Issuu on Google+

CH cover August new:cover novemver NEW.qxd

August 2010

7/30/2010

4:19 PM

Page 1

Rs 60


Ad Dumi page.qxd

4/30/2010

4:30 PM

Page 1


Edit page.qxd

8/2/2010

11:01 AM

Page 1

EDITOR-IN-CHIEF’S NOTE

Of alliances and tie-ups

S

ome years back, Vijay Mallya and Naresh Goyal had announced grandiosely that they would bring about synergy between Jet Airways and Kingfisher, to make sure that the two airlines were able to meet the economic slump. Mind you, it wasn’t a merger, but simply a resolution to share assets and cooperate. Apart from some excellent photo-ops and a few good quotes, nothing much has come in the three years since the so-called deal was first announced. Well, even without the deal, the Competition Commission of India is investigating whether indeed the deal is a catalyst to stifling competition and recently the Supreme Court declined to stay the CCI 2009 directive to probe the so-called monopoly. The status, as the first half of 2010 closes, is that the probe is on. A good 18 months of probing with a conclusion nowhere in sight! Contrast with the two major alliance/mergers (not synergy/not cooperation) across Europe and America in the last 15 months. In May last year, American Airlines (AA) and British Airways (BA) announced, what was in the words of Richard Branson of Virgin Atlantic “a monster alliance” that included Finnair, Iberia (since taken over by BA), and Royal Jordanian Airlines. “It doesn’t make sense to encourage even less competition by allowing dominant carriers to increase their stranglehold by setting prices together and agreeing schedules,” he said. “…Our arguments are as strong today as they were on the previous two occasions when BA and AA tried to merge. Their dominance has grown even further between then and now,” Branson said angrily. Branson’s pleas obviously fell on deaf years. In close to 15 months, the US Department of Transportation (DoT) approved the alliance: “The department found that granting antitrust immunity to the oneworld alliance will provide travellers and shippers with a variety of benefits, including lower

CRUISING HEIGHTS August 2010

fares in some markets, new non-stop routes, improved services and better schedules,” DoT said, adding, “The department also said that the alliance will enhance competition around the world by enabling the oneworld alliance to compete more vigorously with Star Alliance and SkyTeam (this permission or antitrust immunity has already been granted to 10 airlines in Star and six in SkyTeam, including the recently-merged and now the world’s largest airline Delta), which operate similar immunised alliances.” The European Union too swiftly approved the deal. Twice in the past they had scuppered the alliance. But the 2008 Open Skies treaty between the US and EU, the legal basis for giving up slots in exchange for alliances/synergies no longer exist. In effect, the aviation scenario has completely changed with the Open Skies. Now, one could commiserate with Richard Branson who says he has three per cent of the slots at Heathrow as opposed to the 60 per cent that BA-AA together hold for North America, or revel in the delight of Willie Walsh who says, “This final approval is fantastic news for all three airlines and the oneworld alliance. We’ve waited 14 years to bring the benefits of the transatlantic joint business to our customers and level the playing field with the other two global alliances.” The point is that the authorities on either sides of the Atlantic moved efficiently and quickly to come to a decision and announce clearly and unequivocally. The Kingfisher-Jet synergy pre-dates the AA-BA alliance and we are not yet off the starting block. It doesn’t matter whether Mallya and Goyal see eye to eye or whether the whole thing was a washout, but a clear ruling will help the industry mature and move forward as it looks at consolidation in the coming years. Maybe the only smart move in these 24 months has been Mallya joining the oneworld alliance and Goyal signing up code-share with most Star Alliance members to protect their turf. And it also tells us something about how seriously they take each other and how seriously the institutions look at them!

1


Off the cuff

Content 2-3 march CH 2008 final new.qxd

Chat in the air Is the world really growing smaller? That question may continue to be debated but though the Internet may have made relationships impersonal, it is the same Net that is strangely responsible for bringing the ever-growing fraternity of frequent fliers together. Thank you, social networking sites. More and more people are using their mobile devices to create an informal travellers'community in airports and in the air. Helping them along, of course, are the carriers. According to a recent report, more than 10 airlines in the US, and that includes the big ones like American, Delta and Southwest, have been wiring their fleet for Internet access. Lufthansa, in Europe, has new technology that lets customers connect on transoceanic flights. The report quotes Chris Babb, senior product manager of in-flight entertainment for Delta Air Lines, who states that around 1,200 commercial airliners in the US will have Wi-Fi capability by the end of the year. Virgin America has wired its 28-plane fleet for the Internet. According to the report, half of Virgin's passengers took laptops with them and 17 to 20 per cent were online at any given time. And here's the best: for those who want to connect, Virgin America, in addition to its Internet service, offers seat-to-seat messaging via its seatback video screens. It has also teamed up with match.com to create a party atmosphere on specific flights (reportedly at least one couple who met this way became engaged). That's marriage literally in the heavens!

7/30/2010

6:31 PM

Page 2

contents

AIRASIA’S ASEAN DREAM

p36

As Tony Fernandes' AirAsia starts its services from Delhi, it is time for our legacy carriers to take note. Innovative to the point of starting a trend, AirAsia has set a scorching pace for itself — and it is coming out with flying colours. A close look at what makes AirAsia what it is today.

NEWS DIGEST

p14

A sneak peek at the pulls and pressure that is associated with the proposed Navi Mumbai airport saga and a report on the first interactive meeting between the AERA chief and aviation stakeholders. Plus: Aviation infrastructure briefs from around the country. CRUISING HEIGHTS August 2010

AIR SHOW This year’s Farnborough Air Show in Britain was historic for India. For the first time, the country’s high-tech capabilities were on display for the world to see. A report.

p50


Project1:Layout 1

7/21/2010

10:25 AM

Page 1


Content 2-3 march CH 2008 final new.qxd

8/2/2010

11:00 AM

Page 4

contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST

CRUISING HEIGHTS Volume V  No 4

Editor-in-Chief K SRINIVASAN Managing Editor

TIRTHANKAR GHOSH

INTERVEIW

Consulting Editor

p30

R KRISHNAN Co-ordinating Editor

CRUISING HEIGHTS talked to Michiel Peters (President and CEO) and Martin Mossinkoff (Managing Director) steering Vanderlande Industries, the world’s number one company in the design and implementation of integrated material handling solutions of all sizes.

FOCUS

p34

Delhi’s Terminal 3 has opened its doors to the airlines and travelling public. It's a grand show. We take you inside the T3 for a closer look at the facilities available in this world-class terminal.

PRIYANKA SAXENA Special Correspondent (Mumbai)

ROOHI AHMAD Copy Editor

ASHOK KUMAR Reporters

JASLEEN KAUR, PUNIT MISHRA Art Director

BHART BHARDWAJ Design

RUCHI SINHA, PRADEEP JHA, SHIV Photo Editor

H C TIWARI Publishing Director

ROHIT GOEL Director (Admin & Corporate Affairs)

RAJIV SINGH Subscription

CARGO

JAYA SINGH

p53

(Mob. 9650433044)

CHOCKS OFF

The gloomy economy in Europe and the US has not perturbed Rene Peerboom, Director, Air France KLM (Cargo), who is upbeat about India, and is looking forward to a good 2010. Plus: Rajasthan and the north will get its first Greenfield airport that will provide impetus to the development in the region.

p45

Will Air India have to wait for Turnaround Plan III? The carrier has to go all out if the new Turnaround Plan that was announced recently, has to succeed. What is needed is out-of-the-box nimble moves.

Executive Director

RENU MITTAL MARKETING Director

RAVI SHARMA (Mob. 9650433900)

Regional Sales Manager (South)

KARTHIK K. V. (Mob. 9880209405)

Senior Manager (Marketing)

VARUN MALHOTRA (Mob. 9871866651/9650433099)

Business Development Manager

PRANAV KHULLAR (Mob. 9650433088) Editorial & Marketing office: Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 , Tel: +91-11-41033381-82

BACK PAGE SNIPPETS

p66

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

4

p72

A vintage Sikorsky S38 will fly from Canada to Germany this September. Tom Schrade, who will be piloting the antique “flying boat” plans to enjoy the flight while earn money on a mission of charity.

CRUISING HEIGHTS August 2010

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 Adver-tisements 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.


Looking for budget accommodation for your customers during Commonwealth Games 2010?

InterGlobe Technology Quotient


Periscope 4-5 March 2008.qxd

7/30/2010

6:20 PM

Page 2

Great vision!

PERISCOPE

“

India is at the centre of our vision for the future. CHAI WOO FOO , General Manager, India, Singapore Airlines while talking about seeing a revival in demand on the India route.

Together we are one Reliance Industries and Deccan 360 will jointly work to derive synergies in IT automation, project management and retail network.

CAPT G R GOPINATH, Chairman and Managing Director, Deccan 360, on the JV plans, around 350 kiosks to be opened at Reliance Retail outlets and RIL will help build a central warehouse in Nagpur.

LETTERS TO EDITOR

Truly speaking

The story (The vision creators, July 2010) revealed some very interesting facts and figures about the Terminal 3, which I am sure is truly going to be world class in nature. Touted as the country's biggest and world's eighth largest airport terminal, the terminal has become a harbinger of new India. The visionary like G M Rao has done India proud by creating such a brilliant edifice and that too in record time. The credit should also be given to the Civil Aviation Minister Praful Patel as this would not have been possible without his support. The benchmark being created by Terminal 3 will definitely go down as one of the greatest infrastructural achievements in India. Reema Shukla, Gorakhpur Rs 60

July 2010

We need to create safe, secure, efficient and environment-friendly systems conducive to healthy growth of the civil aviation sector. During the inauguration of T3, Prime Minister DR MANMOHAN SINGH on aligning of policy framework with aviation needs.

G M Rao, Chairman, GMR Group, at T3

Illustrations: Rajeev Kumar

(Moving to brighter skies cautiously, July 2010) was worth a read. The IATA Annual General Meeting came out with strong recommendations for the airline industry. However, IATA's Director General Giovanni Bisignani’s assertion of Vision 2050 in the meeting remains a far cry. It was worthy to note that the meeting remained a gala affair as awards were presented in droves while deserving ones were well awarded. Neil Armstrong being honoured with the Global Aviation Leadership Award (GALA) was something which was long overdue. But the surprise decision of Bisignani to step down came as a shock since the man has done quite good job over the years at IATA. Ram Manohar Singh, Ghaziabad

6

The cargo story (Managing ULDs in tough times, July 2010) revealed interesting trends about air cargo industry. As a matter of fact, unit load devices have come as a boon for perishable products. The practical feasibility of unit load devices in air cargo industry is immense. The air cargo industry can make great use of unit load devices in strengthening its base and volume. In these difficult times, banking on unit load devices might be risky, but it can reap rich dividends for the air cargo industry, that is for sure. Unit load devices is here to stay for a long time! Riyaz Ahmed, Nainital All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin (East), New Delhi -13, OR mail to cruisingheights@newsline.in.

Flying high Gujarat has some 20 small and big airports, and to promote tourism we need better air connectivity. We have also floated our own aviation company to develop infrastructure.

Gujarat Chief Minister NARENDRA MODI on getting 11 new airports to provide air connectivity to major pilgrimage sites in the state and to promote tourism.

Take-off trouble The Navi Mumbai airport needs to take off.

Considering the increase in traffic and limitation on Mumbai airport up to 40-45 million, G V KRISHNA REDDY, Chairman, GVK, believes that if another airport does not come up, it is going to be a problem for the city.

Meeting demands There is tremendous potential for the use of A380 by Indian airlines since traffic here is growing much faster than that in other parts of the world. KIRAN RAO, Vice President, in-charge of marketing at Airbus and head of India operations, on the decision of Indian carriers to add 60 A380s over the next 20 years.

Strong commitment I appeal to all AI employees to show everyone that when a chance is given in the form of a world-class airport, we will also give back world-class services. ARVIND JADHAV, CMD, Air India, on the plans of national carrier to use the new integrated Terminal 3 as its hub.

CRUISING HEIGHTS August 2010


Periscope 4-5 March 2008.qxd

7/30/2010

6:20 PM

Page 3

Top long-haul airlines

 Thai Airways International is up to the mark in all categories except inflight entertainment, while Cathay Pacific has got 4/5 for all services.  Qantas needs improvement in value for money and leg room while Virgin Atlantic has got mixed response.  Delta Airlines is ranked eighth in list, with lowest score in leg room and Air Canada on ninth rank, with lowest score in value for money  Continental Airlines, British Airways, KLM and American Airlines score between 55 and 60 per cent with good performance indicators in checked-in baggage allowance, cleanliness and inflight entertainment.  At the bottom of the list are Thomson Airways/First Choice, Thomas Cook Airlines, United Airlines and South African Airlines: all score below 50 per cent and need upgradation in all services.

COLD STATS

Flying with a good-quality airline really makes a difference to your holiday, and no one wants to kick-start his trip in a cramped or dirty plane. UKbased consumer magazine Which? recently conducted an airlines' satisfaction survey. More than 5,700 travellers rated airlines on the basis of value for money, checked-in baggage allowance, cleanliness, leg room, food and beverages, and inflight entertainment. The list of top long-haul carriers:  Air New Zealand and Singapore Airlines top the list with scores of 86 per cent and 85 per cent respectively, scoring 5/5 for cleanliness and inflight entertainment.  Emirates is on the third position with a score of 83 per cent for its cleanliness, checked-in baggage allowance and inflight entertainment.

LOOKING GLASS

“Oops, Captain! You seem to be making a habit of making passes in the air...�

Aiming high We want to be the premier Indian producer of aircraft. We will explore every opportunity to become a top aircraft manufacturer on the lines of the Brazilian Embraer. ANAND MAHINDRA, Vice-Chairman and Managing Director, Mahindra & Mahindra, on becoming the first Indian private firm to manufacture smaller civil aircraft for the Indian general aviation market.

No comments, please! We continue with our commitment to develop the aerospace ecosystem in the country. However, we do not comment on a specific business transaction. DINESH A KESKAR, President, Boeing India, on the decision of Mahindra & Mahindra to buy one of the Australian facilities of Boeing.

CRUISING HEIGHTS August 2010

7


Off the Record august.qxd

8/2/2010

11:36 AM

Page 8

OFF THE RECORD

AHMEDABADIS GET A MINI CHANGI

C

ivil Aviation Minister Praful Patel inaugurated the re-modelled passenger terminal at the Sardar Vallabhbhai Patel International Airport in early July. Built at a cost of more than Rs 300 crore and modelled on the one at Singapore's Changi Airport, the terminal will give the airport a major facelift. The terminal, spread over 41,000 square metres

ALL IN THE FAMILY!

I

t’s remarkable the foresight and the exceptional vision of many Air India employees. In a country that is full of Boeing and Airbus aircraft, they had that uncanny knack to send their children to become pilots and then get type-rated (it allows you to fly specific aircraft you are rated on) on the ATR and the CRJ. And these are the planes that are least in demand — at least the CRJs have no takers. The ATRs, for that matter, are flown apart from AI by Kingfisher and Jet. But, boy, there are so many AI children who have gone for the CRJ rating. Some foresight this! Sometime back AI issued an advertisement for ‘walk-in interviews’ for type-rated pilots of the CRJ and the ATR for induction as first officers in Air India. There were seven vacancies for the ATR and 11 for the CRJ and lo and behold there were enough type-rated pilots who walked in to be considered. Amongst those who made the cut were the following: Abhinav Sharma (son of M P Sharma, Acting GM-Opera-

8

tions) in Mumbai, Akhil Puri ( brother of AI Commander Rahul Puri presently on deputation to Alliance Air), Anshu Sharma (air hostess with Air India), Sulabh Paul, son of Vijay Paul (ED, Air India), Sawmya Ritvij Kapoor, son of Atul Kapoor (Senior Manager-Commercial), Vijayander Sanjay Kumar Lal, son of Shyam Lal (Retired EDRelated Business), presently on contract in the In-Flight Services Department. There are only 11 vacancies against which nine have appeared, so all are bound to get their jobs. In the ATR section, there are seven vacancies and seven have applied of which two are AI children: Amol Goyal, son of Arun Goyal (Company Secretary, Alliance Air and Senior Manager, Finance, AI), Shashank Gupta, son of Rajeshwar Gupta (Senior Manager, AI and ex-PA to former Managing Director, Sushma Chawla). Usually Alliance Air interviews are held without a written test and are ‘walk-in’ by nature. But this particular interview comes in the wake of an exhaustive process to select copilots for the CRJ and ATR fleet of AI held nearly a year back. At that CPL Arvind Jadhav

of floor space, can handle 100 domestic and more than 20 international flights a day. Besides the state-of-the art departure baggage conveyors and the carousal-type arrival conveyors, the terminal will boast of a 410-metre-long travelator that will provide an underground link for passengers from the new terminal to the existing terminal, helping them avoid the drudgery of walking a long distance. With 12 bays (apron), four aerobridges and 32 check-in counters, the airport will be able to handle 80 lakh passengers a year, against the present traffic of 27 lakh. AAI Chairman V P Agarwal said, “This is the airport of the future and this is the sort of design and conveniences that passengers can expect from the AAI.”

holders were invited to apply and the entire process of selection had been completed and the file put up to the present CMD to release the vacancies so that the appointments could be made. While that was not done, the personnel department has gone ahead and held ‘walk-in interviews’. One wonders if the CMD is indeed aware of this and does it have his blessings? Meanwhile, both the ICPA (Indian Commercial Pilots Association) that represents former IA pilots and the Indian Pilots Guild (IPG) that represents AI pilots have protested at the AI management’s move to recruit Boeing 737 type-rated pilots from outside and then train them for the B777 when there are a huge number of in-house pilots who are hardly flying. “Sir, the entire purpose of the merger of AI and IA was to have synergy — to use the resources of one airline which are in excess at places where there is deficiency of a requirement. There is a surplus of pilots in NACIL (I) with repeated submissions to you and to the office of ED (operations) that a minimum of 60 sets of pilots (60 commanders and 60 copilots) can at any stage be released from IC (NACIL-I) network for re-deployment wherever there is a shortage. There is severe shortage of pilots on B777 and in the coming days on B787 aircraft (to be inducted shortly). When there are pilots available in-house, we fail to understand why the company is advertising for pilots,” the ICPA said in its letter of July 27 to AI CMD Arvind Jadhav. The management’s argument is that the DGCA does not agree to the movement of pilots from one entity to the other. If indeed this is true then what is the whole idea of merger?


Document1

6/29/2010

12:31 PM

Page 1


Off the Record august.qxd

7/30/2010

6:13 PM

Page 10

OFF THE RECORD

S M Thiagarajan

WHAT’S UP, THIAGARAJAN?

N

10

mental challenge. He worked to turn it around, put the high-flying Ajay Singh in his place, got the unstinted backing of Wilbur Ross (the only hiccup was the MRO agreement that SpiceJet did under Sanjay) and ran an efficient airline. But Sanjay need not be dismayed. There are reports that many are impressed with his SpiceJet stint and keen to use his expertise in the LCC space to improve their own floundering operations. Watch this space for an update. It is quite possible that Sanjay may stay on and join another airline in India. For those of you who want to know who are talking to him, we have no answers to offer. Some things are best left unsaid. Why don't you do your own digging for a change? Interestingly, so strong is the earnings growth for the quarter-ended June 2010 that the airline has ordered 30 Boeing 737-800 aircraft to take its fleet size to 75 planes by 2018. The deal is pegged at $2.7 billion on the list prices and deliveries for these Boeing will begin from 2014 and continue till 2018.

WHAT WILL SANJAY DO NOW?

Sanjay Agarwal

CRUISING HEIGHTS August 2010

Photo: H.C. Tiwari

ow don’t get us wrong, but the one question everyone wanted to ask the Paramount Airways owner is whether indeed his company intended to fly or wind up. No surprise for guessing what Thiagarajan thought of the question. He seethed in anger. “Where is the question of winding up? We had a problem with GECAS and they have taken back three aircraft,” he said. One of the company’s planes is under operation and the other one is under maintenance. Is he worried at the entry of the Marans in the airline business? “Our model is completely different from other airlines. Our’s is a completely wellaccepted Business Class product with the highest load factor even in the few aircraft that we are flying,” he said. He is categorical that he will continue to fly and, well, expand. And what does he explain the woes of the last months to? He doesn’t want to name names, but believes some people in authority ganged up to keep them on the ground (meanwhile, DGCA sources say that Thiagarajan is himself to blame for his present predicament). And what about all the staff during this time? “We asked some of them to go on leave for this period and most of them agreed to our request, but there are about five or six people in the cabin and cockpit crew team who did not want to take leave, but leave. So we settled their dues and they have left the company.” And, finally, when does he hope to be back with a bang? “By the middle of August, we will be back to our routine. We have established a place for ourselves and are not going to give it up any time soon,” said Thiagarajan.

anjay Agarwal will be leaving SpiceJet any time now. In fact, by the time this comes into print he could be out of the frame. So what's on the agenda for this low-profile CEO who was handpicked by Wilbur Ross to take SpiceJet to the next level? Sanjay did the honourable thing by quitting when he realised that all of Kalanidhi Maran's sweet talk had no meaning when he was already in discussion with Neil Mills, currently serving as the Chief Financial Officer (CFO) of the Middle-Eastern low-cost airline, FlyDubai. Mills will be the new CEO of SpiceJet and is likely to join the airline in October. Many believe that the deal with Mills is the reason why Sanjay chose to step down. Kishore Gupta is the interim CEO of the airline. It's ironical that Sanjay leaves at the end of a sterling performance. When he joined SpiceJet there was a bit of organised chaos at the airline: oil prices were zooming up, there was fragmented ownership and internecine wars amongst them, no one saw eye-to-eye on anything and decision-making was a monu-


At Amadeus we aspire to be Brighter, Bolder, Better Amadeus people all around the world are working together, helping you be brighter. Our bolder approach to innovation is enabling every step of the travel chain. We aspire to deliver better service and solutions to drive your business results. Together we can build a Brighter, Bolder, Better future for the travel industry.

To learn more about how the world’s best travel technology provider can help your business succeed, call us on our 24x7 help line on 1800 111 200


7/30/2010

6:07 PM

Page 2

SU

N O BSCR W IBE !

double spread tX add for ch.qxd

:Cover Cover July

VOL. I, ISSUE

July.qxd

VI, JULY 2010



7/7/2010

12:24 PM

Page 1

India’s best known Travel & Tourism monthly Magazine.

Rs 60

Putting

world oring the back to expl the zing

es love Why ladi

Antwerp the Let’s go on

No secrets in

Khajuraho

Great Ocean Drive

FOR

SUBSCRIPTIONS

r seen  Call Have you eve’ down? +91-9650433044 or in m o the rain...c  email: jaya@newsline.in

Welcome to TravelX TravelX, the new landmark in the travel publication industry is the latest offering from Newsline Publications whose magazine on aviation - Cruising Heights has been an integral part of the Indian aviation scene for many years now.


double spread tX add for ch.qxd

7/30/2010

6:07 PM

Page 3

Putting the zing back to exploring the world

VOL. I, ISSUE III, APRIL 2010  Rs 60

VOL. I, ISSUE I, FEBRUARY 2010

VOL. I, ISSUE IV, MAY 2010  Rs 60 VOL. I, ISSUE V, JUNE 2010  Rs 60

Putting the zing back to exploring the world

Putting the zing back to exploring the world

Putting the zing back to exploring the world

Putting the zing back to exploring the world

Rs 50

BACCARAT & TARTS IN

EUROPE from a train window

Macau!

Football or Luxury Cruises? Options galore...

Ever seen India’s

NIAGARA FALLS!

Race

Journey to

with the dragon

TAWANG

By George!

It’s Clooney’s Paradise

Psst! Game for a weekend trip...

Up hill, down dale

Paradise is a few hours from home

Bored, braised and roasted in the heat of the plains? It's time to head to the hills!

Discover our

Top-Secret Hideaways A sneak peek at locations you will never find in any travel brochures

S u b s c r i b e t o Tr a v e l X a n d b e c o m e a p a r t o f o u r f a m i l y

Please accept my subscription for 12, 24 and 36 issues of TravelX



Name_________________________________________________________________________________________________________________ Address_______________________________________________________________________________________________________________ Ph. No.________________________________________________ Payment

Cash

e-mail_______________________________________________________

Cheque

Cheque/DDNo. ____________________________________________

Drawn on_____________________________________________________________________________________________________________ Date_______________________________________________________ Signature _________________________________________________ NO. OF ISSUES

NEWSSTAND PRICE

DISCOUNT

YOU PAY

YOU SAVE

12

Rs. 720/-

15%

Rs. 618/-

Rs. 102/-

24

Rs. 1440/-

20%

Rs. 1152/-

Rs. 288/-

36

Rs. 2160/-

25%

Rs. 1620/-

Rs. 540/-

Cheque / DDs should be drawn in favour of NEWSLINE PUBLICATIONS PVT. LTD. Send your subscription to Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 Contact us on : +91-11-41033381-82, Mob : 9650433044, e-mail: jaya@newsline.in


NewsDigest August.qxd

7/30/2010

6:03 PM

Page 14

NEWS DIGEST

NAVI VS PURANA

A MUMBAI SAGA! N

NEW BEGINNING: Maharashtra Chief Minister Ashok Chavan lights the lamp to inaugurate the Mumbai airport’s terminal. Others in the picture are Praful Patel, Dr T Subbarami Reddy and GVK’s G V Krishna Reddy.

