Indian customers appreciate Lufthansa’s extraordinary service quality as well as the unrivalled international connectivity and the TRAVELLER’S CHOICE: Indian travel enthusiasts have selected outstanding value for money we Lufthansa for the Outlook Traveller offer”, explains Axel Hilgers, Award for its qualitative services Lufthansa’s South Asia director. In addition, Lufthansa has introduced a wide range of India-specific services like local cuisine, Indian entertainment options, Indian crew members on all flights, a personal assistance service in local Indian languages for passengers who arrive at Lufthansa hubs in Europe. Lufthansa appoints new VP : Lufthansa appoints Steffen Harbarth as the new Vice President for Asia-Pacific region effective April 2011. He will direct the airline’s regional headquarter based in Singapore. In this new role, Harbarth will manage and direct the sales, marketing and airport operations for Lufthansa Asia-Pacific which includes India. Jens Bischof, member of the Lufthansa German Airlines Board, Sales and Revenue Management said,” Steffen’s wealth of experience in managing Lufthansa’s expanding network and growth at our Munich-hub will be a great asset for further strengthening Lufthansa in the Asian markets.”

Air Arabia expands family AIR ARABIA received the third and fourth of 44 A320 aircraft it has ordered from Airbus. With these two aircraft, global operating fleet of Air Arabia has now 27 A320 aircraft which has a strong network of 67 destinations. A total of six aircrafts are expected to be delivered in 2011 as well. Air Arabia services are spread across Europe, the Middle East, the Indian Subcontinent, Central Asia and North Africa.

QA increases Global Capacity CONSIDERING GROWING passenger demand, Qatar Airways recently announced capacity increase to an array of destinations

across its global network. Services to Kuala Lumpur and Tanzanian capital Dar Es Salaam will increase by twice a day. The daily Bengaluru services to southern India will be upgraded from A320 to a wide-body A330. Flights to Muscat will also increase with capacity rising to 24 flights each week. In Europe too, Qatar Airways is concentrating its expansion plans with new route launches to Bucharest, Budapest, Brussels and Stuttgart. Services to Geneva and Paris will get two new weekly flights. Copenhagen route will go with one extra flight a week and the introduction of a wide body A330 on the daily Barcelona services. Qatar Airways CEO Akbar Al Baker said: “These

EXCELLENT CONNECTIVITY: QA increases its capacity globally with extra flights and more new destinations

capacity increases yet again demonstrate Q A’ commitment to building our route profiles in line with our strategy to offer passengers more travel options.” All the extra flights operate non-stop from Qatar Airways’ Doha hub, offering excellent connections to and from key feeder markets.

Germanwings offers flexi-travel options TO OFFER travel agencies more flexible travel options and comprehensive ticketing services, Amadeus, a leading travel technology partner and Germanwings, low cost airlines in Europe, announce the launch of a new distribution solution. The Amadeus solution enables Germanwings to issue tickets on Lufthansa’s ticket stock and start interlining with the full service carrier. By collaborating with Lufthansa, Germanwings avoids the complex accounting, multiple IATA Billing and Settlement Plan (BSP) contracts and servicing

Around the world in 80 days

will involve the finalists touring Hong Kong for a day and using CATHAY PACIFIC Airways has designed a program to give their initiative and creativity to post Twitter “tweets” and upload the term ‘Experience of a life-time’ a new meaning. It launched photos that capture the essence of the city’s attractions. Cathay a unique initiative through its official Pacific Airways will declare the winner, Facebook page: Once-in-a-lifetime who will receive an unlimited round-trip chance to travel the world in 80 days on Economy Class tickets from Hong Kong the Cathay Pacific network. to any destination of their choice on the You want to be a traveller? All you networks of Cathay Pacific and sister need to do is, click on the ‘like’ option of airline Dragon air for 80 days between the Facebook page and submit a short June 1 and August 31, 2011. Hotel stay video, photo or story explaining the way and daily allowance will be paid in you will spend the travelling days before addition. In return, the winner will March 6, 2011. Cathay Pacific will shortlist submit a daily report on his or her travel a total of eight entrants and will invite them experiences, including photos and LIFETIME EXPERIENCE: Cathay Pacific in a unique to Hong Kong for a final panel interview initiative videos. Billing and Settlement Plan (BSP) through Facebook page gives a experiand a one-day challenge. The challenge ence of a lifetime through its new programme contracts and servicing.

