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IT IS TIME AERA NOTICED THE EXISTENCE OF AIR CARGO

July 2011 n ` 90

www.cruisingheights.in

INDIAN SUMMER l

GOAIR’S JEH WADIA l INDIGO’S RAHUL BHATIA l AIRASIA’S TONY FERNANDES INDIAN CARRIERS, WITH A MASSIVE DOSE OF HELP FROM MALAYSIA CREATE, A “FRENZY” AT THE PARIS AIR SHOW BY ORDERING A WHOPPING 452 PLANES — ALL FROM AIRBUS.


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EDITOR-IN-CHIEF’S NOTE

Own your judgement any moons back, the then Director-General of Doordarshan, Rajiva Ratna Shah, faced the K Srinivasan ignominy of a Central Bureau of Investigation(CBI) filibuster on the basis of a report that during his tenure as the head of the country's public television broadcaster he had caused plenty of losses to the exchequer. Nothing was quantified but it was pointed out that the brand of programming had caused the losses. Weird logic indeed! I interviewed Shah weeks after the CBI courtesy call and he was sanguine about the whole thing. But he did indeed make a telling point. "Who is to tell whether doing a serial on Vikram Seth's book — as he was planning then with Gulzar as director — or the short stories of Munshi Premchand would be a better bet for a nine pm audience?" What he inferred was that as the man in the hot seat, he took a decision based on his experience, inputs from colleagues and reports from the field. That was his decision to make; maybe someone else would have made some other call. It all depends on the person, the situation and the choices at that point in time. But the most important point he made in that interview was that he was prepared to argue his case, defend his decision and produce the hard evidence on which he made his choice. In effect, he was ready to own his judgement. So, when the CAG says, why did Air India close down so many routes, it needs to ask itself who asked them to start many of the routes they did so in the first place? One remembers an Indian Airlines flight to Jabalpur when Sharad Yadav was the Civil Aviation Minister and to oblige him it had to hop, step and jump and go via Bhopal and Raipur to justify the loads. That flight is history now. Or the Nagpur to Bangkok that was launched during the early years of the Praful Patel raj. That too is history now. There are scores and scores of such flights — another classic is the Hyderabad-Dubai IA flight that had to accommodate Pune; so it became a Dubai-Hyderabad-Pune operation that completely unsettled the rhythm of the earlier

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CRUISING HEIGHTS July 2011

operation and stymied its loads. One wonders if it's still operating. By the same yardstick, the company in its wisdom decided that it wanted a point to point operation and closed what was one of its most paying propositions: Delhi (Mumbai)-LondonNew York. The argument was that AI was now poised to becoming a point to point badshah with its 777s and the 787s and was best served by looking at servicing specific cities rather than looking at Fifth Freedom rights. The result is that it now has a codeshare out of London with Kuwait Airways! And now Air India wants to cancel the 787s, but fly more abroad! Again, just weeks ago at the ACI conference in Delhi, Managing Director Arvind Jadhav was blunt in stating that the Frankfurt scissor operation was a disaster. Whoever had thought the scheme up, he nearly suggested, needed to get a Padma Shri! The point is it was driven by one of his predecessors who was also a Civil Servant and it was approved by the board that had two government nominees — both Civil Servants! One of them is now a Secretary in another Ministry that has nothing to do by a long mile with aviation and he is simply not answerable to the decisions he took as financial advisor in the Ministry and a Director on the Air India Board! If the government is serious about Air India, it need to do several things straightaway:  Get off its back;  Hand the company over to the financial institutions and let them set up a board to run it;  Get people to own the choices they make; and, finally,  Set a ruthless example of punishing those who don't do so.

srini@newsline.in

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Off the cuff

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100 % or not 100 %

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contents seshippingnews.typepad.com

After all the hype about 100 per cent scanning of all shipments scheduled for the US, it now appears that the US government is considering alternatives. In fact, the government authorities have confirmed it is considering alternatives to plans for all containers loaded at a foreign port to be scanned before they can enter the country. According to directives, any container bound for the US would have to be scanned for conventional — as well as radioactive — threats before being loaded onto a vessel at a foreign port. The scheme had been criticised because its implementation would need to be paid for by non-US ports and because the process could cause disruption to the supply chain. Recently, however, US Homeland Security chief Janet Napolitano said that 100 per cent scanning was “probably not the best way to go”. The requirement, introduced by the US Congress in 2007, meant all containers would need to Xrayed at the foreign port of loading by 2014. Napolitano indicated that Congress was now considering a more layered approach to container security and was developing a combined system, which would include scanning, data analysis, risk analysis, physical checks and closer co-operation with ports and countries around the world. She said: “I think what we have learnt over time is that there are many different ways to achieve a security objective. You have to have multiple layers that operate effectively.” According to experts, the Homeland Security chief is not the final word — meaning that she was not the one making the rules — and 100 per cent scanning requirement would probably be followed.

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INDIAN SUMMER IN PARIS

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India dominated this year Paris Air Show with record orders for planes from IndiGo and GoAir. The biggest blip on Airbus’ order books, however, came from AirAsia with 200 planes. The orders dubbed “a frenzy” by aviation pundits only went to prove that the world’s economic power had shifted from the west to the east.

OFF THE RECORD

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Read the latest buzz about Capt Gopinath’s daughter Pallavi getting married. And, AirAsia chief Tony Fernandes’ tale about how he signed the whopping aircraft order with Airbus. Plus: why people in Air India remember its former head, Sunil Arora. CRUISING HEIGHTS July 2011

NEWS DIGEST

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IndiGo announced the launch of its international daily flights connecting Delhi to Dubai, Singapore and Bangkok from September, how private airports are puzzled about User Development Fee (UDF) and Air India’s Arvind Jadhav plans to quit. Plus: Jet Airways and international alliances and much more.


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contents ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST

CRUISING HEIGHTS Volume VI  No 3

Editor-in-Chief

IATA DIARY

K SRINIVASAN

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Managing Editor

IATA’s 67th Annual General Meeting (AGM) in Singapore saw many important announcements including the major one about Tony Tyler taking over from Giovanni Bisignani. The AGM also witnessed a war of words between the Gulf carriers and the European ones. A report.

TIRTHANKAR GHOSH Group Consulting Editor

R KRISHNAN

CHOCKS OFF

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Consulting Editor

The air cargo industry needs a NANDU MANJESHWAR major push to flourish. Deputy Editor PC SINGH Improvement in infrastructure could usher better times for the Assistant Editor air cargo industry in India and JUSTIN C MURIK AERA must play a pivotal. Copy Editor ASHOK KUMAR Sub-editor-cum-reporter

PUNIT MISHRA Senior Designer

RUCHI SINHA Design

NAGENDER DUBEY, MOHIT KANSAL, SHIVNATH

FOCUS ON CHOPPERS

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What’s happening in the world of choppers? While Pawan Hans chief R K Tyagi speaks out on the challenges being faced by Pawan Hans, Eurocopter showcases its Mercedes Benz style chopper and Bell, Cessna begin work on a new facility at Singapore.

Picture Editor

GLOBETROTTING

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Ever heard of a mechanic being stowed away or for that matter a pilot accused of drinking on the job and getting rewarded for it. Plus: more rib-tickling stories.

PRADEEP CHANDRA Photo Editor

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

ROHIT GOEL Director (Admin & Corporate Affairs)

RAJIV SINGH Asst. Manager (Subscription)

JAYA SINGH

BACK PAGE

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US Airways Flight 1549, better known as the “Miracle on the Hudson” jet, is now at the Carolinas Aviation Museum in Charlotte, North Carolina, thanks largely to the efforts of a transporter.

CARGO

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Deccan 360 is not in good health. Reason: Captain G R Gopinath’s end-to-end cargo venture is struggling for want of funds. Plus: how Hyderabad’s Rajiv Gandhi International Airport seized the pharma opportunity and the first flight of the new ‘green’ Boeing Freighter.

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Cover Design: Ruchi Sinha

CRUISING HEIGHTS July 2011

(Mob. 9650433044)

Executive Director

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

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


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PERISCOPE

Clarion call

“All the states should improve their civil aviation system including state government-related aircraft operations as per the DGCA regulations.”

DR NASIM ZAIDI, Civil Aviation Secretary, on improving the civil aviation system in the country.

Security check “In

an environment prone to nepotism and corruption, aviation security must be well shielded from outside influence.” CAPTAIN MOHAN RANGANATHAN, member of the Civil Aviation Safety Advisory Council, on aviation security in India.

LETTERS TO EDITOR

Since the ground-handling policy is still to be implemented, it is going to be contentious issue especially in the wake of the burgeoning demand from private airlines and airports as stated in the story Ground handling: Nowhere story (June, 2011). Interestingly, the Ministry of Civil Aviation had proposed to introduce the ground-handling policy in 2007 but it was deferred quite a number of times due to one reason or the other. The new twist to the story came when the Civil Aviation Ministry wrote to all airlines to hire their own staff to do ground handling at non-major airports. Ajay Singh, Cochin

The story Creating the future (June, 2011) was a pleasure to read. There is an urgent need for India to have world-class gateway airports providing aviation services and passenger/cargo facilities of global standards, in a safe and secure environment. The government has taken a number of measures to step up the airport infrastructure for the country. It has envisaged a modernisation plan with a view to modernising 37 non-metro airports. In this scenario, the role of private airport developers will become vital as they would be in the thick of action. Kanwaljeet Singh, Ludhiana

MRO outlook bright but… (June, 2011) revealed may interesting aspects about the MRO industry in India. Over the next decade, India is poised to become the fastest growing market in the world for aircraft Maintenance, Repair and Overhaul (MRO) services. Business jets and freighters are other promising segments for the MRO industry to tap in India. The Indian airlines have to take a farsighted view and enter into planned alliances with the Indian MRO industry in order to take a giant leap into the future. Although at a nascent phase, the Indian MRO industry has enormous growth opportunities. There is great opportunity and challenge for India is to position itself as a competitive regional MRO hub. Kumar Kunal, Patna All correspondence may be addressed to Editor, Cruising Heights, D-11 Basement, Nizamuddin (East), New Delhi -13, OR mail to cruisingheights@newsline.in.

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Case-in-point “In India, infrastructure was seen as a problem because of the time (taken) for execution. But the example of Delhi airport is really amazing and is an example of a great airport.”

GIOVANNI BISIGNANI, IATA Director General and CEO, on the precedent set by Delhi airport.

Expanding wings “We plan to start flights to South Asian and West Asian countries by August or September, as some of our Boeing aircraft will be delivered during that period.”

NEIL MILLS, CEO, SpiceJet on the expansion plans for the airliner.

Guru Gyaan “Whenever an airline starts aggressive expansion, it is very useful to get guidance from professionals with adequate experience.” ANKUR BHATIA, Executive Director, Bird Group, on the level-headedness to be followed by airlines during aggressive expansion.

Options galore “There are two engine choices available, we haven't decided which one we are going to go for.” VIJAY MALLYA, Kingfisher Chairman, on the engines to be integrated in the Kingfisher planes.

CRUISING HEIGHTS July 2011


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Carriers to the top — with passengers

 

 

115,837) was in the fourth position. The fifth position was grabbed by British Airways (international passenger kilometres in millions: 103,095). Cathay Pacific (international passenger kilometres in millions: 87,332) secured sixth position. Singapore Airlines (international passenger kilometres in millions: 84,911) earned seventh position. Ryanair (international passenger kilometres in millions: 81,890) captured the eighth position. The ninth position was grabbed by American Airlines (international passenger kilometres in millions: 80,531) and the tenth on the list was KLM (international passenger kilometres in millions: 76,065).

COLD STATS

The International Air Transport Association (IATA) recently published its latest ranking of the world's airlines in terms of international passenger kilometres. The European carriers that had earlier led the rankings came after the Emirates (international passenger kilometres in millions: 143,660), which has emerged as frontrunner. German carrier Lufthansa (international passenger kilometres in millions: 124,614) managed the second spot. The third spot was garnered by Delta Air Lines (international passenger kilometres in millions: 119,055). Most of the others in the top ten were from Europe.  Air France (international passenger kilometres in millions:

LOOKING GLASS

Poor, little Maharaja can only watch while others are ordering away planes

Clear skies “Air India is making efforts to connect major cities such as Kanpur with metros where there is a high demand.” VAYALAR RAVI, Civil Aviation Minister, on Air India strengthening the base in major cities and metros.

Sustainable development “The regional hub for civil aviation at Guwahati has been a three decade-old demand of the people of the region. I am hopeful that Guwahati will start functioning as a regional hub very soon.” B K HANDIQUE, Union Minister of Development of North-East Region (DoNER), on Guwahati being developed as regional hub for civil aviation.

CRUISING HEIGHTS July 2011

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OFF THE RECORD

 

IF THERE is one civil servant who will win the popularity stakes at both Air India and Indian Airlines it has to be the redoubtable Sunil Arora. During these troubled times, employees in both the erstwhile airlines now one under the AI umbrella, fondly remember his stewardship. The positive feedback from erstwhile IA employees is understandable; after all, Arora was at the helm for a full five years at IA. That was a period of great calm and a time when he took on the private sector giants and bested them on several counts in their own turf. The surprise is that he spent few months at Air India but that seems to have left such a deep

OFF TO AMERICA  

HARSH OR FAIR  

EVERGREEN SUNIL impact that employees still remember those days. So what was special about his tenure? Topping the list of qualities that most endeared him to staffers was his ability to take quick decisions and own them. “He not only took a quick call on issues, but he owned them if it came to a crunch and delegated hugely,” said one former AI staffer. For ex-IA staffers, he was “transparent, straightforward and a man who ran the company as if he had been there his whole life”. Could one ask for a bigger compliment!

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Vayalar Ravi

THE PROBLEM IS that Civil Aviation Minister Vayalar Ravi is also Minister for Overseas Indians (a euphemism for the non-resident Indian) and his constituents are all spread over the globe. So it’s only fair that he will travel to the far corners of the world to meet up with them, attend to their problems, celebrate with them and generally look after their welfare. Unfortunately, the business of Civil Aviation requires that he spend more time in Delhi than on flights or overseas. And that’s the contradiction. Often he is out on business and Rajiv Gandhi Bhawan wonders why the Minister is travelling so much. It came to a head a few weeks back when the Minister had to cancel his trip to Toronto for the Pravasi Bharatiya Divas on the gentle nudging of the PMO. In fact, a consequence was that the plan for a trip to Paris for the Air Show was also cancelled lest the Prime Minister’s Office gently nudge him to cancel that as well. But the whole thing is so bizarre. Every trip that any Minister in the government undertakes — private or official — has to be approved by the Prime Minister’s office. In fact, on scores of occasion, the trips have been undertaken and the ipso facto the permissions have been granted. Ravi’s predecessor, Praful Patel took up cudgels on behalf of his ministerial colleagues when he wrote to the PMO that he saw no logic in Ministers having to file their private tour plans and seek permission from the PMO. Even the logic of “political clearance from the Ministry of External Affairs”, he believed was needless. “After all if there are certain countries that you do not want us to visit, they can be specified in a no go list,” he argued. That has now been granted, but for official trips South Block still rules the roost and Ministers can’t make their own decisions. What a pity!

CRUISING HEIGHTS July 2011

DON’T BE surprised if you find that the Member (Air Navigation Services), V Somasundaram at the Airports Authority of India loaded with files the next time you enter his office. Doubling up as he does as he is also the Member (Finance), Somu’s navigational capabilities are being tested to the hilt as he juggles with the responsibilities of the two offices. But that’s because Member (Finance) S C Chhatwal completed his five year term and his extension — he still had a year-and-a-half to go for superannuation — hadn’t come through. Strange, though it may seem, even here it isn’t the recom mendation of the principal officer. In this case, the Airports Authority Chairman who has been taken into consideration. While he wanted Chhatwal to continue in his job, the Ministry of Civil Aviation in their wisdom choose to say ‘Nyet’. No one knows why. If Chhatwal was good enough to be serving for five years and good enough to be recommended again, why was his nomination turned down? Meanwhile, the good man unmindful of the swirl around him, jetted off to America to be with his children.

S C Chhatwal


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OFF THE RECORD

DANCING TO TONY!

BACK TO THE MINISTRY

 

 

AFTER THE flyDubai ruckus when the see-saw battle between the Ministry of Civil Aviation and the DGCA saw the Dubai-based LCC get the green signal to launch agreed upon flights and then being scratched, the Ministry has decided that it will oversee the bilateral negotiations and also grant the seats to the designated airlines and leave the job of implementation to the DGCA. The Directorate is unwilling to go on record to comment on the Rajiv Gandhi Bhawan diktat, but officials privately explain that this is rather unfair and once the ASA (Air Services Agreement) as the bilateral has been inked by the government, it is for them to take over. But no one wants to get into a tangle with the decision. What seems to have queered the pitch is the letter from the Sheikh of Dubai who is also the Prime Minister of UAE to the Indian PM and the extraordinary pressure from the MEA to get things back on an even keel once the permission was denied. No you can’t say ‘yes’ and then ‘no’. Therefore, the decision to say ‘yes’ again!

nath

Sheikh Maktoum bin Rashid Al Maktoum

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PALLAVI IS GETTING HITCHED PROUD FATHER: Capt Gopi with his daughters photographed during his election campaign. Pallavi is on the extreme right.

 

CAPTAIN GOPINATH’S daughter Pallavi will get married later this month. According to the DNA: “A source close to the family tells us, friends and family will enact the love story between Pallavi and her French beau. This will be a grand affair, where there will be a lot of song and dance, Bollywood style.” But Gopi insists that it will a Carnatic music concert at his home with close friends and a traditional South Indian wedding the next morning. There is little doubt that Gopi who enjoys a remarkable degree of friendship across the board will have the best and brightest attending the marriage. Amongst those who are likely to be there includes the top brass of Airbus who can’t thank him enough for starting the low-cost revolution in India that saw the A320 simply zip past all competition. Of course, the likes of Naryana Murthy, Nandan Nilekani and Vijay Mallya are sure to be there. Not to forget plenty of Air Deccan veterans, it was a remarkable journey by a few enterprising and bubbly individuals and in many ways it will be a reunion for all of them. Don’t be surprised if they all shed a tear amidst the happy event for memories of the years gone by and a dream that unfortunately went awry. CRUISING HEIGHTS July 2011

WHEN HE finally signed the deal: Air Asia’s charismatic CEO Tony Fernandes had a tale to tell about the deal. It all happened on Valentine’s Day earlier this year in a bar in France and rested on whether John Leahy, Airbus’ persuasive COO would dance. “At 12 am, John nudged me and said ‘Tony, can we sign?’,” Fernandes said and added: “I said ‘no, you haven’t danced’.” When Leahy said ‘no’ it too CEO Enders to get him on the dance floor, Fernandes said. “The great secret is that he didn’t stop dancing, and after three dances, we went over to the bar and signed the deal.” Exuberant at having signed the draft deal, the executives even got one of the women present to “seal” it with a lipstick mark, he said. “This is what we like about Airbus — they stay out with us until 3 am,” Fernandes said and added: “John is a terrier — he never gives up, never gives in and he’s a pain in the ass at times.”

Tony Fernandes


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OFF THE RECORD

 

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VIGILANCE ISSUES

their positions and as the complaint of the Air Corporation SC/ST Employees Association notes: “It may be observed that Air India is the only organisation which has a separate Vigilance Cadre which was created some years back to benefit the then deputationists from Security Department. All other public sectors including erstwhile Indian airlines have no separate cadre. This is in violation of the CVC guidelines on the subject. “Officers of Vigilance Department got around four out-of-turn promotions in a short span of around five years. Earlier, all of them were security staff in lower grades and in a con-

WANTED: The Maharaja as a doctor to cure the rot within; and (above) the Air India offices in Mumbai.

Courtesy: Air India

THE CHIEF Vigilance Officer (CVO) at Air India, Ms. Urmila Subbarao is soon to return to Delhi. This Andhra Pradesh cadre 1975 batch civil servant had moved to Mumbai when her husband took over as the RBI Governor. But now that his job is coming to an end, Ms Subbarao is likely to shift back to the capital. Hopefully, the drift and confusion in the vigilance department at Air India will end with her tenure. In fact, so bad is the situation that members of the vigilance team are themselves writing to the CBI asking for a suo motu investigation into the state of affairs. One official in his letter said: “There were complaints such as molestation, asking favours or oblige to settle the case or else face the music. The perception, which, I could make here that more innocents were being harassed than real corrupt personnel. The honest cannot oblige or favour. One Lokinder Yadav (who proudly declares that he is Lalu Prasad Yadav's relative) even made indirectly threatening remarks to me. The main Vigilance officers who are involved in this are Kishore Prabhu (Dy Manager), Lokinder Yadav, Virdi and Yoginder Singh. Because of permanency (sic) and being protected by CVC guidelines they have become very arrogant and complacent to law/rules/regulation. They mislead CVO/Dy CVO who come from outside.” What is astonishing is that almost all the officials — at both Mumbai and Delhi — in the Vigilance Department have spent over a decade in their jobs (in fact, some have spent over 15 years) when the CVC guidelines clearly stipulate that no one must serve beyond three years extendable by a maximum two further years. Clearly, they have a huge amount of vested interest in continuing in

CRUISING HEIGHTS July 2011

troversial internal recruitment they were selected as Asst. Managers, Vigilance. In fact, the written test for this recruitment was held thrice to ensure that the favoured few had cleared the same. This recruitment though open to all Air Indians was manipulated to ensure only the deputationists to Vigilance Department were selected. “In all other departments, an Asst. Manager takes an average of seven years in a single grade. Whereas in Air India they have got three to four promotions within seven years making a mockery of the promotion policy for officers in the company. They have thus superseded large number of officers in various grades at least three times. What is shocking is that once again the CVO has recommended an out-ofturn promotion for these officers. They have already been gifted with enough promotions in violation of all rules, regulations and procedures relation to promotions.” If reports are to be believed the CVC and the CBI have taken a serious view of the situation and the CVC is contemplating getting details of all Vigilance officials at Air India and checking their record. But who will act against Ms Subbarao, who has allowed this to continue for the past five years? And before her, Ms Manjari Kakkar, who is now a member of the Central Board of Direct Taxes!