14

CRUISING HEIGHTS August 2010

early 22 months ago on September 18, 2008, the then Managing Director of CIDCO (The City and Industrial Development Corporation of Maharashtra Ltd) said, “We want the work on Navi Mumbai to begin as early as possible. We want to work to replant the mangroves that occupy about 115 hectares and have also offered replant these on the Palm Beach Road and other areas of Navi Mumbai. The first phase of the work (Navi Mumbai airport) can be completed by 2012 provided CIDCO was given permission to start the work right away.” This statement came 22 months ago. Interestingly, the statement came towards the fag end of UPA-I (United Progressive Alliance) and as we all know just after UPA was about to assume office for the second time in May 2009, the Ministry of Civil Aviation rejoiced at receiving the “In Principle Approval from the Ministry of Environment and Forests”


Document2

7/21/2010

3:02 PM

Page 1


NewsDigest August.qxd

7/30/2010

6:03 PM

Page 16

NEWS DIGEST

QUESTIONING THE FEASIBILITY: Jairam Ramesh has put a big question mark on the viability of Navi Mumbai airport.





NEWS

INFRASTRUCTURE

for starting work on the Navi Mumbai airport. That is where everything stands today more than a year after UPA II assumed power. In December 2009, Maharashtra Chief Minister Ashok Chavan announced that the Navi Mumbai airport should become operational by 2013 rather than 2014 as he wanted the showcase airport to be ready for public viewing before the next Lok Sabha elections. As per Chavan’s December 2009 schedule, the first phase of Navi Mumbai airport could become operational by December 2014 or in five full years. Chairing a review meeting of state government officials, Chavan exhorted them to speed up work of

16

regeneration of mangroves and resettlement of 3,000 families so that the much-awaited airport could become a reality by December 2013 rather than 2014. The Chief Minister as per Environment Ministry’s directions wanted CIDCO to regenerate mangroves on 300 acres of land which was double the size of the existing 150 acres covered by mangroves. For this, CIDCO appointed Mess Lewis Environmental Services Inc, a US-based firm, as an expert review consultant. It also appointed a Denmarkbased firm DHI as a consultant for the mathematical model study to assist the Central Water and Power Research Station, Pune, for diversion of two rivers — Ghadi

BIAL TOPS IN QUALITY

The Bengaluru International Airport Limited (BIAL) has received a high rating in a survey carried out by the Airport Councils International (ACI). On a scale of five, BIAL has received a score of 4.2 in the first quarter of 2010 alone. The survey was carried out by speaking to passengers every month of the year. BIAL Director (Operations) Hari Marar said that airports generally score around 3.5 in their first year of operation. “We received a score of 4.07 in the first year. Internally we believe

operation stability was gained very early,” said Marar, explaining that more than 32 criteria are mapped in the survey. Marar said that they also conduct internal surveys to gauge responses from passengers. He also cited the example of Air France whose passengers rated BIAL as number one in the areas of check-in and boarding, leaving behind airports in Shanghai and Hong Kong. In April this year, BIAL was awarded with the title ‘Best Emerging Airport’ in the Indian subcontinent, by the Emerging Markets Airports Awards (EMAA). Other nominees included the GMR Hyderabad International Airport, Bandaranaike International Airport (Sri Lanka) and Malé International Airport (Maldives). 

Bengaluru airport

and Ulve — that flowed in the area where the Navi Mumbai airport was going to be built. In addition, it was also informed that a 90-meter hill would have to be flattened to make room for the airport. It appeared that the Chavan government without full clearance from the Union Environment Ministry went about the job as if it had got all the clearances to build the much-needed second airport for Mumbai at Navi Mumbai. But then, Jairam Ramesh in his new avatar as Union Environment Minister in UPA-II (he was Power Minister in the UPA-I) had already started questioning the very meaning of “In Principle Clearance”. He pointed out that there was no meaning in giving “In Principle Clearance” unless everything was okay from the environment point of view. He even visited Mumbai and Navi Mumbai in the latter part of 2009 and early 2010 and then put a complete stop to any work on the proposed new airport. He then went about methodically and commissioned an Environmental Impact Study by IIT Mumbai that said at least 400 acres of mangroves would be affected and two rivers as mentioned above would have to be diverted to make way for the new airport. Besides, it also raised many other contentious issues. The environment related issues moved back and forth and no formal clearance was anywhere in sight. As a result, the long-awaited tendering job remained in a limbo. This obviously means that the Navi Mumbai airport — if cleared — cannot be ready before 2015. Simply put, that would mean an excruciatingly

JUHU AIRPORT GETS CONSULTANT

Plans for the expansion of Juhu airport moved forward a little with the appointment of a consultancy firm. Airports Authority of India (AAI) has appointed KPMG to develop expansion plans of the Juhu airport, according to a senior airport official. The firm has three months to come out with the Juhu airport development plan. Based on this plan, the AAI will come out with a short-term plan, a medium-term plan and a long-term plan for the

CRUISING HEIGHTS August 2010


NewsDigest August.qxd

7/30/2010

6:03 PM

It appears that there are only two rivers: parallel or not parallel we do not know. The Maharashtra government noted that the diversion of the two rivers will not cause any flooding and hence the environmental clearance should be waived. But the IIT report said that there should not be any compromise on retaining the geomorphology of the rivers, the aquatic life and the mangroves in the airport zone. All this reached a flashpoint on July 3, 2010 when Civil Aviation Minister Praful Patel, while talking to a TV channel on the occasion of the inauguration of T3 terminal at Delhi airport, said that the Union Environment Ministry and its Minister were being very obstructive and that they should reason in the fast approaching deadline when Mumbai will be unable to

Photo courtesy: affordablehousinginstitute.org

painful period for Mumbai airport that is in any case about to be saturated by 2013. So, for two years from 2013 onwards, Mumbai will not be able to accommodate any more new flights — domestic or international — till Navi Mumbai airport starts operations. The future, or should we say crystal gazers have begun to point out that four years from now, we may see passengers taking any surface transport to go to Pune, Bengaluru or other airports from Mumbai to fly out! The existing Mumbai airport which is under renovation and modernisation has a maximum capacity of 40 million passengers which it will reach by 2013. The new proposed Navi Mumbai airport if built could cater to 60 million passengers as it will have much bigger terminals and also two parallel runways.

Page 17

LANDING AMID SLUMS: An Air India plane landing at Chhatrapati Shivaji International Airport, Mumbai.

airport which would also have to secure environmental clearances. Authorities are exploring the option of expanding Juhu runway to ease some pressure off the Chattrapati Shivaji International Airport (CSIA). At present, Juhu airport handles around 90 helicopter operations, which is among the largest helicopter bases in the country. Part of the runway expansion plan could run into the Juhu beach, which would have to be referred to the Environment Ministry. Further, the airport officials would have to coordinate with municipality officials for a subway. If approved, in the first phase of runway expansion programme, the airport ought to be able to accommodate ATRs and in the later phases, larger aircraft could also operate out of the airport. 

WAIT CHOPPER WAIT

The Ministries of Defence and Environment are, as usual, ready to play the spoilsport. The state government’s plan to set up heliports across the city has hit a major roadblock. Despite the Mumbai Metropolitan Region Development Authority (MMRDA) submitting all necessary plans, the Union Defence Ministry and Environment and Forest Ministry have not given nod to the project that will allow helicopters in Mumbai. The MMRDA

accommodate any more flights due to saturation. He said two years from now it will not be even possible to carry out regular maintenance of the runways as flights will be operated round the clock in Mumbai where the idea of constructing a second parallel runway was abandoned because it was simply not feasible. However, what is not understandable is why the Maharashtra government is not keen to clear the encroached airport land of squatters and resettle them elsewhere. According to G V K Reddy, promoter of MIAL, of the 2,100 acres Mumbai airport land, nearly 990 acres is under encroachment. It was only recently that a deal was stuck to get nearly 265 acres of airport land freed of such encroachment with a real estate developer who will resettle the squatter near Dhaisar and also get nearly 65 acres of airport land for real estate development. This means that the airport will get only 215 acres of its land back. What about the remaining 700 acres of land? The Maharashtra Chief Minister could be asked that question. It is simply not understandable that even after the 26/11 terrorist attack when the terrorists came smoothly in rubber boats and landed near the Gateway of India, the Maharashtra Government does not want to clear the existing Mumbai Airport or all encroachments. Anyone can see from the plane waiting to take off how close they are to human habitation. Why does not the state government take a cue from the National Highways Authority of India which has a Supreme Court clearance for getting encroachments out of the way? The

was asked by officials of the Urban Development Department (UDD) to plan the project and accordingly a survey was carried out by the authority. Based on the survey, two locations were short listed — one in Nariman Point and the other in Navi Mumbai sector 30 — where the heliports could be set up. According to a senior MMRDA official, they have made presentations before the transfer authorities as per norms of the Directorate General of Civil Aviation (DGCA). However, Indian Navy officials feel that running a heliport near their base in INS Kunjali in Colaba can be a security issue. Mumbai has a huge demand for passenger helicopter services. 

MULTI-LEVEL PARKING AT CHENNAI AIRPORT

Chennai Airport will get a multi-level car parking facility at an estimated cost of Rs 132 crore. This will be built at the entrance of domestic terminal of Chennai airport and will be able to accommodate 1,338 cars. The project is based on the “Build, Own, Operate and Transfer” (BOOT) model. According to the tender issued by Airports Authority of India (AAI), the proposed car park will be lauded out in a 56,283 sq m area and in that, 7,375 sq m area on the ground or the mezzanine floor will be used for commercial purpose and a total of three basement levels for car parking. Chennai airport is one of the oldest and high air traffic drawing airports in the country. It is visited by 17,000 passengers’ everyday

CRUISING HEIGHTS August 2010

17


NewsDigest August.qxd

8/2/2010

10:58 AM

Page 18

NEWS DIGEST

GREENERY ALL AROUND: A view of one of Navi Mumbai's water bodies that environmentalists are afraid will be destroyed when the new airport comes up.

compulsions of vote bank politics have ensured the continuance of airport land encroachment. What is the point of attacking the Environment Ministry, if the state government cannot put its own house in order? Of the 2,053 hectares of land earmarked for Navi Mumbai airport, nearly 1,153 hectares is in possession of CIDCO. Besides, the state government has transferred another 443 hectares of land to CIDCO which leaves 457 hectares of private land that still remains to be acquired and for which CIDCO is in talks with the villagers or land owners. If the Maharashtra government is so keen to develop the Navi Mumbai airport, why does it not explore the possibility of resettling the encroachers on the Mumbai airport land to Navi Mumbai? This can be done in the name of airport and passenger security. Perhaps, Praful Patel

and Ashok Chavan can examine this perspective. Even as this tamasha continued, on July 6, 2010, Chief Minister Ashok Chavan once again handed over the Maharashtra Coastal Zone Management Authority clearance to the environmental issues confronting the proposed Navi Mumbai airport. Chavan also met Jairam Ramesh with the clearance and sought early approval of Navi Mumbai airport project. All that Jairam Ramesh would say was he would put it before the environmental committee concerned on July 21, 2010. But later it was learnt that Jairam Ramesh had returned the IIT Mumbai environmental impact report, stating it was very vague and wanted it to be reworked. For public consumption, Jairam Ramesh told newspersons, “I have had a word with 

Chennai airport

in the domestic terminal out of which 42 per cent of the passengers are from southern regional airports. In the international terminal, on an average 10,000 passengers travel through the Chennai airport, out of which 55 per cent passengers are heading for/ arriving from South-East Asian airports. 

KINGFISHER TOPS E-TICKETING

According to the International Air Transport Association (IATA), while Air India sells a paltry seven per cent of its tickets through the web, Kingfisher Airlines, on the other hand, sells all of its tickets via the Internet. Indian Airlines is, however far more advanced than Air India and sells 64 per cent of its tickets through the Internet. Among the full service carriers, Kingfisher has accomplished 100 per cent eticketing, while Jet Airways sells 84 per cent of its tickets through the Internet. Cumulative amount for airlines in India is 78 per cent.

18

Maharashtra Chief Minister. It is not that we don’t want development. But it should comply with environmental laws. There are very serious environmental issues that need to be addressed and we will definitely find solution.” Later, after the ministry meeting, he said that the IIT Mumbai environmental impact report on the proposed Navi Mumbai airport was not clear on several aspects and there was no question of giving the project a green nod as of now. A team from the Ministry of Environment would be sent soon for site inspection to further assess the project. This clearly indicated that the Navi Mumbai airport would have to wait for few more months before even the first rock can be moved out. We are sure that by the time all the clearances come in, it will no longer be Navi Mumbai airport but purana Mumbai airport.

STATE-OF-THE-ART FIRE TENDERS AT PATNA

Patna’s Jayaprakash Narayan International Airport now boasts of three ultra-modern fire tenders. Made in Austria, the fire tenders, christened Airfield Fire Fighting Tenders, were purchased at the cost of Rs 4 crore each. Airports Authority of India (AAI), in fact, has purchased 40 such fire tenders, three of which were allotted to the Patna airport. Each of these fire tenders has the capacity to carry 10,000 litres of water and 1,300 litres of foam and can spray 5,000 litres of water per minute. The vehicle attains the speed from 0 to 80 km ph within 36 seconds. “The vehicle can reach any part of the runway within 40 seconds,” the manufacturing firm’s India representative Gaurav Bhartiya said. Another major feature of the new machine is its user-friendly design and it can be handled even by a single person, he added. 

TALLEST ATC TOWER AT IGI

Delhi will have the distinction of having the country’s tallest air traffic control (ATC) tower. The AAI is finalising the design of the nearly 95-metre structure. The new tower will zoom over the present 60-metre ATC. It will also look down on the iconic Qutab Minar that is 72.5 metres. Originally scheduled for the middle of this decade (2015), the ATC construction has been fast tracked, keeping present developments, including the opening of T3, in mind. The new

CRUISING HEIGHTS August 2010


geo sub add.qxd



D

7/30/2010

E

F

E

6:01 PM

N

C

Page 1

E



D

I

P

L

O

M

A

C

Y



S

E

C

U

R

I

T

Y

geopolitics

geopolitics is your window to every nuance and every development in the world of security, defence and diplomacy. If you are looking at making informed choices or at the pros and cons or getting to understand contemporary development, geopolitics is the answer. Simply put, it’s unputdownable.

GET YOUR COPY

TODAY

g geopolitics {

{

NEWSEYE MEDIA PVT. LTD. D-11 Basement, Nizamuddin (East), New Delhi -110 013 Tel: +91-11-41033381-82, email: geopolitics@newsline.in


NewsDigest August.qxd

7/30/2010

6:04 PM

Page 20

NEWS DIGEST

PEELING

THE LAYERS

DREAM COME TRUE: The first passengers experience the travelator at the T3.

T

he Airports Economic Regulatory Authority (AERA) will come out with its draft guidelines for fixing airport charges by the end of August 2010 and that for cargo, fuel dispensation and ground handling should be ready soon. “We are in the process of finalising the draft guidelines for fixation of charges on airport services and this would be put up for public review and comment by

tower-cum-air traffic service block should be ready by early 2013. While the tower will be constructed by DIAL, AAI will underwrite the Rs 80 crore cost of the project. As with any project of this nature, the new ATC tower will be state-of-the-art with an enhanced range of electronics and features that will be a first, not only for India but for the whole of South-East Asia. Combined the total project cost is in the range of Rs 250-300 crore. The design has been drawn up by Hong Kong-based ATC tower, IGI airport HOK International Ltd. GMR Group Chief G M Rao had said at T3’s inauguration earlier this month that construction would begin in six months and would be over in two years. The Delhi ATC software, Raytheon Auto Track-II, is currently being upgraded to Auto Track-III system that

20

August-end,” said AERA Chairman Dr Yashwant Bhave while addressing an interactive session organised by the IndoAmerican Chambers of Commerce in Delhi on July 22, 2010. The guidelines for determination of the charges for ground handling, cargo and fuel supply is nearly ready and should be uploaded on the AERA website soon. It has already put on its website the draft guidelnes for Air Navigation Services

has several advanced features like generating automatic alerts if an aircraft heads to a no-fly zone or is on a collision course with another plane. Its “arrival manager” allows controller to tackle congestion by adjusting traffic flow on a real time basis. In a special security feature, the system gives out alarms if a plane deviates from its set course. “We will upgrade to the next higher level software in the new tower and are already in talks with the US Federal Aviation Administration for that,” said Rao. 

NEW SAFETY RULES

New safety rules have been put in place for VIP operation of planes and helicopters to avoid mishaps like the one which killed former Andhra Pradesh Chief Minister YSR Reddy. The rules, framed by the Directorate General of Civil Aviation (DGCA), encompass all aspects of flight operations — from acquisition of aircraft, employment of crew and engineers to definition of VIPs. The categories include the Lok Sabha Speaker, Rajya Sabha Deputy Chairperson, Cabinet Ministers, Chief Justice of India, Governors, Chief Ministers, State Cabinet Ministers and the SPG protectees who enjoy ‘Z-plus’ category security. The President, the Vice President and the Prime Minister travel on IAF aircraft as a rule. While no flight would be allowed to be operated when “weather conditions are not conducive to safe operations”, every VIP flight

CRUISING HEIGHTS August 2010


NewsDigest August.qxd

7/30/2010

6:04 PM

Page 22

NEWS DIGEST

DELIBRATING ON AIRPORTS: (L-R) Sidharath Kapur, CFO, GMR's airport projects; Yashwant Bhave, Chairman, AERA; and, Vidya Basarkod, CEO, Reliance Airport Developers Private Limited.

would be operated with “a multiple crew composition”, the Civil Aviation Requirement (CAR) says. A Pilot-inCommand (PIC) should either have a Commercial Pilot License (CPL) or an Airline Transport Pilots License (ATPL) with at least 3,000 hours of flying experience, of which 2,000 hours should be as a PIC on the type of aircraft to be flown. He or she should also have a minimum of 50 hours of night flying experience. Politicians’ air safety has come under Similar rules have also been scanner after Y S R Reddy's death. laid down for aircraft maintenance and repairs, besides other airworthiness requirements. The aircraft should be fitted with all suitable equipment needed for instrument flying and pilots should hold valid instrument ratings, the rule stresses. The guidelines come in the backdrop of recommendations of the YSR Reddy helicopter crash probe headed by Pawan Hans Chief R K Tyagi.

22



tariff determination and sought comments before the end of August 2010. The session also took a look at the future. Sidharath Kapur, CFO of GMR’s airport projects, spoke on the economic viability of airports — incidentally the subject matter of the interactive session. Pointing out that Indian aviation was at a take-off stage since only two per cent of the Indian population was actually flying domestic routes, while 0.5 per cent of the population was taking international flights. In terms of traffic numbers, India stood 12th globally. He said that in less than two decades from now, India would move up to the fifth position. All this would mean a huge pressure on India’s infrastructure — new airports would have

CHANDIGARH TERMINAL READY BY DEC

The much-awaited terminal at the Chandigarh airport is likely to be completed by the end of this year. Though work on the new terminal began in April 2008 and was supposed to be completed by July 2009, it got delayed as the airport authorities along with a building contractor had to re-design the project in tandem with the increasing inflow of passengers. Airport Director Suneel Dutt told the media, “As we altered the building plans, the deadline for the new terminal has been revised to December 31. This was done as there is only one way to approach the new building as the Air Force headquarters are on one side, while the working terminal is on the other and a parking lot on the remaining area.” He said there were two options before the Airports Authority of India (AAI), one being to shut down the existing terminal and begin work on the new terminal, while the other was to continue work in the old terminal till a new one is ready to commence operations. The deadline has come at a time when the authorities are struggling to accommodate the ever-increasing inflow of passengers and have come under severe criticism for not being able to manage affairs efficiently. 

GMR AND GVK APPROACH CCI

In an unprecedented move, two of the country’s largest airport operators — GMR and GVK — have approached the Competition

CRUISING HEIGHTS August 2010


NewsDigest August.qxd

7/30/2010

6:04 PM

to be built and developed while existing ones would have to be expanded. This would create opportunities with increased investment in airports, airlines, MRO, etc. In India today, said Kapur, 97 per cent of foreign tourists fly in and airports are the first impression creators. Less than one per cent by weight and 35 per cent by value of India’s traded goods are transported by air. It is imperative for the private sector to play a much bigger role. Kapur pointed out that to make any airports self-sustaining and also meet strict performance standards, costs had to be incurred. Even as Delhi airport continued to expand, there is a need to maximise non-aero revenue. And it was essential to establish regulatory certainty, a reasonable rate of return on equity, development of hubs and development of real estate. In 2008, globally non-aero revenues accounted for 46 per cent of all airports revenues which was estimated at $96 bn. The remaining constituted aero revenues. Significantly, the aero revenues accounted for only four per cent globally of airline cost. Fuel cost, for instance, was much more. In India, aero and non-aero revenues accounted for 70 per cent and 30 per cent of the total airport revenues, respectively. Non-aero revenues were emerging or rising in existing airports with increase in retail activity in the last five years. This would contribute significantly to the total revenues. Sidharath Kapur described that as “budding revenue sources which needs to be flowered and nurtured”. Once cash could be generated, future growth of the

Page 23

airports could be planned and executed. The GMR airports division CFO said that while AERA provided key objectives to ensure viability of airports which the lenders and investors wanted to look at, one of the issues that needed serious attention was the revenue stream either in the single till form or the dual till form. This was core of the regulation and Kapur said that the representatives of metro airport developers believed that there should be a hybrid/dual till system and not single till as seems to have been suggested by AERA. GMR, or for that matter the Association of Private Airport Operators, were in favour of a hybrid/dual till. The single till system where non-aero revenues were being subsidised by other sources was not desirable. Even in a hybrid system there was an element of 30 per cent cost subsidy. “We perceive that hybrid/dual till ensures long-term viability while the single till distorts the market as it does not provide for building into cost adequately. The non-aero revenue is no incentive to develop. Hence the hybrid/dual till system is necessary as it helps in attracting lenders and investors as well. Most importantly, single till makes it difficult to privatise the airport in future with the exception of the British Airports Authority. This is our submission to AERA and also to the Government of India. In the long run, single till does not lead to lower pricing.” Kapur then gave the examples of Toronto, where single till had not led to a fall in costs, and Mexico where the dual

Commission of India to get clearance for a 10 per cent hike in aeronautical charges like landing and parking tariffs. They have urged the competition watchdog to overturn a decision by the Airport Economic Regulatory Authority (AERA) rejecting the hike in aeronautical charges, Civil Aviation Ministry sources said. CCI has been named as the appellate authority for verdicts of the airport regulator. If the AERA’s decision on landing and parking charges is turned down, airlines have to pay more at the Delhi and Mumbai airports. Citing provisions in the concession agreements with the government, GMR and GVK had sought the Civil Aviation Ministry’s permission for a 10 per cent hike in aeronautical charges. The ministry referred the proposal to the AERA, but the airport regulator rejected the tariff hike. The DelhiMumbai airport tariff hike proposal is the first appeal against an AERA decision to be considered by the Competition Commission. According to industry sources, the government had agreed in 2006 — when the concession agreements were finalised — to a 10 per cent hike in 2010. Since four years have been completed as of April 2010, the hike is being pursued now. If the hike is cleared,

till system exists and the costs are lower. Therefore, he said, one could not generalise. Even in terms of performance standards, Airport Council International (ACI) has shown that the highest ranking quality airports are on dual/hybrid till system. Further a dual/hybrid till airport makes the airport far more passengerfriendly, prompting the passengers to move faster allowing them to have more time to spend in shopping, duty free, etc. Sidharath Kapur referred to a study by KPMG which said that the risk profile of airports was far higher than roads, ports, etc. According to a study by GMR, Kapur said the cost of capital in India for airports was between 20 per cent and 28 per cent. This was bound to raise questions like the need to go for higher revenue share. These are serious issues, said Kapur, which needed to be debated separately. He gave the example of Hyderabad airport which was built with a far higher capacity than anticipated initially and remains underutilised. Bengaluru airport, on the other hand, was under-planned in terms of passenger handling capacity and was now choking. In Hyderabad, said Kapur, the time had come to use the assets. This, in turn, would mean the need to optimise costs. “We are making cash profits in Hyderabad airport and soon should be making net profits,” Sidharath Kapur disclosed. As for Delhi airport, he said 90 per cent of its traffic was being routed through aerobridges. The large number of aero-bridges has obviously led to an increase in the terminal size and, therefore, costs as well.

large airlines like Jet Airways, Kingfisher, Air India, IndiGo and SpiceJet will have to spend more for operating flights to Delhi and Mumbai. Therefore, they have been opposing any hike in airport charges. If charges do go up, then some airlines may prefer to pass on the burden to passengers since it is felt that strong demand could result in the higher cost getting absorbed. 

AIRTEL WIRES UP TERMINAL 3

Bharti Airtel has announced the availability of its basic telephone and mobile services in Indira Gandhi International Airport’s newly integrated T3 terminal.Through this initiative, Airtel has become the only mobile service provider to be associated with India’s biggest and world’s second largest integrated airport terminal. The services to be provided will include superior network connectivity, enabling Sunil Mittal Airtel subscribers to be constantly in touch with the world, PCOs to make calls, charging stations to charge laptops, and facilitation counters which will offer telephony solutions and services to customers.