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BA tickets on Travelport TRAVEL AGENCIES in the UK can book pre-paid seating on BA (British Airways) flights through the GDS (Global Distribution System) channel, using their usual desktop and workflow processes. Previously, this was only booked via www.ba.com. Jason Clarke, Travelport’s MD for Europe and Brazil, said, “The initiative with BA is just one of a number of high profile merchandising announcements, the GDS provider hopes to make over the coming months with other key flag carriers.”

Glamorous Virgin THE SEXY advertisement shows they are more than just your runof-the-mill trolley dollies, with their tight red uniforms, long legs and perfect smiles. And it seems the world agrees as Virgin Atlantic’s flight attendants have been voted the most attractive in a new survey of travellers. In fact Virgin’s ‘red hotties’ swept the board with a massive 53 per cent of the vote with no other airline’s cabin crew even coming a close second. The accolade has been RED HOTTIES: Virgin Atlantic’s flight attributed to their global attendants have been voted as the most advertising campaign, attractive in a survey by travellers. which features Bond-style graphics, suggestive images, lots of attractive male and female crew and plenty of subtle innuendos.

Airline of the Year goes to Emirates EMIRATES HAVE been given the Airline of the Year award by leading industry publication Air Transport World. Since starting up in 1985, Emirates has consistently grown into one of the largest and most dynamic airlines in the world. And Emirates’ flagship, A380s are the only commercial aircraft to feature onboard shower spas for first class passengers.

As its president Tim Clark received the award at a gala dinner in Washington DC, he said, “The last few years have been among the most demanding in our industries history but despite the challenges, we have kept our focus on delivering the very highest standards of product, passenger comfort and operational efficiency.” Emirates now flies to 110 cities in 66 countries across Europe, North America, South America, the Middle East, Africa, the Indian subcontinent and Asia-Pacific. Introduces a unique travel experience: As part of its promotion campaign to distinctive holiday destinations, Emirates Airlines launched an innovative contest for its Indian travellers who are planning an international vacation this summer. The contest is valid from February 07, 2011 till March 10, 2011 to explore nature and adventure in Africa, experience the versatile America and witness the scenic views in Europe via Dubai. The 360 degree campaign which includes print, outdoor, digital and television commercials conceptualised by Mudra Group; revolves around the

GALA TIME: SSP Chowrasia, the winner of Avantha Masters 2011 with Emirates cabin crew.

thought “Guess where, and Emirates will fly you there!” The campaign invites participants who have to identify the name of the city by taking cues of the visual representation in the advertisement and enter the contest either by SMSing or logging onto emirates.com/fly there to submit their answers.

Fly-Thru on AirAsia

services to meet the requirements of new-age and tech-savvy AIRASIA HAS become one of the first low-cost carriers to customers. The new free service is a platform for guests to pose offer single itineraries and through-baggage checking on flights any question and engage with AirAsia via live chat, webmail from London to destinations including Melbourne and and twitter. Christchurch. The Fly-Thru service means passengers travelling As soon as a question or enquiry is received, airasia.com/ask from London can now book connecting flights under a single would provide specific, tailor-fitted answers in real time through itinerary, rather than having to book separate flights. Baggage the use of intelligent automated response technology. It also will also be checked through to offers guests the option of the final destination, and passenengaging the airline at twitgers are guaranteed a free change ter.com/ askairasia, live to the next available flight if they chat and webmail. Twitter miss a connecting service as a and live chat services are result of cancellation or reschedulavailable from Monday to ing. Friday between 9 am to 6 Fly-Thru is available on pm Malaysia time (GMT flights from London Stansted to +8). Perth, Melbourne and Tony Fernandes, Group Christchurch, and Air Asia has CEO of AirAsia, said, “The also added the service to its shortairline is investing more in haul network on London flights technology to vastly to Bangkok, Bali and Singapore. improve our guests’ experiThe carrier says that it intends to ence. A huge segment of further roll out the service our guests are internet throughout 2011. savvy and well versed in INNOVATIVE SERVICE: A service by AirAsia that enables guests on May I help you?: AirAsia the use of interactive media multiple flight travel to perform a single check-in for their original and connecting flights. has come up with new online platforms.” CRUISING HEIGHTS March 2011