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NEWS DIGEST

Expose and dip!

THE CIVIL Aviation Ministry’s policy to expose airlines whose flights are frequently delayed has yielded results. Data released by the ministry shows that 280 flights landing or taking off from Mumbai airport were frequently delayed in May, which translates to a 14.63 per cent decrease since April, when 328 flights were frequently delayed.

Some other statistics:  A Kingfisher Airlines flight to Delhi (IT 312) did not land as per schedule even once in 31 operations.  Air India’s daily flight from Mangalore (AI 680) to Mumbai was delayed 30 out of the 31 times it landed.  Among departures, a Hyderabad-bound Jet Airways flight (9W 2135) was delayed every time it took off from Mumbai.

BOEING 787 Dreamliner launch operator All Nippon Airways (ANA) has unveiled the flight schedule for the aircraft’s service ready operational validation (SROV) in Japan in early July. It will help simulate operations between several cities in the country and allow ANA to practise maintenance and servicing on the aircraft. The developments will be watched closely by several Gulf airlines that have invested heavily in the long-delayed jet. Qatar Airways is one of the largest buyers of the 787 with 60 orders. The SROV, to be performed by test aircraft ZA002, will be conducted between Tokyo Haneda airport and other airports in Osaka, Okayama and Hiroshima, said the Star Alliance carrier. ZA002 will depart Seattle at 05:00 on July 3 and arrive at Tokyo Haneda at 06:30 on July 4.

Qatar, IndiGo are the best

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Hire avenue WHICH AIRLINE HAS 4,056 EMPLOYEES AND PLANS TO HIRE 200 PILOTS, 900 CABIN CREW AND 600 ENGINEERS OVER THE NEXT 18 MONTHS? IT ALSO HAS 19.7 PER CENT OF THE MARKETSHARE, IS THE THIRD LARGEST AIRLINE IN THE COUNTRY. IT MADE A PROFIT OF RS 550 CRORE IN 2009-10 AND BELIEVES 2 IN 10 OF ITS PASSENGERS WILL TRAVEL OVERSEAS BY MARCH NEXT YEAR. IT ALSO HAS THE LOWEST AIRCRAFT-EMPLOYEE RATIO IN THE INDUSTRY. INDIGO!

www.apnnews.com

Asian and Middle-eastern airlines have scooped the pool in the annual Skytrax World Airline Awards, with Qantas slipping down the ladder for the fourth year in a row. The surprise winner of the world’s best airline award was Qatar Airways, which pipped a field of better-known brands including Singapore Airlines, Cathay Pacific, Etihad and Emirates. There was an India representation on the Skytrax awards too. IndiGo bagged the “Best Low-Cost Airline” in Central Asia and India. Speaking on the achievement, Aditya Ghosh, President, IndiGo said, “This is a great moment for us. To be recognized at the world stage, second year in a row, is an exhilarating yet humbling experience.”

Print and move

PASSENGERS AT Mumbai airport can now avoid long queues at airline counters to get prints of their e-tickets. Those who have booked online but do not have a hard copy of the e-ticket can now get a quick printout from the newlyintroduced kiosks at the airport. Mumbai International Airport (MIAL) has introduced eticket printing kiosks outside all departure gates at the domestic terminal. “I think there is an element of indivisibility in security. The entire system has to be integrated in a manner that no weak link is left anywhere for a criminal or a terrorist to attack. Security cannot be dealt in fragments. If any nation is unable to adopt a foolproof system of civil aviation security, the entire region would become fragile,” said Civil Aviation Minister Vylar Ravi after Inaugurating the Steering Committee Meeting of Cooperative Aviation Security ProgrammeAsia Pacific.

CRUISING HEIGHTS July 2011

www.arunrajagopal.files.wordpress

In May, Air India topped the delay list. In all, 43 Mumbaibouond Air India flights and 37 outbound flights (departures) were frequently delayed.  Jet Airways came second with 42 inbound domestic flights and 26 of its departures being consistently delayed.  Kingfisher Airlines followed next with 36 of its citybound flights and 24 of domestic departures making it to the blacklist.  Among low-cost carriers, JetLite and SpiceJet were the poor performers. 

787 validation schedule


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Touch, my foot!

Sahara wants more THE BOMBAY HIGH COURT HAS ADMITTED AN APPEAL FILED BY SAHARA INDIA CHALLENGING ITS EARLIER SINGLE-BENCH ORDER, WHICH HAD HELD THAT JET AIRWAYS WAS LIABLE TO PAY RS 1,450 CRORE (OVER $ 32 MILLION) FOR THE PURCHASE OF SAHARA AIRLINES (NOW JETLITE) IN 2007. IN THE APPEAL, SAHARA HAS STAKED ITS CLAIM FOR RS 2,000 CRORE (AROUND $ 45 CRORE), THE ORIGINAL PRICE FOR THE BUYOUT. IT SAID THE COURT HAD ERRED IN HOLDING THAT JET AIRWAYS WAS LIABLE TO PAY THE RENEGOTIATED AMOUNT OF RS 1,450 CRORE.

THE TEXAS House of Representatives approved a bill last month banning “intrusive” airport screening, but the legislation stalled in the State Senate after Washington threatened to consider halting flights to Texas if screeners were prevented from doing their jobs properly. The bill would have banned any pat-down that “touches the anus, sexual organ, buttocks or breast of another person including through the clothing, or touches the other person in a

Flying in

IN ADVANCE OF the Paris Airshow, has unveiled what to expect in 2050: a Concept Cabin. It will be a whole new flying experience inspired by nature. Personalised zones replace traditional cabin classes to offer tailored levels of experience. While taking a hop between destinations, according to Airbus, passengers in 2050 could join an interactive conference; enjoy a game of virtual golf; read the kids back home a bedtime story; and recharge in a ‘vitalising seat’ whilst watching the planet spread out beneath their feet. This latest instalment of The Future by Airbus — a vision of aviation in 2050 — follows last year’s unveiling of the revolutionary Airbus Concept Plane, packed with technologies to reduce fuel burn, emissions, waste and noise. The Airbus Concept Cabin now gives further insight into some of the innovations and technologies that will shape future passenger experiences on board. The aircraft’s bionic structure mimics the efficiency of bird bone, which is optimised to provide strength, where needed, and allows for an intelligent cabin wall membrane, which controls air temperature and can become transparent to give passengers open panoramic views. The Concept Cabin has an integrated ‘neural network’ creating an intelligent interface between passenger and plane. It can identify and respond to passenger needs and enables bespoke features such as morphing seats, which change to your body shape.

 



2050

UNLEASHING THE FUTURE: Graphic impressions of Concept Cabin unveiled by Airbus.

380 Facts

 manner that would be offensive to a reasonable person”. The measure might be reintroduced in the current special session, where its backers say it might have enough votes this time to pass the Senate. Its sponsor, Representative David Simpson, a Republican from Longview, discussed the issue with The New York Times “They are touching parts of our bodies that are reserved for our most intimate activities. They’re treating us as criminals. If we try to prevent every act of criminality, we won’t have freedom anymore. We’re doing more than the terrorists could ever have done and we’re doing it to ourselves — and then we say we’re doing it for our own good. Someone had wanted to introduce legislation that would have just covered children. That would be a step forward, but I think we’re giving up too much. Think about this: We are allowing someone to touch your daughter or granddaughter’s private parts as a condition of travel. What have we come to?”

CRUISING HEIGHTS July 2011







 

With the May delivery of Korean Air’s first A380 the number of aircraft in operation is now 49. South Korea’s Asiana (six) and Japan’s third largest carrier Skymark (four) are the two latest customers for the A380, both having placed orders this year. Korean Air and China Southern have become new operators in 2011. The new KAL aircraft has the lowest seat count on an A380 so far, with 407 seats; the upper deck is all business class. Singapore Airline’s 12th A380, to be delivered shortly, will also have an all-J upper deck and a total of 409 seats. Launch operator SIA has experienced an average load factor of 83 per cent since operations began in October 2007. The A380 will be flying to seven North American destinations this northern summer, putting pressure on US carriers to consider the aircraft. The A380 is now flying to 11 of the top 15 international airports. The freighter version remains part of the concept but is not imminent.

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INFRASTRUCTURE NEWS DIAL STOPS COLLECTING ADF

Delhi Airport

The Delhi High Court has ordered the GMR-led Delhi International Airport Limited (DIAL) to stop including ADF in fares with immediate effect. “All airlines have been advised not to collect ADF of `200 from domestic passengers and `1,300 from international passengers at IGI Airport, until further communication,” DIAL said in a press release. Consumers Online Foundation, an NGO, had filed a petition in the court saying that without a finalisation of the fee, which is a mode of funding airport projects, DIAL cannot be permitted to collect it, especially since the Supreme Court had struck it down on April 26. The High Court has asked the NGO to file an appeal before the appellate tribunal of the Airports Economic Regulatory Authority of India within a week. The levy and collection of ADF will be decided within two weeks of the appeal being filed. The Supreme Court said the development fee could be levied or collected from the embarking passengers at major airports, “unless the Airports Economic Regulatory Authority determines the rates of such development fee”. The matter for determining the rates will now be heard afresh by the appellate tribunal. Even though they claimed there has been a steady flow of passengers seeking refunds, none of the airlines could clearly spell out the refund procedure for passengers booking tickets online through service portals like yatra.com and makemytrip.com. There is massive confusion over the issue. Tickets might have been booked in any city, country or with any agent. It’s possible that airlines were not paid the entire amount collected by travel agents. And once an international passenger has travelled out of Delhi, there is no way to track him down to refund the money. No procedure has been determined for this.

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‘DF’ woes for private airports

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rivate operators of Delhi and Mumbai airports must be frustrated with the on-off approach to Airport Development Fee (ADF) or User Development Fee (UDF) as both the variants are applicable in India. In April 2011, the Supreme Court ruled against the GVK-promoted Mumbai International Airport Limited (MIAL) from continuing to charge development fee from both departing domestic and international passengers at the rate of `100 and `600, respectively. In the case of the GMR-promoted Delhi International Airport Limited (DIAL), it did not impose any such bar as the Court said DIAL had got the approval from the Airports Economic Regulatory Authority (AERA) to charge development fees at the rate of `200 from departing domestic passengers and `1300 from departing international passengers. The reason for MIAL being asked to discontinue the charging of the fee was that it had not got the approval from AERA and the approval it got from the Ministry of Civil Aviation to charge the fee lacked legal sanction. According to informed sources, ADF from the beginning was allegedly questionable as it was granted by the Ministry of Civil Aviation after the award of the airports in Delhi and Mumbai to GMR and GVK groups, respectively. When they started the projects, there were certain costs and set of rules. As they took over the airport in May 2006, all was reportedly hunky dory. But soon afterwards, costs began to escalate and traffic shrank in the wake of the economic recession of 2008 and 2009. Not only that, even the planned real estate development around the airport suffered sharply as land prices fell. It was then that a hue and cry was raised about the CRUISING HEIGHTS July 2011

shrinking revenue stream and bad economics of developing airports in India. This led to the demand for ADF. In February 2009, the central government as per the Airports Authority of India Act allowed ADF to be imposed. This was done as per a provision: “The Central Government under Section 22A of the AAI Act, 1994 has approved the levy of development fee (DF) by MIAL at the Chatrapati Shivaji International Airport in Mumbai. The DF will be `100 for departing domestic passengers and `600 per departing international passenger inclusive of the applicable taxes purely on ad hoc basis for a period of 48 months with effect from April 1, 2009. This was, therefore, not supposed to be part of the concession but was given through the AAI Act and the approval the central government gave was supposed to be subject to the following conditions: (i) the final determination of levy may be made by the government/ regulator on a detailed review after six months from the effective date; and, (b) procedural/monitoring mechanism. Even at the time of imposition of the development fee there was a feeling that something was amiss as there were no set of rules obtaining then to clarify how the DF would be adjusted from the capital invested and how the returns would be calculated. In a way, some calculated risk was being taken by the government. AERA came into being in May 2009. It gave approval to DIAL to continue its imposition of DF at the rate of `200 from each departing domestic passenger and `1300 from each departing international passenger from Delhi airport through a public notice in April 2010. AERA, however, did not issue such a notice for collection of DF by MIAL. On June 1, 2011, the Delhi High Court,


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EXPANDING HORIZONS: Inside views of Mumbai and Delhi airports.

which was seized with the matter of and a reasonable return on it. Earlier, the imposition of DF by DIAL, ruled that the Supreme Court in its April 26, 2011 order airport operator should cease immediate said since the passenger from whom the collection of ADF and that should continue ADF was collected so far “cannot be for the next three weeks or till June 21, identified nor can they be traced for 2011. At the same time, AERA would have making the refund and also because there to decide in the next two weeks — that is were no refund claims, the money so by June 16, 2011 — whether to apply its collected should be used for development rule for collecting DF by DIAL. In any of the airports only”. case the Delhi High Court has directed As per rough estimates, DIAL might AERA to take a decision within 45 days. have collected through 2010, `1200 crore GMR, before it was restrained from and MIAL `1300 crore. DIAL began to collecting DF, was charge ADF from collecting `2 crore April 2009 and daily from the MIAL from April departing domestic 2009. In view of all and international these developments, passengers at the rate it is now clear that of `44 lakhs and AERA will have to `170lakh, respectively. reapply its mind The High Court before coming out informed that the with a new set of proper remedy would rules and an actual be to approach the amount that can be AERA and not the collected by DIAL court. Independently, and MIAL as DF. DIAL and MIAL have But, as is well decided to ask AERA known, there is for extension of time already a controversy period for collection of over the revenue ADF. Following the streams flowing from GAME CHANGERS: (Clockwise from court stay, DIAL is aeronautical and nontop left) G M Rao, GMR Group likely to seek aeronautical services Chairman; G V K Reddy, Chairman, GVK Group; Yashwant Bhave, AERA compensation once the provided by the Chairman and Vidya Basarkod, CEO, regulator finalised the airports, respectively. Reliance Airport Developers. quantum of fee and its While DIAL and duration. GMR-led DIAL said the court MIAL have been insisting on Dual Till, stay would result in an extended period for AERA was inclined to fix Single Till. collecting ADF. While DIAL has reportedly invested DIAL claims to have submitted its own `12800 crore and come out with its brand cost to AERA and expects the regulator to new spanking T3 at Delhi, MIAL is on its quantify the new rate and the time period way to invest `9600 crore to spruce up for which it would be collected. DIAL lost Mumbai Airport and expand it wherever `477 crore in fiscal 2010-11 and fears may it can physically do so. Watch out for the lose even more in the absence of a clear-cut latest in this space as much remains to policy guideline on recovery of investment take place. CRUISING HEIGHTS July 2011

DIAL and MIAL have decided to ask the sector regulator, Airports Economic Regulatory Authority (AERA), for extension of time period for collection of airport development fee (ADF). The move comes after the Delhi High Court asked the companies to stop collecting the fees. A DIAL official said the company was losing about Rs two crore daily due to the court stay and, therefore, needed to be compensated once the regulator finalised the quantum of fee and its duration. “We are not in a position to raise any further equity because other members of our consortium have issues. The lenders are not comfortable about raising more debt since serviceability is seen as an issue. So we are left with no option but to take the ADF route to bridge the gap in funding,” said Sidharth Kapur, GMR’s chief financial officer (airports).

DGCA OFFICER SUSPENDED The government has suspended one of the seniormost officials of the Directorate General of Civil Aviation for allegedly helping promote the business interests of a firm run by his second wife that supplies small aircraft and their parts. The action against Deputy Director (Airworthiness) Raje Bhatnagar came after getting complaints that he had allegedly helped the firm get business “worth crores of rupees without any prior intimation/permission of the government” from aircraft maintenance and engineering (AME) institutes. Bhatnagar said, “This action has been taken without giving me a chance to respond. There are documents that will show the authorities have been misguided. This is the first time such a harsh action has been taken without issuing a showcause notice. I am not even aware of the charges against me and why such a thing has been done. Is it because my wife runs a business and a restaurant? The complainant got in touch with me and he himself is not above suspicion.” DGCA chief Bharat Bhushan had initiated a probe against the official after getting complaints from certain quarters. A preliminary probe found prima facie evidence in the complaints.

 

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PILOTS’ EXAM GOES ONLINE



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The government has started plugging loopholes in the pilot examination and licensing system that helped unscrupulous Directorate General of Civil Aviation (DGCA) officials churn out scores of fake commercial pilot licence (CPL) holders. It has also decided to conduct the Airline Transport Pilot Licence or ATPL exam (meant to certify commanders) entirely online from July this year to remove any discrepancies in the earlier process which was manual. So, for the first time ever, DGCA will now do extensive verification checks — asking the foreign authority concerned — about the veracity of the applicant’s claims on flying experience, etc. before even beginning the process of licence conversion. To check the quality of pilots coming after getting their commercial pilot licences from foreign shores, the government has decided to make such pilots undergo skill tests in India before converting their licences so that they become eligible for flying with desi airlines. The foreign licences will be checked with the issuing authority before converting the same. There will be increasing focus on technology to limit human interface — and hence chances of using corrupt practices. Applicants who want to proceed for flying training abroad will first have to clear a specific technical examination to obtain a no objection certificate by the DGCA for aircraft with weight less than 5,700 kg.

REGIONAL AIRPORT ISSUE GOES TO CABINET The Civil Aviation Ministry has decided to refer to the Cabinet the proposal to commercially develop regional airports through private participation after differences emerged within the government over who should retain the terminal buildings. Tenders for the commercial or city-side development of regional airports should have been floated by

Multiple issues at Mumbai

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ven as debate rages on the issue of DF, Single or Dual Till, etc, MIAL may be getting into full-fledged sarkari mode and soon this will extend to DIAL as well. Consider this: Mumbai International Airport Limited (MIAL) has become the first private concern to be brought under the ambit of the Right to Information (RTI). As per an order issued by the CIC, MIAL will have to appoint a Chief Public Relations Officer (CPRO) within 30 days of receiving this order, which was dated May 30, 2011, and also fulfil the mandate of disclosure under RTI within two months of receiving the order. This means the CPRO will have to be in place by June 30 and fulfilment of the mandate of disclosure by July 31. MIAL is a joint venture of GVK Airports Holdings Private Limited, ACSA Global Ltd, Bid Services Division (Mauritius) Ltd and the state-owned Airports Authority of India (AAI), which owns 26 per cent stake in MIAL. Incidentally, DIAL is also a PPP consortium led by GMR with its partners, which include Fraport and Malaysia Airport besides AAI ,which holds 26 per cent. The CIC order said that MIAL was funded by the government as it accrued huge benefits from the State of Maharashtra. The state government has waived the stamp duty CRUISING HEIGHTS July 2011

worth from `200 crore to `250 crore. MIAL is using 2000 acres of AAI leased land at concessional rate while the actual market value of the land, which is otherwise close to `50,000 crore. What one desires to know is while MIAL may be technically in possession of 2000 acres of land, quite a large tract is encroached upon and of which less than 10 per cent has been freed till now. MIAL has already entered into an agreement with HDIL to resettle part of the encroachers and the freed-up space could be used for real estate development around the airport to increase its non-aeronautical revenues. Even after this, a substantial part of the airport-owned land will remain colonised by encroachers raising serious security concerns. With all these handicaps, MIAL has been working hard to increase the efficiency of its airport operations as it is technically impossible to have a parallel runway because land layout does not permit it. So, a few months back, MIAL drafted experts from NATS, UK, to explore the possibility of increasing the hourly aircraft movement at Mumbai Airport, which has a single runway and a smaller cross-runway built decades ago to meet weather and the winds when planes were virtually pistonpropeller driven.


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MAKING A CHOICE: Grab of new MIAL website

Simultaneously, MIAL not only recarpeted the main runway but also built at least four rapid exitways and is planning to have nine more so that the time between take-off and landing of two planes is minimised to increase the efficiency as well-boost aircraft movement. It is in this context, MIAL believes that its hourly aircraft movement could go above 38 from the present low level. Incidentally, NATS, UK, which manages the air space in UK, has shown handing aircraft movement of 55 each hour at Gatwick where there is a single runway. Why is MIAL doing it? To boost traffic and revenue. By June 30, 2011, the re-carpeting of the main runway would be completed and the curfew that was being imposed for the last few months during the afternoons on the main runway would have been lifted. Notwithstanding all this, the situation in Mumbai airport remains grim and there is hardly any scope for new slots to airlines — whether domestic or foreign-bound. The saturation of Mumbai airport was earlier expected to happen by 2014 but it now appears that this will happen by 2012. In this context, any talk of a second airport in Mumbai — which is what Navi Mumbai Airport seeks to be — will be welcomed by airlines and passengers but may cause nervousness to GVK which is

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managing and operating MIAL in a competitive sense. This is despite GVK having the first right of refusal provided it be allowed to match the highest bid in terms of revenue sharing should its bid be within 10 per cent of the highest bidder as and when bids are invited to build and operate Navi Mumbai Airport. The steering committee of the Ministry of Civil Aviation had in late May 2011 reportedly cleared the final hurdle for Navi Mumbai International Airport and extended the approval to the master plan at its meeting in New Delhi. It is learnt that Navi Mumbai airport will be developed in four phases with 2014, 2017, 2025 and 2031 as deadlines. It will have a capacity of 60 million passengers per year by the end of 2031 against the saturation passenger handling capacity of MIAL of 45 million, which will be reached in a couple of years. According to T C Benjamin, Principal Secretary, Maharashtra State Urban Development, the Ministry of Civil Aviaition may hold another meeting with CIDCO, the nodal agency for the airport project, in the next two months to finalise and issue the RFP. At the meeting, Civil Aviation Secretary Nasim Zaidi asked CIDCO to put on hold the proposed demolition of the hillock till the developer was finalised. This was in response to CIDCO’s request for permission from the Ministry to demolish the 92 metres hillock on the airport site. CIDCO has asked National Institute of Disaster Management (NIDM) to prepare a risk assessment and disaster management for the project. It has also appointed Central Water and Power Research, Pune, to design the needed diversion of Ulwe water body and measures to avoid flooding in the area. These are reportedly two of the 66 conditions the Ministry of Environment and Forests imposed while extending ecological and coastal regulatory zone-related clearances. The Ministry of Defence has given its approval for the project. Bids for the selection of the developer will be invited between July and December 2011 and CIDCO expects the financial closure to take place in April 2012. Work will commence in May 2012 and Phase-I will become operational in 2014-15. The total land earmarked for the project is 2020 hectares, of which 1333 hectares is already in CIDCO’s possession. While the investors are keenly awaiting pre-bid conference, the Navi Mumbai International Airport project itself is expected to involve an investment of `9800 crore. After environmental CRUISING HEIGHTS July 2011

INFRASTRUCTURE NEWS May latest, but because of the conflicting opinions among various government bodies over the terminal building the matter will be referred to the Cabinet. An inter-ministerial group, headed by the aviation secretary, had decided to hand over maintenance of the terminal building to the private developer. But in November last year, the then Civil Aviation Minister Praful Patel overruled the panel’s recommendation. Patel wrote to the Prime Minister’s Office (PMO) arguing that the responsibility of maintaining the terminal building should rest with the Airports Authority of India (AAI). The PMO asked the Aviation Ministry to involve the Planning Commission, the Department of Economic Affairs and the AAI for the preparation of the concession agreement. This agreement should have been ready by February. “If the maintenance of the terminal building of an airport goes out of our hands, it could have big security implications and can decrease the efficiency of the private developer in undertaking city-side development,” Airports Authority of India Chairman V P Agarwal told the media.