CRUISING HEIGHTS August 2010

23


NewsDigest August.qxd

7/30/2010

6:04 PM

Page 24

NEWS DIGEST These, said Kapur, were necessary to meet all the performance standards as per the concessional agreement. Hence, there was a requirement to ensure and optimise costs without compromising quality and performance standards. “Notwithstanding our excellent work, long-term funds are still not available in India mainly because of the absence of the bond market which is hugely successful in the US. Long term fixed rate loans are not available in India,” said Kapur. The GMR airports division, he said, has its debt reset mechanism altered every two to three years and therefore “we are carrying the risk of interest rate fluctuation”. In an interesting remark, he also mentioned, “Our revenue share is high and we happily signed the concession agreement despite high revenue share and it is still profitable. But the situation can change drastically should another or second airport come up within the barred area. There is a clear cut policy on this issue. Unless the current asset is fully used, there should not be a second airport. Otherwise, there will be competing assets/infrastructure leading to traffic getting diverted and lead to an inevitable rise in tariffs. One way of rising revenues, is to focus the concept of building hubs which we plan to do in Delhi and Hyderabad. In Delhi with T3, we have the playground in place to make a hub available to airlines. But for this,” he emphasised, “We need the Union Government’s support to build a hub. (As we go to the press, CRUISING HEIGHTS understands that DIAL has reached an



Hyderabad airport

understanding with Air India to make Delhi airport and T3 as its hub and the Maharaja has made a promise to increase its traffic into and out of Delhi to five times of what it is now).” Sidharath Kapur’s presentation was followed by Vidya Basarkod, CEO of Reliance Airport Developers Private Limited. She said all the focus in India was on bigger and metro airports while no one bothered about smaller airports like the ones being operated by Reliance Airports at Nanded, Latur, Baramati, Osmanabad and Yavatmal. Of these, only two had some semblance of traffic while the others were being used by flight academies, for parking, etc. With the fast growth in India, there has to be greater focus on Tier II and III city/town airports.

CHAKAN A GLOBAL INTERNATIONAL HUB?

The proposed airport near Chakan has many advantages to its credit. According to experts, if there is a political will, the airport has the potential to become the international hub of Western India. Air Marshall (Retd) S S Ramdas, member of the MCCIA’s civil aviation committee said that compared with the proposed international airport at Navi Mumbai or Nagpur, the Chakan airport has strategic advantage. “The proposed Kopar airport is on transharbour link and has limited area of 1,142 ha as compared with 2,800 ha of Rajgurunagar airport. Nagpur is a remote position with inadequate cargo and passenger potential.” “Also the proposed Navi Mumbai airport does not have enough area to construct two runways. While the area earmarked for the Rajgurunagar airport is bigger than both these airports and it can be planned in such a way that it can have two runways. It can have separate cargo complex, hotels, convention centre etc,” Ramdas told The Indian Express. He said the growth of passenger and cargo movement in Lohegaon airport exceeds that of the national average. “Over 20 per cent of the international air cargo through Mumbai is from the Pune region and the region’s economic output and tax collection is larger than Mumbai. All these things put together an international airport is a need of the hour for Pune,” he added.

24



Basarkod also said she had been trying for the last eight months to get banks and investors interested in her airports. Apparently, no one seemed to be keen about the idea. As a result, Reliance had to spend its own money from internal accruals to upgrade these five airports. She also mentioned that even the airlines Reliance had spoken to had said that they could not provide guarantees for regular flights and could withdraw when demand dropped. Even real estate developers were not interested in participating in real estate ventures at these airports as they were situated 15 to 20 km away from the towns. In the last one year, Basarkod said, she had tried marketing the airports but found no takers. “We have a 95-year lease. We also need low-

TAGORE CONTROVERSY AT AGARTALA

Cutting across party lines, the Tripura assembly has passed a unanimous resolution asking the Civil Aviation Ministry to rename the Agartala airport after Rabindranath Tagore. “As a tribute to the great poet, who had visited Tripura seven times between 1899 and 1926, we propose to rename the Singerbhil airport after Tagore,” Tripura Chief Minister Manik Sarkar told the house. However Tripura Maharaja Kirit Pradyot Deb Manik Sarkar Barman Manikya Bahadur said he opposed the proposal to rename Agartala airport after Tagore. He said that the airport should be named after Maharaja Bir Bikram Kishore Manikya, who had built it. “A majority of the people of Tripura feel the airport should be named after the Maharaja,” Pradyot told journalists. The Agartala airport or Singerbhil airport, administered by the Airports Authority of India (AAI), is located 15km southeast from the capital city Agartala. It connects Agartala with New Delhi, Kolkata and Guwahati.

CRUISING HEIGHTS August 2010


NewsDigest August.qxd

7/30/2010

6:04 PM

Page 25

Bengaluru airport

cost ATC,” she said. There were a few more speakers but most were airport users with a number from the cargo sector. Most complained that Delhi airport was charging exorbitant fees for cargo handling and in the absence of any competition, they were becoming monopolistic. Kapur, the CFO of GMR’s airport projects, said that the cargo people would have to wait for a year by which time one more cargo handler would be available at Delhi airport. The charges then would come down. The charges levelled against GMR, the Delhi airport operator, by cargo handlers in the presence of the AERA Chairman, Yashwant Bhave, showed that it was going to be a very interesting match. Bhave made a presentation which 

briefly stated that there were 89 functioning airports in India while AERA was concerned with only those airports with annual traffic more than 1.5 million. With 13 airlines operating domestic air services, AERA had a job to do. Nothing should be done that burdened the air passenger unnecessarily, he pointed out. While observing that traffic and related statistical estimates differed between that of the International Civil Aviation Organization (ICAO) and ACI, there was a symbiotic relation between Gross Domestic Product (GDP) and air passenger growth and this was reflected in “elasticity”: GDP vis-à-vis air passenger movement. In UK, the elasticity was 2.4 for the 2008-09. In terms of price elasticity of airline tickets, this was

FREQUENCY AT MUMBAI ATC UPGRADED

Following complaints from airlines that aircraft flying into Mumbai sometimes struggle to get in touch with the Air Traffic Control (ATC) while over the sea because of heavy congestion, the Airports Authority of India has boosted infrastructure to make communication smoother. Officials said they have set up additional receiver towers at Mumbai airport’s Remote Receiver Station at Dahisar. This will increase the frequency spots available to planes. “We are increasing the frequency spots from two to six. This will help communication,” said an AAI official. The installation was done in the span of a week earlier this month, to ensure that the facility is available during the monsoon. “Some fine-tuning is left. But we have already received feedback from South African Airways that communication has improved. The upgrade will ensure clear communication up to 1,500 nautical miles,” said an AAI official. The range of the Mumbai ATC varies from 800 nautical miles to around 3,000 nautical miles in various directions. Around 40 per cent of the planes flying to Mumbai and over its airspace do without HF communication. 

estimated at 1.85. So, if the ticket prices dropped by five per cent, the traffic moved up by nine per cent. “I take this from the well known management expert late C K Prahlad that is price point is very crucial in India as it is so in the US and UK as well.” In a lighter vein, he said, “There are 14 airports in our clutches and they all handle about 90 per cent of passenger and cargo traffic.” After describing the philosophy of the regulator and the driving forces that helped AERA determine various charges, Yashwant Bhave said that the same philosophy would drive AERA in future. Quoting the Civil Aviation Authority of UK which performed the regulator’s role, he said it was very clear there — keep the passengers’ interest at the top. “I was delighted to read that,” he said and mentioned that he would love to do the same in India as well. “We thought the passenger is most important but no stakeholder has any view on this. As a regulatory building block anchor, it will be appropriate to have a price cap regulation under the single till system. True, there has to be fair return and given the cost of debt how does one go about it?,” he queried. But when asked if AERA would accept any cost of debt however high it may be, Yashwant Bhave replied in the negative. But it has to be reasonable for the Delhi and Mumbai airport operators who have committed resources and borrowed accordingly before AERA came into being. It will be a different ball game and the regulator may have to accept the actuals.

MADURAI GETS NEW TERMINAL

The opening of the newly constructed terminal building at Madurai airport is awaiting green signal from AAI. It will become functional

Madurai airport

within two to three months of getting the approval. The new terminal building, with an area of 17,000 sq m, has 16 check-in and independent security holds for international and domestic passengers. The new building has been provided with six escalators and six lifts with separate enclosure for immigration and customs. As it becomes functional, seven flights will be accommodated during the peak hour capacity. There are provisions for three aero bridges to take the passengers directly to flights and two of them will become operational within six months. International connectivity for Madurai will materialise by December.

CRUISING HEIGHTS August 2010

25


NewsDigest August.qxd

7/30/2010

6:50 PM

Page 26

PERSPECTIVE

ON WINGS AGAIN

RAM MENEN

As aviation around the world looks up to a brighter tomorrow, the movers and shakers in the sector have to come out to speak on 2010 and a whole lot more. A glance at what they told the media and in speeches across the world.

Divisional Senior Vice President Cargo, Emirates

RAM MENEN ON 2010 2010/11 is already performing better than last year and we are expecting volumes to grow by about 20 per cent this year. Getting the right product mix to increase our yields and to have the right capacity at the right place all the time (is the top priority now). The airline ran a very strict cost containment programme during 2009 and we only launched two new destinations —Durban and Luanda (and Kabul for freighters), the fewest since 1998. Last year, in the midst of the crisis, we took delivery of two brand new 777Fs. So while everyone else was shedding capacity we were receiving these new-generation freighter, which obviously gave us a few sleepless nights beforehand! But the 777F is a fantastic, very economical aircraft. The universal challenge that we have is that of the health of world economy and how unpredictable it has become. So far 2010 is looking good and I hope it stays that way for a long time. However, the challenges that some of the Euro zone countries are facing need to be seen. Weaker Euro would/should help the exports from the Euro zone — provided the industrial actions don’t weigh down these countries.

BRITTIN AND 100 % CARGO SCREENING Overall, the industry is well prepared (for 100 per cent cargo screening) in the US. There should be no issues at any non-wide body airport, as that cargo has been 100 per cent screened since October 1, 2008. Carriers at larger airports that have only a few wide body flights per day are already close to the mandate, if not already fully there. The carriers at the 18 major gateway airports have all indicated that they are prepared to get over the “final mile,” but caution that, depending on how much cargo comes in pre-screened, there may be some instances where cargo misses its intended flight. We have seen that most have advised their forwarders or direct shippers to bring unscreened cargo earlier than previously, to allow

time for screening to occur (and have published new screening fees). We also have a ‘latent capacity’ in existence as well, with over 75 Independent Cargo Screening Facilities (ICSF’s), most of which are at these 18 airports. The challenge for international inbound is primarily awareness. We would prefer not to have carriers having to comply with TSA programmes as well as origin country programmes. However, we cannot accept country programmes to commensurate until we are able to review them. We are working with groups such as ATA, IATA, TIACA and AfA, as well as EC and other bi-lateral efforts to help raise awareness and hopefully facilitate sharing of these programmes as quickly as possible.

WILLIE WALSH ON THE IBERIA MERGER

DOUG BRITTIN General Manager, Cargo, TSA

WILLIE WALSH CEO British Airways

26

The objective we had set ourselves at the beginning was to create an entity that was capable of being scalable. The intention was to be in a position to take advantage of opportunities... We are not targeting anything in particular, but we want to be in position do so if an opportunity arises. IAG is not about putting BA and Iberia together, but about creating a platform to create a global carrier. We all know there are constraints in aviation growth in the UK. The government has taken its decision, and we respect it. Our planned merger with Iberia will give us the scope to grow at Madrid. It is very clear, in creating the new entity, we are also committed to growing. We need to recognise that scope for growth in London is limited. If we can’t participate in growth at London, the [demand]

growth is not going to stop just because the London runways are full. We have created an entity capable of being scaled up. Our ambition is truly global. We are looking to work on synergies with Iberia, but our focus goes much beyond that and we want to be in a position to avail ourselves of opportunities. We can compete effectively for the next ten years. But in 20 years, the UK is going to be in a difficult position because we do not have the necessary infrastructure to compete. We are not going to stand still, so we will look to participate at other hubs. It has worried me that aviation is being treated by policymakers as a kind of cash machine with wings.

CRUISING HEIGHTS August 2010


NewsDigest August.qxd

7/30/2010

6:50 PM

Page 27

MARAN AND SPICEJET

KALANIDHI MARAN Chairman, SpiceJet

When I started satellite television, people laughed at me saying Tamil cannot be in satellite television, it’s too costly. When I started radio, they said television has come, radio is a dead business. When I started DTH, they said there are too many big players. We are now 5.5 million subscribers strong. If I’m going to follow the herd, I’ll be one amongst the crowd. Let me be clear. All my steps are calculated, I am not going blindly with intuition. I never wanted to do it when oil prices were at $140 per barrel. Right now, SpiceJet and IndiGo are the only two profitable airlines. We picked up one company that is making profits. So it disproves your theory

BISIGNANI ON INDIA Unfortunately, what happens is that the government — as is the case in many countries — often does not support the aviation ministers. At present, the government is the Ministry of Finance all around the world. One of the problems in India is that the processes take a certain time. An example of a process that took so long but is in the good part (now) is the new regulator (the government recently set up the Airport Economic Regulatory Authority). India could be an example for others. It took a bit of time. A country which is growing so fast and wants infrastructure badly has to have a regulator to discipline

that it’s a loss-making industry. EBITDA for SpiceJet is 19 per cent for FY10. The aviation sector hit rock bottom two years back. Now, it can only go up. That’s how we see it. We have been studying SpiceJet only for three months. Next couple of months, we will consolidate this acquisition. I am not an FII. Whatever business I do, I am an active player. If I wanted to be a financial investor, I would have stayed at 10 per cent. I am not like that. If you see what we’ve done, over a period of three years, is that we have brought in professionals. We have got one of the best teams for Sun, it is all professionally managed. It is a board-run company. We may look at more (routes) in the south. Spice actually is less represented in the south.

airlines and airports. There have been other airports that have shut down due to high charges. IATA has criticised India for high airport charges earlier. So, where does India stand — it has not made it to IATA’s “Wall of Shame” for high airport charges this year at least…We had to be fair and give time. When we know that a regulator is starting to do its job, it would be incorrect for IATA to not consider this. In a few years, when the regulator is effective, I am sure the country will not be in the “Wall of Shame” but on other side. But you have seen how the “Wall of Shame” has been used effectively to challenge airports to reduce charges and improve services.

KIRAN RAO Vice President, in-charge of marketing at Airbus and head of India operations

KIRAN RAO ON DEAL MAKING The Indian market is growing at 16 per cent (per annum). That’s incredible. Even China is growing only at nine per cent. Our India projections have been eight per cent growth but the market is growing at 16 per cent. Even if it can sustain eight per cent growth for 20 years, India would need more than 1,000 planes. In every 15 years, passenger traffic in India has doubled and in every 20 years it has trebled. It’s enormous growth. Well, we can’t take everything for granted. We are looking for more opportunities and we are in discussions with them (IndiGo who have plans to buy 150 more aircraft). But one thing is confirmed: that A320 is a great success for India. All carriers require more planes. We have a market share of 68 per cent and I am more focussed on strengthening the relationship with existing customers. Historically, Boeing had old planes. Now old Boeing planes are being phased out. In fact, Boeing’s 777 planes are rejected by Indian customers. The strength of the Indian market is A320, which is the airplane of choice for the domestic market, especially for low-fare carriers. And A330 is the plane for the choice for international market. We will deliver 30 more planes in this calendar year. Every deal I have done has a unique story. If I have to single out one, it was the (sale of) 41 aircraft to South Africa. It was my first deal and a tough one. One day I will write a book. India is full of interesting characters — all full of energy and in-depth knowledge like Vijay Mallya, Naresh Goyal, etc. The best deal is IndiGo in (terms of) numbers. But in terms of money, it was Kingfisher Airlines.

GIOVANNI BISIGNANI Director General, IATA

CRUISING HEIGHTS August 2010

27


Traffic Data august.qxd

7/30/2010

5:54 PM

Page 2

TRAFFIC DATA PASSENGER GROWTH

CAPACITY VS DEMAND

Passengers carried by domestic airlines from Jan-Jun, 2010 were 257.10 lakh as against 210.99 lakh in the corresponding period of year 2009 thereby registering a growth of + 21.86 per cent.

Analysis of Capacity and Demand data on year-to-year basis indicates that trend of increase in both the capacity and demand continued in the month of June 2010 also.

ON-TIME PERFORMANCE (SCHEDULED DOMESTIC AIRLINES)

There are 70 foreign carriers operating to/from India. At the time of compilation of this report, OTP data of 41 carriers was received.

ON-TIME PERFORMANCE (FOREIGN AIRLINES)

The overall On-Time Performance (OTP) of scheduled domestic airlines for the month of June 2010 has been 78.5 per cent. The airline-wise details of OTP are as follows:

The overall On-Time Performance (OTP) of these 41 carriers for the month of June 2010 has been 73.3 per cent in departures and 74.1 per cent in arrivals. Departure

Arrival

THREE AIRLINES HAVING LOWEST OTP (ARRIVALS)

MARKET SHARE Airline-wise details of market share of scheduled domestic airlines for the month of June 2010 are as follows:

A

n analysis of capacity and demand data on year-to-year basis indicates that the trend of increase in both capacity and demand continued in the month of June 2010 as well. Air traffic in India continued to show a marked improvement since the financial downturn in the past two years, with total passengers carried recording about 135 lakh in the second quarter, compared with over 118 lakh in the first.

28

AIR TRAFFIC CONTINUES

Jet Airways and its subsidiary JetLite together garnered the largest chunk of passengers flying 35.28 lakh, followed by Kingfisher at 28.42 lakh and Air India (Domestic) at 23.69 lakh, according to the official figures released. Closely following them was the no-frill carrier IndiGo with 21.48 lakh while SpiceJet flew with 17.57 lakh. Not far, CRUISING HEIGHTS August 2010

GoAir flew 7.88 lakh people while Paramount carried 45,000 only, primarily due to lack of aircraft in their fleet. Meanwhile, the ownership change at India's second largest LCC, SpiceJet, which is yet to have a new top management, has possibly taken a temporary toll on the airline. According to DGCA figures, it had the lowest on-time performance with 59.7 per


Traffic Data august.qxd

7/30/2010

5:54 PM

Page 3

FIVE AIRLINES HAVING HIGHEST OTP (DEPARTURES)

PASSENGER COMPLAINTS DURING THE MONTH During June 2010, a total of 1,617 passenger related complaints had been received by the scheduled domestic airlines. The number of complaints per 10,000 passengers carried for the month of June 2010 has been 3.7 per 10,000 passengers carried. The airline-wise details are as follows:

FIVE AIRLINES HAVING HIGHEST OTP (ARRIVALS)

SEAT FACTOR The seat factors of various scheduled domestic airlines in May-June 2010 are asfollows:

The month of June 2010 observed comparatively lower seat factor primarily due to end of vacations and onset of monsoon.

THREE AIRLINES HAVING LOWEST OTP (DEPARTURES)

CANCELLATIONS The overall cancellation rate of scheduled domestic airlines for the month of June 2010 has been 1.7 per cent. Airline-wise details of cancellations are as follows:

TO SOAR

cent flights being on time. Jet Airways led the on-time performance pack with 86.8 per cent flights on time. On the complaints front, Jet Airways saw the highest number of passenger complaints — with 9.2 complaints from every 10,000 flyers. Its LCC arm JetLite was second on this list with 4.6 complaints per 10,000 flyers. National carrier AI

(domestic) saw the lowest passenger grievance with just one per 10,000 flyers. According to DGCA figures, 73.3 per cent flights took off on time from India, while 74.1 arrived on time. The most punctual airlines were the likes of Singapore Airlines, Austrian, United, while the poor performers on this count include Aeroflot, Iran Air and Kenya Airways.

On-Time Performance

The overall On-Time Performance CRUISING HEIGHTS August 2010

(OTP) of scheduled domestic airlines for June, 2010 was 78.5 per cent. Reasons for delay have been analysed and presented (see graph). It has been found that a majority of delays have been attributed to ‘Reactionary’. At the time of compilation of this report, OTP data of 41 carriers was received. The overall OnTime Performance (OTP) of these 41 carriers for the month of June 2010 has been 73.3 per cent in departures and 74.1 per cent in arrivals.

29


Interview

august.qxd

7/30/2010

5:51 PM

Page 2

INTERVIEW

“WE ARE VERY IMPRESSED Michiel Peters (President and CEO) and Martin Mossinkoff (Managing Director) are the leaders who drive Vanderlande Industries, the 60-year-old world’s number one company that provides end-to-end baggage handling systems at airports in India. The duo was in India recently. Excerpts from an exclusive conversation: Your company’s philosophy? PETERS: The philosophy of our company is to deliver what we promise, so the execution should be excellent. One of the core elements in our organization is to make sure that we have excellent project management and that we deliver the projects on time. A part of the philosophy is also that we have control of our own equipment. We are an integrator and as well as our own products we also source equipment from third parties. But even where we use partners or subcontractors, the equipment is still designed by our own R&D. It will be our quality. That means the customer knows exactly what he gets. This is also very valuable for our project teams, of course. They are familiar with our equipment, and because we have our own equipment and do our own R&D, it means we are always able to provide state-of-the-art solutions to airports and propose improvements. That of course is also the added value that we offer our customers. Tell us something about your operations. PETERS: Like I said we are world market leader in a big sense. The market is more than $1 billion a year, but the annual loss of money by airlines or airports due to late baggage is three times as much, about $3 billion a year. So having systems that ensure baggage is handled correctly and on time with high reliability means big savings. Our job is to make sure that happens, and that partners like Airports Authority of India or GMR or the others that are in the market will see the benefit of that. Hopefully they will not just go for the lowest ticket on the investment, but will go for the best in terms of the most customer value, the most performance. We want to offer more bang for the buck. Sometimes that requires a more sophisticated system. The question is: How do you bring the message across in a market that is now driven by initial investments, where the lowest bid will win.

30

We have been able to convey the message very well in some places. We have a service team in place in London Heathrow Airport, where we’ve built the new terminal. Our people there, and it’s more than 100, are actually performing so well with the system that we are saving a lot of money due to the fact that we are managing bag flows better than the specifications. MOSSINKOFF: When it’s installed and when it is in operation, they sa,y “Hey, this is very well installed and what we asked for, you delivered on time. And your maintenance team is excellent. It is much more than we thought of when we prepared the tender.” So we get to be known for the value of the whole proposition, not just the system. Why is it that you don’t have a pole position in India? You should have been the leaders. MOSSINKOFF: One of the reasons is, of course, the L1 (the lowest bid in a tender procedure) situation whereby we always hope that we make the best price proposition. Secondly, you have to grow into the market to learn. We set up local companies, an India sales unit and an engineering company. Our local office is taking up execution of contracts with support and guidance from our international teams. This enables us to make a proposition that combines local experience with our international expertise and knowledge to optimally meet the Indian market needs. Are you now ready? PETERS: We are ready, and possibly of course there are some projects you win and some projects you lose. There are many projects that are coming up. Are you bidding for them? PETERS: Yes, definitely there are some projects at the

CRUISING HEIGHTS August 2010

moment in the tendering stage, and with the knowledge that we have gained, we definitely feel that we have a good chance to be successful. There is a huge market in other areas including cargo, postal services etc. where the opportunities are vast. Are you also exploring them? MOSSINKOFF: Yes, except for cargo which is not our business, but definitely in postal and parcel we have gained a


Interview

august.qxd

7/30/2010

5:51 PM

Page 3

BY INDIAN ENGINEERS” world-leading position, and we are very much interested in exploring the opportunities here. And the same on the WalMart type of distribution. We know there are some requests, and we are exploring whether they can be filled in by our own company. Tell us something about your operation at Heathrow Airport? PETERS: What is really special about Heathrow is that it is a system which delivers outstanding performance, both in design and in the way it is operated. Let me start with the design. We have built a system together with the airport and the airline, British Airways. Being the fastest system, it allows us to deliver to each ‘head of stand’ for loading onto each individual plane with a high-speed

link. Late baggage, due to an airplane coming in late and passenger transfers, normally means the bag doesn’t make it. But we have a special way of delivering those bags, using a system with small carts that go at up to 50 kmph, and these carts can be directed to each individual airplane. So even with minimum connection time between airplanes, from the baggage point of view the transfer time is reduced drastically. That is a system we have built to meet the needs of both the airport and the airline together, to ensure the minimum connection time. This is one of the key competitive factors at a hub airport, and here this factor is actually very low. That also means that since the system went live, Heathrow now has one of the most efficient baggage handling systems in Europe. Connection time is also known as ‘head of stand’. PETERS: It means the nose wheel of the aircraft is at the parking place, right? So normally you have a baggage system which sorts through a certain unloading gate, and from there the bags are transported on a truck and dolly system. It takes a long time to reach the plane. While that is fine for the bulk of VANDERLANDE DUO: (Left) Martin Mossinkoff, Managing Director; (Right) Michiel Peters, President and CEO.

the bags, the last five or 10 per cent are directed through this high-speed link, which means by design you have created a system with much more performance. And the system is in sync with the terminal? MOSSINKOFF: Yes. We have created a whole system design over a long period working together with the airport and the airline, basically an integrated design which is well suited to a transfer hub like Heathrow competing against other European hubs such as Schiphol, Frankfurt and Paris Charles de Gaulle. These are the Big Four in Europe. The other part is the operation of the system. As said before, the system is operated by a combined crew of Vanderlande and the customer. We have more than 100 people on the site for preventive maintenance, 24x7! We also make sure that the daily operations can support itself well, and when unexpected events happen we can tune the logistics and balance the system. That means we can in many cases still deliver late bags on time, which is a big financial advantage. It saves a lot of money, a few hundred dollars a bag, as well as avoiding a lot of problems. It also means that both by design and by operation, together with the customer, we have been able to make Heathrow one of the best airports in Europe.