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TRAVEL & TOURISM Austria for all seasons IF YOU were going to visit one European country this year, what would it be? In a continent teeming with diversity, new statistics show that Austria, home of Mozart, Sigmund Freud and Maria Von Trapp, is gaining popularity among Eurail riders as a onestop destination for arts, culture, and breathtaking beauty. The Eurail Austria pass offers the opportunity to travel through one of Europe’s most diverse and breathtaking terrains in record time. You can now easily ski the Tyrolean Alps, tour Salzburg’s majestic lake region, and JOURNEY THROUGH ECSTASY: Eurail takes travellers through best of the stroll through Vienna’s tourist spots in Europe. royal gardens all within the same trip. And with prices starting at approximately $27 per travel day, this Austrian adventure can be more affordable than ever. Ana Dias e Seixas, Eurail Group’s Marketing Director said: “Eurail offers the best way to experience the European continent, enabling pass holders to hop from city centre to city centre at their own leisure whilst absorbing the ever-changing landscapes.”

strengthening the trade relationship with India. In his last assignment, he was responsible for Presidential Committee of G20 Seoul Summit 2010. Impressive growth: KTO announced recently a high growth of Indian arrivals to South Korea. In terms of visitors’ arrivals, Korea reported an increase of 19 per cent from India by December 2010 as compared to 2009. The tourist arrivals are expected to grow further this year with increased promotions and connectivity. South Korea has been the booming outbound Asian market this year and the market it is growing in double digits. KTO has plans to woo Indian film makers as well. The board is also open to co-marketing campaigns with tour operators and TV broadcasting agencies.

Grape Escapade kicks off FUSION CUISINE, exotic desserts, cheese and wine tasting sessions, live entertainment acts, fashion shows, music and dance - all this happening in Goa’s Grape Escapade, that too along the banks of river Mandovi. Goa Tourism Development Corporation (GTDC), in association with Department of Tourism, is organising the seventh edition of the Grape Escapade, a four-day food and lifestyle festival at the Inox

The road to South Africa THE SOUTH African Tourism, in association with South African Airways has acquainted the Indian channel partners with the most popular destinations and activities with their road show. The road show has gained popularity not only with local delegate participation but also participation from South Africa, with representation from 29 leading travel partners in the travel and hotel industry this time. The road show comprises destination presentations by the board and delegates participating from South Africa and more than 1200 representatives from the travel and tourism industry in India.

Destination Spain rolls out its India campaign INDIAN HOLIDAY-seekers now have a great new destination to set their sights-on Sunny Spain. A country blessed with a climate that allows year-round travel, some of the most spectacular natural beauty, a fabulous bouquet of history comprising 13 UNESCO world heritage sites and the people whose vibrant culture and welcoming attitude prompts the tagline: you’ll feel you’re among friends. Miguel Nieto-Sandoval, Director, Spain Tourism, India, said, “We recognise India’s preeminent position as one of the fastest growing outbound markets in the world. Spain has approximately 80,000 Indians visiting for pure leisure and we have seen a growth of 11 per cent in 2010. We expect this market to grow by well over 25 per cent per year for the next decade at the very least.”