WILL IT ‘SIMPLY FLY’ IN GUJARAT? The fate of ‘Simply Fly,’ Deccan Charters Limited’s proposed intra-state air service in Gujarat, hangs in the balance. After waiting Capt. Gopinath for exactly one month, Captain GR Gopinath of Deccan Charters has appealed to the Union Civil Aviation Ministry against the Directorate General of Civil Aviation (DGCA) ,which has raised objections to the proposed service. “I am waiting for a decision by the Civil Aviation Ministry. I have appealed to the Ministry against the DGCA’s capricious and arbitrary decision. It has gone back on its own recommendation, besides disregarding the Ministry’s approval,” said an unhappy Captain Gopinath, who had planned to launch the ambitious service in Gujarat. Besides the air service, a large sum of money is also at stake. According to the captain, `10 crore have been spent to get two aircraft on ‘wet lease’ basis. “I needed approval to get the

 

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aircraft on wet lease and to fly them in Gujarat. The Civil Aviation Ministry had sent my proposal to the DGCA asking for a clarification. The DGCA didn’t object to the proposal at the time but when the Ministry gave its approval and sent it back to DGCA, it raised objections to the proposal itself,” said Gopinath. Besides Gujarat, Gopinath had planned similar intrastate air services in other states such as Maharashtra, Madhya Pradesh and West Bengal among others. But now he is worried as his very first initiative in this direction is facing hurdles.

OFFENSIVE AD The internet is abuzz with how a section of the people in the airline industry have not taken too kindly to a television advertisement where actress Genelia D’ Souza is trying to woo an airplane pilot. The websites are already abuzz with how some airhostesses feel that the bubbly actor shouldn’t have done this ad as it portrays airhostesses in bad light. “I am outraged at this advertisement. What does Genelia want to prove here — that she can act all sexy and woo a pilot? Isn’t this in a way degrading the airhostesses? These kind of advertisements should have been made with more responsibility,” says an airhostess who gave her opinion to a website. A reputed website quoted adman Prahlad Kakkar who also opined that these kind of ads should not be aired in a country like India. “Frankly, a majority of our society is not ready for such ads,” a site quotes him as saying. The creators of the ad, however, defended their advertisement and pointed out that Genelia’s act should not be taken too seriously.

AIRPORT EXPRESSLINE BEGINS The impasse over baggage handling and check-in facilities on the Airport Expressline Metro network has finally come to an end. The service, which missed its May 1 deadline, has now transformed the Delhi Airport Metro Express into a fully-functional airport link metro service — the first of its kind in India. “We are delighted to provide our commuters with this ultra-modern facility of baggage and passenger

clearance was received from MOEF, the actual land available for the airport has reduced and therefore required reconfiguration. It was a consequence of all these that were considered and the master plan cleared at the Delhi meeting. The master plan was prepared by LBGINECO-RITES consortium and it is learnt that the land earmarked for commercial exploitation has been reduced significantly. This is bound to impact the commercial viability of the project. In fact, the very cost of project and the related investment estimate has made many investors rethink their plans. Ultimately, the viability will also largely depend on which carriers, domestic and international, will be permitted or will want to come to this airport. At a meeting organised by the Indo-American Chamber of Commerce (IACC) in Delhi in May 2011, one of the prospective investors, ADAG’s (Anil Dhirubhai Ambani Group) airport division representative Vidya Bhaskargaud raised some key issues. In the presence of AERA Chief Dr Yashwant Bhave and Secretary of AERA Sandeep Prakash, the ADAG representative said: “It is of great concern as to how will be the regulation for the Navi Mumbai Airport?” She said: “I was actively involved in the privatisation process of Delhi and Mumbai airports and we had taken some risk mitigation in the bid. But what happened was unforeseen.” She commented: “Navi Mumbai will be even more risky and we would like to be doubly sure.” In this context, she asked how traffic — both domestic and international — will be shared between the existing MIAL and proposed NMIA, once it becomes operational. This could be potentially a new battleground for MIALpromoter GVK who have already taken a majority stake in Bengaluru International Airport as it was clear to them that after touching more than 40 million passengers annually by 2015, it will be difficult to do anything more in Mumbai airport. And even this was coming at a huge investment cost of nearly over `10,000 crore which is supposed to be the first phase of MIAL expansion after GVK won the bid and acquired Mumbai airport. Industry sources feel the investment estimate of between `6500 crore and `9800 crore for NMIA could keep away potentially sound private equity investors or even the airport itself. The general feeling is that the lending community is extremely concerned as it feels that if an CRUISING HEIGHTS July 2011

investor won the bid, how would he tie up finances and how long would he have to wait to make his first paisa? KPMG representative Amber Dubey who specialises in aerospace practices for the consulting group, noted: “We are all wondering as to what could be the way out.” To that Bhaskargaud said, perhaps, the promoter would come back to ask for ADF and later UDF. It was then left to Yashwant Bhave, who said, “As of now we have no clue of any component and hence I cannot respond.” So, it has become all the more urgent to hold a pre-bid conference — in fact a series of them — to resolve issues in order to prevent the kind of onagain and off-again kind of approach to ADF in DIAL and MIAL. Just imagine the plight of MIAL and those who are using it for at least domestic connections. For a person in a corner of the city, to reach the present domestic airport at Santacruz, it is quite a drive. Now if he is expected to catch a flight from Navi Mumbai it will become even more tedious. This is notwithstanding the efforts and plans of the Maharashtra government to connect the proposed new airport by rail, road and sea on an exclusive basis. As on date, this is a pie in the sky. But as we said what happens to MIAL if it manages to get NMIA. It will be a Herculean task to manage the finances and ensure adequate return to both the airports. As it appears from the cost estimate of NMIA, it will prove quite costly for both the airlines and passengers. If it is going to be developed by another company or group different from GVK, then should anyone of the two drop tariffs to attract airlines? It will be even more suicidal. Besides, can the Ministry of Civil Aviation force the airlines — whether domestic or international, but mainly domestic — to fly out of only Mumbai or Navi Mumbai. The situation in Mumbai is different from what it is in Delhi where Terminal 1D is just about 4 kilometres from T3 while within the airport or aeronautical functional area it can be directly accessed from T3 or vice versa. Suppose the ADF in MIAL is withdrawn by that time, then NMIA will be seeking or perhaps might have even got it at higher levels considering the inflation over the next four years. In that situation, we may have a unique situation of NMIA charging higher departure fee besides fare from passengers to the same destination as one would fly from the existing Mumbai airport for the same fare but not the user fee.


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The Directorate General of Civil Aviation (DGCA) has finally woken up to rising aviation fuel emissions. In a recent circular, the Bharat Bhusan aviation regulator has asked airlines to compile data on fuel emissions since 2005 and submit it at the earliest. Only a month ago, the DGCA had asked airlines to compile monthly data on carbon emissions from aircraft and submit it on a regular basis. Now, it wants data from previous years as well. In a circular dated June 4, the DGCA directed airlines to furnish yearly fuel consumption data of their fleet from 2005 to 2010. The circular stated that it would be a one-time exercise and a review of carbon emission attributed to the aviation industry will be carried out. “After compilation of the above, an endeavour will be made to review the report of CO2 emission and mitigation measures implemented on voluntarily by the airlines,” the circular stated.

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check-in at the metro stations. The baggage check-in system will give the passengers a hassle-free and convenient travel experience,” said the spokesperson of Reliance Infrastructure, the concessionaire company. New Delhi and Shivaji Stadium stations have the check-in facility. At New Delhi station, six counters are currently operational of which two have been occupied by Air India. Jet and Kingfisher are the other airlines that will operate from this station. At Shivaji Stadium station, two of the six counters are dedicated for Air India, said sources. “The check-in facility will be highly beneficial to the upcountry commuters including passengers coming from Punjab, Chandigarh, Agra, Jalandhar travelling with big bags. They can check-in their luggage at the metro stations itself,” said the spokesperson.

airline has, in the last six months, logged unprecedented loads of over 80 per cent. Kingfisher Airlines at present has a fleet of 66 aircraft, which includes the widebody Airbus A330, the narrowbody A319, A320 and A321 besides the ATRs. It has on order 125 planes, which were placed earlier but deliveries deferred to future date because of the intervening recession during 2008-2009 and its extended effect in 2010 on the airline’s financials. Not that the finances have bounced back but certainly the losses are being reversed. In order to, perhaps, quicken the pace of such a reversal and migrate to a positive profit area, Kingfisher Airlines has decided to lease some aircraft immediately pending the deliveries of its own in about 18 months from now. The renewed confidence expressed by Mallya

ASD

Airport express train

e had reported in the last issue of CRUISING HEIGHTS, the financials of Jet Airways and Kingfisher Airlines. Both showed losses but reduced compared to the previous fiscal. A month later, both the airlines are talking of fleet expansion. In the case of Kingfisher Airlines, its promoter Dr Vijay Mallya told the press that he was keen to raise the much-postponed $300 million through a GDR as global crude prices and, therefore, jet fuel prices were coming down after peaking in April 2011. Speaking in Singapore on the occasion of IATA Annual Conference, Mallya said: “When I made my business plan, fuel prices were at $ 90 per barrel but later shot up to $ 120 per barrel. What the investors have asked me is to come back with a revised business plan and negotiations are still on.” It was in the context of fall in oil prices in May over April 2011. Though the banks have restructured his debt and allowed a revised repayment schedule, the




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is also due to Kingfisher Airlines’ membership of OneWorld Alliance that in all probability will be formalised and sealed in February 2012. The idea is to have more planes on both its domestic and international networks as the present non-availability has restricted Kingfisher Airlines to capitalise on its rising loads. This will also help it to fully exploit the benefits of the OneWorld Alliance. At present Kingfisher Airlines is seriously thinking of using the alliance on its London and Hong Kong



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routes. Among the other members of OneWorld are the big boys are BA, Cathay Pacific, Qantas and American Airlines. If Kingfisher Airlines is able to successfully leverage this alliance, then this arrangement could contribute 5 to 6 per cent of the enhanced revenues expected by Mallya’s airline. It may be mentioned here that the lack of such an alliance has troubled Air India mainly on its India-US non-stop flights especially, the premium class occupancy. All the three alliances — Star, OneWorld and Skyteam — galvanise themselves by their respective inter-dependent Frequent Flyer Programmes. This is what Kingfisher Airlines desires to exploit but would need planes for it. Hence, the intensive and extensive lookout for both wide and narrowbodies. It is in this context, the GDR issue also assumes importance. It is priced based on a previous month’s average of Kingfisher’s scrip prices at the BSE. Since Sensex is refusing to move up and in the process will also take up Kingfisher share prices, it is becoming costly for Kingfisher to go in for its $ 300 million GDR issue. This would mean dilution of the airline equity more than Mallya wants to. Obviously, he wanted funds as quickly as possible. So he chose the forum of IATA meet in Singapore to air his pet views and wanted the government to consider allowing foreign carriers to invest in airlines in India. “We will keep making representations to the government of India. A foreign airline will understand the investment opportunity in a much better way than others,” he remarked. But the present government, like the previous ones of different political formation, has continued to keep out FDI from foreign carriers either directly or indirectly. Meanwhile, it is reported that

CRUISING HEIGHTS July 2011

INFRASTRUCTURE NEWS DGCA officials said at present, the idea is to create an inventory of data for analysis in future. Aviation industry poses a minimal threat from emissions as compared to other industries or vehicles. Today, emissions from aviation constitute only 3 per cent of the total carbon emissions globally. With the growth in the sector, emissions are likely to increase. The need to curb it before the problem gets out of hand has been felt across the world.

PUNJAB, HARYANA SPLIT HAIR ON AIRPORT Even before the international airport in the vicinity of Chandigarh becomes operational, Punjab and Haryana have been slugging it out over its nomenclature as much as their rights on it. Though the airport is coming up on a piece of land owned by Punjab, Haryana wants its equal share in it. Haryana Chief Minister Bhupinder Singh Hooda claimed recently that the Union Civil Aviation Ministry has made Punjab and Haryana joint partners in the international airport, something that Punjab Deputy Chief Minister Sukhbir Badal rebutted firmly. He said Haryana could lay no claim on it. The tug of war does not end there. When it comes to naming the airport, Haryana wants it to be named as the Chandigarh International Airport, whereas Punjab has insisted it to be called the Mohali International Airport. The MoU for the upgradation of the Chandigarh airport for international flights was signed in 2008 by the Airports Authority of India (AAI), and the governments of Punjab and Haryana. Even when the MoU was about to be signed Haryana Chief Minister had thrown a spanner demanding the inclusion of his state as a partner in the project as the setting-up of the new international airport involved upgradation of the existing Chandigarh airport. The MoU says that the project would be piloted by a special purpose vehicle (SPV), which would be constituted by members of the AAI, Punjab and Haryana. The AAI would meet 51 per cent of the cost while Punjab and Haryana are required to share the rest fifty-fifty.

 

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BUILDERS WARY OF BIDDING FOR NAVI MUMBAI AIRPORT The bidding process for appointing a developer for the Navi Mumbai airport at Panvel could be delayed owing to the delay in declaring the number of flights that will operate from the new airport. Prospective bidders for the city’s second airport in Panvel want the state government to give an assurance about the number of flights that will operate from the new airport to ensure viability of the project. The City and Industrial Development Corporation (CIDCO), the promoter of the Navi Mumbai airport, will soon take this up with the state government. “If we get the inprinciple approval, it will be taken up with the Civil Aviation Ministry,” said Tanaji Satre, Managing Director, CIDCO. In January, CIDCO had set a June deadline to start the process of appointing a private developer by floating tenders. Sources said that the process is likely to get delayed by at least two months. “CIDCO fears that the project could have few takers unless the government guarantees some business in advance,” said a senior official with state government undertaking. If the bidding process fails to kick off immediately, the airport could miss its 2014 deadline. Meanwhile, CIDCO plans to issue a request for qualification (RFQ) for the Navi Mumbai international airport in the middle of July. “Issuing RFQ is yet another important milestone. This will be done in the middle of July once the steering committee of the Civil Aviation Ministry at its ensuing meeting gives its approval. The Ministry of Environment and Forests (MoEF) had cleared the project on November 22 last year, while the steering committee had cleared the master plan of the project in May.”

INDIGO-CAE COLLABORATE FOR PILOTS Low-cost air carrier IndiGo has tied up with CAE Global Academy to meet its pilot requirements, as it undertakes a massive expansion plan. To meet its long-term requirement it has signed a five-year deal with CAE Global Academy, based in Gondia, Maharashtra. IndiGo President Aditya Ghosh said this should also be seen as the company’s effort to address the

Air India has fulfiled all the 72 conditions its fleet to not just meet the long haul laid down for it to enable its entry into Star demand but also regional and domestic Alliance whose big members include demand. It was earlier reported that Jet Continental, Lufthansa, Turkish Airlines Airways would over the next four years and Singapore Airlines. Air India now acquire 49 airplanes of which nearly 15 to expects to join Star Alliance formally in 20 would be widebodies and the remaining July or August 2011 that is about six narrowbodies. months before Kingfisher Airlines joins These included A330, B787, B737OneWorld. 800s. It is learnt that Jet Airways, which is This will leave out Jet Airways, which also facing a fund crunch, has finalised by far, is a more successful carrier than the agreement for leasing 28 Boeing 737-800s. other two mentioned above. In fact, when Besides, in the forthcoming Paris Air Show Air India was delaying its entry into Star it will also formally place orders for five Alliance, the latter had even begun talking Airbus A 330-200s. As for its returning to Jet Airways. Unfortunately for Jet, its Boeing 777-300 ER from Turkish Airlines, entry was barred into Star Alliance more Jet may be tweaking its winter schedule to because of the opposition from the add newer destinations on the medium to Ministry of Civil Aviation lest it was long haul routes. Goyal has already accused of sidelining the state-owned Air disclosed that his airline has applied to the India’s interest. But rules of Star do permit Ministry of Civil Aviation to get approval two principal carriers from the same region to fly more new routes, which could or country to become its members. Air include Paris, Rome, Amsterdam, points in India’s integration with Star Alliance’s 27 Germany, continental Europe besides member airlines network is expected to Shanghai and Beijing in China. increase Maharaja’s revenue by over 10 per In Singapore, he said: “We are cent annually. watching how the Gulf carriers are moving It would also help Air India reduce its traffic from Europe to South and East Asia. cost as it would now share airport We are preparing on how we can take on infrastructure with Star this competition.” As Alliance members. for funds, he said the Once Air India airline is looking at all integrates its network options to raise funds. with Alliance members, Goyal said that it was it will be in a position to better to play safe than offer seamless travel to promise too much across continents to its and not deliver to the passengers with a shareholders. With single-boarding card. GDP growth at about However, the question 8.5 to 9 per cent, we to be asked is: will that should plan our be all so easy? For expansion for about 11 instance, Kingfisher to 12 per cent growth in Airlines will have the domestic sector and American Airlines as its 12 to 15 per cent in the BATTLING HURDLES: (Clockwise from alliance partner in One international sector. World while Air India top left) Arvind Jadhav, Dr Nasim Zaidi, This seems to suggest Vijay Mallya, Naresh Goyal. will have Continental as that the domestic part of Star Alliance. Where will it leave passenger growth will indeed not be Naresh Goyal’s Jet Airways, which has sustainable at the current rates of over 20 shown what a world-class airline should be per cent annually. out of India in terms of both product and Naresh Goyal reasoned that the services. It may be recalled that Jet demand for passenger traffic growth was Airways had concluded many code share always there but it was artificial and agreements with leading airlines. created by predatory pricing. Maybe Obviously, the question that will be Naresh Goyal was hinting at Air India, asked is whether those code shares will still which dropped fares to a number of be valid. Suppose they are valid, how will domestic destinations. As for the LCCs, the alliance partners resolve the issue of even IndiGo, which has always believed in preferring one member over the other’s keeping lower fares and mobilising code share partner? Notwithstanding these maximum seats or passenger loads of late issues, Jet Airways chief Naresh Goyal, has been raising its fares to a level, which who has been re-elected as a member of has seemed unIndigo-like. As for Air IATA’s Governing Board at its recentlyIndia, its fare cuts seem to have hurt it more concluded Singapore meeting, has than help it. How can anyone cut fares and disclosed that his airline will soon expand keep costs high? Photos: H.C. Tiwari



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AI chief may quit before term ends

long-term shortage of qualified pilots in India. The IndiGo Cadet Pilot Programme is designed to enable aspiring young pilots to receive both their initial Commercial Pilot Licence (CPL) and an Airbus A320 Type Rating, the airline said in a press statement. Selected candidates would have to pay up to `45 lakh for both courses. The training in the academy’s flying school will be in line with IndiGo’s protocol and standards.

he big news of the month for most Air Indians, if one may use that term, was the khabar that their mukhiya, Arvind Jadhav may quit before his time. Now Jadhav is not the sort of bloke who’ll make an announcement, but those in the know say that he has at least two jobs in the bag and he is tired of the constant haranguing from employees, many of whom want him out. Informally, he has conveyed to the ministry that he could well move before his time is up. But those who know Jadhav well are dead confident that the stubborn and feisty Karnataka cadre officer would be the last person to leave when being chased around the corner. “He will leave when he wants to and not because some people want him out,” said someone who has worked closely with him. At the moment, Jadhav has Civil Aviation Minister Vayalar Ravi eating out of hands, and Civil Aviation Secretary Nasim Zaidi lending him a patient ear. But his relation with Board Member and Financial Advisor in the Ministry (and also the present DG of the DGCA) E K Bharat Bhushan is far from cordial. Bharat Bhushan is unwilling to rubber stamp Jadhav’s decisions and that’s been a source of constant friction. But this indeed is confirmed that the FA has formally written to the Ministry asking to be relieved from his position as a government nominee on the AI Board. If Jadhav indeed steps down before his term expires, he would be leaving an airline that has accumulated losses of about `19,000 crore and a working capital loan of `20,000 crore. The airline also has to service a long-term debt of about `18,000 crore for aircraft purchase.

HELIPADS ARE BELLARY’S NEW STATUS SYMBOLS After the Reddy brothers, it’s the turn of Karnataka Health Minister Sriramulu and MLA Anand Singh who want to fly in and out of their homes Bellary’s richie-rich politicians are giving the phrase “over the top” a whole new meaning. Not for them helipads on skyscrapers. They want it right there on their own terraces. Bellary MLA and Health Minister B Sriramulu, the young

turk of Hospet, now rechristened Vijayanagara, and MLA Anand Singh are building bungalows in their hometowns, with helipads incorporated in the building plans. Sriramulu is said to have applied for a clearance from the Director General of Civil Aviation (DGCA). Sriramulu and Tourism Minister G Janardhan Reddy own vast expanses of land on Siriguppa Road in Bellary at the foot of the historical fort. Though there is a helipad opposite the upcoming Reddy fortress with its high walls, Sriramulu wants one more on the terrace of his office-cumresidence. The cost of such enormous housing projects is anybody’s guess! “The Reddys introduced the helipad culture in Bellary. The first private helipad, situated opposite Reddys’ house, is fully operational. Now, a hotel near the railway station has a helipad too. And coming up next is one on Sriramulu’s building,” say sources close to the Reddy brothers.