CRUISING HEIGHTS August 2010

Photo: H.C. Tiwari

Is the best way to build your system when the operator is building the terminal? PETERS: For sure that is the best way forward… to optimise the terminal design and start growing together with the civil engineers and the architects. Figure out together with the users, the airlines, a master plan of what requirements are there, plus the minimum connection times and other things that have to do with security and all types of regulations. We have to be involved earlier on. So what we like to do, and that is especially valuable in bigger airports like Schiphol and others, is to do a kind of design partnership. Basically, don’t waste time in doing all this tendering but come up with a very high-level functional specification in the beginning and start developing a master plan together, which saves you a lot of time and money in tendering. And this

31


Interview

august.qxd

7/30/2010

5:51 PM

Page 4

INTERVIEW means that you can get the best solution for the situation.

You have done the Heathrow model elsewhere too? MOSSINKOFF: At Amsterdam Schiphol we are already working on a similar model. We are also developing partnerships at other major airports, for example Vancouver, Oslo and Barcelona. The same model? MOSSINKOFF: More a partnership. We have created an air hub for UPS at Louisville in the USA, which is the biggest air hub in the world for parcel and postal, also in partnership. So, it’s really for more complex bigger projects, it’s basically aimed at making the best use of resources and getting the best results for the customer. What you are suggesting is that as operator I examine the option, and call who I perceive to be the best to get on board on a collaborative effort? PETERS: Yes, that would be ideal. Of course, we respect the fact that there are different commercial settings like the L1 option we are used to playing that’s there in the US and many other countries like China and Eastern Europe. There are many settings in which we can operate, but it’s of course a different game being purely focused on initial investment or doing a partnership. So, in our organisation we have separate teams to execute the different aspects of business. As I pointed out, from the customer’s point of view at the end, our wish is always to bring maximum value, and in different settings we have to find the ways to communicate that message to potential customers. Is baggage clearance the same for an LCC operation as opposed to the legacy carriers?

32

Photo: H.C. Tiwari

So what you are talking about is a non-tender process… MOSSINKOFF: It is, and if it is a tender process it is on a high level and is more specified not towards, say, the thickness of the steel but more towards what the overall system performance will be and what’s it’s being built for, and then start together within the constraints of the financials, within the constraints of time and other constraints on how best to create the optimum project in a joint team effort.

other one is the building blocks.

MOSSINKOFF: Well, I can imagine that for LCC, it is more directed towards short turnaround time of the aircraft. But that would mean baggage in and out more quickly… MOSSINKOFF: Yes. But then it’s more for the original destination, not so much transfer involved. It’s directed more to the passengers coming in, and that’s all optimised towards the aircraft, whereas in a hub operation it is really the connection that is driving the money, because the hub airports are competing against them. It’s a different game. In the hub airports the business case is minimum connection time, and for the low-cost carrier it is for minimum turnaround time of the aircraft. And, having really cost-effective systems with not too many frills but really to get the basic, reliable system with low-cost, also low space usage, straightforward, ‘nofrills’ systems. So in this way we have different solutions for different market segments. What about your R&D? PETERS: Well the R&D is basically two things. One is to get your hands on the business case of the customer. As said, the bigger airport has different performance needs from the low-cost carrier airport. There are different economic drivers, and then based on that input you create the system concepts together with the airport’s optimum layout functionality at a system level. This means you start simulating passenger and bag flows, and try to optimize these in economic terms, in space usage etc. And then if you have the concept fixed, you try to create building blocks to execute projects, like mechanical units, sortation equipment and so forth. And our R&D is actually two things: one is the concept — the simulation and logistics optimization — and then the CRUISING HEIGHTS August 2010

All this would mean collecting a huge amount of data! PETERS: Oh yes. We have a lot of statistics which we use for our simulations. We really have a good basis for estimating whether a certain solution is suitable.

Do you do all this in Amsterdam? MOSSINKOFF: Well, it is not only in Amsterdam but it is also outside. We have also done a lot of new things in London. Part of our R&D is also in our project business, because we always have new situations in which we try out new things. What are you doing in Pune? PETERS: In Pune, we are doing the engineering and controls engineering. Basically two things — one is to make sure we have local contacts and a local presence here in India to be able to work against local standards. And the other is on the bigger picture: to make sure we have access to sufficient numbers of skilled engineers. We found Pune to be the ideal location to get access to well-trained software and control systems engineers. So it also means that we will bring business to Pune more than just serving India. MOSSINKOFF: Another fact which is also very important which we have experienced in India is the knowledge level of the people. It’s not only that we train our own engineers, but even more so when we ask them, how would you solve a particular problem? And we see that we have tremendous opportunities to improve our systems. So, it’s not only that we can offer labour at a lower cost, but redesigning and re-engineering and changing the architecture through the Indian way of thinking is a big benefit to our ability to do things more effectively and efficiently. We are actually very impressed by the quality of the people. You can imagine you start with a European organisation in India, and now that is turning around. We see that our people are starting to realise that people in India are very well educated, very creative. And it is easy to communicate. Along with the language skills, that combination means that we’re becoming much more open in Europe to learning ‘the other way around’. 


t 3.qxd

7/30/2010

5:39 PM

Page 36

FOCUS

W

IS NO Photo: H.C. Tiwari

DREAM!

34

ould any of us have dreamt a few years ago that we would be able to put up a world-class facility like T3 at the Indira Gandhi International Airport? Not only have we done it — and that too well ahead of time in a bare 37 months — but shown the world that we possess the capacity to produce magic (read all about the making of T3 in CRUISING HEIGHTS’ July 2010 issue)! No wonder, Civil Aviation Minister Praful Patel commented, “It is one of the top five in scale and size in the world. This is not a big building designed grand. It is a statement.” And, Delhi Chief Minister Sheila Dikshit added that it was a “dream come true!” Indeed, T3 is pure magical grandeur and those who have passed through it will remember the experience for a long time. To begin with the gleaming new T3 is huge - humongous, in fact — leading Prime Minister Dr Manmohan Singh to say at the inauguration of the terminal: “An airport is often the first intro-

GREAT BEGINNING: (L-R) Sheila Dikshit, Chief Minister, New Delhi; UPA Chief Sonia Gandhi; Prime Minister Dr Manmohan Singh; Civil Aviation Minister Praful Patel; and G M Rao, Chairman, GMR Group at the inauguration of Terminal 3 of IGI airport on July 3, 2010.

CRUISING HEIGHTS August 2010


t 3.qxd

8/2/2010

1:49 PM

Page 37

duction to a country. A good airport would signal the arrival of new India, committed to join the ranks of modern, industrialised nations of the world…We should have airports that are receptive to the comfort of passengers even as they meet the highest standards of efficiency and safety. They should employ the most modern of technologies but also exude cultural warmth.” He went on to laud the GMR group for the wonderful show, saying “It proves the success of the Public Private Partnership model in execution of large infrastructure projects…This project gives us yet another reason for satisfaction. It also proves our capacity to coordinate across agencies and governments and work as a united team.” T3’s business-like elegance has prompted the national flag-carrier Air

WORLD CLASS: Vignettes of the inauguration of new Terminal 3 at IGI airport. VIPs, visitors and custom officials take a tour of the terminal and pose for photographs.

CRUISING HEIGHTS August 2010

India to step forward and get its act together. Air India has decided to make T3 its hub and launch new flights to Melbourne, Toronto and Chicago from the winter schedule, starting October. Chairman Arvind Jadhav declared, “Our challenge is to provide world-class service from this world-class terminal. It was also a big challenge to build it. The second challenge was to run our services successfully to meet passengers’ aspirations.” Seeing the world-class features all around at the terminal, Chairman Jadhav could not help but ask the Air India employees to be ready to deal with passengers “in a world-class manner”. T3, he said, had provided Air India with the opportunity to be the first mover. “We will have to develop it as a formidable primary hub from which we will be able  to connect India to the world.”

35


Air Asia 34final.qxd

8/2/2010

11:41 AM

Page 2

COVER STORY

Asia, according to

Tony

Barely ten years old, but AirAsia is creating waves high and strong enough to force the legacy carriers to take note. All thanks to the vision of the carrier’s founder Tony Fernandes who thinks and acts quite differently from the other entrepreneurs in the aviation industry. As his planes start flying from Delhi to Kuala Lumpur this month, Indian carriers would do well to brace themselves for some competition.

36

I

f Virgin’s Richard Branson was ever asked if there was anyone who resembled him — not in looks, but in attitude, style and the manner of doing things — he would certainly point his finger at AirAsia’s Tony Fernandes. Both are flamboyant and love speed — on air and on the F1 race track. Both started their career with music — well, almost. And above all, both want to do things their way, and do it impeccably. The Fernandes saga began when he learnt to think like an entrepreneur from his mentor Richard Branson. After passing out of the London School of Economics in 1987, the AirAsia CEO worked for sometime as an accountant with Virgin Records from 1987 to 1989. By 1992, he had become the Vice President for Southeast Asia for Warner Music Group. By then, he had decided to become an entrepreneur but it would not be like Sir Richard, who had started branching out into a number of businesses. A few years after he started the airline, Fernandes, in an interview, said, “Unlike Sir Richard, I am totally focused on just one thing — AirAsia.” Today, as AirAsia is poised to start operations from Delhi, Tony Fernandes has made yet another connection that is close to his heart: link the ASEAN (Association of Southeast Asian Nations) nations together. It has been a short ten-year-long eventful journey. When he had bought the bankrupt AirAsia in 2001, with its two 737-300 Boeings and $11 million in debt, from the Malaysian government, everyone had poohpoohed the idea. How could an accountant, trained in Britain, and somewhat of an expert in the music and entertainment business, change the aviation scenario of Southeast Asia? They had asked. After all, airlines


Air Asia 34final.qxd

7/30/2010

5:44 PM

Page 3

What’s so unique about AirAsia? Considering its astounding success in a short period of time, this is a question that perhaps lingers in most of our minds. Putting many a restless wits to rest, Kathleen Tan, Regional Head — Commercial, AirAsia Berhad, says, “It’s innovation, aggressive expansion and the unbelievable low fares.”

HE LOVES SPEED: Tony Fernandes of The Lotus F1 Team at the press conference held after Practice 2 at the 2010 Petronas Formula One Grand Prix Malaysia in Sepang International Circuit.

around the world were struggling to keep their noses in the sky amidst the gloom of the September 11 attacks. Fernandes, however, managed to convince the then Malaysian Prime Minister Mahathir Mohammad who let him have the airline for the princely sum of 26 cents. Since then, Fernandes, the amateur guitarist, and his AirAsia have played the kind of music that is sweet to the ears of the common traveller. Result: AirAsia has become the leading and largest low-cost carrier in Asia with the most extensive network. It has approximately 132 routes covering destinations in Asia, Australia and Europe. Within eight years of operations, AirAsia carried more than 92 million passengers while its fleet has grown from the two aircraft to 96-odd. The airline today is proud to be a truly ASEAN airline with established operations based in Malaysia, Indonesia and Thailand, servicing a network stretching across all ASEAN countries, China, India, Bangladesh, Sri Lanka and Australia. The astounding growth has happened because Tony Fernandes has followed his heart. CRUISING HEIGHTS sampled that difference when Azran Osman Rani, CEO, AirAsia X — the international arm of AirAsia — visited Delhi to “tease” the flying public and whet the appetites for the DelhiKL flights starting this month. Speaking about the uselessness of code-sharing with other low-cost airlines in India, he exclaimed, “Here’s the beauty. There is today a seamless alliance for all LCCs in the world. It’s called the Internet.”

How different is AirAsia from the others? It stands apart primarily for its undisputed values — low-fares coupled with five-star service. Its newest fleet is highly reliable, technologically advanced and fuel efficient, featuring luxurious settings along with environment friendly engines. AirAsia offers excellent connectivity through its various direct connections to many Indian cities while its long-haul operations make flying the airline highly economical. A variety of affordable and popular hot meals and heartfelt service makes the airline stand apart from the rest. AirAsia is at the forefront of innovations in the airline industry to make flying a fun experience. Our unique culture — One People, One Family, One Culture — is our mantra and the reason behind our success. What’s so special about AirAsia?  Our low fares  Aggressive expansion  Innovations  The partnership with global brands  Worldwide brand recognition. How do you plan to woo the discerning Indian traveller and get him on an AirAsia flight? We are positioning AirAsia as India’s link to Southeast Asia. AirAsia provides, on a daily basis, affordable travel from Trichy (currently our only destination in India) to KL. Of course, we also encourage our Indian guests to travel on AirAsia

X, to connect from the ASEAN region to Melbourne, Perth, Gold Coast, London, Taiwan, Hangzhou and Tianjin. We offer luxury in the skies at a highly affordable rate, that’s a major incentive to woo Indian clientele. India is a market that continues to grow in terms of the size of its travelling population, this population’s familiarity with and utilisation of low-cost airlines, and people’s disposable income. Because of these, we are confident that demand for our seats from India will only grow. The Indian travel agents demand commissions and can fight airlines who deny it. How do you plan to handle them? AirAsiaGo.com, using its new technology platform, has the ability to distribute via travel agencies. We have just rebranded and re-launched the new travel portal replacing GoHoliday. Products available online now include flight packages, hotels, transfers, concert tickets, excursions and cars. In India, we are working with a General Sales Agent (GSA) called Track India. They are responsible to recruit all travel agents in India to sell AirAsia, promote AirAsia’s products and services and handle enquiries pertaining to booking related matters. In addition to that, we are also working with Online Travel Agents (OTA) in India such as Akbar Travel Online, Yatra.com, Riyaconnect and many more to target the FIT (Frequent Independent Travellers) mainly.

HONOURS AGAIN: Kathleen Tan receiving the award for AirAsia being named one of the top 10 airlines in the passenger carriage category by Changi Airport Group. The award is presented by Lee Seow Hiang, CEO of Changi Airport Group.

CRUISING HEIGHTS August 2010

37


Air Asia 34final.qxd

7/30/2010

5:44 PM

Page 4

COVER STORY Osman Rani put it rather succinctly, “I don’t need code-shares… it was the 20th century. Code-sharing, interlining, is the way of the legacy carriers. Today, we realise what we see on the internet is just the tip of the iceberg. The tools that are coming online, it might be a Yatra.com or a Google but they would be able to seamlessly connect. Suppose I would like to go from Lucknow to Kuala Lumpur, they (the internet engines) can find two sectors for you and say this is the best one and go here to buy AirAsia and from five minutes it becomes eight minutes online. People do it, so you don’t need code-sharing. Code-sharing means you have got to make sure two systems talk with one another. You have got to deal with inventory, you have got to deal with pricing, and you have got to deal with payments, settlements — all that adds to cost and complexity.” Everyone in AirAsia seems to be driven by the thought that things have to be

AirAsia has shaken and stirred the aviation industry like no other. And it has taken on the big-ticket holders by doing things they normally do like starting new routes

“ASIA-PACIFIC’S THE NEXT GROWTH AREA” The dapper and nimble Azran Osman Rani, CEO of AirAsia X, is new to aviation. But he has ideas — all out-of-the-box — that will take the LCC forward. Excerpts from his conversation with K SRINIVASAN and TIRTHANKAR GHOSH. How do you see the flights from Mumbai shaping up? It’s in very early days. AirAsia has only just started the Mumbai service. It’s a promising start despite the challenges of the global economy. I think what we’ve proven is that we can generate new interest. (It is an interest that) people have never found before. From completely new routes like Trichy-KL to even Mumbai-KL when we first started flying, we have seen quite a number of people from Mumbai who were firsttime visitors to Malaysia. And I think that is encouraging because it does show for this business and industry to grow, you’ve got to stimulate the market. If (it is ) not (that), it’s just incremental growth.

38

What kind of numbers are you expecting? I think we are meeting expectations. There is a lot more that we can do. There is a lot more that we need to learn about this market, which is very unique and complex. So we hope to keep learning and be a better corporate citizen in India. Essentially, Delhi-KL or Mumbai-KL: would that be short-haul, long-haul… we can’t understand…? I’ll tell you the secret. While we call ourselves long-haul, the real economics is medium-haul and by that I mean 4-8 hours (flying distance). Really long-haul, like Europe or US, is very, very difficult business. The only difference is really the contractual relationship that I (AirAsia X) have with AirAsia that defines a four-hour separation. AirAsia operates any route that is less than four hours. Anything more than four hours we operate. And that also has to do with the economics of the narrow-bodied aeroplanes. Beyond four hours, the economics starts to fall apart. CRUISING HEIGHTS August 2010

done differently. Time and again, Osman Rani pointed out this fact. Simply because the others have done something does not necessarily mean that is the only way to go about it, he said. Sathis Manoharen, Regional Cargo Head of AirAsia, was more emphatic (see following story — ASEAN Cargo Connector) when he spoke about Tony Fernandes’ idea to make the empty bellyholds bring revenue that saw the creation of the cargo division. The India foray — and it is being done in a big way — has been part of Tony Fernandes’ plan from the time he started the airline. Although Fernandes is yet to read the well-known business strategy book, first published in 2005 and written by W Chan Kim and Renée Mauborgne of The Blue Ocean Strategy Institute at INSEAD, one of the top European business schools, he has been following the concept to the last letter. Incidentally, the book illustrates the high growth and profits an organisation can gen-

AirAsia X started the concept of flatbed seats? How does it work? It is basically a full Business Class sleeper seat. The new concept, which is more an innovation in service, is that you offer just the seat. That means (the flatbed seat is) without the traditional frills that are associated with Business Class travel, namely the lounge, the free-flowing champagne and wine and caviar and all the good stuff. By doing so we can price it much closer to an economy fare of another airline. So, suddenly you have got a different segment. The real people that I’m targeting are probably not the Business Class passengers of Singapore Airlines. But if you are a Kris flying member of Singapore Airlines flying economy, then for the price of an economy ticket, you can get a flatbed seat. You have got televisions… We’ve got portable units that are available for rent. Anybody can hire it… Well we track demand and we right now probably have about 92 per cent fulfillment rate. Only in eight per cent of the flights it is sold out. How did you come up with the concept? When we started, we learnt a lot of things but we made mistakes. One of them was premium economy and the other one was in-seat IFE (In-flight entertainment). We started having IFE on board every seat. And then we scrapped it all, because what we learnt is, half of our flights are night flights, leaving Kuala Lumpur at midnight and arriving Perth in the morning.


Air Asia 34final.qxd

7/30/2010

5:44 PM

erate by creating new demand in an uncontested market space, or a “Blue Ocean”, rather than by competing head-to-head with other suppliers for known customers in an existing industry. Fernandes began by capturing what he termed as a “huge ASEAN market”. In an interview to INSEAD Knowledge five years ago, he gave an example: “Southwest Airlines has 400 planes in a market of 350 million people. We’re in a market that’s double, triple that. So a lot of potential to grow, but grow sensibly and grow at the right pace is, I think, the key.” Later in the interview, he said, “We think there’s a lack of ASEAN brands and we think ASEAN’s been kind of looked over. Everyone’s focusing on China and India. We have 600 million people in ASEAN, of more or less the same socioeconomic background... So that’s our focus. In some ways it’s been looked over by many people, so let’s be key in that first. Our strategy is very clear: Be key in your own coun-

Are you looking for Fifth Freedom rights from India? No. Not interested. I think it is a lot important that we stick to our core market, which are our hubs in South-east Asia. I would be keen to get people to come to KL and from there to Australia and to North Asia. I don’t think it makes sense for people to come here and then go up to London. And we’ve got a lot of options. What about Dubai, Qatar… Those are the big guys. You have to know who you are up against. We started our service to Abu Dhabi. Three months later we pulled out because in a region like the Middle East with only one city, five flights a week and you go against Emirates, Etihad, Gulf, Qatar. (Woof). You have to cut your losses and lick your wounds. We’ve got to be a lot more deliberately careful about where we stand. That’s why we are focussing on where we have our strength, which is from Kuala Lumpur into the Asia-Pacific confluence. Do you think that is the area where you will grow… I don’t think that anybody’s going to challenge me that Asia-Pacific’s the next growth area. Tell us about your London flights? We are probably running at about 80-82 per cent load factor, which is just kind of break even on London. But it’s a tough route to make money. If we do it (it is because) it provides a lot of feeders for Europeans to

Page 5

“The response to the Delhi flights has been excellent. Delhi is our ninth station... Our pan-India presence and services have established us as a brand and given us a good name” — Suresh Nair Regional Manager — India, Sri Lanka and Bangladesh

come to South-east Asia en route to Australia. It is a good brand position to say that you’ve got service to London but will we be rushing that much faster to Europe? No. As a LCC, how do you manage flying to London? I think that is a very interesting point and I think we will probably be proving to the world that this is the way forward for lowcost carriers. This is the next breakthrough and I’ll explain why. Low-cost carriers basically have always traditionally focussed on narrow-bodied planes flying within the four-hour radius, right? Everybody in the past tried to be long-haul and the low-cost didn’t work. Why it worked for us is because of the fit between AirAsia and AirAsiaX. We use the same brand, we use the same website, the same feeder network that a standalone company did not have. And it provides AirAsia tremendous strategic advantage. Imagine if you’re just in South-east Asia flying for hours, and you are trying to add 175 planes — it’s going to be tough for the market to just keep growing organically. But now that you’ve got trunk routes Melbourne, Tokyo… New Delhi, Mumbai, London — all these passengers come in and they take connecting flights. About 30-40 per cent of them do and it allows AirAsia to cater to a new growth market that say a Tiger Airways doesn’t have access to. So, there’s a lot of tremendous energy, strategically.

CRUISING HEIGHTS August 2010

try first. In terms of low cost, I think we are. Then go out to ASEAN and then maybe one day go to India and China.” Suresh Nair, Regional Manager, India, Sri Lanka and Bangladesh, AirAsia’s man on the spot could not be more upbeat when he mentioned the launch of the Delhi flights. “The response to the Delhi flights has been excellent,” he told CRUISING HEIGHTS. “Delhi is our ninth station. No one has expanded as AirAsia has done. Our pan-India presence and our services — we started from the smaller cities and then moved to the metros — have established us as a brand and given us a good name,” said Nair. A major reason for the popularity of the Delhi-Kuala Lumpur flights, Nair mentioned, is the ease of connectivity. The flight leaves Delhi at 8.25 pm and reaches KL at 4.45 in the morning - well in time to connect with AirAsia flights to 75 destinations spanning the whole of the ASEAN region along with China, Australia and London.

What do you think about an LCC alliance? Here’s the beauty. There is today, a seamless alliance for all LCCs in the world: It’s called the internet. What about code-share? I don’t need codeshares. It is the 20th century-model. Code-sharing, interlining, that is the way of the legacy carriers…Today, we realise what we see on the internet is just the tip of the iceberg.

39


Air Asia 34final.qxd

7/30/2010

5:44 PM

Page 6

COVER STORY

Race for the Indian skies India has become a favourite hunting ground for low-cost carriers and AirAsia’s elaborate plans to ramp up operations in India is only a part of the story that is being played out by South-East Asian carriers and now even the low-cost carriers from the Gulf. It is time Air India woke up to counter the competition, writes R Krishnan.

F

or the past three years, the Low Cost model literally burnt the rubber from under the legacy carriers over the domestic skies in the sub-continent. Now, the battle is moving one level higher with SpiceJet getting ready to go overseas from August. That will be almost at the same time that Air AsiaX arrives in Delhi. It's a numbercrunching battle where the price point is the lifeline. For Jet, Kingfisher and Air India it has to be an unending quest to be nimble, agile and flexible. Air India has now firmed up a new turnaround plan which envisages a serious shake up of its low-cost carrier business. In addition to fine-tuning international services under the Air India Express brand, it will also target a panIndia domestic LCC services. The reverse argument could be that it will reach out its international destinations from many more domestic destinations and in order to do that may even increase its fleet of Boeing 737-800s that it currently operates. It had 25 in all of which 18 were owned and remaining leased. After the loss of one such aircraft in the Mangalore crash on May 22, 2010, it Having completed the first phase of growth, Fernandes’ dream of turning AirAsia into an international carrier is nearing fruition. CAPA’s (Centre for Asia Pacific Aviation) Managing Director Peter Harbison speaking about AirAsia was quoted: “Fernandes has had remarkable influence in shaping government and airline thinking in Southeast Asia and beyond..” Echoing Tony Fernandes, Nair emphasized that AirAsia had opened the ASEAN market to India. “At least 50 per cent of our fliers from the ASEAN nations are visiting India as tourists. We have opened up a totally new market,” he said. As an example, he said that while two Indian carriers had two flights a day from Chennai to Kuala Lumpur, AirAsia had seven flights a week. In addition, the carrier operated Chennai-

40

now has 24 Boeing 737-800s. There is a serious possibility of Air India inducting at least 10 more Boeing 737-800 should it decide to cancel its remaining Boeing 777-300 ERs on firm order and exchange them for these 10 Boeing 737-800s. And should these 10 come in one year, then with nearly 34 narrow-body aircraft, Air India Express could soar past Penang flights (there are four flights a week now but there would be seven soon). Indeed, AirAsia has taken on the bigticket holders by doing things they normally do like starting new routes. No one knows it better than Kathleen Tan, the airline’s Commercial head. Terming the marketing shove as “tsunami marketing”, AirAsia does not, she emphasised, go in for half measures. Acquiring the necessary clearances from the Indian government was not easy but they were completed. AirAsia is in India through three separate companies. While AirAsia Bhd, the mother company, has started flights from Kuala Lumpur to Hyderabad, Bengaluru and Chennai (in addition to the existing flights to Trichy, Kolkata, Kochi and GOURMET’S DELIGHT: Food served to AirAsia passengers.