New Korea Tourism Director JAE-SANG Lee has been appointed as the new director of Korea Tourism Organisation (KTO) in India. In his new role, he will be responsible for branding and promoting Korea as well as developing new tourist products for the Indian market. He will also be in charge of building and

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Jae-Sang Lee

ESCAPE TO GOA: Exotic cuisine, cheese and wine tasting sessions, live bands and fashion shows -all happening in Goa’s Grape Escapade

courtyard in the capital city. Shyam Satardekar, Chairman of GTDC Ltd, said, the escapade, being a lifestyle and cuisine festival will go a long way to promote tourism in Goa The event is gaining popularity with every passing year and this year too we the four day festival promises to be filled with great cuisine, fun and excitement.”

Accolades for Claridges THE PRESTIGIOUS Five Star Diamond Award 2011 from the American Academy of Hospitality Science goes to the Claridges, New Delhi and the Claridges, Surajkund. Each year, the academy presents its popular International Star Diamond award on superlative establishments that are deemed to be of pinnacle quality.

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Peter J Leitgeb, President and CEO, the Claridges Hotels & Resorts said, “It is an honour to be bestowed with the Diamond awards. The award comes as a reward for our exceptional effort in enhancing the overall quality of commitment to hospitality and services.”

Hilton spreads out in Mumbai TO CONTINUE their ongoing global expansion plans, Hilton Hotels & Resorts recently announced the opening of its second hotel in Mumbai, India, Hilton Mumbai International Airport. The property is Hilton Worldwide’s third in India which plans to offer 171 rooms. The other two ventures are Hilton New Delhi, Janakpuri and Hilton Garden Inn, New Delhi, Saket. Dave Horton, Global Head, Hilton Hotels & Resorts, said, “We are ranked among the top five international hotel brands in India, and we’re thrilled to bring our authentic hospitality and premium products and services to travellers in India with the opening of the Hilton Mumbai International Airport.” In addition to its beautifully decorated guest MUMBAI CASTLE: A majestic rooms accented with different view of Hilton hotel in Mumbai hues of wood and cream and beige soft furnishings, travellers staying at Hilton Mumbai International Airport can enjoy an exciting range of dining options. Hilton Mumbai International Airport is also equipped with 7,696 square feet of function space; a 2,420-square-foot ballroom and five stately halls exuding a charming European ambience.

Ista adorns Pune ISTA HOTELS recently announced the launch of its fourth hotel in India and first in Maharashtra, in Pune. Part of IHHR Hospitality Private Limited, a young chain of five star luxury hotels, the Pune setup follows its award winning hotels at

Spectacular CityView INDIA’S GARDEN city, Bengaluru, is likely to get a makeover with CityView’s new venture that will include three spectacular buildings including the prestigious Four Seasons Hotel and Private Residences, premium corporate offices and a boutique shopping. The project is a fitting addition to the garden city and embodies the essence of the fastest-growing metro in India. Located close to the heart of the city and with easy access to the new international airport, CityView’s location and understated luxury will create the ideal destination for the discerning global citizen. It is designed by some of the preeminent names in architecture, interior design and landscape design including Studio u+a, Yabu Pushelberg and Landscape. Speaking at the ground-breaking for CityView, Vinay Kapoor, Founder and CEO of Westcourt said, “We are not just creating a premium offering

Bangalore, Hyderabad and Amritsar. Equipped with 209 elegantly appointed rooms, including 12 spacious suites, some with private gardens, two restaurants and a trendy lounge bar, the hotel will cater to the young corporate executive and LAUNCHING LUXURY: Ista Hotels launches its fourth hotel in Pune leisure traveller alike. Ashok Khanna, Managing Director IHHR Hospitality Private Limited, said, “Pune is an integral part of our expansion plan and we are pleased to open hotel Ista in the city. Since the launch of Ista hotels five years ago, we have focused on creating exceptional guest experiences. This has proved to be a critical differentiator for us in the market, one that we look forward to bringing to our Pune debut.”