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PANELS TO REVIEW AI RESTRUCTURING PLANS Add two more committees to the marathon number of committees that are examining Air India’s health in their bid to find the latest prescription to restore its vitality. The Group of Ministers looking into Air India’s turnaround plan will set up two subcommittees to review the airline’s restructuring plans and examine its `1,100-crore (`11 billion) bill for VVIP and evacuation flights. The issue of equity infusion in Air India will be taken up by the Cabinet shortly and CRUISING HEIGHTS July 2011

a Cabinet note will be prepared in two weeks. This was decided at the latest edition of the GoM (Group of Ministers) which was attended by Finance Minister Pranab Mukherjee, Petroleum Minister Jaipal Reddy and Civil Aviation Minister Vayalar Ravi. Apart from proposing an increase in revenue by `5,000 crore (`50 billion) and reduction in expenses, AI has also proposed a debt restructuring exercise. It has a working capital debt of `20,000 crore (`180 billion) and annual interest burden of `3,200 crore (`32 billion).The airline has proposed conversion of 60 per cent loans to long-term debt and balance into preference shares.

AIR INDIA IS FIFTH Almost one in five flights of Air India was cancelled in May when some of its pilots went on a 10-day strike. Low-cost carrier IndiGo did not report a single cancellation during the month and all the remaining five airlines also reported cancellations under a per cent. Though the overall cancellation rate was 3.4 per cent, Air India’s 18 per cent in any single month is the highest in recent memory. As per data released by the Director General of Civil Aviation, three out of

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four times domestic airlines cancelled flights for operational reasons — technical faults accounted for less than 5 per cent of all cancellations.

DREAMLINER ON OR OFF? There is a serious rethink on whether AI can go ahead with the order for 27 Boeing 787 Dreamliners as part of the mega order of 111 new planes worth `55,000 crore placed during UPA-1. These aircraft have been delayed by over two years and Boeing says the delivery could begin in a few months. But given the financial position of AI, the ministry is no longer sure whether the airline — that’s not getting loans to pay even salaries — can afford this acquisition. Coupled with working capital and aircraft acquisition loans and vendor dues of `4,500 crore, the total liability is close to `60,000 crore. The monthly loss is `400-450 crore. The daily income is such that it just about covers the fuel bill. The 27 Dreamliners will push the liability to `90,000 crore.

A `7,000 CRORE LOSS

AI is estimated to have posted a record loss of `7, 000 crore for the year ended March 2011. Air India made a loss after tax of `6,994 crore, more than the previous year’s `5,552.44 crore and falling short of targets that were set last year. The figures were contained in an internal assessment prepared by the carrier. Net loss before tax is seen at `7,195.75 crore compared with `5,633.56 crore in the previous year. The financial results, which are still being audited, are likely to be announced over the next few months. Air India’s revival plan, which was vetted by consulting firm Deloitte Touche Tohmatsu India Pvt. Ltd in March, had kept 2010-11 as the base year for most of the revenue and other projections with a turnaround seen in 2014-15. In 2006-07, they lost `688.22 crore. In 2007-08, after the balance sheets were merged, the loss was `2,226.16 crore. This increased to `5,548.26 crore in 2008-09, according to data presented in Parliament by Aviation Minister Vayalar Ravi. Air India’s latest loss estimate overshoots targets set on March 31, 2010 for fiscal 2011. The airline projected a net loss after tax of `4,164 crore, a 16.81 per cent increase in revenue to `15,655.49 crore and expenses limited to `19,819.49 crore, from the previous year. Apart from registering a loss of `6,994 crore, revenue is now seen at `13,963.93 crore and expenses at `21,159.68 crore,

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according to the note cited above. In the March Air India turnaround plan vetted by Deloitte, which was based on inputs from the airline’s management, the projections till 2014-15 were prepared on a total revenue of `15,927 crore and total expenses of `14,923 crore for 2010-11. The carrier will fall short on both counts. The final turnaround plan is yet to be submitted to the government.

UNIONS THREATEN PROTEST Ten associations and unions of national carrier Air India (AI) and erstwhile Indian Airline (IA) have written to the Civil Aviation Minister asking him for an appointment within a week to sort out their issues. They also said that if the Ministry does not respond to their request they will be forced to go on a nationwide protest which can be in any form.

The days of labour unrest in AI are not over yet. “We have asked the honourable Aviation Minister to meet us within a week for a dialogue over various issues including salary payment and turnaround plan for the airline,” said a member of the AI Cabin Crew Association (AICCA). “We haven’t decided on the course of protest yet but it can be anything right from wearing black bands or even strike,” he said. This is for the first time that 33,000 employees of both the merged airlines — AI and IA have come together and want a dialogue with the Minister. “We want the ministry to assure us that our salaries will be paid on time. Because the airline is in a mess due to management fault and not because of us,” said a member of the Indian Commercial Pilots Association (ICPA). The employees have not got their salaries for the month of May yet. “The money that was paid by the government to pay us was diverted by the airline to make payments towards fuel charges, etc,” said another union member. IA pilots have not received their performance linked incentive (PLI) right from the month of March till now. The PLI constitutes 60 per cent of the pay package of the IA pilots as they are paid on hourly basis.

AIE ON TO SAARC CAPITALS Air India Express (AIE) plans to operate flights to the capitals of the South Asian CRUISING HEIGHTS July 2011

Association for Regional Cooperation (SAARC) countries and to new destinations in the Gulf. Besides India, the other SAARC nations are: Afghanistan, Bangladesh, Maldives, Nepal, Pakistan and Sri Lanka. At present, the low-cost carrier operates flights to all the cities in the Gulf, except Saudi Arabia. In view of the new services, the airline has started recruiting more cockpit crew members. The focus is on the operational bases of the AIE in the State — Thiruvananthapuram, Kochi and Kozhikode — and in adjoining Mangalore. The recruitment will also be for taking care of the future needs of the airline in Mumbai, Delhi and Chennai, and the augmentation of the fleet. The airline has invited applications for pilots and co-pilots, and the last date for submission of the application forms is July 15. AIE, which recently shifted its headquarters from Mumbai to Kochi, operates 70 per cent of the flights from Kerala with Boeing 737800. The recruitment of the cockpit crew follows that of cabin crew — to address the shortage — through a walk-in interview in October last and early this year. It also comes at a time when the — 110-crore Boeing 737-800 maintenance base in the vicinity of the new worldclass terminal at Thiruvananthapuram airport is getting ready for commissioning.

PILOTS WANT NOTICE-PERIOD WAIVER Indian Airlines’ pilots have asked the Directorate General of Civil Aviation (DGCA) to waive its rule that pilots must give a six-month notice to their employer before switching jobs. The DGCA had issued this rule in public interest in October 2009 to ensure that no airline’s schedule goes haywire due to sudden resignation of pilots. “With exhausted resources and no income, one cannot think of public interest as an employee (but) has to think about his/her family as well. All the employees are slowly but surely becoming insolvent by deferring on their payments... pilots and their families are undergoing immense mental distress and financial hardship. Also, this victimisation could be a flight safety hazard,” the Indian Commercial Pilots Association (ICPA) letter sent to the DGCA says, while requesting for exemption from this rule for all AI pilots.

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Low-cost and international — that’s IndiGo! AIR INDIA

`16,625

AIR ARABIA

`17,080

KINGFISHER AIRLINES

`18,273

JET AIRWAYS

`21, 845

EMIRATES AIRLINES

Photo: H.C. Tiwari

ROUND TRIPDELHI - DUBAI

`19,573

GLOBAL FOOTPRINT: (L-R) Aditya Ghosh, President, IndiGo and Sanjay Kumar, CCO during the announcement of international operations of the airline.

business model for the foreign operations would be similar to the carrier’s domestic operations — low fares, hassle-free flights, etc. — except that liquor would also be sold on the international routes. Fliers from Delhi will have an added advantage: the IndiGo flights will operate from Terminal 1D and Terminal 1C, cutting out the long walks associated with the sprawling Terminal 3.

There is a huge potential for Indian carriers to fly overseas. There is no reason why people won’t fly with us if we keep our costs and fares low. ADITYA GHOSH, President

C

ome September and it will be time to take a vacation with IndiGo. The Delhi-based low-cost domestic carrier will be flying out to Bangkok, Dubai and Singapore at unheard of prices: `9999 for an all inclusive round-trip ticket to any of the destinations. Although the offer is a promotional one and applicable for the first 25,000 seats, it is more than likely that IndiGo will continue with its low fares to international destinations. Incidentally, the promotional fares were between 30 and 50 per cent cheaper than the fares offered by others (See graphic on page 28-29: the return fare prices for a journey ex-Delhi between September 1 and 6, 2011 were taken from a travel website around the middle of June 2011). Said Aditya Ghosh, IndiGo President, about the below `10000 fare, “IndiGo will keep its promise of providing low fares on international routes as well.” He also hoped that the carrier would be able “to provide a much-needed avenue for countless Indians to explore wider horizons and at the same time open doors to more and more overseas travellers to experience India.” The

market share of 19.7 per cent and its low fares have taken the price war to the doorsteps of a number of carriers, both international and domestic. Among the other carriers operating on the Bangkok, Singapore, Dubai routes are low cost carriers like Air Asia and Air Arabia. Air Asia, for example, charges around ` 13,000 for a return fare on the DelhiBangkok/Kuala Lumpur sector. It is now almost certain that IndiGo’s short-haul international venture would mean more competition for home-based carriers like Jet Airways, Kingfisher and Air India. Whle five carriers fly on the Delhi-Bangkok route, there are three on the Delhi-Singapore routes, six on the Mumbai-Bangkok route and five on the Mumbai-Dubai route. IndiGo’s competitive

IndiGo’s international foray comes after its successful completion of five years of domestic operations that began in August 2006. Today, as the second largest carrier in the country, IndiGo has a

INNOVATING TO BE AHEAD IndiGo has ventured into end-to-end travel services like many other airlines. However, what is different is that the bookings — travel packages, hotel accommodation, conveyance and even entertainment — are all real-time. Most airlines that have such facilities do not provide real-time confirmations or availability. IndiGo’s ‘Get Packing’ site

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(http://getpacking.goindigo.in) allows its users to plan the perfect trip enabling them to book holiday and business packages in one go. The website provides flights, hotel accommodation, airport transfers, entertainment and sightseeing and conveyance. At the time of filing this report, the carrier had 150 packages in 30 destinations. The packages cover a wide range: religious,

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ROUND TRIP

 Delhi - Bangkok  Delhi -Singapore  Delhi - Dubai

` 9999 ROUND TRIPDELHI - BANGKOK 



Dubai 

Delhi

`13,605   Bangkok



SINGAPORE AIRLINES

`18,545

`18,152

`18,851

JET AIRWAYS

Singapore

`18,402

`19,286

AIR INDIA

ROUND TRIPDELHI - SINGAPORE

`15,914

`19,965

`24,630

ticket rates will, according to aviation watchers, result in a price war. On his part, President Aditya Ghosh said that there would be no dearth of fliers on the three routes: “There is a huge potential for Indian carriers to fly overseas. There is no reason why people won’t fly with us if we keep

IndiGo would offer tour packages, user-friendly website, affordable pricing, multiple payment options, 24x7 customer service support and mobile website (for the international sectors). SANJAY KUMAR, Chief Commercial Officer

business and leisure. The site also offers frequent business travellers unique business packages with same-day return features. For the moment, the carrier’s ‘Get Packing’ site only has domestic destination and packages, Chief Commercial Officer Sanjay Kumar pointed out that while “the competition is tough in international sectors”,

our costs and fares low.” He also added that only 34 per cent of the international routes from the country had been taken by Indian carriers. Perhaps, that is why IndiGo will enhance its foreign operations: in October, IndiGo will launch flights from Mumbai to Bangkok and Dubai and later DelhiKathmandu and Mumbai-Muscat flights. The carrier has also sought permission to fly to Dhaka and Bangkok from Kolkata. From November this year (winter schedule of 2011-12), IndiGo would like to link Calicut, Cochin and Trivandrum to Dubai; Chennai to Singapore and Kolkata to Kathmandu and Bangkok. IndiGo hopes the international services will get a good response from fliers. “We have just started international operations and are hoping for good response,” said Aditya Ghosh. IndiGo would leverage on the same service benefits and “offer tour packages, user-friendly website, affordable pricing, multiple payment options, 24x7 customer service support and mobile website.” Backing up the “user friendly” site, IndiGo has set up a 24x7 call centre that supports travel counselling, holding bookings and making secured payments.

CRUISING HEIGHTS July 2011

For its international operations, the carrier will be deploying nine planes by March 2012. It has recently ordered 180 A320-neos at a whopping $15.6 bn. The planes will start operating from 2016. Earlier, in 2005, IndiGo had ordered 100 A320s, the delivery of which will be completed by 2015. A major part of the fleet will be utilized for domestic operations since IndiGo’s “heart will continue to be in India”, as Ghosh put it. There was a lot of potential in domestic operations. Said Ghosh: “In India, the number of domestic flights available is three-times less than the number of flights available in economies like Indonesia, China and the Philippines. The passenger traffic is still growing at 15-20 per cent per annum. Our heart still lies in domestic operations and we would be strongly focusing on it this financial year.” Chief Commercial Officer Sanjay Kumar said that the carrier had started operations to Ranchi, Vishakapatnam and Mangalore and was planning to start flight on the KolkataIndore and the Delhi-Coimbatore sectors. Meanwhile, the company will ramp up its staff by adding around 1700-odd personnel to its present strength of 4056 employees. Over the next 18 months, it proposes to add 200 pilots, 900 cabin crew and around 600 engineers.

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new

IATA without Basta! BESTOWING THE HONOUR: Director General of IATA (left) Giovanni Bisignani with Tony Tyler (who took the reins from him).

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THERE WOULD BE NO MORE ‘BASTA (ENOUGH)’ AS CHARISMATIC DIRECTOR GENERAL GIOVANNI BISIGNANI SAID AT HIS FAREWELL AT THE ANNUAL IATA JAMBOREE AT SINGAPORE. THERE WERE, HOWEVER, PLENTY OF FIREWORKS AND DRAMAS APART FROM GIOVANNI’S CURTAIN CALL: TONY TYLER’S ACCESSION AND THE GULF CARRIERS’ ANGER. A SPECIAL REPORT.

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AY ONE of the International Air Transport Association (IATA) Annual General Meeting at Singapore quickly dispelled all expectations that the annual jamboree of the top airline executives of the world would sing paeans for outgoing Director General and Chief Executive Officer Giovanni Bisignani. In his final Director General’s speech Bisignani called for airlines to focus on sustainable profitability even as the association downgraded the projected combined profits of its members for 2011 to $4 billion, 54 per cent below the March 2011 forecast. “After a decade of crises and shocks, airlines today are safer, stronger, leaner and greener,” said Bisignani. “But sustainable profitability remains elusive. We expect airlines to make just $4 billion profits this year on revenues of $598 billion.” In fact, airlines have only recorded a net return of 0.1 per cent over the past four decades, said Bisignani. “We know that will not work; cost-cutting alone does not increase long-term profits (and) ‘unbundling’ erodes the value of the base product… and re-regulation would kill efficiency and innovation,” he concluded. The real thrust of his speech, however, was on the tensions with the Gulf carriers: “We are not as united as we need to be. Tensions around the growth of Gulf carriers need to be removed,” Bisignani told delegates and he went with Messers Tim Clark, James Hogan and Akbar alBakr by stating that “the solution to call in governments as advocates or referees

has not worked and it won’t.” He was alluding to the European airlines trying to keep Gulf carriers from growing by urging governments to not grant more traffic rights. Emirates Airline President Tim Clark supported Bisignani’s remarks. He pointed at the fact that European airlines started to lobby against Emirates and other Gulf carriers around 2005, “when we were at 70 aircraft. We are now at 153. They have to accept us as a fact of life. We are not going to go away. We are not interested in fights with other airlines, we are focussed on managing our business in extremely challenging circumstances”. 

In his final Director General’s speech Bisignani called for airlines to focus on sustainable profitability even as the association downgraded the projected combined profits of its members for 2011 to $4 billion.





It did not stop the ‘West’ if one may use that word for airlines from Europe and North America, which used the high-profile CEO forum to dig into the Gulf airlines for protectionism — an argument that has been discredited by a report from Oxford Research. Air Canada chief, Robert Milton, called the three main Gulf carriers — Emirates, Etihad and Qatar Airways — “the most protected carriers in the world that cannot be allowed unfettered access to markets”. A surprise indeed! Considering that Air Canada has been at the forefront of putting the brakes on Emirates and Co. and got into an ugly spat with the Middle Eastern giant over more rights into Canada. He said: “They are arguing for free access, but aren’t we talking about the most protected, most government-supported carriers around? There are none more state-owned than these three.” Milton urged the major airline

FUTURE PERFECT: IATA unveiled new airport check-in system at the AGM.

CRUISING HEIGHTS July 2011

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alliances to stand up to the challenge by the Gulf carriers and offer an alternative. The three Gulf carriers are part of no alliance at the moment. Tim Clark was sanguine and icy cool in his response: He described the arguments about government aid as being “like a cracked record” and added, “Show me evidence of a non-level playing field. Our books are open.” Qatar Airways boss Akbar al-Bakr said the arguments against Gulf carriers made little sense in an “age of globalisation and free trade”. He said arguments that they benefited from low labour costs was incorrect by pointing out that Qatar pilots earned more than did American or European pilots with the same experience. At the core of the discussion was the Oxford Research report, published a few weeks before the IATA conference that reflected that there was no commercial advantage for Emirates airline and that its success was due to being well managed. But that held no sway with some European airlines. 



The real riposte came from the charismatic al-Bakr. He was brutally frank in his assessment and pulled no punches in lamenting the ‘crony comfort’ that governed the management at IATA. In fact, his onslaught was supported by a number of other CEOs who blasted IATA’s failure to show “clear transparency in its processes” and questioned the auditing process for the association’s financial statement. Akbar al-Bakr highlighted some of IATA’s expenditure, including $18 million on travel, $58 million on data processing and IT, and $29 million on outsourcing and consultancy. He called on IATA to justify “such large sums spent on travel” and the processes by which consultant and outsourcing contracts were awarded. He backed a motion for

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We expect airlines to make just $4 billion profits this year on revenues of $598 billion.



IATA to reconsider the appointment of its auditors. The Qatar CEO also questioned the “surprise” nomination of Etihad Airways CEO James Hogan to fill the extra seat created to broaden the representation of Middle East carriers on IATA’s board. “We believe such issues should not be surprising,” he said. “Firstly, such decisions should be transparent and secondly, if geographical representation is the basis of the composition of the board, the regional airlines involved should be informed in advance of their regional allotments so that they can coordinate who should represent them.” Akbar al-Bakr’s onslaught resulted in a secret ballot that was close, only being narrowly defeated. The tight result reflected the unease that many CEOs have in IATA’s governance. The ballot results: 43 in favour of proposal, 48 against, 5 abstentions, 22 blanks, 1 ineligible. A very divided IATA, if one may say so.

— Giovanni Bisignani

CRUISING HEIGHTS July 2011





Spelling the end of the era of lower airfares, airlines worldwide would be forced to raise fares by an average of 5 per cent this year, succumbing to a 50 per cent hike in fuel prices over the past year, according to the chief economist at IATA. “We are looking at a fare increase of at least 5 per cent, owing to a surge in oil prices.We have seen a five per cent increase in unit costs because of the rise in jet kerosene and that is with the [airline] industry having hedged 50 per cent of this year’s fuel bills.”Had they not done that, it would have been twice the impact. So we are going to see that five per cent is reflected in airfares,” Brian Pearce, IATA’s chief economist, told journalists on the sidelines of the meeting in Singapore.


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HAPPENINGS ALL AROUND: (L-R) Tony Tyler and Giovanni Bisignani sharing a lighter moment; Goh Choon Phong, CEO, Singapore Airlines, hammers a point; Hans Ollongren, SAS Scandinavian Airlines, receiving STB certificate from Alex Popovich, IATA; and Miroslav Dvorak of Prague Airport, receiving the IATA Eagle award.







A mock-up of what it dubbed the “Checkpoint of the Future,’’ caused plenty of headlines. It’s a checkpoint where passengers separated by security risk would walk through one of three hightech, 6.1-metre-long tunnels that can quickly scan shoes and carry on luggage and check for liquids and explosives. “Passengers should be able to get from curb to boarding gate with dignity,” DG Bisignani said. “That means without stopping, stripping or unpacking, and certainly not groping.” The checkpoint of the future uses a “risk-based approach” that divides passengers into three groups — the “known

My goal is to make the world a better place for airlines to do the important business of connecting 2.8 billion people and 48 million tonnes of cargo.

He added that there would be some variation in the market but that was sort of a general guide for the airfare increase that IATA was looking at for this year, raising the possibility of a repeat of 2008 when fuel prices sent ticket prices spiraling.”In weak market conditions, airlines try to stimulate demand by discounting and reducing fares. But it is a really difficult environment at present to be able to do so,” Pearce said, adding that the industry has witnessed around 50 per cent rise in fuel costs this year, “and fuel is an airline’s main cost”. “We have already seen some airfare increases this year by airlines,” said Pearce, adding that even airlines that had 50 per cent of their fuel bills hedged were going to face the fare rise of “at least 5 per cent”. Pearce said: “With no sign of a significant decline in an oil price that is staying stubbornly above $100 a barrel, airlines are fighting to stay profitable and have pushed up ticket prices in order to recoup costs. They have had no choice but to hike fares.” He added that the geo-political unrest in the Middle East and North Africa, coupled with the recent shocks suffered by Japan, would further add to the industry’s woes.