CRUISING HEIGHTS August 2010

the likes of JetLite, IndiGo and SpiceJet, including their international operations. Obviously, there will also be a fleet of A320s to support the domestic LCC operations of Air India. At the same time, SpiceJet will also get ready to operate the so-called low-cost or low-fare international services from August/September 2010 as it has already received permission from the Ministry of Civil Aviation. It is understood that besides Dhaka and Kathmandu, SpiceJet may also get the okay to fly to Colombo from Chennai. It is only a question of time when the carrier will begin to fly to Dubai or other parts of UAE. IndiGo is also getting ready to increase its fleet of A320s to reach out destinations outside India though this will only be in 2011 when it will complete the mandatory five years of domestic flying. As for the LCC airlines, we have Air India Express, JetLite, Kingfisher Red (if Dr Vijay Mallya also begins to believe in LCC on foreign routes) and IndiGo. These should give quite a tough fight to foreign LCCs like AirAsia which has a very aggressive plan for India (see interview). Besides, AirAsia, there is Tiger Airways from Singapore operating a low-cost modThiruvananthapuram), the Thailand-based AirAsia (in association with Shin Corp) has chalked out plans to start flights in the course of this year from Bangkok to four destinations in India. Fernandes will be capitalising on AirAsia’s Bangkok hub to connect Indian travellers from Bengaluru to visit Phuket, Krabi and nine other places in Thailand. The last and third initiative is being handled by AirAsia X (Fernandes’ business tie-up with the Virgin group): its A330 flights connect Mumbai and Delhi to


Air Asia 34final.qxd

7/30/2010

5:44 PM

el. As on date, it flies to Bengaluru and Chennai and come November 2010, it will start operations from Singapore to Trichy and Trivandrum taking its total India operations to 26 flights a week. Tiger Airways uses brand new A320 for its operations. Since it started services to Bengaluru in May 2007 and to Chennai in May 2009, its traffic capacity has increased by 180 per cent and 21 per cent, respectively. In a way, Tiger Airways has begun to provide competition not only to Indian carriers but to its own domestic cousins, Singapore Airlines and SilkAir. Tiger Airways officials say there is a difference in the traffic emerging from Malaysia and that from Singapore. This will influence the respective network of AirAsia and Tiger Airways. The Tiger Airways CEO said some time ago that in the case of Malaysia the majority of Indians originally hailed from Tamil Nadu (Chennai and Trichy), while in the case of Singapore besides Tamil Nadu, there is a large percentage from Kerala, and some northern Indian states. That is why Tiger Airways is keen to fly to Trivandrum. Tiger Airways currently has a fleet of 19 A320s and by 2015 it will go up to 68. In 2010 and 2011, it proposes to induct seven new A320s every year. Besides AirAsia and Tiger Airways, Dragonair — a subsidiary but not a low-cost model of Cathay Pacific — started its operations from Hong Kong to Bengaluru in March 2008 with its fleet of A320s with a daily flight. Soon after the economic meltdown, the services were brought down to less KL. Ever on the lookout for new destinations, AirAsia wants to connect more Indian destinations to the ASEAN nations. "We want to be innovative in our search for new routes," said Suresh Nair, "and you could one day find us flying from Bangalore to Phuket or Langkawi, for example." Other than going abroad, AirAsia has been focussing on what Fernandes termed in his INSEAD Knowledge interview as “the underserved, on the market that many people have missed out on, which is the vast majority of the population”. In response, he has started a chain of no-frills hotels through Tune Hotels.Com. He believes that most entrepreneurs have always been competing against brands that have gone upmarket and have, therefore, built a cost structure that can’t serve that market. In his own inim-

Page 7

WE ARE EXPANDING: (From L-R) Tony Fernandes, Group CEO, AirAsia; Azran Osman-Rani, CEO, AirAsia X; Datuk Seri Ong Tee Keat, Transport Minister, Malaysia; Kathleen Tan, Regional Head of Commercial, AirAsia and Fam Lee Ee, Director, AirAsia.

than four a week. However, in the first few months of 2010, Dragonair has registered between 30 and 40 per cent rise in demand for its Business Class and would soon be redeploying capacity to take its flight frequency to and out of Bengaluru to seven times a week and also add some

Tony Fernandes will be capitalising on AirAsia’s Bangkok hub to connect Indian travellers from Bengaluru to visit Thailand CRUISING HEIGHTS August 2010

more stations. In 2010, it will celebrate its silver jubilee. Well before these Southeast Asian carriers — lowcost and full-service carriers — launched operations to India, Thailand's own LCC, Nok Air, started operations to Bengaluru from Bangkok in May 2007. It also acquired landing rights to Chennai, Hyderabad and New Delhi. However five months after it started flights to Bengaluru, Nok Air suspended operations for reasons of fleet unavailability. It also decided to focus near its home market before expanding in India. Perhaps, Nok Air could also join the India race soon. From the Gulf and Middle East, we have a successful Air Arabia operating to 11 Indian destinations with its Airbus A320s. It has been offering very competitive fares that can knock the bottoms off any competing carrier. Recently, FlyDubai has decided to launch services to three Indian destinations starting with Lucknow. The other two cities where it will fly are Chandigarh and Kozhikode. It operates Boeing 737-800s and has already placed orders for a fleet of 54 B737-800s. FlyDubai, an LCC, is closely related to Emirates. Perhaps, what that means is that the leftovers of the Indian market after the 191 fights a week by Emirates will be mopped up by FlyDubai! itable way, Fernandes has gained knowledge about what the common man wants. “Why spend hundreds of millions of dollars to get someone to tell what they want, when you can just ask them?” he said in that interview. “What do Asians love to do? Shop and eat. The mode of transport and the hotel are less important things to them. So, if it’s clean, cheap, nice bed, nice shower, people want it. There isn’t a branded low-cost hotel in Asia like Motel 6 in the US or Formule 1 in Europe. So, I saw that as an opportunity.” Asia will see more of Tony Fernandes and his AirAsia. Not only has he created a revolution of sorts but he has also lit a thousand sparks to interest would-be entrepreneurs. His advice: “Never listen to anyone else. Just go with your gut, because you’ll never start otherwise.” 

41


Cargo AirAsia.qxd

7/30/2010

5:22 PM

Page 2

COVER STORY

A

irAsia, a low-cost carrier and also air cargo. Somehow the two do not seem compatible but both have been happily married for sometime now. The marriage — if one may call it that — has been so successful that AirAsia recently became the first low-cost airline to win the Air Cargo Industry Newcomer of the Year Award 2010, at the Air Cargo Week (ACW) World Air Cargo Awards held recently in Shanghai. AirAsia emerged at the top in a global survey that polled industry peers and shippers. Commenting about the award, Sathis Manoharen, AirAsia’s Regional Head of Cargo, said that the honour signified the

42

ASEAN cargo connector The AirAsia style of doing things differently is nowhere more apparent than the carrier's cargo business. Keen to generate revenue from every source available, AirAsia has maximised the use of belly-hold space and is even looking at 40 per cent growth. Tirthankar Ghosh found out more about AirAsia’s cargo moves. CRUISING HEIGHTS August 2010


Cargo AirAsia.qxd

7/30/2010

5:22 PM

Page 3

ACCOLADES: Sathis Manoharen, Regional Head of Cargo of AirAsia, receiving the Air Cargo Industry Newcomer of the Year Award 2010 during the award ceremony in Shanghai.

growing confidence and belief in the carrier’s cargo products and services. In fact, the airline has immense trust in its cargo division and Manoharen among other top officials of the carrier has gone on record to say that the company is strengthening the cargo operations in part to protect its bottom-line against fluctuations in fuel prices. The LCC’s cargo story began like most of its other initiatives with Tony Fernandes, the Group CEO. Recounting the venture, Manoharen, in an interview with CRUISING HEIGHTS, mentioned that Tony Fernandes was inspecting the first A320s when they arrived. As he was inspecting the aircraft, he

Cargo’s revenuegenerating capabilities have also been snapped up by AirAsia X, the lowcost long-haul associate of AirAsia and the airline is optimistic about the cargo business CRUISING HEIGHTS August 2010

kept on asking about the belly-hold. He kept on questioning, “Why can’t we maximise this (belly-hold) space and let it be a revenue-generation stream?” It was a pure Tony Fernandes trait, led by his core belief (and one that is followed by everyone in AirAsia) which is: Never shy away from questioning conventional wisdom. Whilst experts in the industry have said low-cost carriers and cargo do not fit as a business model due to the short turnaround time, Fernandes created the cargo department and said, “We will be in the cargo business.” Today, while most other airlines have been reducing capacity, AirAsia’s cargo division has done well. According to Manoharen, “The good showing happened because of the carrier’s comprehensive network, frequencies and pricing structure, which are our key competitive edges. The growing number of established freight forwarders who are now using our service is a pleasant surprise. Not long ago, established freight forwarders were shying away from us as they questioned our ability in providing a reliable service. Now, we are thankful that we have managed to establish a good structure in our operations and service levels and we are seeing positive results.” Cargo’s revenue-generating capabilities have also been snapped up by AirAsia X, the low-cost long-haul associate of AirAsia. During his visit to Delhi to announce the launch of direct flights from Delhi to KL, beginning August this year, Azran Osman Rani, Chief Executive Officer, AirAsia X, was optimistic about the cargo business. “Cargo may not be part of our business, but we will stay there,” said Osman Rani. Conversant with the business from India, the CEO pointed out rather matterof-factly: “We have been utilising our bellyspace.” He gave the example of Tiruchirappalli, one of the southern Indian destinations that AirAsia touches twice a day. “In Trichy, the number of consignments of onions, vegetables, etc. going to Malaysia is huge,” said Osman-Rani. When questioned about the quick turnaround that is the lifeblood of all low-cost carriers, Osman Rani said with emphasis, “It (quick turnarounds) can be done. We have figured out how to complete our turnaround even in the short turnaround time that we have. Ours is efficient management. We get everything ready and we do it.” AirAsia X's A330-300 aircraft can be loaded with between 16 and 18 tonnes of cargo in an hour flat, well within the aircraft's 75-minute turnaround time. In addition to Tiruchirappalli — where it picks up vegetables — AirAsia X flies to Australia (Perth, Melbourne and the Gold Coast), China (Chengdu, Hangzhou and

43


Cargo AirAsia.qxd

7/30/2010

5:22 PM

Page 4

COVER STORY Tianjin), India (Mumbai and Delhi by the time this issue of CRUISING H EIGHTS appears), Taiwan (Taipei) and the UK (London, Stansted). The CEO also mentioned that AirAsia has been changing all the accepted rules in the aviation business. “The problem with the aviation industry is that just because someone initially said you cannot do cargo turnaround or you cannot do long-haul, it does not mean that we have to follow suit. We have figured out how to do a quick turnaround and we are doing it. In fact, we are earning good money,” said Osman Rani.

with our passenger operations, we don’t find it time-consuming as cargo is a revenuegeneration stream,” he said. Another part of the business strategy is ULD management that AirAsia has outsourced to Unitpool. According to the cargo head, “We explored various channels and we made a decision to be on the pooling system with Unitpool. This has given us a sizeable cost advantage and economies of scale operations-wise — not managing the administrative burden of inventories, hiring resources for maintenance, repair and storing activities.

MAKING MONEY EVEN WHILE PASSENGERS SLEEP: With flatbed adjustable seats, while AirAsia X has made its air journey more passionate, it has also raked in money through cargo.

As fear of the global downturn recedes, AirAsia is optimistic about the Asian market. “With the heightened downside risks to growth and the renewed optimism of the global economy, the outlook for the logistics industry certainly looks promising and has a sizeable upside compared to last year. We are optimistic about our growth and we are looking at a 40 per cent growth this year. With a population base of approximately over 500 million people in ASEAN, our forecast for growth is in the double-digit region. In our view Asia will continue to fuel the cargo growth for us,” said Manoharen. Backing that optimism is a shrewd business sense. Well aware that the freight business is time consuming and therefore needs constant financial sustenance, Manoharen mentioned that AirAsia had gone in for what he termed as “regimented outsourcing”. “The move helped it manage the cost aspects of the business. Time is a relative measurement tool. For some, it is time consuming but for us with our structured methodologies and harmonisation

44

AirAsia has worked with its outsourced business partner to tailor and customise the web-based system based on the carrier’s business and operational needs CRUISING HEIGHTS August 2010

Almost simultaneously, the carrier went in to upgrade its IT system, specifically for cargo. “We were on a manual booking and tracing platform till January 1, 2010, where we migrated to our web-based cargo booking and tracing system domestically. On June 1, 2010, we started using our webbased system for international stations,” said Manoharen. The company did not purchase the system off the shelf. Instead, AirAsia worked with its outsourced business partner to tailor and customise the web-based system based on the carrier’s business and operational needs. “We started from ground zero and Air Asia is probably the first major low-cost airline to have a web-based cargo booking and tracing system,” he elaborates. As the carrier touches more Indian stations in the coming months — last year, the carrier started touching three more Indian cities — Kolkata, Thiruvananthapuram and Kochi in addition to Tiruchirappalli — the cargo division has planned to strengthen its foothold in the airfreight market. Said Manoharen, “Our utilisation rate in the belly space is a high 80 per cent for our narrow body (A320). With our wide-body (A330), that has just started its Mumbai service and Delhi coming into the picture from August 2010, we expect significant growth from India, in terms of both tonnage and revenue. We are expecting India to be a very important and valued business partner for us.” All this because there are ample opportunities of air cargo traffic between India and Malaysia and beyond. Simply put, “It’s about capitalising on the opportunities and understanding market dynamics for cargo trans-shipments within the ASEAN region. There remains a huge scope for air cargo movement in the ASEAN region, especially for perishables and pharmaceuticals,” said Manoharen. Will the future see AirAsia’s dedicated freighters flying in and out of India? “Not immediately, but who knows what the future holds,” said Manoharen. And in classic AirAsia style, he reminded, “We have never been rigid in exploring business opportunities. It’s all about being flexible to changes, understanding demand and capitalising on economic opportunities.” Capitalising on opportunities is the transport of perishables, machinery and automobile parts, electronics, and apparels. At its Kuala Lumpur hub, AirAsia provided up to 48 hours free of charge cold room and chiller storage facility for customers to facilitate shipments from India, China, Far East, Australia and Europe. And to add more muscle to the network, AirAsia has special arrangements for cargo with Gulf, Etihad and South African Airways. 


Krishnan’s col final.qxd

7/30/2010

5:19 PM

Page 3

COLUMN/CHOCKS OFF

Jadhav: All izz well! Banks: Izz all well? R Krishnan

Even with Turnaround Plan II, Air India, with its massive fleet is somewhere near the market share of low-cost carrier IndiGo. More than anything else, what is needed is out-of-the-box nimble moves to get the carrier back to its position of eminence, suggests R Krishnan.

S

o, now we have yet another turnaround plan from Air India within 11-and-a-half months of the first one which was premised on a different basis. On August 7, 2009, the then barely three-month-old CMD of Air India Arvind Jadhav told newsmen in Delhi after he and his team had made a presentation to the Prime Minister’s Office that it would take a minimum period of three years before the erstwhile Maharaja could get his clothes back. A year later, perhaps, we now need to get the Maharaja back. I am not joking. I am serious — in fact, as Air India’s Turnaround Plan I and II. It is three years since the legal merger was completed in August 2007 but the two merged entities still remain as separate as they were before the union. No, I am not talking of the derecognised, or for that matter, the recognised unions in the airline. All I am saying is that the so-called legal communion still shows a separation when you look at the very basic thing about an airline — the flight code — AI and IC. As far as meeting of minds, it is even more apart especially after the two unions — ACEU

and AIAEA representing nearly 13,000 employees of Indian Airlines — were derecognised by the Air India management. We saw the entire Board of Directors, including the famous Independent Directors (IDs) of Air India proudly sharing the dais along with the merger driver Civil Aviation Minister Praful Patel on Sunday evening of July 25 at Mumbai after the Board meeting. The message that was sent out was clear: “All is well”. The 12 unions, as per one news report, and 14, according to another, pledged full support to Minister Patel, Secretary M M Nambiar and the five IDs — Anand Mahindra, Amit Mitra, Air Marshal Fali H Mistry, Harsh Neotia and Yusuf Ali. As one saw them from Delhi on the TV screen, they displayed satisfaction at what they were about to achieve — four years later in 2014-15 — when Air India hopes to be in the black again. Praful Patel, perhaps, hinted or should we say, revealed, that no wage cuts and no employee cuts formed the basis of the “All is well” mood: a conclusion they came after talking to the unions. Take a look at this closely. I am told by responsible people in Air India, that the talks

CHALKING TURNAROUND PLANS: File picture of Air India CMD Arvind Jadhav (centre) along with S Chandrasekhar (left) and Jitender Bhargava (right) addressing a press conference regarding turnaround plans of Air India in August 2009.

CRUISING HEIGHTS August 2010

45


Krishnan’s col final.qxd

7/30/2010

5:19 PM

Page 4

COLUMN/CHOCKS OFF leaders were suspended after their May 2009 illegal strike and their union NACIL Fleet (as on July 1, 2010) offices sealed? However, the Delhi High Aircraft type Owned Leased Total Court ordered the de-sealing of the Operational Fleet union offices and the rest of the matter is Wide Body still being heard. Obviously, the minisB777 -200LR NACIL (A)# 8 0 8 terial party could not have spoken to B777 -300ER NACIL (A)# 11 0 11 new union leaders because they should B747-400 NACIL (A)# 5 0 5 be elected and should that process have A310-300 NACIL (A)# 4 0 4 been allowed then the whole premise of A330-200 NACIL (I)* 0 2 2 unions de-recognition could have fallen Wide Body Total 37 2 39 raising larger legal issues. Narrow Body I am raking all this up which I am B737-800 (AIX) NACIL (A)# 17 4 21 sure many of my critics will say is A320 NACIL (I)* 23 5 28 unnecessary. Just look at the market A319 NACIL (I)* 19 5 24 share of Air India (domestic) in June A321 NACIL (I)* 20 0 20 2010 which was a mere 16.9 per cent CRJ- 700 NACIL (I)* 0 4 4 against IndiGo’s 16.4 per cent. The ATR42 NACIL (I)* 0 7 7 accompanying table shows the fleet Narrow Body Total 79 25 104 strength of Air India. Take a note of the Total Operational Fleet 116 27 143 narrow-body aircraft other than Air Freighters India Express’ Boeing 737-800s. Of the A310-300 NACIL (A)# 2 0 2 104 narrow-body aircraft, 21 belong to B737-200 NACIL (I)* 6 0 6 Air India Express which is a foreignFreighters Total 8 0 8 going LCC with a small domestic leg. Non-Operational Aircraft Therefore, 83 of these narrow-bodies A320 NACIL (I)* 10 0 10 (A319, A320 and A321 besides four A320 NACIL (I)* 0 6 6 CRJs and seven ATRs) are totally devotB737-800 (AIX) NACIL (A)# 0 1 1 ed to domestic operations except for B777 -200ER NACIL (A)# a 4 4 limited foreign rights — Singapore, B747-300 Combi NACIL (A)# 1 0 1 Malaysia, Bangkok, Colombo, Dubai, B747-400 NACIL (A)# 1 0 1 Sharjah —that Indian had been operatB737-200 NACIL (A)# 5 0 5 ing. Even if we assume that Air India (or DO- 228 NACIL (I)* 2 0 2 former Indian) was deploying say 70 of Non-Operational Total 19 11 30 its narrow-bodies, CRJs and ATRs on NACIL Total 143 38 181 the domestic network, it managed to # Nacil (A) is erstwhile Air India * Nacil (I) is erstwhile Indian garner a market share of only 16.9 per cent compared to 16.4 per cent captured by IndiGo with only 27 A320s in its fleet. With its fleet strength rising, I am sure IndiGo will move far ahead. An even more intriguing aspect is held with unions did not include the derecogthe seat factor. In June 2010, Air India domesnised ones: the ACEU and AIAEA. The question tic logged a seat factor of 72.3 per cent with a that should be asked is: Who represented the passenger carriage of 7.60 lakh. IndiGo, on the 13,000 of the 15,000-odd employees of erstwhile other hand, had a seat factor of 90.7 per cent Indian that comprised all the non-technical carrying 7.37 lakh passengers. SpiceJet, the ground staff, cabin crew and aircraft mainteother domestic LCC, had a market share of nance engineers? The only leftover Indian 13.3 per cent and that too with only 24 Boeing Airlines-walas, the Minister and his party of IDs 737-800 aircraft. Shockingly, Air India domescould have spoken to, might have been the Inditic with a domestic fleet larger than the coman Commercial Pilots Association representing bined fleet of IndiGo and Spice had a market the pilots, Indian Airlines Technicians Associashare which was half of the two LCCs with tion representing the technical ground staff and who it is now raring to compete as per the new the officers of erstwhile Indian. Now, in a Air India Turnaround Plan II. merged airline with 33,000 employees, could Arvind Jadhav pointed out that Turnaround anyone smoke the peace pipe with representaPlan I was based on a shrinking growth scenario tives of only 20,000 employees and leave the rest while Plan II was based on a growth scenario. 13,000 to watch TV? Hence, the theory that “All How could Air India management including the is well” can only be two-thirds true as one-third IDs assume that competing domestic LCCs will of the employees might have gone unrepresentlie back and enjoy watching Air India eating their ed. Even if one assumed that the Minister and his market share? party did speak to them, then the question that I must now bring in the statement of Air arises is: who were the union leaders of ACEU India’s new COO Gustav Baldauf. He said the and AIAEA they spoke to since all those union LCC arm would play a major role in the

AIR INDIA’S PLANES THAT SIMPLY FLY

The unions pledged full support to Minister Patel, Secretary M M Nambiar and the five Independent Directors. They displayed satisfaction at what they were about to achieve — four years later in 2014-15. 46

CRUISING HEIGHTS August 2010


Krishnan’s col final.qxd

7/30/2010

5:19 PM

Page 5

Air India’s Turnaround Plan II Corporate vision and mission:  Turnaround plan envisages a corporate vision: To be the leader in Indian aviation and India’s ambassador to the world  Corporate mission is to deliver the highest quality of service around the world and be the epitome of Indian hospitality  Be India’s flag carrier and provide seemless travel within India and the world Financial restructuring:  Restructuring working capital loans through mix of bonds guaranteed by government with longer tenor and bullet payment  Land/buildings monetised either through outright sale or as security for raising fresh loan  Equity infusion by government to strengthen the balance sheet  Release of security given under long-term loans to provide security for working capital loans to reduce borrowing cost Operational restructuring goals:  Goals to be achieved by 2015: 25m domestic and 15m international passengers  Ontime punctuality 93 per cent  75 per cent load factor with target passenger revenue of Rs 35,000 cr  Target non-passenger revenue of Rs 6,500 cr

business model of Air India. The LCC will be introduced on the domestic routes in a phased manner — say, six months. In these six months, both IndiGo and Spice, besides of course Jet, would have expanded their fleet to absorb the rising passenger numbers at better yields and loads. True the rising market has helped Air India increase its yield from Rs 2.49 per kilometre to Rs 3.29. But can Air India afford to raise its fares and still retain the loads? That is a very big question. Air India has admitted that it is unable to cut costs. With high costs, how can it venture into a domestic LCC business? Air India Express, that made a loss of over Rs 300 crore a year ago, had employees on contract. How can the domestic LCC employ people on contract and what will it do with its permanent employees operating the domestic services? If you have high costs and offer low-fare services, you may require Plan III. Let us now focus on the cost of Air India’s debt. In Plan I of August 2009, it was pointed out that Air India would replace its high-cost debt by low-cost debt. One year down the line, nothing of that sort has happened and Civil Aviation Minister Praful Patel said on July 25, 2010, that the Government of India would provide sovereign guarantee to enable Air India to get loans and ensure comfort to lenders. This followed after Air India’s efforts to rope in bankers to give it both working capital loan and capex failed. What this meant was that for bankers, both domestic and foreign, “All is not well with Air India”. Hence, the sovereign guarantee. While debt per se strained Air



  

Covering the market with different business models viz., local feeder services, LCC, high quality mainline operation and cargo Providing non-stop/one stop connectivity Moving to a hub carrier (Delhi and Mumbai hubs supported with smaller hubs within and outside India) Develop a strong feeder network

Fleet size:  35-45 feeder aircraft,120-150 narrow-body aircraft for domestic operations, 50-55 wide-body aircraft for medium and long-term intercontinental traffic  25-30 narrow-body plus 4-6 wide-body aircraft for low-cost operations  Cluster of major 60 cities will be connected using Indian hopper and mainline, international long-haul will be operated through primary hubs by mainlineIndian hopper will serve five regions in domestic markets bringing traffic also for mainline Business process and organisation:  Introduce best practices to support joining of alliance  Strong it backbone to support business processess  MRO and ground handling to be shifted to subsidiary companies  Catering, hospitality and independent training center to be separate business units  New governance structure with a supervisory board and executive board

India’s balance sheet, the difference between Plan I and Plan II was the promise of sovereign guarantee to help the Maharaja sit up and then see whether it can fly. Some of the other aspects of Plan II seemed a repetition of recommendations of Accenture, the agency that advised on the merger. The Air India management stated that it would set up separate business units (SBUs) for MRO, Ground Handling, Training and the employees from Air India could be relocated to these subsidiaries. We saw the unions (mainly Air India) protesting at permanent employees being transferred to the Joint Venture Ground Handling company with SATS. Will the management derecognise the Air India unions should they protest the transfer of staff to these SBUs? It is one thing to have a “shared vision” and quite another when “vision is shared” later. Even as the Air India management talked of no wage cut, no employee cuts, etc, it disclosed that in the next four years, it would increase its present combined fleet of 138 aircraft to between 250 and 275. So, brace up for acquisition of another 100 aircraft of which nearly 70 per cent could be narrow-bodies and the remaining wide-bodies. Who will fill them and who will pay for them? And will the Government of India, habituated to extending sovereign guarantee, even go forward to present an exclusive “Air India budget” like the Rail budget from next year?  (Veteran journalist and long time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.) CRUISING HEIGHTS August 2010

The talks held with unions did not include the derecognised ones: the ACEU and AIAEA. The question that should be asked is: Who represented the 13,000 of the 15,000odd employees of erstwhile Indian? 47


Dubai.qxd

7/30/2010

5:17 PM

Page 2

SPOTLIGHT

Dubai is rolling Cargo operations have started at the newly-opened Al Maktoum International Airport (Dubai), but the race amidst passenger carriers on who will make its debut landing at the airport is still on. UAE’s national carrier (Emirates), however, is in two minds. A report. oining the list of some unique countries possessing the advantage of being host to two airports, Dubai, has once again attracted the attention of world media to its newly opened Al Maktoum International Airport for a variety of reasons. “Phase 1 is the first step in a long infrastructure development project that over time will see our new airport transformed into the world’s largest global gateway and a multi-modal logistics hub that plays an increasingly integral role in the ongoing economic and social development of Dubai,” said Sheikh Ahmed Bin Saeed Al Maktoum, President, Dubai Civ-

J

48

Sheikh Ahmed Bin Saeed Al Maktoum, President, Dubai Civil Aviation Authority and Chairman of Dubai Airports.