Around India with Axis

HELPING THE user to avoid issues such as loss of currency, thefts, frequent currency fluctuations, Axis Bank announced the launch of India Travel Card, India’s first and only Indian currency prepaid travel card for foreign nationals and nonresident Indians travelling to India. The India Travel Card will initially be available at select Axis Bank branches in Mumbai, Delhi and Chennai as well as a large network of money changers. The card will be made available at over 190 well-located Axis Bank branches in the next few months. India Travel Card has a limit of Rs 50,000 that can be used at any point of time. A customer can exchange foreign currency with the Branch/Money changer and receive a rupee-denominated prepaid card with the same amount as converted in Indian rupees at the prevailing exchange rate. P Mukherjee, President - Treasury and International Banking, Axis Bank said, “Axis Bank, as a total solutions bank, endeavours to introduce new and innovative products for its customers. We are proud to have introduced this unique payment solution for foreign nationals and NRIs visiting India.”

with this development, but adding to Bengaluru a landmark destination that will define new standards of living, work and leisure, all in one location.”

MAKEOVER: Bengaluru will get a makeover with CityView’s new venture

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TRAVEL & TOURISM Canada woos Indian tourists CANADA TOURISM Commission (CTC) is keen to promote the country in India. Derek Galpin, Managing Director, CTC (China and India) admitted that the focus is more on high-end travellers to visit Canada. India is one of new CTC emerging markets. Bollywood actor Akshay Kumar, Canada’s tourism ambassador; was in attendance at the conference. In the Canadian High Commissioner’s words, “As Akshay can attest, Canada is a great place for holiday.” The theme was to promote Canada as a premier four-season destination for holidaymakers in India. With an eye on India’s growing outbound market, CTC continues to invest its money PARTYING HARD: Canada’s tourism with an annual ambassador Akshay Kumar (third from left) enjoying a toast. marketing budget of Canadian $1.50 million. The resulting surge in outbound numbers to Canada speaks for itself. Tourism from India to Canada has shown a steady growth of 11 per cent annually since 2000. However, in 2010 the number of Indian tourists jumped 20 per cent over the same period in the previous year, to a total of 1,30,000. CTC says it is a healthy mix of business travel, students, leisure and visits to family and friends.

Wooing Indian travellers TAIWAN IS wooing the Indian traveller like never before! Lying off the coast of East Asia and a mere six-hour flight from India, Taiwan is a beautiful, friendly island that never fails to impress. The capital, Taipei, is a modern and hospitable city that preserves its traditional Chinese culture while providing all the modern amenities. In Taipei, visitors find it easy to get around, bask in the pleasant climate, and savour all kinds of Chinese and international cuisine—including authentic Indian food! To publicise Taiwan’s tourist attractions to the Indian traveller, the Taiwan Tourism Board is actively working under the theme of “Tour

Taiwan and Experience the Centennial,” in association with major travel companies including China Airlines, Edison Travel Service, Kuching Travel Service, Spring China Travel Service, Phoenix Tours, and Lion Travel Service.

Delhi Duty Free unveils ‘Spirit of Ireland festival DELHI DUTY- Free IGI Airport in Delhi and Bord Bia, the Irish Food Board joined hands to bring together a month-long Irish Spirits festival called the ‘Spirit of Ireland’. Coinciding with St. Patrick’s Day, which is celebrated in Ireland on March 17 every year and to pay a befitting tribute to St. Patrick, a patron saint of Ireland, the month-long festival will run at Delhi Duty Free from March 01 to 31, 2011. As a part of the promotion, over 20 different Irish spirits brands and a variety of chocolates will be on offer at concessional prices at Delhi Duty Free. Select products will also be available for tasting. To mark the beginning of the festival, the Ambassador of Ireland, Kenneth Thompson made the announcement during a cocktail reception hosted at his residence. Announcing the Festival, Kenneth Thompson said, “St. Patrick’s Day is celebrated with a lot of fervour in Ireland during March and we thought this would ideally be the best time to bring in focus the Irish offerings in the form of Spirits and Chocolates. We are happy to partner with Delhi Duty Free as this will enable us to TIMES: Irish Ambassador reach the maximum CELEBRATION to India, Kenneth Thompson (extreme left), number of Spirit lovers. unveiling the ‘Spirit of Ireland’ festival. The month long festivities begin from March 1 and go on till 31st of the month during which Delhi Duty Free will have a complete Irish setting and ambience.” The festival, Spirit of Ireland also gives every purchaser of an Irish brand during the month of March the opportunity to win an exclusive week long holiday to Ireland with your loved one. All you have to do is buy any Irish brand, fill out a lucky draw coupon.