— Tony Tyler

CRUISING HEIGHTS July 2011

traveller,” “normal,” and “enhanced security” (see photo on Page 33). It does not see all passengers as equal, which is today’s standard. The groupings are based on electronic data that is prescreened by government officials — not airport staff — before the flight. A guard simply checks whether a “board” or “no board” flag comes up and if you are able to board, you put into one of the three lanes. US Transportation Security Administration chief John Pistole said he thought IATA’s security system, which it hoped to implement within five years, was a great idea. “It’s something that’s long overdue,’’ Pistole said at IATA’s annual conference. “We’re not at the checkpoint of the future yet we’re working toward that. I think eventually we will see something similar. The TSA has been working for the last six months on developing a system that could differentiate passengers by security risk to cut down on needless checks, one size would not fit all,” Pistole said. The TSA would likely to start a pilot programme this year in some airports that allowed frequent flyers or other travellers with clean records to receive minimal checks, he said. Low-risk passengers would walk through a tunnel with their carry-on luggage in just a few minutes — much quicker than the current average security screening of 35 minutes, IATA said. High-risk passengers would be directed to walk through the tunnel that performs a full-body scan while searching for items like explosives. “We must amalgamate intelligence based on passenger information and new technology,” Bisignani said. “That means moving from a system that looks for bad objects to one that can find bad people.” 





As for the Indian representation on the IATA Board of Governors, Jet Airways

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SPECIAL REPORT

UNITED, WE STAND: Members of Board of Governors at the AGM.

Chairman Naresh Goyal was re-elected for a further period of two years (from 2011 to 2013), at the Singapore meeting. The Jet chief has been on the board from 2008. As a member of the 30-member board, Goyal will act on behalf of the membership as a whole in representing the interests of the industry. Commenting on his re-election, Goyal said: “As the aviation industry’s apex international trade body, IATA has, over the years, played a leading role in representing and serving global commercial aviation. I am honoured to have been re-elected to the IATA Board of Governors and look forward to working closely with our industry members to facilitate further growth of the global aviation sector.” 







IATA wants to use 100 per cent biofuels as soon as possible but the cost is too high and the supply is lacking at the current time. The present situation makes it unrealistic for the industry to switch to biofuels, said Paul Steele, IATA’s director for aviation environment. IATA said that its members had set a goal for 2020 of having 6 per cent of their jet fuel being biofuel, and wanted these alternative fuels to come from sustainable, non-food biomass sources. Biofuels made from food crops were largely unsuitable for use in jets. Carbon emissions from one tonne of biofuel were 80 per cent lower that from one tonne of jet kerosene, said Steele. Each year, global airlines used approximately 230 billion liters (60.76 billion gallons) of jet kerosene, according to IATA. The aviation industry’s carbon emissions, which at 649 million tonnes a year accounted for 2 percent of the world’s total, had been reduced by 3.3

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billion tonnes since 2004, due to better fuel efficiency, Steele said. Emissions trading was “a useful tool,” said Steele, although he opposes the European Union’s (EU) intention to include flights to and from Europe in the programme starting next year. Under the EU’s proposal, airlines would have to buy permits for carbon emissions above a set amount.Bisignani has often called the EU trading scheme “illegal”.

Under the EU’s proposal, airlines would have to buy permits for carbon emissions above a set amount.Bisignani has often called the EU trading scheme “illegal” CRUISING HEIGHTS July 2011





There were no hiccups in Cathay’s former CEO Tony Tyler’s appointment as DG. He is hugely respected across the board for his achievements and he responded with his usual understated demeanour: “I heard your message about greater member involvement and transparency,” and added, “It has been a difficult AGM, but in my mind one of the most positive AGMs in recent times.” he said. “Yesterday (day one of the IATA AGM that was set ablaze at the CEO forum by the Gulf vs the West sniping) was an interesting day, wasn’t it? It shows how relevant and important IATA is to you... that’s a good thing. My priority now is to ask questions and then to listen and to learn,” he said. For the record: Tony Tyler will succeed the charismatic Italian on July 1, while Peter Hartman, President and CEO of KLM, will serve as the new Board Chairman for 2011-12. James Joyce of Qantas is the next President Elect and Air China will play host to and chair the 68th Annual Conference of IATA and the World Civil Aviation Summit to be held in Beijing in 2012 — the first time that the IATA Annual Conference will take place  in the country.


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GUEST COLUMN

Change is in the air Airlines and airports must prioritise collaboration in at least four areas to address the major challenges they share: security processes, common use self-service, new pricing models and airport capacity constraints, comments P Indira Rani.

A

irlines and airports face escalating costs, revenue growth constraints and an increasingly dissatisfied customer base. By offering passengers a highly differentiated experience and simultaneously enhancing its operational efficiency, the aviation industry can position itself to become and remain profitable in a volatile business climate. To accomplish this, the industry should adopt a new business model that combines distinctive customer services, a flexible infrastructure and greater collaboration, among partnering airlines and between airlines and airports. Today, the average waiting time for travellers to check-in at a desk is 13 minutes. But it’s become common practice to bypass the agent and use a kiosk to get boarding passes and check baggage. And the kiosk is just the beginning of self-service in air travel. One such technology is Common User Self-Service (CUSS) kiosks that enable different airlines to provide passenger facilities at a shared kiosk and split the running costs. This can reduce heavy traffic times at specific terminal entrances, spreading the flow of passengers more evenly throughout the airport. The system can even include hotel check-in and rental car information. A CUSS screen allows any passenger to check-in, regardless of carrier. Similarly, short messaging service (SMS) technology can help passengers receive flight notifications, gate change information and even digital 2D boarding passes on their mobile phones. Second only to flight delays, baggage handling is a top concern for air passengers worldwide. Some of the main causes of baggage delay worldwide include tagging errors, arrival station mishandling, space-weight restrictions, loading offloading error, ticketing error/passenger bag switch/security, failure to load and transfer baggage mishandling. The good news is baggage handling can be improved by harnessing sophisticated technologies. It is estimated that an airport operation has an average of some 30 disparate systems running concurrently. New technologies can enable closer collaboration and a more holistic view, especially of baggage handling. Service-oriented architecture (SOA) enhances information sharing between baggage and other systems. Linking systems can improve quality of baggage handling through more upto-date and complete data and connection of baggage information with passenger information. Radio frequency identification (RFID) is a key underlying technology that can enable, in conjunction with traditional barcoding techniques, virtually 100 per cent tracking and tracing of baggage to improve the irregularities rate, lowering the need for lost baggage retrieval. Among its major benefits, enhanced baggage tracking through RFID can improve the security of baggage, increase baggage traceability along the whole chain, enable automation and speed processes, optimise transit management, thus reducing transit times, and reduce baggage reconciliation times. Air passengers know the drill by now: identification out, boarding pass in hand and, quite likely, shoes off your feet. But current

screening processes are time-consuming and ineffectual, not to mention expensive. The entire experience can be improved through simpler processes using advanced technology and innovation in identity management will change how air travel passengers are screened and determined secure. Some of the key innovations that are expected to be adopted by many leading airports include: Web technologies to connect customs airlines and airports; hand/fingerprint recognition to identify passengers at customs and automated document identification systems; wireless technologies to connect customs, airlines and airports; Iris-scan technology to identify passengers at immigration and customs; and facial recognition technologies; and data analysis systems to prescreen passengers using closed circuit television (CCTV). Soon the majority of countries are expected to require machinereadable ePassports. An ePassport is a paper document, similar to the passport we use today, with an embedded chip that can be read by a secure scanner using radio waves. The scanner retrieves the passenger’s digital picture which the border guard may use to compare against the person presenting the documents. As self-service empowers passengers to be independent of gate agents, airline representatives can focus their efforts on building relationships. Today, airlines interact with their passengers for a limited time. The bond lasts from check-in to baggage pick-up, and starts over again on the next flight. But airlines can look to retailers to learn valuable lessons: collect information, reward loyalty and customise experiences. The average airport has become a mini-metropolis, with more focus on retail than transportation. This drives revenue into facility operations, offering welcome distraction for delayed passengers, but it does little to address the issues facing the airport’s biggest clients: the airlines. The Airports Council International (ACI) predicts that the number of global passengers will rise to over nine billion by 2025. But forecasted facility growth can’t match the rise in passengers. In fact, only 25 per cent of airports reported plans to add new runways in the next 20 years. Airlines and airports must prioritise collaboration in at least four areas to address the major challenges they share: security processes, common use self-service, new pricing models and airport capacity constraints. This Smart Aviation Model includes a more flexible environment: physical gates, check-in spaces and baggage handling systems that can work for all airline tenants. This also includes a more flexible infrastructure — converge multiple networks onto one integrated platform, allowing more opportunity for growth with advanced network applications like video over internet protocol (IP) and RFID tracking. Besides, it also necessitates a more flexible information system — not just sharing information with passengers, but with the cleaning, catering and cargo delivery firms, alerting them to aircraft status in real-time. Are we ready to take off in turbulent times? (The writer is Vice President, Distribution Sector, IBM India & South Asia.)

CRUISING HEIGHTS July 2011

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o use half a sentence from Charles Dickens’s immortal A Tale of Two Cities, “it was the best of times”, for Airbus as it celebrated a $72-billion haul of orders, including the biggest single airliner deal in history, in a home turf victory over Boeing at the Paris Air Show. The icing on the cake were two mega Asian orders for 200 A320neo from Air Asia and for 180 aircraft of the same make from IndiGo. “This success sets a new record for any commercial aircraft manufacturer at any air show ever,” Airbus announced. It brought Airbus’s order

The icing on the cake were two mega Asian orders for 200 A320neo from Air Asia and for 180 aircraft of the same make from IndiGo

book to 730 aircraft including 701 for its new star, the single-aisle A320 in both its original and fuel-efficient “Neo’’ variants. The Air Asia order makes the Malaysian low-cost pioneer Airbus’s biggest customer and is the biggest single airliner sale by numbers in history. By contrast, Boeing logged 142 firm orders and commitments worth more than $22 billion during the show, most of the confirmed purchases being for the medium-haul 737, the A320’s direct competitor. ‘’They choose to use their shows to make announcements, we choose to use our shows to demonstrate our technology to connect with our customers and suppliers

AN

INDIAN SUMMER IN PARIS

TH IS

Y” B Z N E R ’S AIR ED “A F B B U D Y L SHOW IN PARIS WAS QUICK FOR M AVIA D E R E O TION P UNDITS. INDEED, IT WOULD BE REMEMB DERS FR AL D OR R O ONG C E T TIME, T Y” OF R Z N E R D THA F “ N H E A H T N K O U T S O ND NE AR O Y R E IA A V ND SECOND, PROVING TO E EC THE M O R F ONO MIC POWER HAD SHIFTED RT. WEST T O THE EAST. A REPO

YEA R

I

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CRUISING HEIGHTS July 2011

Y


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SKILLS AT ITS BEST: Extra 440 aircraft showcasing its aerobatic skill at the Paris Air Show, 2011.

and to highlight our new airplanes’ capabilities,’’ remarked Randy Tinseth, Boeing’s Vice-President for marketing. But Tinseth is way off the mark, if you account for figures through the year: Sales figures for the year as a whole to date show a stark divide. Since January, Airbus has received 725 firm orders and Boeing only 195. The bestseller was the A320 — a bread-and-butter single-aisle workhorse now available as the ‘’Neo’’ or ‘’New Engine Option’’ which the company boasts is 15 per cent more fuel efficient. “I have to admit, I largely underestimated the market demand for Neo before this show,’’ Airbus Chairman Thomas Enders

The bestseller was the A320 — a bread-andbutter single-aisle workhorse now available as the “Neo” or “New Engine Option” CRUISING HEIGHTS July 2011

remarked on the success! Ironically, the Boeing presence in Paris was, perhaps, its biggest for years. It had a 737-700 and a Qatar 777 on display but also the first 747-8 Intercontinental to fly to Europe. The freighter version of the 747-8 was also on show as well as one of the flight test 787s. Airbus, meanwhile, suffered double bad luck with its two star products — the A400M and A380 — both of which were grounded: the A400M due to a gearbox problem and the A380 after it clipped a wingtip with a ‘structure’ whilst taxiing. After hiding the company aircraft from view, Airbus managed to get customer

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COVER STORY Korean Air to step in to let it use its A380 in the flying display. After Air France had a well-publicised A380 brush with a CRJ in New York, next Farnborough will see the launch of a new wingtip proximity sensor.

THE INDIAN CONNECTION Indian airlines walked away from the Paris Air Show with a third of the airplane orders last week — a $23 billion of purchases. GoAir placed what by any normal standards would have been an eye-catching order for 72 Airbus jets at $6.6 billion but with IndiGo signing for 180 jets and Air Asia for 200, it didn’t attract the same eyeballs. The backlog of airplanes on order has exploded from just 12 in 2000 to well over 500 after the show. At the beginning of 2000, there were 100 large passenger aircraft in India for a billion people; now, there are 300 aircraft for 1.2 billion. By contrast, China has 1,400 large jets for 1.3 billion people. Integlobe went one step ahead when it announced that it was forming a joint venture training centre, which would provide pilot and maintenance training solutions for the Indian aviation market. The centre will be located at Delhi and ready for operation by the end of 2012. The New Delhi centre will be the fifth aviation training facility that CAE operates in India. The focus of the New Delhi training centre will be to provide “wet” and “dry” type-rating, recurrent, conversion and jet indoctrination training for commercial aircraft pilots. Programmes will also be offered for maintenance technicians. The training centre will initially house four, new CAE-built Level D full-flight simulators covering Airbus and Boeing aircraft types being operated in India and complementing CAE capabilities at its Bengaluru training centre. The Delhi centre will be capable of expansion to eight simulator bays. “This partnership will provide stateof-the-art infrastructure in India for training airline personnel in one of the fastest growing aviation markets in the world,” said Rahul Bhatia, Group Managing Director, InterGlobe Enterprises. “We are very pleased to partner with CAE, the global leader in commercial aviation simulation and training, to offer world-class equipment and services.”

HERE COMES CHINA Meanwhile, China’s efforts in the jet market are gaining greater attention. The plane to watch is China’s C919, under development by Commercial Aircraft Corp. of China, known as Comac. Ryanair and Comac revealed that they would work together on design elements of Comac

40

NOTABLES ¨¨  One announcement in Paris specifically 

aimed at business aviation was the order by VistaJet, the Switzerland-based private jet operator, for 10 ultra-long-range Bombardier Global 8000 aircraft. The order, worth about $650m at 2011 prices, follows orders by the same company for six Global 6000s and two Challenger 605s. VistaJet is reporting high demand from the BRIC nations (Brazil, India, Russia and China) and Nigeria. The order for the large-cabin Global 8000s, a model launched by Canada’s Bombardier in October last year, is part of the recent trend that has seen sales of larger, longer-range jets that do much better than those of smaller jets.

 Rolls-Royce could spend about $500m to 

develop a new version of its engine for Airbus, after an earlier design proved insufficiently powerful for the largest version of the A 350. The A350, currently in development by Airbus, has been designed to carry Rolls-Royce XWB — or “extra wide body” — Trent engines. But earlier plans by Rolls to use the same engine across all three versions of the A350 have had to be shelved, after the engine proved unable to adequately power the 1000 series, the largest A350. Similar engines can often be placed on different-sized aircraft by making software changes to vary the amount of power emitted. But for short runways or at high altitude, greater thrust is needed, and the A350-1000 was too large to use the Trent XWB that is being used on the smaller A350-800 and A350-900.

 ATR has plenty of reasons to celebrate 

its 30th birthday with a big bang after increasing its Paris Air Show tally to a record 60 new orders and 37 options. The 97 orders and options announced at the air show this week join 28 orders and five options previously revealed this year, lifting 2011 sales to 130 aircraft. ATR’s backlog now stands at 233 aircraft valued at $5.4 billion. “This is a totally outstanding and historical air show for ATR. Our list of customers, both airlines and leasing companies, is dramatically increasing, and ATR aircraft are today in almost 100 countries,” said CEO Filippo Bagnato, concluding that this “clearly underlines the ATR product as the optimal solution for regional transportation”.

 Bombardier added another order to its  CRUISING HEIGHTS July 2011

new CSeries backlog, this time for 10 of the CS100 model from an unidentified European customer. The latest order brings Bombardier’s CSeries order book to over 125 aircraft. The signing of Korean Air as its first Asian customer for the CSeries jet and second CSeries customer of the show, and securing more than $1 billion worth of firm business jet orders, partially offset the disappointment after Qatar Airways stated it had deferred a decision on a potential order for Bombardier’s CSeries.

 The United Aircraft Company (UAC) in 

Russia announced that it would be producing a business jet variant of the Superjet 100 regional aircraft. Mikhail Pogosyan, CEO of the United Aircraft Company (UAC) in Russia gave details of the company’s plans for producing and marketing the SukhoiSuperjet 100 regional jet and the 150-seat Irkhut MS-21. Both aircraft are entering a crowded market — the Superjet is currently competing with new regional aircraft from companies such as Bombardier, Embraer and Mitsubishi while the still-under-development MD-21 will be up against the Airbus A320neo, COMAC’s CRJ919 and whatever revamped version of the 737 that Boeing decide to pursue.

 Mitsubishi’s 

press conference on the progress of its new MRJ regional jet included an unusual video clip of a ditching test in which a model MRJ was catapulted into a swimming pool to test how the aircraft would fair, if faced with the same situation as the famous incident in which an A320 crash landed on the Hudson River. The video was only a few seconds long but the model was still floating when it ended.

 Airbus customers at the Paris Air Show 

this week overwhelmingly chose CFM International and its LEAP-X engine to power their A320neo jetliners on order, ringing up $11 billion in future revenue.In terms of market share, though, Pratt & Whitney engines still come out ahead, with that manufacturer’s PW1100G geared-turbofan engine tapped for use on 540 A320neo jetliners versus CFM’s 455. Having drawn more engine orders than CFM for the A320neo is an impressive outcome for Pratt & Whitney. Both the Pratt & Whitney and CFM engines promise greater fuel efficiency, less noise and lower maintenance costs.


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planes. Comac President Jin Zhuanglong told reporters that the two companies would sign a memorandum of understanding, though he provided no details. Last year, British Airways signed a similar agreement with Comac.

HONEYWELL, BIOFUEL ARE BEST OF BLENDS

The first transatlantic flight to use a 50/50 biofuel and Jet A1blend landed at Le Bourget opening the way for a potential 50 million tonne a year cut in CO2 emissions by 2020. A Gulfstream G450, using Honeywell’s Green Jet Fuel (GJF) made from camelina, flew from New Jersey, USA, to France in seven hours with the right engine using the biofuel blend and using less fuel than the left, Jet A1 engine. The flight demonstrated a carbon emission reduction of 5t and — with GJF certificated — could lead to a 50 million tonne-plus cut in annual carbon emissions if airlines used 10 per cent of the blend in their fuel. Now that ASTM (Americal Society for Testing and Materials) International approval is in place, biofuel is one step closer to commercial use that will help to reduce the carbon footprint. By 2020, the 10 per cent usage could be a reality. Camelina is an energy crop that does not compete in the food chain. Later, a Boeing 747-8 Freighter flew in using a 10 per cent GJF/Jet A1 blend — the first airliner to cross the Atlantic using biofuel (see Cargo Jottings).

TO SYDNEY IN 150 MINUTES! EADS demonstrated a theoretical hypersonic jet that flies above the atmosphere, yet takes off from a regular runway. It is not a Concorde but it looks like a Concorde using the aerodynamics of the 1960s. By flying above the atmosphere

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VIGNETTES FROM THE SHOW: (Clockwise from top left) Visitors taking a look at A400M, at the Paris Air Show; The new Boeing 747-8 Intercontinental landing at Le Bourget airport; The Beriev — Be-200 multipurpose amphibious aircraft performs its demonstration flight, dropping its freight of water; Taiwan’s TransAsia Airways signing an agreement for six Airbus A321neo aircraft; France's President Sarkozy and Defence Minister Longuet attend the flight demonstrations on the opening day of the Air Show and Eurocopter X3 helicopter performs during a demonstration flight.

and using biofuel to get the plane off the ground initially, EADS hopes to avoid the supersonic boom and pollution Concorde was notorious for. The plane, being developed in collaboration with Japan, is being primarily designed with the business market in mind and could carry 50100 passengers. The concept project, known as ZEHST (Zero Emission High Speed Transport), comes as companies such as Virgin Galactic push forward with plans to take paying customers up on commercial space flights. Indeed, ZEHST is being developed using research from EADS’ space arm Astrium.

EMISSIONS HORROR

China and the United States have expressed opposition to the European Union’s move to make all airlines flying into Europe pay for their pollution CRUISING HEIGHTS July 2011

China has blocked a multi-billion dollar order for 10 Airbus A380 Aircraft in a sharp escalation of Beijing’s protests against Europe’s plan to bring international airlines into its emissions trading scheme from the start of next year. A Hong Kong Airlines order for the planes worth $3.8 billion at list prices was due to be formally announced at the show was blocked by Beijing and the announcement did not go ahead. China and the United States have expressed opposition to the European Union’s move to make all airlines flying into Europe pay for their pollution, the most ambitious step yet by Brussels to make the rest of the world comply with its climate change rules. Tom Enders, Airbus Chief Executive, wrote a joint letter with European airlines recently to the EU climate Commissioner, Connie Hedegaard, to warn that it was “madness to risk retaliation” from such influential players as China over the issue. Ms Hedegaard and José Manuel Barroso, the European Commission President, have both made it clear Brussels has no intention of caving in to  such threats.

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Air cargo remains a non-runner R Krishnan

Relegated to remain behind the scenes — and always after passengers — air cargo in the country continues to be at the receiving end with hefty charges being levied by airport operators. The Airports Economic Regulatory Authority, comments R Krishnan, must step in, to help the air cargo industry.