Artistic impression of Dubai World Central.

il Aviation Authority and Chairman of Dubai Airports, adding, “It is a proud day for Dubai and an auspicious occasion for the future of global aviation.” Phase 1 of the airport will feature one A380 capable runway, 64 remote stands, one cargo terminal with annual capacity for 250,000 tonnes of cargo and a passenger terminal building designed to accommodate five million passengers per year. When completed, Dubai World Central-Al Maktoum International will be the largest airport in the

world with five runways, four terminal buildings and capacity for 160 million passengers and 12 million tonnes of cargo. In the short term, Dubai World Central-Al Maktoum International will increase the airport capacity of Dubai to accommodate the 48 per cent increase in cargo volumes from 1.9 to 3 million tonnes that is anticipated by 2015. In the long term, it will serve as a multi-modal logistics hub for 12 million tonnes of freight and a global gateway for the 150 million passengers

CRUISING HEIGHTS August 2010

per annum that are expected to pass through Dubai by 2030. During the live operation, the flight effectively tested Air Traffic Control procedures, airfield and taxi way signage and routes, radio communication and a host of processes and procedures related to ground and cargo handling, fuelling, catering, customs, immigration and security. The trial also tested communication links between all the parties involved — Emirates SkyCargo, Dubai Airports, Dubai Air Navigation


Dubai.qxd

7/30/2010

5:17 PM

Page 3

D I D YO U K N O W ? 









Dubai Airports owns and manages the operation and development of both of Dubai’s airports — Dubai International and Dubai World Central - Al Maktoum International. According to ACI’s latest figures, Dubai International is the 4th busiest airport in the world in terms of international passenger traffic and 5th busiest for international cargo, offering connections to over 210 destinations across six continents on more than 130 airlines. DWC’s phase 1 features one A380 capable runway, 64 remote stands, one cargo terminal with annual capacity for 250,000 tonnes of cargo and a passenger terminal building designed to accommodate five million passengers per year. Upon completion DWC will feature five runways, up to four terminal buildings and capacity for 12 million tonnes of freight and 160 million passengers per annum. Dubai World Central - Al Maktoum International passenger operations are currently slated to start up at the end of March 2011 in concert with the IATA schedule change.

Services, Dubai Police, Customs, Immigration, Engineering Projects, Dubai Logistics City, Dubai World Central, JAFZA, Dnata, Swift Freight and Roads & Transport Authority. However, Dubai’s newest airport, Al Maktoum International, will begin passenger operations in March next year. “The planning date is spring of 2011 — so we’re looking at the end of March for the start of passenger flights,” said Andrew Walsh, Vice President, Cargo and Logistics, Dubai World Central, adding, “Right now, the passenger terminal is in the final stages of fit-out. Now that the cargo terminal is open and the operations are settled, we’ll move into the operational readiness process for the passenger terminal through the latter part of this year and

from the new passenger terminal, but Walsh said that the facility itself was probably designed more for regional carriers. “It’s an all-bus operation, and there are no jet bridges,” he said, adding, “It’s a facility that’s about

Emirates Airline will not move its operations to the new Al Maktoum International Airport until some time between 2022 and 2030. the early part of next year.” When completed, the five-runway airport will eventually be able to handle 160 million passengers a year, up from the previously projected 120 million, as well as 12 million tonnes of cargo. As yet, there has been no clarification as to which carriers will operate

CRUISING HEIGHTS August 2010

twice the size of Terminal 2 and can handle five to seven million passengers. So the ‘right fit’ would be to get a number of regional operators — as well as potentially a couple of long-haul operators — because clearly one of the aspects they want is a hub carrier in place so they can exchange feed.” But Walsh confirmed that no airlines would be forced to shift current operations from Dubai International Airport to Al Maktoum International Airport. “We’ve had a very clear direction from Sheikh Ahmed that we won’t force anyone to move. So at the end of the day, it’s going to be the carriers’ choice to be there,” he confirmed. Now was this statement hinted towards Emirates’ announcement of not shifting to Al Maktoum International Airport is anybody’s guess. According to a recent statement made by Tim Clark, President, Emirates Airline, the airline will not move its operations to the new Al Maktoum International Airport until some time between 2022 and 2030. “We have refocussed here (at Dubai International). With a certain amount of investment here, you can get a lot more out of this airport,” he was quoted as saying. “In time we expect Emirates to move to the new airport but we need enough capacity. Emirates Airline has 20 million passengers annually so we won’t be able to accommodate the airline until a substantial amount of phase two is completed,” said Paul Griffiths, CEO, Dubai Airports. 

49


frrnborough.qxd

7/30/2010

5:11 PM

Page 2

AIR SHOW

FARNBOROUGH,

HERE COMES

INDIA! A REPORT ON THIS YEAR’S FARNBOROUGH AIR SHOW IN BRITAIN 50

CRUISING HEIGHTS August 2010

T

he value of orders taken at this year’s Farnborough International Airshow was finally in advance of 2006 but will fall short of 2008’s record. Orders for the 2010 show were over $47bn (about £31bn). New orders at the event didn’t come close to the record-breaking 88 billion dollars announced at Farnborough in 2008 before the global recession had hit. Still, many believe that this show confirms the recovery trend that has been in evidence since spring. Ian Godden, chairman of aerospace, defence and security trade organisation ADS, said, “The 2010 show has been very successful and the figures demonstrate the mood of strong optimism that there has been around the show this year, which is very encouraging given the current global economic climate.” Farnborough International Airshow opened its skies on July 19 for the 47th internationally acclaimed expo where trade customers discovered the latest technological innovations and members of the public wit-


frrnborough.qxd

7/30/2010

5:11 PM

Page 3

nessed great aviation in action. The Financial Times described it as “the most eye-catching order”. It came from Steven Udvar-Hazy, who founded and ran the ILFC aircraft leasing company until he left to start his own venture, Air Lease Corporation, earlier this year. Air Lease dominated the show by ordering more than 130 aircraft, mostly Boeing 737 and Airbus A320 narrow-bodies, with a listed value of at least $10bn. Many see Udvar-Hazy’s splashy re-entry to the market as a sign that the recovery was definitely at hand. But others remained cautious. The heavy preponderance of narrow-bodies was unusual at this stage of an upturn, said one expert. Orders for larger wide-bodied aircraft would have suggested that airlines were confident about a sustained growth in the passenger traffic needed to fill them. There were some orders from large international airlines at Farnborough, notably Dubai’s Emirates, which said it would buy

47

SHOWCASING THE BEST: An aerial view of the Farnborough Air Show

Now with the global recession almost forgotten, the airline industry has been looking at the Farnborough show with optimism CRUISING HEIGHTS August 2010

30 of Boeing’s 777 wide-bodied jets. But the piece de resistence was the “break in hostilities”, as the FT again described it when Boeing’s Chief Executive James McNerney and Jim Albaugh, Head of Boeing’s Commercial Aircraft Arm, gave a personally guided tour of the 787 Dreamliner, the world’s newest passenger aeroplane, to rivals Tom Enders, the Airbus Chief Executive, and Airbus Head of Sales, John Leahy. At the end of the tour Enders is believed to have remarked that the 787 was a “great aircraft but ours will be better”, referring to Airbus’s forthcoming A350, which like the 787 will be partly made from lightweight carbon fibre composites. Leahy was even cheekier: “We came to Farnborough to show our latest aircraft flying, they came to the show to park theirs,” he said. “What a difference.” Airbus also said that it now hoped to win orders for more than 400 planes this year. “This was a good airshow for us and I think it was a good airshow for the aviation industry,” said Airbus’ Thomas Enders. Airbus, a unit of the European aerospace giant EADS, won firm orders for 133 planes worth $13 billion at the show along with preliminary orders for 122 aircraft worth $15 billion. Brazilian manufacturer Embraer also said Farnborough had been good for business, yielding contracts in the amount of $7.9 billion.”This has been a very good show for Embraer and I would say for the entire aerospace industry after a deep crisis,” said an Embraer Vice President, Horacio Aragones Forjaz. Boeing has significantly increased its long-term airliner delivery forecast on the back of a big jump in expected demand for single-aisle aircraft. However, the airframer is unmoved by the recent sales success of the Airbus A380, remaining downbeat about long-term demand for very large aircraft. Last year, Boeing took the unusual step of reducing its 20-year forecast slightly (to 29,000 units) - a move that has been more than reversed in 2010’s current market outlook, where it has hiked up demand by 1,900 aircraft. The industry, however, likes to present a picture of rude health at its showpiece events, saving up orders to trumpet. Look a little deeper and a less sprightly picture starts to emerge. Some of those deals are old news - such as 18 of Emirates’ $9 bn of “new” orders for 30 Boeing 777 widebodied jets. Moreover, such customers are still going for Boeing 737 and Airbus A320 short-haul workhorses that can easily be placed with emerging market airlines. Boeing has yet to generate much interest

51


frrnborough.qxd

7/30/2010

5:12 PM

Page 4

AIR SHOW

PROBE-AND-DROGUE: An F-16 fighter aircraft employs a flexible hose that trails from a tanker aircraft.

VERSATILITY AT ITS BEST: Farnborough Air Show got critical acclaim for showcasing different range of airplanes.

52

for the next iteration of the 747 jumbo jet, another aircraft in prolonged and expensive development. Both Boeing and Airbus continue to struggle to get their new flagship aircraft - the 787 Dreamliner and A380 super jumbo - into regular speedy production. It is not so much the sunny horizon that investors should be concentrating on but rather the sputtering noise coming from the engines. This year’s show was special for India. The show literally showcased the country’s prowess in manufacturing world-class equipment for military aviation. In addition, it was also the first outing into Europe for the Boeing 787 - a year later than expected. Providing competition of sorts will be the distinctive four-propeller Airbus’ A400M transport plane, which was seen at the June 2010 Berlin airshow. Indian visitors to the show, however, would be interested in the Hindustan Aeronautics Limited (HAL)-manufactured aerial refuelling device. The device will put an Indian company on the map for a high-technology sub-system development of the F-16 fighter aircraft. Known as probe-and-drogue refuelling (see photo), the device employs a flexible hose that trails from a tanker aircraft. The drogue at the end of the hose connects to the receiving aircraft’s probe. The US Navy, Marine Corps and the air forces of many countries that employ the F-16s use the probe/drogue system. Mike Griswold, Director, Advanced Development Programmes, Lockheed Martin, mentioned to a defence publication that the refuelling system had been developed by HAL’s Aeronautical Research and Development Centre (ARDC) under a two-year research contract. A Memorandum of Understanding had been signed between HAL-ARDC and Lockheed two years ago while the system took more than a year to develop. The display at Farnborough enabled Lockheed to showcase the high-tech capabilities of the ARDC, its Indian partner and also opened doors to the world to purchase F-16 sub-systems from India. With more than 500 F-16 fighters in service in 22 countries, the Indian probe-anddrogue refuelling system could find a wide market. Summing up the air show, Mike Alvis, Executive Vice President of the American defence technology supplier ITT Defense International said, “We’re seeing unbelievable demand from India. There’s a lot of willingness to spend on defence.” Western firms are seeing India as the biggest spender among emerging CRUISING HEIGHTS August 2010

economies. Ongoing deals that got plenty of sound bytes at the air show included the C-17 military transport planes and Dreamline 787 passenger craft from Boeing, the Hawk fighter jets from British defence group BAE Systems and military equipment from ITT Corp. These firms are also keenly awaiting India’s choice of supplier for its Medium Multi-Role Combat Aircraft (MMRCA) deal for the supply of 126 aircraft to augment the Indian Air Force. Of the six firms short-listed, five are from the US and Europe, the sixth being a Russian firm. Defence deals are on top of the agenda as British Prime Minister David Cameron came visiting New Delhi soon soon after the show -- more so because of Britain slashing defence spending and looking for increased exports. Cameron will have in mind the fact that one of the competitors for the MMRCA deal is the Eurotyphoon fighter, manufactured by EADS, a consortium of which BAE is a partner. But the immediate British deal relates to the Hawk jets. BAE Systems hopes to sign a deal to supply more Hawk trainer jets to India, building on an established partnership with Hindustan Aeronautics Ltd (HAL). BAE is also interested in selling the Type-26 Frigate. BAE’s group business development director Alan Garwood said his company “is close to sealing” the Hawk deal. The Americans too, seemed enthusiastic about growing defence ties with India at the air show. An American arms supplier said, “The relationship is at the best and highest level it’s been.” Christopher Chadwick, president of Boeing military aircraft - which too has a stake in India’s MMRCA deal - said India was interested in buying more than the 10 C17 planes already planned. Russia, whose Ilyushin Il-76 transporters the C-17s will eventually replace, sought to downplay the impression that its deals with India were drying up. At a briefing at the Russian stall, Alexander Mikheiev, Deputy Director of the Russian agency Rosoboron export announced details of the deal involving the fifth generation Russian fighter, T-50. Meanwhile, airshow organisers Farnborough International Ltd (FIL) have already secured hotel accommodation for the 2012 show in anticipation of the increased demand due to the London 2012 Olympics. In conjunction with Zibrant, the official accommodation provider for the airshow, FIL has worked closely with VisitLondon to ensure there is enough bed space in London to accom modate all visitors to the show.


cargo COVER august.qxd

7/30/2010

4:36 PM

Page 1

CRUISING HEIGHTS August 2010

AIR CARGO & LOGISTICS

NEW MOVES

Leveraging the potential of the Delhi-Mumbai Industrial Corridor (DMIC), the Rajasthan government’s decision to set up a Greenfield airport will not only ease freight movement but also enhance the growth of the industrial region in close proximity of the national capital.

AF-KLM cargo looks at growth p58

IBS- JetBlue partnership p62

Cargo head Rene Peerboom on the India market and the competition ahead

Country’s leading cargo solution provider IBS adds another feather in its tie-up with JetBlue


Last in first out.qxd

7/30/2010

6:20 PM

Page 2

LAST IN/FIRST OUT

TRENDS

FOUNDING MEMBERS OF THE INITIATIVE: lr Mathias Jakobi (ACD), Thorsten Hölser (SLV), Heiner Rogge (DSLV), Carsten Spohr (Lufthansa Cargo AG), Ewald Heim (Managing Director), Dr Adolf Zobel (BGL), Martin Gaebges (BARIG).

In support of flights at night GERMANY’S transport and logistics industry is championing competitive operating times at this country’s commercial airports. The Association of German Freight Forwarders and Logistics Operators (DSLV), the Federal Association of Road Haulage, Logistics and Disposal (BGL), the Forwarding and Logistics Association of Hessen/Rheinland-Pfalz, the Board of Airline Representatives in Germany (BARIG) and the Air Cargo Club Germany (ACD) joined with Lufthansa Cargo in Frankfurt on June 24 to found the “Cargo needs the night” initiative. At a press conference at Frankfurt Airport, the Managing Director of the initiative, Ewald Heim, presented the aims of the alliance: “The logistics sector is the backbone of Germany’s export business. The basic prerequisite for its

success in world markets is reliable, trouble-free air cargo connections. The ‘Cargo needs the night’ initiative will therefore press hard for competitive operating hours at commercial airports in Germany.” The initiative will highlight the importance of the logistics industry for Germany’s economy. About 40 per cent of the value of domestic exports is transported worldwide by air. Night flights are a key component in functioning global supply chains. Politicians and the public at large must be made more aware of the importance of air cargo for German industry, which is dependent on exports. That is what the companies that belong to the associations represented in the initiative and their hundreds and thousands of employees are calling for.

AIR Canada Cargo (ACC) has launched a pilot programme using RFID tracking solutions. The company has partnered with Florida-based RFID solutions provider Franwell, Inc. to explore the possibilities of using RFID to improve real-time tracking of shipments. The project, designed to require minimal human intervention, will track cargo shipments between Air Canada's London Heathrow (LHR) and Montreal (YUL) facilities. If benefits are proven, ACC may look at a large-scale implementation. The pilot project will provide end-users with a single interface and tracking information will be available through a web-based system. ACC plans to use Franwell's

Chennai cargo terminal to go world class CHENNAI airport’s cargo terminal will be a world-class one with the news advanced systems that are being installed.The project involves the installation of a world-class automatic storage and retrieval system, and is expected to be ready by the end of 2010. Once the project is completed, the integrated terminal will handle both export and import and will cover an area of 58,000 sqm.The automated cargo handling facility known as Automated Storage and Retrieval System (ASRS), which will replace the current manual handling system, will not only facilitate optimum utilisation of the space, but will also ensure faster cargo processing and handling system that will locate a particular piece of cargo with ease. The ASRS unit, which is being manufactured by a joint venture enterprise between a Portugal-based company and the AAI, will cost Rs 43 crore. Another advantage of the new system is the lack of paper work for each cargo, as all transactions will be done online with the help of the Integrated Cargo Management System.With all export as well as import transactions online, the transparency and accountability will increase.The Chennai airport presently handles 30 airlines, with 14 of them being dedicated cargo carriers.

54

“Air freight growth will continue its upward trajectory for the remainder of 2010, with space becoming tighter and airlines massaging thier cargo rates upwards.The following year is far more uncertain... I do not envision any sustained growth for air freight until at least 2012.”

 Julian Keeling

CEO Consolidators International

CRUISING HEIGHTS August 2010

“rfid>Sleeve” wearable RFID reader to ensure that it can capture data with minimal interruption to the normal workflow. The rfid> Sleeve is a wearable RFID system that consists of a reader and an antenna enabled by Bluetooth or wifi. Designed to be worn on the lower arm, the rfid> Sleeve automatically scans RFID tags on products, cases or containers as the user handles them in their normal workflow. “The data we will be able to capture with RFID will be invaluable to achieving our goals for improving cargo and mail tracking.There is no other technology that will let us capture this level of detailed data with minimal disruption to our normal workflow and processes,” said Barbara Johnston, General Manager of postal affairs for ACC.


Cargo Lead story.qxd

7/30/2010

4:13 PM

Page 3

CARGO

FROM OUR FILES: Ashok Gehlot speaking at the inaugration of new terminal building at Jaipur airport in 2009.

n a recent development, it has been decided that the Rajasthan government would leverage the Delhi-Mumbai Industrial Corridor (DMIC), which is within 150-200km of the national capital as a part of the key initiatives to achieve sustainable growth of economy and to overcome the bottlenecks for freight movement between the industrial regions and major ports of the country. Rajasthan is very strategically located with regards to DMIC as nearly 39 per cent of the total length of this corridor

I

Rajasthan to get its first Greenfield

airport

passes through Rajasthan and 46 per cent of the total DMIC Project Influence Area (PIA) falls in the desert region. The DMIC presents a major development opportunity for the state. Development of appropriate infrastructure along the DMIC would be the key to driving industrial expansion and growth in the region. It has been decided that a Greenfield airport is to be set up in the region. This would be an entirely private sector initiative and would be developed on the DelhiJaipur national highway. This Greenfield airport would

Like everything else in Rajasthan, aviation too has a long history attached to it. It was Maharaja Umed Singh’s love for flying that gave Jodhpur an international airport way back in 1930s. And today, as part of the DMIC project, the region is all set to get its first Greenfield airport, which will provide impetus to development. A report by Prakash Bhandari. CRUISING HEIGHTS August 2010

55


Cargo Lead story.qxd

7/30/2010

4:13 PM

Page 4

CARGO include an airport, a business park, a logistic park, a cargo warehousing park, distribution centres, information technology complexes, wholesale merchandising marts, tourism and educational parks, residential and other infrastructure located in and around the airport, said Chief Minister Ashok Gehlot. Rajasthan is the first state

The Chief Minister further elaborated that under the new industrial policy, a clear policy to ensure fair and transparent acquisition of land will be framed, which would protect the farmers’ interest as well as speedy availability of land for infrastructure and other investment projects. The airport development thus falls under the category of

The proposed airport will use its location to position itself as a multi-modal logistics hub with a key focus on cargo. in the country, which has included the development of a Greenfield airport as part of its new industrial and investment promotion policy. Greenfield airport means a new airport, which is built from the scratch in a new location. According to Gehlot, some of the early bird projects identified for development along the DMIC in Rajasthan besides the Greenfield airport include Shahjahanpur-NeemranaBehror (SNB) Global City; Central Spine connecting Global City with BhiwadiTapukada industrial complex via Ajirka and a logistic hub at Bhiwadi and a rail link from Delhi to Jaipur passing through Bhiwari, Neemrana and Manoharpur. These early bird projects are to be built with the Japanese government’s loan. Gehlot hinted that the proposed Greenfield airport would be built by private sector along the Delhi-Jaipur National Highway and the Greenfield airport development has been made a part of the industrial and investment promotion to enable the investor get all the benefits and smooth processing of the project.

56

investment project as the airport project would run into several hundred crores. If 25 per cent of the land is purchased by the developer on his own, the government may facilitate acquisition of the remaining land. “The

airport would require at least 5,000 acres of land and the bidder for the Greenfield airport would have to understand the need of the land before doing anything,” added Gehlot. The Union government, in its Greenfield airports policy unveiled in 2008, had said that if an airport was proposed within 150km of an existing facility, such cases would be examined on a case-to-case basis and the same would be considered by a steering committee set up by the Union government. The proposed airport on the Delhi-Jaipur National Highway could become the country’s first to come up within 150km of an existing airport, and overcomes the government’s stated policy of not allowing more airports within 150km of an existing airport. Rajasthan charges only four per cent sales tax on aviation turbine fuel that would serve as an advantage

DFC Alignment Investment Region (Min. 200SQKM) Industrial Area (Min. 100SQKM)

CRUISING HEIGHTS August 2010

BOOST FOR CARGO: The upcoming Rajasthan airport will position itself as a multi-modal logistics hub with a key focus on cargo.

as the sales tax is the lowest in the country and a number of international airlines make stopover at Jaipur for refueling. The proposed airport will use its location to position itself as a multi-modal logistics hub with a key focus on cargo. The airport will be flanked by the dedicated freight corridor (DFC) on one side and the National Highway 8 on the other. DFC will provide the port connectivity. Three industrial zones fall within DMIC: ManesarBawal, KhushkheraNeemrana-Behror and Jaipur-Dausa. It would be a multi-modal logistics hub, where cargo could move seamlessly by rail, road, and air. The DFC would connect to ports in Gujarat and Jawaharlal Nehru Port (Nhava Sheva) in Navi Mumbai. The Jaipur international airport, where a new terminal has been added recently, faces a critical challenge of being severely limited in the


Cargo Lead story.qxd

7/30/2010

physical infrastructure capping the possibility of any kind of future expansion. Moreover, there is just a single runway without even a parallel taxiway, which limits the maximum number of aircraft that can be handled. The parking space makes this important alternate airport to Delhi. It will be suited for meeting any emergency requirements. No cargo processing facility, warehousing, cold storage chains, etc. are possible in the existing scenario. Large settlement of population along the boundaries and the surrounding infrastructures of road and railway network make any kind of expansion impossible. But the decision of the Rajasthan government for inviting investment proposals for the Greenfield airport has given a rude jolt to Rajasthan Aviation Infrastructure (India), a Delhi-based company which claimed that the Union government has accorded, in-principle, approval to Rajasthan Aviation Infrastructure (India) for setting up a Greenfield airport at Viratnagar, 67km from

4:13 PM

Page 5

Jaipur. The in-principle approval was granted by the Union Ministry of Civil Aviation in February this year after a steering committee, comprising representatives from the ministries of civil aviation, defense, home affairs, economic affairs and revenue, as well as those from the meteorological

an investment opportunity. The airports are not built in air, but on land,” explained Gehlot as matter-of-factly. Rajasthan Aviation wanted to make it the first no-frills airport that could offer faster landing, lower parking charges, and lower refueling charges. Since it will largely cater to cargo, the

Rajasthan Aviation wanted to make it the first no-frills airport that could offer faster landing, lower parking charges, and lower refueling charges. department, Airports Authority of India, directorate general of civil aviation, and the state governments, had approved the airport. But the point of contention here is that the Rajasthan Aviation Infrastructure does not have land for the project. “As they do not have the requisite land, we have started afresh and made the whole process more transparent where large players could participate as

airport does not plan to add any frills like airconditioning, LCD panels and expensive lounges. Typically, cargo airports can be 40-60 per cent cheaper to build than those meant for passengers. The airport was eyeing low-cost carriers like AirAsia, which is looking for a hub in India, or SpiceJet, which soon plans to launch its international operations. However, Nikhil Gupta, Managing Director, Rajasthan Aviation, said that

CRUISING HEIGHTS August 2010

the proposed project would be implemented on schedule. “We have got approvals from the Union government for the airport project and the Rajasthan government will help us in project implementation. I do not know what Greenfield project Rajasthan government was talking about. We are going full stream on our project. In the first phase, the airport entails an investment of Rs 500 crore. It will be funded by a debt-equity mix of 70:30. The promoters were investing around Rs 50 crore and hope to raise the rest by diluting equity to strategic investors and banks,” he said. Sumitomo Mitsui Banking Corporation, the nodal bank for Japanese investment in DMIC, was expected to find investors. Fraport AG, the technical consultant to the airport, gave a hint that it could pick up a minority stake in the project, while Rajasthan Aviation Infrastructure was picking up a five per cent equity in the project with an option to increase it to 13 per cent. The promoters, who come from non-aviation background, have roped in professionals and former bureaucrats in their board of advisors. They include former Department of Industrial Policy & Promotion Chairman Ajay Dua, who is the Chairman of Rajasthan Aviation Infrastructure, Chief Operating Officer Mark Martin, who served as the head of operations for SpiceJet and chief commercial officer for Rwanda Air, and Senior Vice-President Manu Trikha, who brings in the knowledge of setting up a multi-modal logistics hub. It has also roped in tax expert Mukesh Butani of BMR Advisors, former DGCA Satender Singh, former bureaucrat P J Vincent, and Anckur Srivasatava, a real estate expert. 