Dimsums to touch the heart

Caviar dimsum. Perhaps, what is most interesting is that Kapur’s dimsums are available through the day and not as mere snacks. It is a concept as old as Chinese cuisine but it has been given a The exotic ones apart, dimsumbros serves steamed buns and new personality by restaurateur Ashish Kapur in his now threedumplings that have lamb, chicken, fish and vegetables and also month-old dimsumbros, standalone restaurant at Gurgaon. It is has bowls of full meals comprising noodles and the usual the latest venture from the founders of the popular Yo! China chain. Chinese fare.Talking about the concept, Ashish Kapur pointed The eatery charmingly brings dimsum — steamed, baked out, “When I visited China, the one thing I realised was the and fried/pan fried — dining to a level that could very well be inherent love for eating that both the Chinese and the Indians equated with wine and cheese. Chefs from China work their share as a commonality. And while Delhi has long been magic on the small, individual portions of introduced to the simplest, yet one of food — except that these can be China’s oldest culinary traditions, dimsums accompanied along with the traditional tea in their authentic form are magical with a number of innovative and house creations that not only excite taste buds, but special vodka infusions such as rose vodka, leave behind a feeling of longing for more.” lemon grass vodka, cucumber vodka and Dimsums (literally point of the heart) many more. The restaurant’s versatile menu were originally meant to touch the heart offers a wide range of 37 varieties with because they were not a full meal but FOODIE’S DELIGHT: Sui cot Dimsum (left) some signature dishes like Almond Prawns and Playboy Dimsum are the specialities dimsumbros has changed all that. Their with Wasabi Mayo, Playboy dimsum and on offer at dimsumbros. dimsums do touch the heart.

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As and Xs Instead of taking a lavish trip to the Bahamas or Switzerland, Azran Osman Rani, CEO of AirAsia X, chose to visit the frigid, perilous and the most isolated continent of the world, Antartica. Although it may have been a place for intrepid madmen explorers, Rani dared to encounter the glaciers and icebergs. In between, he visited the American and New Zealand research bases at McMurdo and Scott Base to experience the unique climate and geology of the coldest, driest and windiest continent and learn about the fascinating research projects being undertaken there. Azran, who flew to Antarctica on a five-hour flight from the United States Antarctic Programme Passenger Terminal in Christchurch, New Zealand, landed at the Pegasus Runway, an airstrip on an ice shelf at McMurdo Sound,

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Antarctica, where he stayed for two days with the scientists. Ever ready to promote Air Asia, Rani pointed out, “We are willing to go to the ends of earth in search of adventure — that is our X-Factor at AirAsia X. This trip captures the essence of our

CRUISING HEIGHTS March 2011

ICY ADVENTUROUS TOUR: Azran Osman Rani on the end of earth in search of adventure tour of Air Asia X tour .

pioneering X-ploratory spirit of pushing boundaries and breaking conventions. There is no place that is too cold or too remote to stop us from championing low fares and exciting travels and adventures.” Besides touring the research base and facilities, Rani, who is an outdoor adrenaline-junkie, grabbed at the opportunity to go along several hikes across the terrain, climbed hills including the famed Castle Rock and Observatory Hill, as well as taking part in crosscountry Nordic skiing in below freezing temperatures that ranged from -10 to -35 degrees Celsius in the southern summer. His adventure in Antarctica also gave him the opportunity to come close to see native Antarctic residents: Emperor penguins and Weddel seals. „


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