O

Since air cargo charges did not come under AERA, air cargo stakeholders were being fleeced by airports through levy of hefty airport charges. What needs to be understood is that the air cargo industry also has to make investments. 42

ur readers may experience an overdose of issues relating to economics of airport development and management in this edition of CRUISING HEIGHTS. But these, in fact, are precisely the issues that need to be tackled head on by the Airports Economic Regulatory Authority (AERA) which completed two years in May 2011. The website of AERA contains many items and reports that are of great reading interest. But the real issue of what will happen to the country's two biggest airport modernisation projects — Delhi and Mumbai — continues to remain in suspense. Further, as AERA Chairman Dr Yashwant Bhave admitted the other day at an aviation industry meeting, the cargo part of Indian aviation remained outside the purview of the regulator. The meeting held under the aegis of the Indo-American Chamber of Commerce was an eye-opener. Blue Dart Managing Director Tulsi Mirchandaney rued that while the regulator was seriously looking into various matters related to airport economics, there was no one to look at issues that governed the economics of the air cargo industry, especially the way in which the airport operator levied charges and changed them at will. While talking about her own company's changing face, Mirchandaney said the past three decades had seen a sea-change in its customer profile as was true with air cargo industry worldwide. And after the galloping speed of globalisation gathered in the last two to three decades (perhaps of much recent experience in India — say about a decade), a sea-change had occurred in the customer profile. Rising globalisation was going in tandem with rising outsourcing and this in its wake was changing the economics of the air cargo industry and consequently required a fresh approach by the regulator to the cargo industry's problems. HP, the computer giant, for instance, says its components undergo 200 border crossings for its laptop: the keyboard is made in Singapore, the core in South Korea and screen in Mexico! In a way the internet explosion had brought about limitless choices and effective logistics was what bound all of these. This is precisely the area and stage where India was in — as part of the global CRUISING HEIGHTS July 2011

cross-border movement — and hence cried for a special focus. A World Bank study showed that countries with efficient logistics saw its GDP getting an extra kick up by 0.5 to 1.5 per cent. In the US, the logistics industry is well established and the market share of the air express industry was 63 per cent while in Europe it was 50 per cent. To make this happen, airports across the world have played a major role. Earlier, most or much of the world trade-related logistics movement was in the US and Europe. Today, it has substantially shifted to Asia where statistics suggest that cargo output/movement was more than the tonnage in the US and Europe. This is not because of continuous GDP growth but also because of a much bigger population. In this context, it is interesting to see the observation of the World Bank study done about a decade ago that ranked India No 39 in air cargo movement. Unfortunately, despite rising GDP over the last decade and virtual explosion in India's exports in the last three-to-four years, India today ranks 47 in air cargo movement in 2010, according to a survey. While this was due to other countries moving far ahead, it was also a fact that India's airport infrastructure had still a long way to go, notwithstanding the modernisation of the metro airports. What we need to understand is that while Indian airports are being upgraded, expanded and modernised, all the focus is on the passenger side and not so much on cargo. On the other hand, international airports, for instance, are far ahead in handling cargo: Hong Kong, for instance, was handling more cargo than Memphis in the US. Incheon in Seoul handled four times the air cargo tonnage handled in India. India today is where South Korea was in 1970. A poignant observation made in this context by some speakers was that, while in India, an arriving international passenger could exit the terminal in say half an hour, for cargo it could be simply days. In fact, Tulsi Mirchandaney stated that the airports in India had made life stressful for cargo handlers. Besides exclusive freight, there was also an issue with belly cargo in passenger aircraft. While India was indeed witnessing major changes in airport economic


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reforms, what had not been focussed on was the real role of airports. Cargo had not got the necessary priority in India, which other Asian giants had and continue to give it even today. If one looks at the charges levied for air cargo movement, South Korea in the last two years had actually dropped rates by 20 per cent, while in India it rose eight times. Hence, it was not surprising when Ms Mirchandaney pointed out that since air cargo charges did not come under AERA, air cargo stakeholders were being fleeced by airports through levy of hefty airport charges. What needs to be understood is that the air cargo industry also has to make investments but how can it be in these circumstances? There were, for instance, discounts for all scheduled airlines if they paid their charges on time. However, such a facility was not available to the cargo industry. These factors impacted the air cargo industry and had a direct bearing on the quality of services rendered. India's exports are rising fast both in volume

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the regulation process in India was still evolving and it would not be possible to import any readymade framework from abroad. It had to be a package including affordability. The areas where regulation was being focussed on were airports, ground handling, fuel supply and cargo. Besides, AERA would also attend to ANS. Bhave noted that AERA had put its primary focus on passengers and then on cargo. There was also a mention in regard to these in the AERA Act. Besides, AERA also derived comfort from the ICAO document, which accorded primacy to passengers. My belief is India's cargo industry will remain largely at the mercy of the airports — mainly the private part of the PPP airports. Delhi, Mumbai, Hyderabad and Bengaluru airports are very vocal and media savvy in publicising their views and their problems — especially after the Airport Development Fee was suspended in Delhi and Mumbai — galvanising the two private airport developers, GMR in Delhi and GVK in Mumbai, to lobby for the restoration of ADF.

TIGHTENING THE NOOSE: Freighter at cargo terminal in Delhi airport and (inset) AERA Chairman Yashwant Bhave: Time to take notice of the air cargo sector.

and in value terms. The monthly export in April 2011, for example, crossed $26.5 billion and this year (2011-12) may see Indian exports crossing $300 billion. These export figures are based on cross-country outsourcing besides cross border movement. Even if it is one source or place-based export, the cargo needs to be moved to the appropriate rapid export outlet or exit in the country. It was based on these arguments and logic that AERA was asked by the air cargo industry to adopt non-discriminatory charges and levies. Indeed, there is a lot of truth in the argument and the regulator should look at it seriously. However, what AERA Chairman Yashwant Bhave said that it was not reassuring at all to either the air cargo industry or aviation buffs like me. A telling observation from Bhave was that

That may be perfectly in order for them as they have mobilised resources at very high rates of interest and it has begun to pinch them. Recently, after the Delhi High Court barred DIAL from imposing ADF and directed it to go back to AERA to get the issue resolved, the consortium of bankers led by ICICI refused to provide a bridge loan to it for fear of bad economics. If you can reduce transportation charges, it will have a salutary impact on rising inflation. Perhaps, we may need to be briefed by AERA as to why this has not  crossing its mind. (Veteran journalist and long-time aviation watcher R Krishnan is Consulting Editor at CH. He can be reached at rkrishnanji@yahoo.com.) CRUISING HEIGHTS July 2011

While India was indeed witnessing major changes in airport economic reforms, what has not been focussed on was the real role of airports. Cargo has not got the necessary priority in India which other Asian giants had and continue to give it even today. 43


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HAS MAJOR PLANS FOR INDIA A leader in cargo and ground handling, the Turkey-based Celebi Holdings has been operating in India from the two major airports of Mumbai and Delhi for the last few years. It has charted out investment plans and is looking for opportunities to expand its business. elebi Holding, a premier ground- handling company from Turkey, has plans to invest around $100 million in Indian operations. Celebi has been operating in Mumbai and Delhi, the two major airports of India, for the last two years and has bid for the ground-handling contracts at the Kochi and Ahmedabad airports. Speaking to visiting journalists at the company's headquarters in Istanbul recently, Celebi Holdings Chairman Can Celebioglu said, “India is a fast-emerging market in the civil aviation sector. We are keen to expand our operations and make our presence felt in other Indian cities. We have also bid for winning the contract for ground-handling services at Kochi airport in Kerala.” Celebi has been developing the cargo terminal at Delhi's Indira Gandhi International Airport and plans to invest around $ 50 million over the next 18 months. Celebioglu informed, “We have also got the licence for developing, modernising, financing and operating the existing cargo terminal at IGI Airport for 25 years.” The cargo terminal at Delhi is being built in six stages and the construction work for the first phase is complete. The new building will be of international standards and work is on for the standardisation of the cargo pallets. The terminal will also have ITenabled processes that will reduce pilferage and time. Delhi is the company's third international venture in the field of cargo handling and is the first out-of-

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Europe operation. Celebi is currently operating cargo and ground handling in Budapest, Hungary, since 2007 and in Frankfurt, Germany, since January 2011. Celebi began its India operations on July 1, 2009, when it was awarded the contract for Mumbai International Airport Limited. In the last one and half years, CelebiNAS — a joint venture of Çelebi Ground Handling and NAS India in which the companies hold 51 per cent and 49 per cent stakes, respectively,—has added

“India is a fastemerging market in the civil aviation sector. We are keen to expand our operations and make our presence felt in other Indian cities.” — Can Celebioglu CRUISING HEIGHTS July 2011

seven new carriers to its groundhandling services portfolio and is currently serving 16 customers. CelebiNAS has a market share of 30 per cent at Mumbai international airport. In the last 18 months, the Mumbai operation has served 1,000 domestic cargo flights and 7,100 international flights. Celebi is also bidding for the cargo terminal for Mumbai. Delhi International Airport Private Ltd (DIAL), the Delhi airport's operator, awarded Celebi the ground- handling contract on November 18, 2009, for for a period of ten years. The company received its initial security clearance on May 8, 2010 and began serving its customers on June 2, 2010, With the addition of Delhi to its presence in India after Mumbai, Çelebi Ground Handling serves about half of the international flight traffic from India. The company started its operation with United States Air Force as the first customer for ground handling in 1958 as Çelebi Ground Handling, founded by Ali Cavit Çelebioglu. Today, the company has around 99.6 per cent of market share, serving 25 airports in Turkey. Celebi has one of the most modern equipment inventories in the industry. The investment in the latest equipment is around $100m. In 2003, Celebi entered into cargo business at Istanbul Ataturk Airport. In its seven years of service -- with two warehouses in Turkey spread out over 8,000 sqm and 84,000 tonnes per year of cargo handling—Celebi is the market leader with 37 per cent of market share. Rohit Srivastava


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CHOPPER BLUES

STELLAR TIE-UP

DAREDEVIL PRINCE

CMD RK Tyagi speaks about problems afflicting Pawan Hans

Bell and Cessna set up a new regional hub in Singapore

Prince Harry is all set to fly Apaches in the badlands of Afghanistan

IN THE LAP OF LUXURY: Eurocopter has teamed up with Mercedes Benz to create the epitome of luxury and elegance

EUROCOPTER

PREMIERES MERCEDES BENZ CHOPPER EUROCOPTER TEAMS UP WITH MERCEDES BENZ TO CREATE THE ULTIMATE LUXURY RIDE — THE ULTRA-ELEGANT EC 145 STYLE

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ell this helicopter sets the standards of luxury sky high quite literally and it’s meant for those who can’t get away from the lap of luxury, even for short hauls. The Mercedes Benz Style is a custom-built chopper crafted with only luxury in mind for the uber rich. Unveiled at the 2011 European Business Aviation Convention & Exhibition in Geneva, the Style has been inspired by the Mercedes E Class and S Class sedans. The interior of the Mercedes Benz Style is meant to fulfil the very highest expectations in terms of elegance, luxury and comfort. It features a versatile interior guided by a modular approach that allows the chopper to be tailor-made to suit a range of travel needs for the well heeled — be it taking the family for a weekend away or ferrying corporate clients around in style. The seats have been made with exclusive materials coupled with sumptuous wood for the floors and ceiling. Built by Eurocopter, the medium-sized, twin-engine EC145 is a turbine-powered aircraft that incorporates a hingeless rotor system and enhanced rotor blades that are claimed to reduce sound and vibration levels.

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“We are determined to

provide safe services” R K Tyagi, Chairman and Managing Director, Pawan Hans Helicopters Limited (PHHL), on the accidents involving Pawan Hans helicopters and the road ahead. Excerpts from an exclusive interview with CRUISING HEIGHTS:

Q:

There has been a spate of accidents with the latest being the Arunachal Chief Minister. It seems that the DGCA has indicted Pawan Hans for not operating single engine choppers for VIPs under the Instrument Flight Rules (IFR). Why do you not agree to double engine choppers with IFR in the case of VIPs as stipulated?

A:

Unfortunately, there has been a spate of accidents in general aviation in the last few months involving five helicopters and one fixed aircraft. Of these, two belonged to PHHL. It is not true that operating single engine helicopters for VIPs under IFR makes it easier for pilots to negotiate bad weather. It is important to remember two points with respect to flights operated under IFR: First, that a helicopter should be equipped and certified for IFR operation; and, second, locations i.e.

helipads, heliports, flight route should be equipped with ground aids/facilities, approach and landing aids to facilitate IFR flights especially under IMC (Instrument Meteorological Conditions). The factual position with respect to mountainous regions of India especially Arunachal Pradesh and the Himalayan region is that flying under IFR is not possible as ground aids/facilities do not exist. Moreover, the helicopter needs to be in communication with ATC for position reporting while following the flight route, but in the absence of continuous VHF communication network in hilly terrain it cannot operate under IFR. Due to nonavailability of ground aids/facilities, approach and instrument landing aids at helipads in the Northeastern States, J&K, Sikkim, Himachal Pradesh and Uttarakhand in the Himalayan range, helicopters are required to follow flights under Visual Flight Rules (VFR) with a freedom to change the flight path in valleys to keep clear of the hills on either side. It is pertinent to mention here that helicopters are deployed for connecting remote areas and these areas generally do not have basic facilities and pilots have no other option except to fly under VFR. As per Civil Aviation Requirements (CAR), multi-engine fixed wing aircraft and single turbine or multi-turbine engine helicopters (passenger version) shall be used for VIPs. The question whether single engine helicopters can be used for VIPs has been thoroughly deliberated within the aviation fraternity and various stakeholders. However, no restrictions have been imposed. In the two accidents that involved Chief Ministers (Arunachal Pradesh in 2011 and Andhra Pradesh in 2009), one was a single-engine helicopter with


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proven high altitude performance and the other was a twin-engine helicopter. In the first case, it does not appear to be a technical failure and in the other it was not due to a technical failure. In the latest case, the helicopter was wet-leased to the Government of Arunachal Pradesh for one year to meet their requirements. The helicopter was deployed by the Civil Aviation Department, Government of Arunachal Pradesh and the list of passengers was given by them before the commencement of the flight. Generally in such accidents, there are three stakeholders for safety: the Director General for Civil Aviation (DGCA), the State Government and the operator (PHHL). Lessons will be learnt, based on the investigation report giving the cause of the accidents, and all the three stakeholders would be taking proactive measures to ensure air safety.

Many of your pilots, with defence backgrounds, fly without licences. Why do you allow ex-army chopper pilots exemption to fly civilian choppers after being exposed to a conversion training of only 15 hours? The conversion training is carried out as per the stipulated requirements of the DGCA and no pilot is permitted to fly a helicopter for commercial purposes and without regulatory clearances. The pilot who is selected from the defence forces undergoes ground training at PHHL and is provided training on general aviation, aircraft rules, navigation, RTR (Remote Transmitter/Receiver) procedures, meteorology and helicopter type ground and flying training as per DGCA requirements. After clearing all the required training and clearances from DGCA, the pilot is assigned operational duties. Aircraft Rules 1937 provides that a

qualified pilot from the Indian Air Force, Indian Navy or Air Operational Wing of the Indian Army and who possesses the necessary flying experience, competency and standards of physical fitness, as required under the rules, may be exempted from all or any of the flying tests and from medical or other technical examinations by the DGCA, in the issue of licenses under the rules. In addition, defence personnel are also exempted from obtaining the flying experience from DGCA approved/recognised training organisations.

How is it that ex-army pilots who have flown single engine Chetaks or Cheetahs in the Army, are upgraded to fly heavier machines like MI-17 in the twilight of their careers without even a license for the same? The pilot in command of the MI-172 accident helicopter had total flying experience of 4655 hours of which 1255 hours has been flown with PHHL helicopters. He had flown MI-17, MI-8 in defence services and MI-172 in civil. The co-pilot was a CHPL holder and had total flying experience of 6407 hours of which 807 hours was with PHHL.

How is the staff coping with negative publicity and still continue to operate across the country? Our operations are normal across the country. PHHL has initiated the implementation of Safety Management System (SMS) as per the DGCA and ICAO requirements since last year and this has to be implemented by 2013 in a phased manner as per CAR. However, due to recent developments, PHHL has put the process of implementation on the fast track and implementation of SMS will be completed in the shortest CRUISING HEIGHTS July 2011

possible time. In addition, PHHL has set up Safety Oversight mechanisms which will work independent of operation and maintenance setup and will be responsible directly to the Chairman and Managing Director for any safety-related issues. PHHL is an organisation comprising highly talented and skilled manpower. We are even more determined to provide safe and excellent services to our customers. Further, in this direction PHHL has also taken initiatives with regard to strengthening operations and maintenance practices. We have taken corrective and preventive action to carry out smooth and safe operations. Communication has also been sent to our internal and external customers to apprise them in this regard. PHHL is a CAR 145 and CARM approved organisation. The stories questioning the maintenance of the PHHL fleet may be either floated by some vested interests that want to harm our business interests or by the people ignorant about our maintenance setup. The PHHL maintenance set up is at par with any maintenance set up in world and is approved by manufacturer as well as regulatory authorities. Our maintenance system is also ISO 90012008 certified system.

The Civil Aviation Ministry has agreed in principle to develop Guwahati, Agartala, Imphal, and Dibrugarh airports as regional hubs. What would the role of Pawan Hans be in such a setup? The development of Guwahati, Agartala, Imphal and Dibrugarh airport as regional hubs is welcome news. Pawan Hans has been nominated as a Nodal Agency by the North Eastern Council to provide necessary expertise/assistance to finalise/sort out the air connectivity requirements of all the NE States for the next Five Year Plan period (2012-17). Accordingly, PHHL has conducted the study of some of the NE States and a Consolidated Draft Report has already been submitted to NEC and all NE States. PHHL still has a role to play in providing the last mile connectivity to remote places in the Northeasten region by providing suitable helicopters under different scenarios like inter-state, intra-state, etc. to meet the requirements of the North Eastern States.

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FOCUS ON ‘COPTERS ARMY PLANS INDEPENDENT HELI ATTACK UNITS The Indian Army is planning to add attack helicopters to augment its powerful strike corps. Currently, the Army depends on the Indian Air Force to aid it with attack helicopters but this will no longer be the case in the future. The changes came into effect after the recently-concluded Rajasthan war games where it was realised that the helicopters could help the strike corps by rapidly deploying not just soldiers but also providing them with heavy weaponry. This move seeks to make the attack choppers an intrinsic part of the strike corps by leveraging their tactical lift and attack capabilities. Strike corps usually train for fast mobilisation and for specific applications with armoured carriers and battle tanks as the essential offensive utility for operations. In the future the use of air assets will give the strike corps an edge in combat. The Army’s three strike corps will be augmented with aviation brigades with two squadrons of twelve attack helicopters each. Apart from these there will also be two squadrons each with 15 choppers for tactical battles scouting and evacuation. The Army is planning to provide each of its defensive corps with aviation brigades to boost its tactical lift capability and add to its offensive potential.

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BELL, CESSNA BREAK GROUND ON SINGAPORE FACILITY

Bell Helicopter and Cessna Aircraft Company have begun work on a new facility in Singapore to serve as a regional sales and service centre. This facility will enhance the capability of the companies to service clients in the Asia Pacific area. Both companies of the Textron Group broke ground on the project recently. Work on the facility will be completed in the second quarter of 2012 and is expected to employ 90 technicians and office workers. The centre with more than

160,000 sq ft of space for offices, storage and maintenance will supplement the current Bell Helicopter Supply Center and augment its sales presence in the Asia Pacific region. The site will also house training facilities for Bell Helicopters for both maintenance and flight training. The group hopes that leveraging shared resources across Textron, Cessna and Bell Helicopter will allow the companies to provide customers with enhanced services that are costcompetitive and add value to missions. This is not the first time that Bell Helicopter and Cessna have worked on a joint site. In the past year, the two Textron subsidiaries have collaborated on regional parts distribution maintenance centres and service facilities in Amsterdam, Prague and Valencia.

BSF UNSATISFIED WITH DHRUV The Border Security Force has asked the centre to replace the Dhruv Advanced Light Helicopter saying they did not fulfill its operational requirements. A senior BSF source said: “The Advanced Light Helicopters — Dhruv — are not helpful in our operations like casualty evacuation and troop reinforcements. They are useless for us. Most of the times these helicopters are under servicing and there are issues about its capabilities to fly beyond a certain height. We have informed the Home Ministry in this regard. The helicopter keeps developing regular snags.” In the Naxal-affected areas, the air wing of the security forces is under the command of the BSF. The Central

CRUISING HEIGHTS July 2011

Reserve Police Force (CRPF), the IndoTibetan Border Police (ITBP), Sashastra Seema Bal (SSB) and state police forces make use of the choppers in the air wing. At present, the BSF air fleet has six ALH Dhruvs with two more due for induction. After a tender was floated by the government last year, a contract to lease six additional helicopters from a private vendor has also been finalised. These choppers are also expected to be deployed for anti-Naxal operations. The Dhruvs based at Raipur in Chhattisgarh and Ranchi in Jharkhand are also not operational due to a spare parts crunch or they are in need of servicing. Since the two Avros it has also not been operating due to mechanical problems, the BSF will also be inducting a large transport aircraft.


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FOCUS ON ‘COPTERS PRINCE HARRY TO RETURN TO AFGHAN WAR FRONTLINE Well here’s one Prince who is all set to prove his martial credentials again. England’s Prince Harry is set to go back to Afghanistan as the pilot of an Apache helicopter once he completes his training next year. According to the Daily Mail Harry has completed his ten-month training course to pilot the attack helicopter and is presently undergoing ‘conversion to role’ training. The young royal is said to have surprised trainers with his knack for flying choppers and his resolve to make it to the Apaches. According to a source in the British Ministry of Defence, “Only the top two per cent of military helicopter pilots make it to

the Apaches and Harry has had to work extremely hard. There is no way his status as a royal could have got him this far.” The AH-64 Apache gunship is a twin-engine attack helicopter used by the British military in Afghanistan amongst other places. As much of the fighting in

DELHI TO GET A NEW HELIPORT

In a move that is sure to send the local property prices soaring, the Environment Ministry has accorded in-principle approval for the development of a heliport in the north Delhi suburb of Rohini. Once constructed, it would become the Delhi’s first heliport outside the Palam airport area, where small aircraft and currently helicopters land. The site, spread across 25 acres of barren land, is a few kilometres away from the Rithala metro station. Mooted by the Civil Aviation Ministry the project is already approved under the Master Plan of Delhi and will cost `64 crore. If it gets all the required clearances, the project should be completed in about three years. The Civil Aviation

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Ministry said that the heliport would be used for both civil as well as military purposes. The proposed infrastructure includes a 2000 square metre terminal building and parking facilities for more than 100 passenger cars. There will be provision for at least four hangars capable of maintaining large helicopters such as the Mi 17 of the Indian Army. In an effort to make the heliport environment-friendly, the Environment Ministry has fixed conditions to protect local water quality, compensatory afforestation and methods to curb noise levels. In addition to this, the ministry has also asked for the details of solid waste and water waste management to be incorporated at the new heliport. CRUISING HEIGHTS July 2011

Afghanistan takes place at high altitudes, Harry’s intensive training will include advanced mountain flying as well, to make sure that he is in top form to fly dangerous battlefield missions. This is not the first time that Harry will be serving in Afghanistan. In 200708, Harry was sent covertly to Helmand province for ten weeks where he directed air strikes against the Taliban. But after news of his presence leaked, his stint in the warravaged country came to an end and he was whisked back to the Britain. Since then, the Prince has often conveyed a yearning to get back to the front line with his ‘brothers in arms’.