57


Air France

Interview.qxd

7/30/2010

4:07 PM

Page 2

CARGO

“It makes more sense now to add capacity” Unfazed about the competition and the general gloom in Europe, Rene Peerboom, Director, Air France-KLM (Cargo), is upbeat about India and is looking forward to a good 2010. In this one-on-one with Tirthankar Ghosh, Peerboom — a staunch supporter of the Dutch football team — believes that Air France-KLM (Cargo) can play the network game probably better than most of the other airlines operating from India.

Q A

How was 2009 for you? 2009 wasn’t a bad year. I could talk about India: yieldwise — from India the export kilos were not bad in the air. It was mainly the yield that was driving the figures down. On the contrary, on a global basis the kilos went down as well. As an airline in India, we lifted a good amount of cargo. The good thing we see is that recovery is taking place. It is certainly a change from what we saw in the market — and this was also true of the

58

CRUISING HEIGHTS August 2010

Indian market — compared to the summer of 2009 which was the lowest. In fact, the yields then were not sustainable for us (the airlines). We saw capacity flowing out of the market in those days. Across the world we saw a lot of carriers were reducing capacity because it was not viable. Since end 2009, we have been seeing yields recovering and it would make more sense now to add capacity.  What kind of capacity did you have in 2009? In fact, Air France-KLM has been relatively stable in its capacity over the last period (of the recession). Air France reduced capacity a bit over two years ago and, on hindsight, it was the smart timing. In the last two years, we have been very particular with our capacity. We have daily capacity — twice a day out of Delhi and twice a day out of Mumbai and once out of Bengaluru. It is about 15 tonnes per flight. The good thing about Delhi and Mumbai is that we have 30 tonnes — 15 tonnes via Paris and 15 tonnes via Amsterdam — which is more practicable than any other airlines. Both Mumbai and Delhi are what we call wing-to-wing flights giving us flexibility to use the two hubs as alternatives. We stopped our passenger flights to Chennai, but we repaired that when we put in three Martinair (freighter) flights at Chennai.


Air France

Interview.qxd

7/30/2010

 I wanted to ask you about Martinair — although in a different context. Don’t you think that the Martinair flights are taking away the Air France-KLM belly-hold tonnage? No. India, in fact, is a good example. We pulled out the Air France passenger aircraft and added a Martinair freighter. We continued to serve our Chennai market, one of the most promising markets in India. Of course, Martinair is part of the Air France-KLM cargo group. Chennai is a good example where the Air France-KLM sales manager also takes care of the Martinair sales. That is the best arrangement that you can have. So, that is the kind of cooperation we have. Martinair and KLM cooperate very well together.  Is most of the cargo that Air France-KLM ferries destined for Europe? I would say around 60 to 70 per cent of the cargo is for Europe from India. We service a significant number of African destinations and, of course, the Americans. At the end of the day, it

4:07 PM

Page 3

is not about how much capacity you have to a destination but how many frequencies you have to that destination. We not only have one of the biggest airlines in the world but also one of the biggest networks. If there is a challenge in the economy, we have more opportunities of changing the destination of the cargo we fly. We can play the game of network probably better than most of the other airlines operating from India.  You spoke about 2009 not being so good. However, a number of carriers doing flights out of India did very well… If you look at 2009, I would say that India had a much better year compared to the rest of the world. If

you look at the export tonnage, India was even or maybe even a bit better. If you look at export statistics, a large part of Asia and Europe had a big drop in tonnage. What we did, however, see was a drop in yield. It went down quite a bit bringing down profitability. How did we do in 2009 as far as India is concerned? Given the market conditions, I would say we did very well, although the market was not good. I am also very confident about the future going by the way the market has been doing for the last two years in comparison to today. The passenger (aircraft) belly loads are at least as good as the freighter loads from India. It also makes us think of what next (for instance adding capacity) we can do from India and how can we serve the Indian market in the next few years.  Do you feel that you will be able to sustain in the kind of market conditions that exist now with loads to Europe going down? That is a good question.

CRUISING HEIGHTS August 2010

I was talking to one of the airlines persons and he was saying that this phenomenon — if you look at the air cargo development and the export development in Asia — was booming with double-digit figures while the economy in the US and Europe was down. The question is how much of the exports would take the air route and how sustainable would it be? In the case of India, I am relatively optimistic. Throughout the bad period of 2009, the Indian economy has been developing quite well. I have been speaking to forwarders and shippers and all are optimistic about the future. The reason for their optimism is that exporters have orders for the coming months — till the second half of this year.  What about your competition? Lufthansa, I would say, is your direct competitor. Lufthansa is, of course, a big player. India has been a competitive market for a long time as such. But I am not too worried about the competition developing at the moment. The only worry that I would have is if the competition starts

59


Air France

Interview.qxd

7/30/2010

4:07 PM

Page 4

CARGO

bringing in too much additional capacity, then we would have a lot of capacity in comparison to the demand and that would upset the equation in the market. But so far we have seen a balanced approach. I would say that all the airlines have to find their own place in the market. We have to look at the market and our own capabilities. In 2009, for example, we saw the development of the pharmaceuticals and automotives sectors in India. We have to look at how we can service these market developments best.  Do you feel that the infrastructure in India has restricted the growth of the air cargo sector? I would say all the airlines face the same

60

Rene Peerboom Director, Air FranceKLM (Cargo)

I would like to say that India is getting more and more serious about (improving) the infrastructure and let us hope that it will get better.

problems (brought about by the lack of infrastructure). But there are good developments taking place. Let’s hope that the additional handling capacity in Delhi as well as the quality of the handling will see an improvement (with the start of the second cargo

handler) at the new (second) cargo warehouse. Mumbai too is seeing developments. Hopefully, the extra handling capacity will ease the congestion at the airports. Meanwhile, in our competitive positions, some airlines are able to handle the present

CRUISING HEIGHTS August 2010

condition of the infrastructure better than others. But I would like to say that India is getting more and more serious about (improving) the infrastructure and let us hope that it will get better. I am more optimistic about the infrastructure than I was two years ago.  Other than your optimistic outlook, how do you view 2010? I would say 2010 has been — till now — a very interesting year. The months of March, April and May business from India was better after a long time. It is fair to say that there was a lack of capacity in this period. Recently it is very much balanced. I am confident that in the rest of the year we will have a sound market with sustainable rates. 


CH sub from:IIIrd cover.qxd

010

d

over

er k cov

main:c

.qx er NEW

2/20/2

Page

PM

12:14

7/30/2010

1:24 PM

Page 1

Welcome to Cruising Heights

1

novemv

Outloo

March

2010



8 AM

Rs 60

0

/201

3/29

qxd

mver

Page

CRUISING HEIGHTS 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.

1

10:2

NEW.

ve r no

cove

NEW: ver

CH co

Rs 60

2010 April

Rs 60

July 2010

Patel Praful r, ion Ministe Aviat Civil

avan Madh iar Nambetary, Secr y of MinistrAviation Civil

sidas n Thular India deva Vasu CMD, Ai er Form

One of the first true aviation magazines of the country, CRUISING HEIGHTS 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. So, the magazine is professionally written in a style and manner for everybody to understand. Published twelve times a year, CRUISING HEIGHTS 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.

av d Jadh Arvin Air India CMD,

G M Rao, Chairman, GMR Group, at T3

Only Rs.60/

Join our aviation loving family…

Please accept my subscription for 12 issues of Cruising Heights

Name____________________________________________________________________________________________ Address____________________________________________________________________________________________ Ph. No.______________________e-mail__________________________________________________________________ Payment

Cash

Cheque

Cheque/DDNo. _________________________________________________________________________________________ Drawn on____________________________________________________________________________________________ _________________________________________________________________________________________________________________ No. of Issues

Newsstand Price

Discount

You Pay

You Save

12

Rs. 720/-

10%

Rs. 648/-

Rs. 72/-

Date............................

Signature of Subscriber..................................... Cheque / DDs should be drawn in favour of

NEWSLINE PUBLICATIONS PVT. LTD. Send your subscription to Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 Contect us on : +91-11-41033381-82, e-mail: jaya@newsline.in

"


Cargo Jottings New.qxd

7/30/2010

3:57 PM

Page 2

CARGO JOTTINGS TNT increases air freight capacity

FedEx Express: A “great place to work”

TNT is increasing its air freight capacity between China and Europe to meet the growing demand. The company will be scheduling an additional Boeing 747-400 ERF aircraft between China and its European air hub in Liege, Belgium. TNT will increase its service frequency to six flights per week from Shanghai and five flights per week from Hong Kong. The move is in response to the strong demand in China for its air services, especially from the high-tech and fashion industries. Chinese exports to Europe rose almost 50 per cent during the first five months of 2010 from a year before, according to the Chinese General Administration of Customs. During the same period, the bilateral trade between China and the EU totalled $177 billion, an increase of 37.4 per cent over last year, confirming the EU’s position as China’s number one trade partner. “Our continuous investment demonstrates TNT’s longterm confidence in China and our commitment to enhancing our service capabilities,” said Michael Drake, Regional Managing Director, TNT North Asia, adding, “With our integrated air and road delivery capabilities in China and Europe, we are well positioned to capitalise on the strong trading links between these two trading regions.” “TNT has seen a significant increase in customer demand for freight services between the regions. Our current freighters between China and Europe are operating at full capacity,” said Iman Stratenus, Managing Director, TNT China, adding, “The increased dedicated freighter capacity will enable our customers, especially those in the high-tech and fashion/lifestyle sectors, in becoming more competitive due to shorter factory-to-market lead times and increased supply chain management efficiency.”

FEDEX Express, a subsidiary of FedEx Corp and the world’s largest express transportation company, has been ranked 22 in this year’s prestigious Great Places to Work Survey (GPTW) in India. FedEx Express is also ranked second amongst India’s best companies to work for in the transportation industry and is the only express transportation company to feature in the top 25 of the GPTW Survey. This ranking was achieved by the Great Places to Work survey in association with The Economic Times and covers more than 400 companies across India. “At FedEx we understand that employees form the foundation of the organisation’s success and motivating them is the core strategy for the success of our business. This is also complemented by our unique People-Service-Profit (P-S-P) philosophy, which guides every initiative, policy, procedure and people practice that we incorporate,” said Kenneth F Koval, Vice President, Operations, FedEx Express India. FedEx Express has been consistently featured in the list of best companies to work for in various countries across the world. In India, FedEx Express has been ranked amongst the top 25 companies for seven consecutive years and was awarded many accolades.

e-Freight milestone from Emirates SkyCargo EMIRATES SkyCargo’s status as a leading innovator was confirmed when the total shipments of e-freight — paperless cargo consignments — reached the one million kilos a month mark. It also passed the 16 million kilo mark in total e-freight shipments recently. The carrier, which is an enthusiastic advocate of the IATA initiative and the world’s leading carrier of

JetBlue chooses IBS’ iCargo solution AFTER recently completing the implementation of its new passenger reservation system, JetBlue Airways is now implementing IBS’ iCargo solution — the world’s leading cargo solution developed using the latest next-generation technology. iCargo is an integrated solution that optimises operations, enhances profitability and provides scalability to the freight business of airlines. The JetBlue/IBS partnership, which was inked in early 2010, was recently announced in Washington, D.C., at the Air Forwarders Association Board of Directors Meeting. “It’s been a remarkable year at JetBlue Airways,” said Ed McDonald, System Manager Cargo, adding, “Not only have we implemented a completely new passenger reservation system, we are now in the process of replacing our cargo systems as well.” After a thorough review of all the cargo solutions on the market which JetBlue believed could handle its growing business, JetBlue chose to partner with IBS. “There was just no other solution that could be compared with the IBS’ iCargo solution,” explained McDonald, the JetBlue Cargo head, responsible for the decision to choose iCargo. It has been a remarkable few years at IBS as well. In February at the Air Cargo India 2010 event in Mumbai, IBS — the leading IT systems provider to the travel,

62

transportation and logistics industries — was named the “IT Systems Provider of the Year for the Air Cargo Industry”. This prestigious International Award for Excellence was given to IBS for its cargo management solution, iCargo. IBS now has more than 20 customers for its iCargo solution, of which 14 are already using it in production. Due to the

CRUISING HEIGHTS August 2010


Cargo Jottings New.qxd

7/30/2010

3:57 PM

Page 3

paper documents. In fact, were it not for various customs authorities still requiring a physical document, all of Emirates SkyCargo’s transactions could be paperless, thanks to its fully integrated air cargo management solution SkyChain. Forwarders who send traffic using e-freight can enjoy the benefits of a faster service through reduced cycle times; greater reliability and accuracy with its one-time electronic data entry at point of origin; better visibility as electronic documentation allows for online track-and-trace functionality; and customs benefits as the number of fines are reduced and deposits are no longer required. On top of these benefits, there is the added financial stimulus for Dubai-based customers whereby customs does not retain the forwarders’ deposits.

Lufthansa Cargo meets TSA requirements e-freight, achieved this landmark in just 19 months and is now seeing around 12 per cent of shipments from compliant airports being sent in this way. Key e-freight stations for Emirates SkyCargo include Singapore, Zaragoza, Mauritius, London Heathrow, Hong Kong, Sydney, New York (JFK), Munich and the carrier’s hub — Dubai. Earlier this year, Emirates SkyCargo launched an extensive marketing campaign to promote and spread awareness about the benefits of e-freight throughout the industry. The campaign, which comprised online and print advertisements, direct mailers and a step-by-step instruction manual to e-freight, ran in more than 100 countries. Ram Menen, Divisional Senior Vice President, Cargo, Emirates, says, “e-freight is the future of our industry, and one we are embracing. Its benefits are enormous, and we encourage our forwarding partners to adopt it.” e-freight aims to take the paper documentation out of air cargo and to replace it with the exchange of electronic data and messages. A single shipment can involve up to 30 paper documents, and e-freight currently replaces 20 of these with electronic messages. Before the advent of e-freight the air cargo industry used the equivalent of 39 Boeing 747 freighters full of

unique way in which the core of iCargo was designed and developed, it is ready for large and small carriers alike, as well as all cargo or combination carriers. “Despite the challenging global economy, IBS captured the attention of the airline cargo community with iCargo, and in a very short period we have become the market leader in the next generation cargo systems’ space,” said Akshay Shrivastava, SVP and Global Head, Cargo Line of Business. “IBS has built and successfully delivered a number of next generation solutions for mission-critical business functions in the TTL industry, earning the trust of customers world over. We have been recognised for our success in providing the air cargo industry a viable alternative to legacy systems. And our outstanding track record of delivering value to our customers, as well as the professionalism and commitment of our people speaks for itself,” he added. “IBS is very proud to have JetBlue Airways as our newest customer in The Americas Region,” said Peter Krebs, Chief Operating Officer of IBS Americas. “IBS and JetBlue have a strong partnership built on mutual trust and respect. McDonald and his JetBlue Cargo Team can rest assured that as their cargo business grows, IBS and iCargo will be here to support them.”

A full month ahead of the scheduled implementation date, Lufthansa Cargo is now equipped to meet the new, tougher cargo screening requirements imposed by the US Transportation Security Administration (TSA) at all its field stations in America. From now on, the carrier will perform the mandatory 100 per cent screening of outbound cargo shipments transported on passenger aircraft at the 17 American airports it serves. “Over the past three years, screening requirements in the USA have steadily increased,” said Klaus Holler, Vice President The Americas at Lufthansa Cargo, adding, “We therefore invested early on in new technologies and in staff training. By meeting the requirements well before the mandated deadline we are able to give our customers planning reliability.” He also emphasised that the cargo carrier’s customers would not feel any negative effects of the heightened security requirements when shipping freight consignments.

Schweinsteiger’s boots take flight EMERGENCY can catch anyone unaware, as what happened to Germany's mid-field star Bastian Schweinsteiger when he forgot to put his footwear as he left for the world cup! Fortunately the German national team can rely on the emergency logistics experts from time:matters, who, together with Lufthansa Cargo, did everything possible to deliver the shipment to the African continent as quickly as possible. The specialists at time:matters Courier Terminal at Frankfurt Airport know everything there is to know about time-critical shipments and were able to load the important package within the shortest time as a Courier Solution on the next aircraft to Johannesburg. As the flight with the number LH572 took off in the direction of South Africa in the evening, not only were Schweinsteiger's boots on board, but also two sets of shirts for the Serbian national team — an unusual combination, when you consider that Germany played against Serbia. But not only are Schweinsteiger and the Serbian national team customers of Lufthansa Cargo. One week before World Cup kicked off the cargo team received an urgent inquiry from the World Cup sponsor Budweiser: two tonnes of uniforms had to be transported as quickly as possible to the Johannesburg stadium.

CRUISING HEIGHTS August 2010

63


final globetrotting.qxd

7/30/2010

3:55 PM

Page 2

GLOBETROTTING

Drunken passenger goes berserk JAMES Green, a young property developer from Thailand, assaulted stewards after they refused to serve him alcohol on the Thai Airways flight from Bangkok to Heathrow. He head-butted, punched and kicked stewards while repeatedly swearing after tearing off his shirt. The businessman started drinking as soon as the plane took off and

three hours into the flight his blood alcohol level was as much as five and a half times the legal driving limit, a court heard. When crew told him he could not have any more to drink he rushed to the lavatory and emptied the bins on the floor. The noise woke many sleeping passengers who soon became targets of the unruly behaviour by the property dealer. The property dealer has been subject to 11 months in prison, suspended for two years, and been ordered to pay £4,800 cost as compensation.

SAA staffer caught A South African Airways (SAA) female cabin crew member was caught with 3kg of cocaine at the Heathrow Airport. Apparently, the drug was hidden in her underwear. Elphia “Tshidi” Dlamini, 42, was the cabin coordinator of the flight, meaning she was the most senior cabin crew official on board. The drugs were found after a sniffer dog identified her during a random search at Heathrow, Beeld learnt. Dlamini, who is from Cape Town, is believed to be related to a prominent family

Landing trouble

No vulgar ads please

T

he Flight Attendants Association of Australia (FAAA) wants to stop risqué airline ads from Russian airlines in particular, which it says are demeaning to air hostesses. One of Australia’s biggest trade unions for flight attendants has said it wants to stop airlines around the world portraying air hostesses as sex objects in raunchy ad campaigns. The FAAA said its patience had snapped after a slew of risqué airline ads, which it said were “demeaning”, and increased the risk of air hostesses being subject to sexual harassment. “This type of provocative advertising using cabin crew in this light will not be tolerated in Australia and should also not be

64

acceptable anywhere else,” a union lady official was heard quoting. She further said that the FAAA had felt obliged to speak out after a series of lewd airline ads from Russian airlines in particular. She singled out an ad that promoted a Russian regional airline which has garnered hundreds of thousands of hits on YouTube. The ad shows four Russian air hostesses stripping before suggestively washing one of the carrier’s planes dressed in skimpy bikinis. The FAAA said it would take up the issue of how hostesses are portrayed in ads with the International Transport Federation. It blamed male airline executives for commissioning the ads in the first place. CRUISING HEIGHTS August 2010

WELL, football can make people go wild and can actually land them in court! A German soccer fan not only had to deal with his team losing the World Cup semi-final, but also had to face legal action. Jorg Mardos apparently became so angry when an SA Express flight was unable to land in Durban that he assaulted a cabin crew member on the plane. He and his family were due to watch the semi-final between Germany and Spain in Durban. There was not enough space for all the planes to land at King Shaka International Airport, which was why SA Express Flight 1339 had to turn back to Port Elizabeth. The German tourist apparently assaulted a male cabin crew member after the announcement was made that they had to turn back. Mardos, 37, was arrested after the plane landed. He was released on warning and appeared in a special World Cup court later on. Mardos had not yet been formally charged, but would probably be charged in accordance with civil aviation regulations.

Born in the air AN unmarried Indian woman gave birth to a baby on the Turkmenistan Airlines and then allegedly tried to flush her baby down the airplane toilet. Horrified cabin crew discovered the baby in the toilet as they were going through the cabin after passengers had disembarked


final globetrotting.qxd

7/30/2010

3:55 PM

Page 3

with drugs

Chappelle freaks out

in Amritsar, India. They prised the toilet from the plane with the baby still inside and rushed it to hospital. The baby remains in critical condition at Amritsar’s Fortis Escorts hospital. The mother, believed to be aged 25 and unmarried, was arrested at the airport. She was admitted to the same hospital and is said to be in a stable condition.

Rahul’s phone stolen at IGI THE thief who stole this mobile phone didn’t realise what he had let himself in for. Because the owner of the phone was none other than Congress General Secretary Rahul Gandhi. Not surprisingly, the thief was soon tracked down and the handset restored to its owner after the official machinery swung into top gear. The incident occurred when Gandhi arrived in New Delhi from London on a Virgin Atlantic flight. After returning home, Gandhi discovered that his handset was missing from his check-in bag and informed Special Protection Group (SPG) officials. The CISF, which is responsible for airport security, promptly got cracking. CCTV footage was examined and investigators zeroed in on one of the four employees of the ground-handling agency who had unloaded the bag at IGI Airport. The thief was apparently handed over to the SPG, while the phone was recovered from his house latter.

Woman wants to leave in mid-air PASSENGERS on a WestJet flight helped restrain a Newfoundland woman who tried to open the door of the aircraft in flight and threatened to jump out. Police said the 47-year-old woman was on a flight from Calgary to Halifax and about an hour after takeoff, she got out of her seat and said she wanted to leave. She report-

A private jet carrying Dave Chappelle was forced to make an emergency landing amid concerns over the comedian’s erratic behaviour after the star reportedly “freaked out” and refused to put his seat belt on. Crew members are said

to have become concerned after Chappelle allegedly barged into the cockpit and they decided to ground the plane over safety fears. A representative for Chappelle confirmed the incident to the website, but explained that the star was feeling unwell and did not want to use the bathroom on the plane.

Illustrations by Rajeev Kumar

in South Africa. She has been working for SAA for 14 years. After the two previous drug incidents, in which SAA cabin crew members had been implicated, pilots had pleaded for stricter measures to prevent smuggling as it could harm their careers, but they were unable to do anything about it. Hopefully, after the turn of events this time, things will be under better control.

edly tried to yank open an escape hatch before concerned passengers and cabin crew restrained her until the plane made an emergency landing in Winnipeg. The woman also allegedly bit a 77-year-old man who was trying to help. Police are still investigating the woman’s behaviour, and did not say if mental illness or suicidal feelings played any role. They said there’s no indication she was drunk or high on drugs and police do not consider the incident to be related to terrorism. Barbara Loretta Morton, of St John’s, is charged with assault, mischief, endangering the safety of an aircraft and failing to comply with the instructions of flight and cabin crew. She is in the Winnipeg Remand Centre.

Drunken man incites bomb scare A man passing through the security checks at the Shuangliu Airport yelled out, "I’m a terrorist, and there’s a bomb in my bag!” The perpetrator, a 60-year-old man from Jiangsu province’s Jiangyue, was drunk and claimed that the scrutiny of the security check annoyed him, leading to his erratic behaviour. “Everything was running totally normal, but when it was this man’s turn, I clearly smelled alcohol on him,” recalled a security-check staff. After putting his items on the conveyer belt, he yelled out, “I have a lot of stuff in my bag; I have bullets, guns, explosives!” Finally, he yelled that he was a terrorist. The staff immediately told the surrounding passengers to leave the vicinity and closed down the security check. The man was held until police came. No explosives of any type were found in his bag, but the man was taken to the police station where he was questioned and ultimately fined RMB400.