SIKORSKY INDIA MD BAGS AWARD AJS Walia, MD, India and South Asia, Sikorsky Aircraft, was conferred with the first ever “The Breakthrough Market Award” at the Worldwide Sales Conference at Palm Beach, USA, recently. This award reiterates Sikorsky’s commitment to the Indian market and recognises the aerospace potential within the country. Accepting the award Walia said, “It feels great to be recognised for our constant endeavour to establish Sikorsky in the Indian market. There has been a boom in India’s civil aviation market making it among the fastest growing in the world.” Sikorsky, the world’s largest helicopter manufacturer, is expanding its presence in India by teaming with local industry to cater to the aerospace needs of the Indian government. The company is now a major player in the Indian market having been short listed by the Indian Navy for its requirements of 16 MRH helicopters. The company recently sold VVIP helicopters to India and has also signed a contract with the Maharashtra Government to deliver an S 76C++ helicopter.


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AIR CARGO CARRIERS OF THE WORLD

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IN DIRE FINANCIAL STRAITS, CAPT G R GOPINATH FINDS THE GOING TOUGH FOR HIS YEAR-OLD CARGO VENTURE

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CSC TIES UP WITH SIEMENS AND NIIT DELHI’S T1 CARGO TERMINAL GETS READY FOR JULY OPENING

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RGIA GETS ITS CARGO BIZ GOING HYDERABAD AIRPORT IS CASHING IN ON THE PHARMA BUSINESS

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’GREEN’ FREIGHTER LANDS IN PARIS BOEING 747-8 F FLIES FROM WASHINGTON TO PARIS ON BIOFUEL

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Challenges and opportunities for air cargo background paper brought out by ASSOCHAM-KPMG on the Indian Civil Aviation centenary points out that the next 15 years would be crucial for the sector. The right vision, coupled with flawless execution, may catapult India into the language of top aviation markets. India has the potential to become a leading hub for passenger and cargo traffic. As for cargo, the paper mentions that in FY 2011 the total cargo handled was around 2.33 mn MT of which nearly two-third was international cargo. However, India's air cargo

A

to international freight.  Dwell time: Dwell time for import and export cargo at Indian airports is three to five days as compared to an average of six to 12 hours in other leading international airports. Reduction in dwell time cost and faster customs clearance and delivery of cargo would be beneficial for the industry.  Competition from other modes: With the improvement in highways and the proposed plans of building dedicated freight corridors, the competition from road and rail cargo is likely to increase in the future. The infrastructure processes and handling cost in respect of domestic cargo need to be addressed on priority.  Customs clearance: There is a need for a review of the customs clearance procedures and identification of ways in which processing can be speeded up without compromising on the safety aspect.  Land acquisition: Acquisition of land near major airports for expanding the cargo- handling capacity remains a cumbersome procedure. In future, as air cargo volumes increase there may be a need to consider development of cargocentric airports hub, the paper mentions.

GIANT LEAP: Air cargo industry in India is poised for big growth.

volume is less than that handled by leading airports like Hong Kong, Memphis, Shanghai, Incheon, Anchorage and Paris! At the same time, the average weight load factor was around 63 per cent. The five year CAGR (FY 2006-2011) has been 8 per cent, which is in line with the GDP growth. However, that is lower than the growth rate in the country's overall exports and imports that grew by around 15 per cent and 18 per cent respectively over the period. The entry of dedicated players in scheduled cargo operations is expected to increase the scheduled cargo services domestically and internationally. Overall, cargo traffic is expected to touch around 9 mn MT by 2025 assuming a growth rate of round 10 per cent. The paper lists out the key challenges facing air cargo:  Mindset issue: With passenger traffic attracting the maximum focus in the Indian aviation sector, cargo has been a bit relegated to the background. The paper advises focus on key export items like agri-produce, meat, flowers, pharmaceuticals and textiles.  Infrastructure: Poor cargo-handling infrastructure at airports across the country is leading to spoilage, pilferage and increased turnaround time for the cargo carriers. Most of the amenities are restricted

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“The air cargo industry is maturing… When an ash cloud from a volcano in Iceland sets off various governments in Europe on separate courses as to what to regulate, and other actions that impact air cargo, they need guidance and some help. Indications we are getting are that they would welcome some expert input. TIACA and GACAG can bring better understanding and cooperation between air cargo and governments and agencies around the world.”

 Oliver Evans

Director, The International Air Cargo Association and Chief Cargo Officer, Swiss World Cargo

CRUISING HEIGHTS July 2011

TRENDS Maersk Line CEO Eivind Kolding has sent out a challenge to container shipping:  What if we could guarantee that cargo would be on time, every time? What if placing a shipping order was as easy as buying an airline ticket? What if the shipping industry was known for beating environmental expectations — not struggling to meet them? What does all this have to do with air cargo? Well, plenty despite the fact that only around two per cent of the world's goods are carried by air. Over the years, that two per cent figure has not changed but the carriers have. And, incidentally, nothing has been done to increase market share. Air cargo industry experts have wondered why the three important points that Kolding has stated cannot be worked out by air cargo carriers. If the shipping lines make reliability their hallmark, aircargo would better wake up.The second is simplicity. Air cargo is already working towards that with e-freight and the sooner it is implemented it will be better for all. Lastly, the environment. Instead of calling for alternative fuels, Kolding asks for more transparency, so the shipper is better informed about the environmental costs of shipping.With the arrival of Europe's much-loathed Emissions Trading Scheme, airlines are ready to answer these questions. But they are also, as an industry, more focused on the future — many companies are looking at sourcing bio-fuels, and IATA has an industry deadline for switching. If these three things are what the shipper wants, the airline industry is in a position to provide them. It is high time air cargo changed.


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Troubled times for Deccan 360 Barely a year after launching operations, Captain G R Gopinath’s end-to-end cargo venture has been stopped in its tracks for want of funds. Worse still, Reliance Industries Limited that had taken a stake in Deccan 360 is almost ready to divest its share. A report. s it curtains for Capt G R Gopinath’s Deccan 360? After all the hype that Deccan 360 or also known as Deccan Cargo & Express Logistics would be the next FedEx of India, the pioneer of India’s low-cost aviation is floundering. Reason: he is looking around for financiers. The market is rife with reports

I

that Mukesh Ambani and his Reliance Industries Limited (RIL) that had invested in Gopinath’s cargo venture had almost decided to dilute its stake. The good captain — he is the Chairman and Managing Director of Deccan 360 — has had to give back the planes he had got on lease from the

Mauritius-based Veling. The three Airbus 310s that had been converted to freighters were — according to those in the know — forcibly taken away for non-payment of dues. The Deccan 360 chief, however, maintained that the planes were given back to the company. Indeed, they had been taken on lease for

GREAT START: Capt Gopinath (in the middle) waving to the crowd after unveiling Deccan 360. Also seen to his left are Kiran Grandhi, Chairman - Airports, GMR Group and S C Chhatwal, former Member (Finance), Airports Authority of India.

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three years but Deccan 360 needed smaller planes. “So, we returned them, and purchased ATRs,” he said. Efforts to contact Deccan 360 or Capt Gopinath failed since no one was willing to take calls. Veling is rated in the Top 40 Aircraft Lessors Worldwide and is engaged in aircraft leasing and sales. The company has, according to its website, concluded more than 20 transactions successfully including aircraft sales and leases of both narrow and widebodies aircraft worldwide. The company has a long association with India: in addition to the planes it had leased to Deccan 360, it conducted its first sale with a lease attached of five A310s to Air India; introduced seven CRJs for the erstwhile Air Sahara and owns two 2007built ATR72-500 aircraft leased to Kingfisher Airlines. The grounding of Deccan 360 comes barely a year after its launch. The cargo airline had started with quite an impressive fleet of three Airbus 310s and five ATRs. While the 310s touched the metros and important cities, the ATRs flew to the smaller towns. The aircraft along with a whopping 1000 vehicles touched 50 centres in the country. To start Deccan 360, Gopinath has invested $25 mn in Deccan 360 and the company had announced plans to raise $30 mn more

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CARGO in May 2009. Gopinath has invested $25 million in Deccan 360. The company had announced plans to raise $30 million in May 2009. By December that year, Gopinath had started meeting private equity players to finance his airline cargo business seeking around `200 crore for a 25 per cent stake in the cargo company. It is at that point of time, Cruising Heights readers will remember that Reliance boss Mukesh Ambani joined hands with Captain G R Gopinath to take a stake in Deccan 360. RIL is believed to have invested $30 mn (` 135 crore approximately) for 26 per cent stake in Deccan 360. RIL said that the finances would provide “growth capital” for the new cargo airline. The tie-up — if one may term it that — was tomtomed to change logistics in the country. Mukesh Ambani had then said: “We believe that our collaboration with Deccan 360 will see a transformation in the logistics domain in India.” At around that time —April 2010 — Captain Gopinath had commented that the business model of Deccan 360 was so sound that it “should become bigger than FedEx”. In an interview with economic daily, Business Standard, he had said, “We will be looking at the roadmap of how

to scale up and at what pace. I feel the way forward is through small-scale industries and real-time management of goods. My dream is that every district headquarters should have a Deccan 360 connection.” However, at the same time he had also pointed out that he needed more investments. “We made an attempt to raise equity in 2009, but the financial tsunami resulted in many of the companies we were in talks with to go belly up. The market has picked up now, and we have started talks with investors again.” Logistics pundits had commented that the investment by Ambani would enable Deccan 360 to enhance its network across the country and Capt Gopi had said: “Deccan 360’s strategic partnership with Reliance will enable us to realise our dream of creating world class logistics reach to every nook and corner of India faster.” The collaboration would turn out to create a win-win situation for both. Reliance with its retail outlets in 200+ cities around the country could take advantage of a dedicated cargo service, the investment would allow Deccan 360 to grow and consolidate its position. Justifying the reasons for choosing RIL, Capt Gopi had said that it was “the highest bidder, I would

have been able to get a higher value. Business isn’t just about money. RIL comes with a background in worldclass execution of projects and they will help Deccan 360 scale up. We were also looking at a company who was going to invest and be there for the long haul. RIL fulfilled these criteria and they in turn invested because of their confidence in the abi lity of Deccan 360’s management. A few months ago Capt Gopi had told an interviewer: “Mukesh Ambani has a vision that Deccan 360 should be better than world class in the cargo business and that’s the kind of vision which inspires us all to forge ahead.” He had also pointed out in the same interview that he had no plans of “rebranding Deccan 360. I am a person who enjoys creating new things,” Capt Gopi had said, “so, I am not going to sell something only for money”. Though Reliance had two representatives on the five-member Deccan 360 board, the day-to-day operations were left to Capt Gopinath and his team. The infusion of finances from Reliance obviously did not help the sagging airline to revive its fortunes. As the news reached Ambani’s office that the planes had been taken away, the Reliance top

FORMIDABLE LINE-UP: Capt Gopinath (middle) poses for a photograph with his core team — the top members are no longer in the company — who were instrumental in the launch of Deccan 360.

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brass said they were thinking of withdrawing from the venture and divesting their stake. Deccan 360’s present CEO H L Rikhye said that the Reliance officials had said that they were not keen to invest in Deccan 360 but were “morally and otherwise supportive of the business venture”. It is now apparent that Deccan 360 could not deliver what it promised. While launching the airline, Capt Gopi had said that if India wanted become an economic powerhouse, opportunities and markets had to spread across every part of the country: from the metros to the smallest towns. He had said that “unlike the West or nations such as China, India’s manufacturers in smaller cities or traders in interior areas and farmers in villages are unable to compete in the international market because of the limiting conditions of transportation and connectivity. If, as a nation, we focus on infrastructural development and include every one of the billion Indians to participate in this revolution, air cargo and passenger traffic will show a strong positive growth”, he had pointed out on the Deccan 360 website. He maintained that India needed to go a long way before “we stake claim to be called a

Mukesh Ambani

developed nation. If you want to live in Chikmagalur (a small town in Karnataka province),” wrote the captain, “you should be able to stay there not only for your weekends, but also to conduct your daily business with the facility of education, electricity, roads, airports and Internet cafes. To achieve this dream, cargo connectivity has to be embedded into the system — and that’s where Deccan 360 chips in.” With the vision of providing a panIndia service while enhancing supply chain and logistics operations, Deccan 360 needed funds as well as clients to expand. According to reports, Deccan

CRUISING HEIGHTS July 2011

360 had a whopping loss of `120 crore last year. The company had banked on large customers but what it had got was small businesses. While on one hand these small enterprises were certainly not the high-yielding kind on the other, they did not provide regular business. Add to that the fact that the company has not had a leader to steer it — in fact, it has seen a number of CEOs in its short life. At the time of filing this report, word from the Bengaluruheadquartered Deccan 360 is that the company is not folding up. Instead, the focus will now be on international non-scheduled cargo operations. Charter cargo operations from international markets is a growing business and Deccan 360 has found a number of opportunities in that sector. In addition, Capt Gopinath was reported to be looking out for private equity players or strategic investors to restart operations. However, market reports state that the blow from Reliance would certainly impact Deccan 360’s plans to raise funds. As of now, the company is cutting down its staff by 40 per cent and planning to restart operations with two ATRs of 7.5-8 tonne capacity on domestic routes. 

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CARGO

A big leap for Delhi’s air cargo Spearheaded by Cargo Service Centre, the facilities at Delhi airport’s cargo terminal will be at par with the best in the world. It will be equipped with high-end software that will ensure faster clearance of cargo. ir cargo from Indian airports witness rapid growth (international cargo has been witnessing a growth of 10.5 per cent while domestic has been around 25 per cent in the last five years). Figures from the Ministry of Civil Aviation indicate that the overall growth has been around 15.3 per cent. The forecast for the next ten years points out that the growth for international cargo would be around 9.6 per cent, while domestic cargo would be 11.7 per cent, while the overall growth has been pegged at 10.47 per cent. In such a situation, international airports around the country are looking out for world-class air cargo handling service providers. The country’s two top international airports at Mumbai and Delhi will soon have world-class cargo handling services provided by Cargo Service Centre India (CSC India). Led by Radharamanan Panicker, CEO, and backed by a team of more than 700 trained staff, CSC hopes to bring about

A

a sea change in the handling of the air cargo business. Committed to providing world-class services, Panicker pointed out that CSC was keen to provide services that would be “unlike other handling companies. We provide total cargo handling solution — physical, document and information handling. We do not rest on our achievements, but constantly keep raising the bar and keep innovating.” In a recent move, CSC has taken a move that will take Delhi Airport’s cargo facility into the big leagues. The Delhi Cargo Services Centre (DCSC), a special purpose vehicle (SPV) of Delhi International Airport Pvt. Ltd. and CSC, has signed on Siemens to set up a stateof-the-art cargo handling equipment for the Integrated Cargo Complex at Delhi International Airport. The 70,000-square metre Greenfield air cargo complex at Delhi airport will comprise two terminals. The complex, entailing an investment of $80 million, will have the capacity to

FUTURE READY: Graphic representation of Cargo Service Center which will come up at Delhi airport.

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CRUISING HEIGHTS July 2011

handle close to a million MT of cargo when fully completed. While the first phase of the project is ready for commissioning by July 2011, the project is scheduled for completion by March 2012. With a high degree of automation, the facility will be able to handle all types of cargo: general, perishable, express, valuable and dangerous goods as well as live animals for both international and domestic sectors under an integrated terminal concept. Siemens Limited’s Mobility Division will outfit the main terminal — T1 with air cargo handling solution (MHS) which will include Automatic Storage and Retrieval System, Cargo Workstation, Pallet and Container Storage and Handling System, all managed and controlled by high-level IT systems. Siemens Mobility Division will also supply high-end automation, Elevating Transfer Vehicles (ETV), Transfer Vehicles (TV), shuttles and hoists for fast movement of unit loading


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devices. High-end software that interfaces with other IT systems will ensure faster clearance of cargo. Starting with a mechanised handling system, in a span of four years, T1 will be largely automated in its operations with a capacity to handle more than 600,000 MT of cargo annually. Siemens will also maintain the system initially for a period of two years. The total investment in the MHS will be to the tune of €37 million, of which the initial order to Siemens is for €27 million, approximately `165 crore, which is till date India’s largest cargo handling system contract. Commenting on the move, Panicker said that the DCSC was focussed on “providing seamless and enhanced quality of cargo services” to its customers, and “we found the right partner in Siemens. We expect huge growth in cargo volumes and traffic, and such a reliable and highperformance cargo handling equipment will help respond to this demand.” Tilakraj Seth, Vice President and Head of the Mobility Division, Siemens Limited, said, “Siemens has implemented over 300 airport logistics systems worldwide. We will use this extensive global experience and proven state-of-the-art technology to enable DCSC to provide highly-efficient and reliable cargo handling services.” The Delhi move comes on the heels of the CSC’s first facility for Mumbai airport. Designed, developed and built on an area of 2,000 square meters, the Perishable Cargo Terminal at Mumbai airport caters to perishable and temperature-sensitive cargo. The CPC is capable of processing and handling 40,000 MT-45,000 MT of cargo per annum. “The new Centre,” Panicker said, “will aim at restructuring the basic cool chain logistics approach to achieve a quantum leap as far as performance is concerned.” The facility at Mumbai airport is on a ‘Build-Operate & Transfer’ concession from Mumbai International Airport Limited (MIAL) to CSC for a period of five years. The first phase of the twophase project has been completed and comprises 1,844 square meters. The second phase has provision of ULD storage of 400 square meters for the storage of 20 ULDs. In addition, the facility will have a non-sterile Customs and operational area of around 430 square metres and a sterile area of 1,400 square metres. “The new Mumbai facility will provide seamless handling of perishable cargo

Radharamanan Panicker

Tushar Jani

and be a one-stop shop for perishable cargo handling. While the Centre will have a processing capacity of 40,000 tonnes, there will be temperature monitors installed at all strategic locations, which will capture temperature and will attach it to product AWB information,” said Panicker. According to Panicker, “CSC is able to integrate the cool chain while providing superior quality service to its customers in handling PTSPs (Perishable and Temperature Sensitive Products).” Panicker is firm in his belief that new technologies help maximise the business potential of customers. “At CSC we are keen to bring macro-level standards in technology to India and we put it to use to give the perishable commodities a perfect quality in temperature control

Tilakraj Seth

in 1995 as a fully owned air cargohandling subsidiary of KLM Royal Dutch Airlines. It was the first cargo handling company in India to offer complete air cargo handling and security handling services to any airline. Today, KLM has divested 51 per cent of CSC to Tushar Jani, presently Chairman of CSC, and Khushroo Dubash. Jani was a founding member of Blue Dart Courier Services, and the founder Chairman of Blue Dart Express Limited and Blue Dart Aviation Limited. In addition to the air freight facilities at Mumbai and Delhi, CSC is actively developing Air Freight Stations with the Container Corporation of India (Concor) at five of its inland container depots. The first of these stations is ready for business at Ahmedabad while the second is scheduled to open at Mumbai. These stations will provide all airport-related

READY TO IMPROVISE: Cargo Service Centre will enhance the quality of cargo handling systems at Delhi airport.

and to give customers a powerful boost to productivity,” he said. CSC has also made investments to develop its information technology base, which will provide EDI connectivity links with more than 100 airline systems, enabling easy accessibility of data and real-time monitoring of all its activities. CSC India started operations in Mumbai

CRUISING HEIGHTS July 2011

activities like export and import cargo processing and handling and will help reduce congestion at Mumbai and other airports. The company also manages the Express Cargo Terminal for the Express Courier Industry at Mumbai and Delhi. —Tirthankar Ghosh

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CARGO/INTERVIEW

“We were quick to understand the pharma market’’ Hemanth D P, Chief Operating Officer at GMR Airports, on the facilities available at the Air Cargo Complex at Hyderabad's Rajiv Gandhi International Airport (RGIA) Commissioned on March 23, 2008, the Rajiv Gandhi International Airport (RGIA) has seen continued growth. It is unique since it has implemented a concept of an Integrated Cargo Facility housing both domestic and international facilities under one roof. Excerpts from an interview with Hemanth D P:

PUSHING FOR GROWTH: Air Cargo Complex at Hyderabad airport is poised for a big leap in pushing cargo business.

Q:

Why has Hyderabad airport taken the initiative to tap the perishables market?

Indian pharmaceutical industry ranks third in terms of volume and 14th in terms of value with a total turnover of $ 21.04 billion between 2008-2009, of which the domestic market share was $12.26 billion (pharmaceutical and drug manufacturers). With doubledigit export growth of pharma in terms of percentage in the last five years and the same projected for the next couple of years, we realised the need to focus on this segment of the market. Hyderabad is considered the pharma hub of the country with 70 per cent of the exports being pharma products. India and, in particular Hyderabad, is emerging as an important pharmaceutical manufacturing centre. To support the growing local industry, which now has strong global footprints, we as logistics enablers have to extend accurate and temperature-controlled care while handling pharmaceutical products. The world over various lifesaving medications and critical ingredients from the pharmaceutical industry require appropriate temperaturecontrolled storage during manufacturing, transportation, at transit points as well as in local pharmacies. Hyderabad being strategically located in the centre of the country and with the first of its kind facility at the Rajiv Gandhi International Airport (RGIA), the 'Pharma Zone' was commissioned at our terminal. We are in a strong position to

A:

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handle and serve not only local and nearby catchment area exports but serve countrywide customers.