CRUISING HEIGHTS August 2010

65


Snippets Aviation august.qxd

7/30/2010

6:33 PM

Page 2

SNIPPETS

DOMESTIC AIRLINES

Fly Jet Konnect to Ranchi IN a recent initiative, Jet Airways Konnect has launched daily, all-economy services to Ranchi from Kolkata, offering enhanced connectivity to travellers from Jharkhand to Mumbai and Delhi. With the introduction of these services, by ATR-72 500 aircraft, Ranchi will be the 44th destination on Jet Airways’ domestic network. Sudheer Raghavan, Chief Commercial Officer, Jet Airways, said, “We are delighted to add Ranchi as the 44th destination on our network. The introduction of Jet Airways’ services on the Kolkata-Ranchi sector is our response to the growing demand for enhanced air connectivity in the region.”

Pay service tax on your next travel A service tax of 10.3 per cent on the gross value of tickets for all classes on domestic flights and Economy Class on international

flights has been levied on tickets sold, issued or re-issued, with effect from July 1, as per the directive issued by the Ministry of Finance, Government of India. All domestic travellers would thus have to bear a service tax of 10.3 per cent on the gross value of the ticket or Rs 103, whichever is lower. For Economy Class tickets on international travel, a service tax of 10.3 per cent or Rs 515, whichever is less, will be levied. Only applicable on journeys originating in India, the service tax, as collected, will be credited to the Government of India Service Tax account. The gross value of the ticket for the calculation of the service tax includes the base price and fuel surcharge in addition to the congestion fee, whereas passenger service fee and airport charges (UDF/ADF) have not been covered. Airline crew travelling on duty and United Nations staff are exempted from paying this service tax. This exemption also includes those embarking on a journey originating or terminating in an airport located in the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Bagdogra in West Bengal and also payment of service tax is exempted for journeys originating in Jammu and Kashmir from the airports of Srinagar, Leh and Jammu.

IndiGo introduces six new flights WITH the induction of a new Airbus 320 aircraft in its fleet, IndiGo is all set to operate six new flights on the Delhi, Bengaluru, Kolkata and Kochi routes. The airline will operate its fifth flight on the Delhi-Kolkata-Delhi sector, while third non-

Crafts bonanza at T3 DELHI Bazaar, a 4,000-sq-feet store, showcasing the best of merchandise India has to offer, has opened up at T3 at IGI Airport, for world travellers transiting through the new terminal. Delhi Bazaar is a concept of Craft House, the luxury lifestyle store which specialises in exhibits that blend traditional and contemporary India, and highlights colours and crafts from across the country. Monisha Gupta, President, Craft House, said, “Delhi Bazaar will be a holistic shopping experience for the travellers flying out of the city. We aim to promote India as a concept and will offer products ranging from handicrafts, tea, spices, décor accessories to coffee table books, aroma, spa and spiritual products, ethnic wear etc. A smaller version of Delhi Bazaar will also open at the Domestic Departure of T3 as well.” The bazaar will be featuring ten shops and will portray several facets of exotic India with focus on showcasing Indian craftsmanship. A shopper’s Monisha Gupta delight, it will also feature the famous Indian hand-woven pashmina in an array of weaves, colours and prints, designer jewellery in precious gems, a variety in silk accessories, bags and crafts. Delhi Bazaar also aims to promote rural artisans and use of eco-friendly material.

66

EXPLORE IT!: Delhi Bazaar with its wide range of products will be a complete shopping experience for travellers at T3.

CRUISING HEIGHTS August 2010


Snippets Aviation august.qxd

7/30/2010

6:34 PM

Page 3

stop flight on the Kolkata-BengaluruKolkata sector. In addition, Kochi will be connected with Bengaluru and Kolkata and the airline will provide increased frequencies on these routes with greater travel options for its passengers. After taking the delivery of the new Airbus 320, the airline’s fleet size now stands at 26. With the introduction of six new flights, IndiGo will offer 176 daily flights across 22 domestic destinations.

InterGlobe is “best place to work for” INTERGLOBE Enterprises‚ a leading aviation, travel technology and hospitality company‚ has been awarded the ‘Best Place to Work For’ award by Great Place to Work Institute in Mumbai for the third consecutive year. In addition, InterGlobe has also been awarded the top spot as “The Best Company in the Transportation industry”. InterGlobe has been ranked 16th in this study, which is conducted every year by the Great Place to Work Institute‚ in partnership with The Economic Times. The study revealed: “InterGlobe employees value freedom of expression, take pride in what they do and have an accessible and a stable management.” Speaking on this achievement, J B Singh, CEO, ITQ said, “It is a matter of J B Singh pride that we have been recognised as one of the best places to work for, consecutively for the third time. Employee satisfaction is one of the key requisites we strive to achieve here at ITQ.”

Thomas Cook opens travel counters at T3 THOMAS Cook (India) Ltd (TCIL), travel and travelrelated financial services company, has launched nine foreign exchange and travel counters in the newly opened Terminal 3 at Delhi airport. The one stop shop counters by Thomas Cook will not only offer foreign exchange services to the passengers but also all travel-related products and services such as insurance, air and rail tickets, domestic and international travel packages, hotel bookings and many more. TCIL has designed these world-class counters on international lines present in other major international airports such as Heathrow and Manchester. Entire staff at T3 has been especially trained on service quality considering the passengers’ profile that the terminal would see. There are five counters in the departure level, including one in international SHA. In arrivals section, there are four counters, two of which are located inside the customs area, directly opposite to baggage belts and the other two counters are located in arrival lounge (outside the customs area).

Enjoy a drink at 1 C terminal, Mumbai THE new 1C terminal at the Mumbai domestic airport just gave the term ‘high fliers’ a new meaning. Its claim to fame? It has the

city’s only airport bar; open to all passengers routed through the terminal. Even those without a First Class ticket don’t have to feel like second-class citizens any longer. Ultra bar, the chic station with a mini lounge, facing the tarmac, serves cocktails, straight drinks and mocktails. The most popular feature is beer on tap, though the staff won’t allow you more than two pints. According to the Rituparn Sharma, General Manager, Travel Food Services, the company that runs the airport’s bar and food court, the bar is always packed. “There are people here at all times of the day. Of course, we keep a check on how much customers are drinking, and if anyone gets a little tipsy, we inform the aircraft staff to be prepared,” he said.

The first sight… WITH T3 (Terminal 3), Delhi's Indira Gandhi International Airport will be the largest airport in India and the fifth largest in the world. Already been inaugurated by Prime Minister Manmohan Singh and other august dignitaries, the terminal is however yet to open to public. Amidst raining praises and awe-struck murmurs, the terminal decided to carry out a real time drill with senior custom officials. S K Goel (4L) Member (Customs) and Special Secretary, Central Board of Excise and Customs, Government of India; with senior customs officials took a tour of the newly integrated T3. Well, we can only hope that this will help them to carry out smooth functions in the future!

Amadeus-Taj partnership boosts room bookings AMADEUS, a travel technology partner and transaction processor for the global travel and tourism industry, has revealed the success of a Partnership Programme with Taj Hotels Resorts and Palaces. Despite the challenging operating environment in 2009, and the decline in travel as a result of the global economic crisis, the Amadeus Partnership Programme has helped Taj Hotels generate a 30 per cent increase in hotel bookings by travel agents within India, and a 12 per cent from five markets across Asia Pacific. With intense competition in the hospitality sector, Amadeus’ Partnership Programme activities have led Taj to reach out to the wider travel agency base, highlighting the features of a diverse collection of hotels globally. The Amadeus Partnership Programme complements hoteliers’ own marketing strategies and sales efforts, allowing them to reach out to Amadeus’ extensive travel agency network through educational events and special promotions that will encourage room bookings. This helps the hotel group access new customers both domestically and internationally, showcasing the best hotel properties on offer for visitors.

CRUISING HEIGHTS August 2010

67


Snippets Aviation august.qxd

7/30/2010

6:34 PM

Page 4

SNIPPETS

INTERNATIONAL AIRLINES AA’s YADA service customers better AMERICAN Airlines (AA) has announced that airport employees using the airline’s mobile YADA (Your Assistance Delivered Anywhere) device, are better equipped to serve customers anywhere in the airport with the additional ability to print boarding passes. Customers in Dallas/Fort Worth; New York (both at JFK and LaGuardia); Chicago; Miami; Boston; Albuquerque N M; St. Louis; and San Juan, Puerto Rico, can now be aided by airport employees anywhere in the airport and can have access to realtime information on flights, gates, standby lists, print bag tags and boarding passes, and even pull up maps of other airports.

Cathay Pacific to offer broadband on flights FLYERS on Cathay Pacific Airways will soon be well connected even during flights as Cathay Pacific and Panasonic Avionics Corporation have announced the signing of a Memorandum of Understanding (MoU) for the provision of full broadband connectivity on all Cathay Pacific and Dragonair passenger aircrafts. The service will include a broadband service, a GSM phone service and a free entertainment portal available to all passengers from the seatback screens and passenger devices. With this initiative, Cathay Pacific becomes the first airline in Asia to announce its intention to deploy Panasonic Avionics’ Global Communications Suite broadband connectivity solution and also the first airline globally to announce an intention to provide the solution across its full fleet. The services will be launched from early 2012, subject to regulatory approval. While the final terms are still being negotiated, the MoU allows the parties to immediately begin developing the plan to provide connectivity for passengers together with promotional, sponsorship and e-commerce opportunities for Cathay Pacific partner brands.

68

Mark DuPont, Vice President, Airport Services Planning, said, “Today, customers interact with airport employees primarily at the counters in front of and behind security. YADA allows us to better assist customers anywhere in the airport, especially during weather-related, off-schedule operations when lines can become long.” The airline’s goal is to eventually have a YADA device at every gate, making it part of a message suite that gives the airline the ability to communicate quickly with agents across the system in the event of an off-schedule operation such as a weather event.

The Panasonic Avionics connectivity solution for Cathay Pacific will comprise eXConnect broadband service, eXPhone GSM phone service, and a CX-branded free-of-charge entertainment portal — accessible through all passenger devices and seatback screens — that will include a range of content updated during the flight, access to airline and partner sites, ecommerce, airline-specific advertising, and live television with a unique pay-per-view capability for special events. Cathay Pacific’s new Haneda service: Cathay Pacific will commence a twice-daily service to Tokyo’s Haneda Airport from October 31, 2010 in addition to continuing to serve Narita International Airport. Tony Tyler, Chief Executive, Cathay Pacific, said, “To resume operations to Haneda Airport has been a longstanding wish for Cathay Pacific and we believe this new service will make Tokyo an even more popular destination for Hong Kong people.” With the launch of this new service, the airline’s flights to Tokyo will increase to seven a day from the current six. Traffic on the high: Cathay Pacific and Dragonair carried a total of 2,216,215 passengers in June — up 27.5 per cent on the same month last year. The passenger load factor was 85.4 per cent, a rise of 8.6 percentage points, while capacity for the month, measured in available seat kilometres (ASKs), was up by 7.7 per cent. In the first half of 2010, the number of passengers carried was up by 8.5 per cent compared to an ASK drop of 0.1 per cent. The two airlines carried a total of 148,520 tonnes of cargo and mail last month, up 19.9 per cent on June last year. The cargo and mail load factor was 75.4 per cent, a rise of 4.1 percentage points, while capacity, measured in available cargo/mail tonne kilometres, was up by 19.2 per cent. In the first half of the year, tonnage rose by 24.4 per cent compared to a capacity increase of 7.1 per cent.

CRUISING HEIGHTS August 2010


Snippets Aviation august.qxd

7/30/2010

6:34 PM

Page 5

EXPERIENTIAL VISIT: Air Arabia's FAM trip to Africa gives key partners a complete experience.

GRAND WELCOME: Tim Clark, President, Emirates Airline, being welcomed by Miroslav Dvorak, CEO of Prague Airport, after the arrival of Emirates’ first passenger flight from Dubai.

Experience Africa with Air Arabia

Emirates’ maiden flight to Prague

AIR Arabia, in association with global destinations, organised an experiential visit to Africa for some of its key business partners in India. The FAM trip covered Masai Mara and Lake Nakuru National Park, the world-renowned reserves in Africa. The Mara offers wildlife in a variety and abundance — over 450 species of animals have been recorded here — while the sight of millions of flamingos at Lake Nakuru is its claim to fame. The airline, which enjoys a presence in the MICE, VFR, and leisure segments, is looking to further strengthen its presence in the leisure segment. The FAM trip was offered to leisure agents from leading companies like Cox and Kings, Kuoni, Thomas Cook etc, so as to give them a complete Air Arabia experience.

EMIRATES lived up to its name as the international airline of the UAE after passengers from more than 20 countries joined its first flight to Prague. Travellers from Kuwait, Saudi Arabia, India, Pakistan, Ethiopia, Malaysia, Singapore, China, South Korea and Australia were amongst those on board. The airline is providing the only daily, non-stop passenger service to Prague, capital of the Czech Republic and site of the famous Charles Bridge, straddling the Vltava River. Tim Clark, President, Emirates Airline, who headed the Emirates’ delegation on the first flight, said, “Prague is our second European route launch this year after Amsterdam. The route is off to a good start with passengers joining the inaugural flight to Prague from more than 20 countries across the world, underscoring the hub role of Dubai and the boost this new link will provide to the Czech tourism industry.”

EXPANDING RELATIONS: Akbar Al Baker, Chief Executive Officer, Qatar Airways, addressing the media in Tokyo on the airline's growth plans.

Qatar Airways’ expansion drive in Asia QATAR Airways is actively exploring further growth opportunities in the Far East following the successful launch of flights to Tokyo, its newest Asian destination. The airline’s new direct daily services between Tokyo’s Narita International Airport and Doha, launched in April, ahead of Japan’s annual Golden Week holiday, has become one of the company’s top performing routes within its first two months of operation. The recently announced new routes from Doha to Phuket in Thailand and Vietnam’s capital city of Hanoi, to begin in October and November 2010 respectively, clearly signal the airline’s commitment to the Asian market.

In addition, the airline is stepping up frequency between Doha and Bangkok from double daily flights to three services a day from the end of October. Akbar Al Baker, Chief Executive Officer, Qatar Airways, said, “Qatar Airways is seeing strong demand for air travel from the entire Asian region and is planning to open up a number of new routes in this vibrant region. Qatar Airways has been keen to tap into Tokyo with dedicated flights for many years but had been unable to do so due to limitations at Narita. The runway extension at Narita here in Tokyo has created tremendous opportunities for Qatar Airways and, after all, we are extremely delighted to be the only Middle East carrier operating a daily service to this wonderful city.”

CRUISING HEIGHTS August 2010

69


Snippets Aviation august.qxd

7/30/2010

6:34 PM

Page 6

SNIPPETS Pre-paid baggage discount for Emirates: Passengers who travel with additional baggage can now enjoy a discount when they plan ahead. Emirates has launched a new pre-paid additional baggage tool on its website, which represents a 15 per cent reduction on standard airport rates and is only applicable for purchases on www.emirates.com. Russell Sheldon, Senior Vice President, Network Passenger Sales & Development, Emirates, said, “Advance planning can make a journey more enjoyable and hassle-free. Now passengers with additional baggage can also save money when they pay for the extra weight in advance of their trip. We encourage passengers to weigh their suitcases, and check the website for details on costs of additional weight,”

SA’s product upgradation on Indian routes WITH an aim to enhance its offerings in the Indian market, Singapore Airlines (SA) has undertaken a comprehensive product upgrade on four Indian routes — Delhi, Mumbai, Bengaluru and Chennai. The airlines conducted a complete upgradation — ‘Enhanced Cabin Experience’ of medium-haul B777-200 aircraft with new cabin offerings, improvement in Economy Class, as well as introduction of new KrisWorld — the airline’s in-flight entertainment system. The upgraded product was rolled out first on the Mumbai-Singapore sector on May 7, 2010 followed by the other three routes. The airline will also introduce the ‘Enhanced Cabin Experience’ on Chai Woo Foo Kolkata-Singapore route in October

this year. Chai Woo Foo, General Manager, India, SA, said, “The ‘Enhanced Cabin Experience’ initiative has been the most comprehensive product upgrade undertaken by Singapore Airlines on select sectors. SA has invested a significant amount in the upgradation of products on five Indian routes which showcases the market’s growth potential and Singapore Airlines commitment to the market.” The airline is marketing the new product offering by updating key corporate clients, through travel agents and frequent flyer customer database. The airline has also marketed the new offerings by conducting road shows at popular malls in Chennai and Bengaluru.

Lufthansa reopens lounge at Frankfurt Airport AFTER extensive renovation, Lufthansa has reopened its business lounge at Frankfurt Airport. Measuring an area close to 1,400 sq m, the newly reopened lounge offers a first-ever ‘Jet Friends’ lounge for children alongside the customary comfort, bistro and work areas. Besides a spacious comfort area equipped with leather armchairs and TVs, the bistro in the refurbished lounge serves hot and cold drinks, snacks, fruit and meals in a menu that varies with the time of day. In separate resting rooms, guests can unwind or complete certain tasks in preparation for a business appointment at their destination. They can also freshen up in one of the five shower rooms in the bathroom area. In addition, the airline has organised a painting competition (My best travel experience) for children to draw and paint their “journey of a lifetime”, where children are invited to paint the most exciting and enjoyable moments in

WE CARE: San Francisco International Airport customer service volunteers are ready to help travellers in their own language.

Language’s not a barrier at SFO SAN Francisco International Airport (SFO) customer service volunteers are now staffing the Federal Inspection Services (FIS) facility to assist customers arriving from international flights. Currently, 40 of the airport’s 200 volunteers have signed up and are being given training by Customs and Border Protection (CBP) staff to speak a total of 12 different languages, including Hindi, Urdu, Punjabi and Hindustani — and will be scheduled so that their language skills will be fully utilised. The customer service and translation assistance of this new programme will help support SFO’s seven-daily flights from Dubai on Emirates. “SFO’s customer service volunteers provide an invaluable service for our travellers,” said John L Martin, Airport Director.

70

“Many of our volunteers are retired airline and travel professionals who can provide our customers with just the right information at just the right time. The expansion of their unique service and skills to our arriving international passengers is a further example of our commitment to unparalleled customer service and support,” he added. The volunteers will staff the entrance into the queuing area for immigration, and roam throughout the facility assisting customers with any information they may require, from selecting and filling out the appropriate customs and immigrations forms, to helping customers find exits, restrooms, and baggage carousels. They will not take over any duties currently assigned to airline or CBP staff. Acting as the ‘greeters of the airport’, the volunteers may be identified by their teal-coloured SFO jackets and red airport identification badges with the customs’ seal.

CRUISING HEIGHTS August 2010


Snippets Aviation august.qxd

7/30/2010

6:34 PM

Page 7

APPOINTMENT S Qatar’s new country manager for India

LIKE NEVER BEFORE: Renovated Lufthansa lounge at Frankfort airport has opened bigger and better.

their previous travels. The closing date for entries is August 17, 2010 and prizes include a luggage set, consisting of a suitcase and a rucksack, or a Nintendo DS. Entry forms and colouring sheets can be picked up in the lounge or downloaded from lufthansa.com/malwettbewerb. Warming up the Indian market: With the Indian aviation sector back on the road to recovery, foreign airlines are cashing in on the spurt in demand. The Lufthansa group will increase the number of its weekly flights to 75 in the winter schedule. The group has also decided to run bigger aircraft on Indian routes. The domestic aviation industry has seen a huge surge in demand in the last few months. The Lufthansa group, which at present operates 66 flights in a week, will fly 75 weekly flights from October 29. Axel Hilgers, Director, South Asia, Lufthansa, said, “By improving connectivity from India’s key gateways to four European hubs, our airline group supports India’s growing need for international mobility.”

Say cheers with Continental Airlines CONTINENTAL Airlines (CA) has introduced specialty cocktails on its flights, which include Stirrings Mojito, Stirrings Pomegranate Martini, and Red Bull Energy Drink. “We continue to search for premium offerings to give our customers more choices in-flight,” said Mark Bergsrud, Senior Vice President of Marketing Programmes and Distribution, adding, “The new specialty cocktails are top-quality products for our customers to enjoy.” Continental Airlines partnered with Stirrings, a leading premium cocktail mixer brand, to offer its Mojito and Pomegranate Martini. The Mojito is a crisp cocktail with a sweet, smooth blend of mint, cane sugar and lime juice, served with Bacardi Light rum on ice for $9, while the Pomegranate Martini is a refreshing cocktail with a sweet-tart blend of pomegranate, cane sugar and lemon juice, served with Skyy Vodka on ice for $9. Stirrings cocktail mixers are made with all-natural, superior-quality ingredients like real fruit juice, cane sugar and triple-filtered water, and are available to customers without alcohol for $3. The airline has also teamed up with Red Bull to offer its energy drink to customers for $3, alternatively customers can pair it with Skyy Vodka on ice for $9.

QATAR Airways has appointed Henry Moses the country manager for India. Henry brings with him a wealth of experience and knowledge that he acquired in the travel management companies, global distribution systems and airline businesses in a span of nearly two decades. Prior to Qatar Airways, Henry was leading a healthy market share growth for India subcontinent market for Amadeus India.

Cathay’s new sale manager for TN & Kerala RAJESH Meon has been appointed Cathay Pacific Airways’ Area Sales Manager - Tamil Nadu & Kerala. Menon will oversee passenger sales and revenue for the carrier and will be responsible for the development and execution of sales strategy for the region. Rajesh Menon has been working with Cathay Pacific since 2005. He joined the airline as Asst. Airport Services Manager at Mumbai Airport. He started his career with Jet Airways in 1995 at Mumbai, followed by a year with Qatar Airways at Doha.

Genpact gets a new CEO MOST recently served as the Chief Financial Officer of Genpact Limited, Vivek has joined Air Works India Engineering as its Chief Executive Officer. Vivek holds an MBA from the Faculty of Management Studies (FMS), University of Delhi, and a Bachelor of Commerce Degree from Sydenham College, University of Bombay. “We are confident that Vivek brings the right mix of proven leadership, experience and acumen to the role,” said Luv Chhabra, Director, Air Works and Director of Corporate Affairs at Punj Lloyd Ltd, adding, “Equally important, he shares our passion for aviation and for working towards making Air Works a world-class aviation services group.” In addition to accepting the position of CEO, Vivek shall become a significant shareholder by investing in Air Works in his personal capacity.

Rajat Bhutani joins Amadeus India AMADEUS India has appointed Rajat Bhutani as Head — Markets and Sales Strategy. Rajat Bhutani has over 17 years of experience in Sales, Revenue Management and Client Servicing. His earlier assignments have been with Interglobe and Thai Airways, while the last association was with GMR DIAL in Revenue Management and Commercial (Airline Marketing). Rajat has a strong relationship management, business development and airline marketing background.

CRUISING HEIGHTS August 2010

71


back page:back page.qxd

7/30/2010

3:06 PM

Page 2

BACK PAGE

FOR A NOBLE CAUSE: (Left) Sikorsky S38 flying boat; and, (below) Pilot Tom Schrade with his copilots — Bruno Gantenbrink, the former world and European champion in gliding and Astronaut and Cosmonaut Dr Ulf Merbold.

A Sikorsky flight for a good cause

A

lot has been done in the name of charity, so don’t be surprised if you hear news about a “flying boat” cruising over the Atlantic Ocean this September. Moving low and close in an antique Sikorsky S38, pilot Tom Schrade, (an ex-US Navy diver and also the owner of the aircraft) is scheduled to make a charity flight from Canada to Germany. And what a flight it promises to be! ‘Wings of Help’, or ‘Luftfahrt ohne Grenzen’, is a charity that specialises in the air transport of children who receive medical treatment in Germany. This adventurous flight will be made to raise money for the children’s charity and anyone can be a part of it by sponsoring a part of the flight, at a reasonable rate. Says founder and president Frank Franke: “Every flight mile, between five and 5000, will be symbolically dedicated to those people who will donate money for it. A mile may be purchased for

72

€10.00 and as a thank you, the donor will receive a signed certificate from the pilot, which documents the donated route.” Standing true to the cause, there is something in it for the kids, too. At the individual stations of the flight, children will be invited on board as ‘small VIP passengers’ for some exciting sightsee-

CRUISING HEIGHTS August 2010

ing flights. “For this historical long-haul flight, the historic S38 will be supported by our technical partner, Condor,” says Franke. Accompanying pilot Tom Schrade will be Bruno Gantenbrink, the former world and European champion in gliding, and Astronaut and Cosmonaut Dr Ulf Merbold as co-pilots. The aircraft (S38) will be a familiar sight to Hollywood movie buffs as it appeared — piloted by Schrade — in the opening scenes of The Aviator, starring Leonardo DiCaprio as the late Howard Hughes. The transAtlantic flight attempt will start in Minnesota in the USA and will take stops in Labrador, southern Greenland, Iceland, Scotland, Faroe Islands, London, Brussels and Frankfurt, before arriving in Berlin. British amphibian fans will be thrilled to learn that the team is to seek permission to land the S38 on the Thames in London. “We don’t have approval yet, but we believe we’ll be able to get that permission,” says Schrade who also adds that the biggest challenge will be to get good weather, to plan it properly and not be in a hurry. Well, hurry or no-hurry, we wish this adventure all the very best, hoping for its smooth take-off and an equally safe landing, after all, it’s all for a good cause.


Document1

7/26/2010

12:13 PM

Page 1


AD dummy.qxd

7/30/2010

7:29 PM

Page 1

RNI No. DELENG/2006/16897 Posting Dt. 8-9/08/2010 Reg. No. DL(E) 20/5294/2009-11


Cruising_Heights_August_2010