 What kind of business have you been getting? Hyderabad has been handling a mix of products namely, pharma, seafood, engineering goods, electronics and gems and jewellery. However, pharma remains at the top with 70-75 per cent share.  How do you see the business shaping up in the next two years? Cargo business at RGIA, Hyderabad, has been noticing a steep growth: 12 per cent in 2009-10 and 21 per cent for 2010-2011. We are confident that we will continue to grow at 20 per cent in the coming years. All this is going to come from the various initiatives we have taken in the last one year to focus on the cargo business.  What plans has the airport management got to enhance the cargo business ? We have a number of plans that will fuel our growth. The 'Pharma Zone' was one of them. We were very quick to understand the pharma market requirements and responded by creating the 'Pharma Zone' facility, which became operational in January 2011. The facility can provide temperature-controlled handling for more than 30,000 tonnes of pharmaceutical products per annum. Among the other facilities are:  Transshipment: In line with our objective of offering integrated cargo solutions through RGIA we approached CRUISING HEIGHTS July 2011

Customs to allow transshipments from our common user cargo terminal. We were granted approval to set up a separate transshipment area within the integrated cargo terminal, which is fully operational. Cargo operators, after obtaining necessary approvals from Customs, can now transship both import and export cargo from the dedicated transshipment area. The integrated cargo terminal concept results in the efficient handing/taking over, handling and movement processes for transshipment cargo.  Airline Partnership: Lufthansa Cargo and GMR group have signed a Memorandum of Understanding to promote RGIA as a South Asian cargo hub, especially in the supply chain of pharmaceuticals. Lufthansa would be supporting the terminal with increased widebody freighter frequencies, capacities and their sophisticated state-of-the-art temperature-controlled transport solutions for time and temperature-sensitive pharmaceutical products.  Logistics Hub: GHIAL has made substantial progress in discussions with major carriers for strategic tie-ups at Hyderabad. This initiative will help transform RGIA into a logistics hub of India and the subcontinent in line with our vision.  Surface connectivity: In order to continue our efforts towards connecting Hyderabad with other major cities in India through surface network we are designing a scheduled Road Feeder Service (RFS). RFS, once operational, will cater to both bonded and non-bonded cargo movements into and out of RGIA, Hyderabad. 


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CARGO

Cathay tops the list IATA's rankings for 2010 show Asian cargo carriers among the top ten with Cathay Pacific leading the pack. t was well-known but with the International Air Transport Association's rankings it is now official that FedEx was the world's busiest cargo airline in 2010. The carrier was way ahead of its closest rival: it handled at least 50 per cent more cargo than its US-based competitor, UPS. Fedex handled 15.7 bn freight tonne kilometres (FTK) — including both domestic and international consignments — while UPS' cargo volumes touched 10.1 bn FTK. As for international cargo carriage, the top place was taken by Cathay Pacific (9,587 mn FTK). The national carrier of Hong Kong SAR and based at Hong Kong International Airport, Cathay Pacific's fleet includes widebody aircraft and its network consists of services throughout Asia, Europe, North America, Canada, Australia and New Zealand. The second on the list was Korean Air (9,487 mn FTK) that serves 99 destinations across six continents. Korean Air Cargo is the third largest cargo airline in the world. The only Middle Eastern airline on the top ten list was Emirates (7,913 mn FTK). The world's largest airline by the number of international passengers carried, Emirates, the third on the list of cargo carriers, is

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recognised as the fastestgrowing airlines in the world with an extensive network of services within the Middle East as well as to Africa, East Asia, South Asia, Australasia, North America, Europe and South America. Lufthansa with 7,422 mn FTK was the fourth on the list. A founding member of Star Alliance, the Cologneheadquartered carrier has hubs at Frankfurt and Munich Airports. One of the largest airlines in Europe, Lufthansa operates a large fleet of narrow and wide-body aircraft on an extensive network spanning Europe, Asia, the Middle East, North America, South America and Africa. Dubbed the busiest cargo carrier, FedEx (7,421 mn FTK) was the fifth on the list. A subsidiary of FedEx Corporation, FedEx delivers packages and freight to more than 375 destinations in nearly every country each day. It has its "superHub" at Memphis International Airport and international regional hubs at ParisCharles de Gaulle Airport, Guangzhou Baiyun International Airport, Toronto Pearson International Airport and Cologne Bonn Airport. Singapore Airlines (7,001 mn FTK) followed FedEx on the top ten list. The carrier uses a fleet of wide-body Boeing and Airbus aircraft, including

the A380 and operates an extensive network to 93 destinations in 38 countries across Asia, North America, Australasia, Europe, Africa and the Middle East. While the flag carrier of the Republic of China (Taiwan), China Airlines (6,410 mn FTK) was the seventh in the top ten, Louisville-headquartered UPS Airlines (5,215 mn FTK) that flies to more than 200 countries around the world, was the eighth. The last two on the list

were: EVA Air (5,166 mn FTK), the second largest airline in Taiwan, based at Taipei's Taoyuan International Airport and Cargolux (4,901 mn FTK) from Luxembourg. With its fleet comprising Boeing 747400 freighter aircraft (the airline is a launch customer of the Boeing 747-8 F), Cargolux operates scheduled and charter service to destinations in Europe, North America, Latin America, Africa, Asia and Australasia, as well as providing surface transport solutions.

International

FTK (Millions)

Cathay Pacific Airways

9,587

Korean Air

9,487

Emirates

7913

Lufthansa

7,422

FedEx

7,421

Singapore Airlines

7,000

China Airlines

6,410

UPS Airlines

5,215

Eva Air

5,166

Cargolux

4,901

CRUISING HEIGHTS July 2011

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COLUMN/FULLY LOADED

Time for

industry to unite SHESH KULKARNI

With our vast country, dividing these arbitration groups into zones such as north, east, south, west, and then educating our logistics community on its existence and the rules of engagement will significantly help the cause of the industry. 60

Stakeholders in the cargo and logistics industry need to sit up and think about the huge losses they incur due to payment defaulters. The only way out is to set up arbitration panels…

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n more than two decades in the cargo industry, I have had the privilege to experience some of the significant changes that our industry has seen. Perhaps, the most striking has been the liberalisation of the economy in 1991 that today has resulted in 100 per cent foreign direct investment. Through these years, issues relating to the industry have also seen major changes: from the “invasion of multinationals” to “infrastructure-related issues”, “economic policies” of the government and its impact on imports and exports, to “carriers attempting to make direct contacts with the shippers”, etc. Many of these happenings, at some stage, looked intimidating. But the trade has survived, only to become smarter and better from the experience and learning. That, however, is not the thrust of this column. I want to point out a “crisis” that has gripped our industry. It hit me when I met an industry colleague at a lawyer’s office. My curiosity prompted me to ask him why he was there. He said: “We have filed a legal case against few shippers…” Here was a helpless colleague with a serious issue and his only recourse was to file a case. What bothered me were his words: “Every time we have had a payment defaulter on our hands, the best we can do is file a case and then let the matter drift (depending on how fast or slow the legal system worked)…” There are many colleagues from the industry who must have had similar experiences where they feel they have been wronged by a shipper or importer by not settling freight dues. Perhaps, we have become indifferent due to a number of reasons: a) As a trade we are not organised; b) Our paperwork is not proper; c) We look the other way when we see a colleague in difficulty; d) We don’t have a clue or a plan to pursue such issues; and, e) As a trade body, we are not united to put up a fight due to our lack of understanding or lack of cohesive data at one place. Whatever the reasons, if we total the industry figure, it would be a mind-boggling one between `10 cr to even `100 cr. What is even more important is the fact that the figure would eventually be written off every few years by the trade. If this be the truth, it has not been highlighted as a painpoint by the trade. If one were to look around globally in matured markets such as Europe and USA, there CRUISING HEIGHTS July 2011

are concerted efforts to learn on how to deal with defaulters. Needless to say, these countries do have a very organised legal environment where matters are processed and judgements given within a certain defined and acceptable time limits. Simply put, these countries have a much evolved “arbitration” system. One wonders if the freight and logistics industry in India should also have approved and authorised arbitrators. These could be a panel of experienced lawyers, senior members of the trade and representatives from airlines and shipping lines. Is that possible? As a part of the cargo and freight forwarding industry, it is within our legal rights to have an arbitration committee. Having such a body would not only help us in speeding up many of these arbitration cases but also aid in consolidating such issues. In addition, while the decisions of the arbitration committee will be binding on all the parties (recognised by law), air carriers and shipping lines will have prior knowledge of the defaulters and can support the trade. If either party (shipper/importer/forwarders) were to dishonour the decision of the arbitrators, one would be free to go to higher courts for recourse and referral. Statistics around the world points out that 80 per cent of issues are resolved amicably with the involvement of the arbitration committee. Incidentally, it is also less expensive and a less cumbersome exercise. Above all, this will provide specific cover and direction to the trade on the manner of a possible recourse when facing a defaulted shipper or importer. With our vast country, dividing these arbitration groups into zones such as north, east, south, west, and then educating our logistics community on its existence and the rules of engagement will significantly help the cause of the industry. This will also put a check on the dubious interest of those shippers and importers who have made defaulting a well-orchestrated practice. Most shippers move on to another company without having the slightest of guilt or commitment to their previous association/relationships. Do our industry leaders think arbitration panels  are possible? (The writer is President and CEO of UFM and he can be reached at cruisingheights@newsline.in.)


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CARGO JOTTINGS

Green Boeing 747-8 Freighter takes flight Boeing flew the new 747-8 Freighter to its international air show debut in a doubly historic fashion, flying the airplane across the Atlantic Ocean to the Paris Air Show using a renewable aviation jet fuel — the world’s first transatlantic crossing of a commercial jetliner using biologically derived fuel. Boeing pilots Capt. Keith Otsuka and Capt. Rick Braun and Cargolux Capt. Sten Rossby flew the airplane with each of the 747-8 Freighter’s four GE GEnx-2B engines powered by a blend of 15 per cent camelina-based biofuel mixed with 85 per cent traditional kerosene fuel (Jet-A). “This historic flight is a boost to aviation’s efforts to reduce carbon emissions and improve efficiency in all phases of our industry,” said 747-8 Vice-President and General Manager Elizabeth Lund. “And the 747-8 Freighter fits in well with these efforts by bringing huge improvements in fuel efficiency, lower carbon emissions and less noise.”

UPS charts out expansion in Americas

Mercator wins for Best Cargo IT Solution

UPS has significantly expanded the capacity of its express air network throughout the Americas region. UPS increased its cargo capacity by more than 50 per cent on 19 weekly flights into Central and South America, replacing a Boeing 757 narrow-body aircraft with a new, larger B767 wide-body freighter. The flights will originate from UPS’s Americas hub in Miami and operate into Quito, Ecuador, Guayaquil, Ecuador, Bogota, Colombia, Panama City, Panama, Guatemala City, Guatemala, and Managua, Nicaragua. “UPS has been one of the largest cargo carriers in the Americas for more than a decade so when our customers asked for more capacity, we responded with this larger aircraft,” said Romaine Seguin, President of UPS’s Americas Region. “This enhancement in the Americas is a great example of how we continue to grow our portfolio of business solutions to serve the logistical needs of our customers.” The B-767 can carry a payload of 132,200 lbs, or about 50 per cent more than a B-757. Those two aircraft are used almost exclusively in the Americas for reasons of crew, operational and maintenance efficiency. The high schedule reliability rate of both aircraft is an attractive alternative for exporters with tight supply chain and cold chain requirements. To increase its reach into the Americas, Asia and other parts of the world, UPS continues to invest in new B-767s with 20 currently on order.

UPSMercator has been named the winner of the World’s Best Cargo IT Solution Award at the 2011 Air Cargo Week World Air Cargo Awards — known as the Information Technology awards for the Air Cargo Industry. Technology designed for the logistics supply chain continues to gain importance each year as airlines, forwarders and ground handlers seek out ways to speed up processes and optimise business performance. Mercator’s SkyChain product is an industry-leading solution for the cargo industry. By facilitating the development, streamlining and re-engineering of a number of key business processes, it delivers measurable value to customers’ botGREAT RECOGNITION: (L-R) Bertrand Schmoll, President, ECS; Sandeep Fernandes, tom line. Market Development Manager, Mercator; and “Our approach Nicole Krieger. in systematically incorporating the customer’s voice into product development is paying dividends, with demand for our cargo solutions continuing to grow across six continents,” said Duncan Alexander, Vice-President, Mercator. “Providing our customers across the airfreight supply chain with a solution that helps them address both their existing and future challenges, such as electronic data interchange (EDI), is key to our success and theirs. This award represents recognition of the world-class products and services that Mercator is delivering to its customers across the globe. We thank our many customers and industry partners for their votes and continued support.”

EXPANDING BASE: UPS expansion in Americas will further add strength to its capacity.

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Camelina, the plant source used to create the biofuel, was grown in Montana and processed by Honeywell’s UOP. Boeing does not need to make any changes to the airplane, its engines or operating procedures prior to departure to accommodate biofuel use. Normal flight parameters are being followed and were approved in advance by the U S Federal Aviation Administration. The airplane was on the static display at the Paris Air Show on June 21 and 22. It left the air show the evening of June 22 and flew to Cargolux headquarters at Luxembourg for a two-day visit. Cargolux is scheduled to take delivery of the first 747-8 Freighter to enter service this summer. The 747-8 Freighter is the new high-capacity 747 that will give cargo operators the lowest operating costs and best economics of any freighter airplane while providing enhanced environmental performance.

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Emirates SkyCargo goes green CARGO EMIRATES SkyCargo recently uplifted its first e-freight consignments from Kolkata to Dubai. The airline shipped about 3,000 kg of fresh vegetables to Dubai completely eliminating the aspects of printing airway bills, handling and processing costs. The airline provides over 150 tonnes of cargo capacity on a weekly basis with 12 flights from Kolkata to Dubai. Incidentally,

for which it is the launch customer. Qatar Airways has five freighter aircraft, and also delivers freight through the bellies of its passenger fleet. “We seek to fuel our growth plans by further developing our air freight business as a major part of our overall product offering and developing Qatar as a leading global cargo hub and one of the major players in the international freight market by 2015,” said Qatar Airways’ CEO Akbar Al Baker. “Our investment in Cargolux, a sound, healthy and profitable company and a leading all-cargo carrier, will deliver great value to Qatar Airways proving to be an excellent strategic partnership.”

Kale Logistics expands its presence

HEAVY DUTY: Cargo being loaded in Emirates SkyCargo aircraft.

e-freight tool allows for most cargo processes to be done electronically and eliminating costs of paper printing, handling and processing. The move by Emirates SkyCargo as well as several other airlines globally following the International Air Transport Association (IATA) fixing 2014 as the deadline to totally erase paper from air cargo supply chain, bring about greater transparency and shortens transportation time.

Qatar bullish on Cargolux deal QATAR AIRWAYS recently confirmed a major push into the air freight market with the purchase of a 35 per cent stake in European cargo-only carrier Cargolux. The Luxembourgbased airline has one of the world’s biggest freighter fleets, with 16 Boeing 747 cargo jets flying to over 90 destinations. It also has 13 next-generation Boeing 747-8 freighters on order,

KALE LOGISTICS Solutions Private Ltd recently announced that it has set up a regional office at Chennai, which is a strategic business hub in India. The Chennai office will enable the company to cater to the growing needs of its regional clients thereby resulting in improved customer service levels. The new Kale Logistics office is centrally located at Nungabambakkam, Chennai. With the company on the growth trail and contributing significantly to the technology needs of the logistics and airports industry, this strategic move of setting up regional offices will immensely aid in providing clients with a quick service and after-sale support. This has been an important move for Kale Logistics Solutions since its formation as a separate entity from its parent company in September 2010. Speaking on the occasion, Sumeet Nadkar, CEO & Managing Director, Kale Logistics Solutions, said that the move assumed strategic significance. “Our presence at Chennai will not only result in improved service levels, but also enable us to stay in constant touch with our key clients, who have contributed to the development of our broad portfolio of World class IT Solutions.”

Cathay’s freighters from Chennai to Frankfurt

Pakistan, Nepal & Bangladesh, said that Cathay Pacific Cargo KALE LOGISTICS Cathay Pacific Airways has launched direct was committed to India. “The new Chennai-Frankfurt service freighter services between Chennai and Frankfurt. The bi- will ease up the capacity constraints that this route has been weekly service operates on Wednesdays and Thursdays, in experiencing and will enable the freight forwarding addition to the four freighter services Cathay currently community in South India to enjoy access to the European operates from Chennai to Hong Kong. These freighters will markets.” continue onwards to Manchester on Wednesday and Brussels Cargo agents honoured: Cathay Pacific hosted award on Thursdays, making Cathay Pacific Cargo online to three ceremonies in Delhi and Chennai, in May 2011, to honour and thank the stalwarts of the cargo industry for their European destinations from South India. excellent support in 2010. According to Tom Wright, General Manager — India, Nick Rhodes, Director Cargo, Tom Wright and Ashish Middle East, Africa & Pakistan: “India is shining — a growing Kapur along with the Cargo Sales Managers, presented the economic super-power and has always been a big focus for trophies and certificates to the top 10 achievers. Said Tom Cathay Pacific Cargo. We have grown in the country over the Wright: “2010 was a fantastic last few years and today we are year for the Cathay Pacific group the biggest freighter operator in with our record breaking profit of India. Ever since we launched HKD 14 billion. Cargo did freighter services from Chennai to extremely well with a substantial Hong Kong in 2006, the route has double-digit growth as well over always performed well. With 2009. India is a very prominent South India becoming the part of our current network and industrial hub of the country we of our future plans. We owe much are thrilled to commence to our trade partners and thank freighter services from Chennai to them for their excellent support Frankfurt.” RECOGNISING THE BEST EFFORTS: Nick Rhodes, Director and contribution to our revenue Ashish Kapur, Regional Cargo Cargo, Cathay Pacific (third from right) presenting awards growth.” Manager-India, M.E, Africa, to cargo agents.

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TRAFFIC DATA

PASSENGER TRAFFIC

JETS AWAY MARKET SHARE OF SCHEDULED DOMESTIC AIRLINES IndiGo 19.9%

PASSENGERS CARRIED BY SCHEDULED DOMESTIC AIRLINES Passengers carried by domestic airlines during Jan-May 2011 were 244.98 lakh as against 208.28 lakh during the corresponding period of previous year thereby registering a growth of + 17.6%.



300

Air India (Dom) 13.2%

2010



 Jet Airways 18.5% JetLite 7.6%

Growth

- YoY(+17.6%) - MoM(+14.8%)

208.28

200





2011

244.98

250

150





100

SpiceJet 14.2%

47.86

50

Kingfisher 20.0%

0

YoY

54.96

MoM

GoAir 6.6%

SEAT FACTOR OF SCHEDULED DOMESTIC AIRLINES

CAPACITY VS DEMAND

The month of May 2011 witnessed decrease in seat factor as compared to previous month primarily due to lean season. Apr. 11 100

66

88.4

82.7

79.8

72.1

71.7

89.4

87 78

40 20

20 10 0 -10 -20 -30 -40

0 Air India

Jet Airways

JetLite

Kingfisher

here seems to be no stopping the Indian air passenger growth, according to the latest data released by the Director General of Civil Aviation. Air India apart, domestic carriers recorded impressive growths. Air India slipped to the fifth position in May, carrying a little over 13 per cent of all passengers. While all other domestic airlines recorded high growths, Air India

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Demand (RPKM)

30

78.6

60

T

Capacity (ASKM)

40

% change over Month

Seat Factor (%)

68.1

84.3

79.8

78.1

80

May. 11

SpiceJet

GoAir

IndiGo

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar Apr May

Year over Year

suffered because of the pilots' strike. Domestic traffic grew 14.8 per cent in May, compared to the same period last year. Domestic traffic crossed 540,000 in the month, and the total number of passengers flown was 549,200.  Jet Airways along with low-cost JetLite continued to maintain its lead as the largest carrier, with 26.1 per cent market share. IndiGo carried 19.9 per cent CRUISING HEIGHTS July 2011

passengers, slightly less than the 20 per cent flown by Kingfisher. SpiceJet overtook Air India, transporting 14.2 per cent of domestic travellers. Air India had a market share of 15.4 per cent in April, which fell to 13.2 per cent in May. GoAir's share was 6.6 per cent.  Load factor of all the airlines increased over April, the peak travel season. In May, SpiceJet went ahead of Air


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ON-TIME PERFORMANCE (OTP)

REASONS OF CANCELLATIONS

Scheduled Domestic Airlines, Overall OTP (May 2011)- 86.4%

Operational 74.5%

OTP

% of Total Ops 120 100

Weather 11.1%

92.3

91.8

92.1

90.2

87.6

80

78.6 68.6

60

Commercial 6.1

40

Technical 4.8%

20

6.8 JetLite

IndiGo

Jet Airways Kingfisher

15

11.2

4.9

0

Commercial 3.4%

GoAir

SpiceJet

AI (Dom)

On-Time Performance (%)

CANCELLATION DATA OF SCHEDULED DOMESTIC AIRLINES

IndiGo

0

GoAir

0.2

SpiceJet

0.2

PASSENGER COMPLAINTS OF SCHEDULED DOMESTIC AIRLINES Total number of complaints (May 2011) – 1194 • Number of passenger-related complaints – 2.2 per 10,000 passengers carried.

Overall Cancellation Rate in May 2011 – 3.4%

Air India (Dom)

1.4

Kingfisher

1.6 1.6

JetLite

Jet Airways

0.7

JetLite

0.8

2.5

SpiceJet

2.7

IndiGo 18

Air India 5

0

2.2

Go Air

0.9

Kingfisher

23.8

22.6

15.7

10

3.3

Jet Airways 25

20

15

0

0.5

1

2.5

2

3

3.5

4

No.of Complaints/10,000 Pax

Cancellation Rate (%)

ON-TIME PERFORMANCE FOREIGN CARRIERS 70 foreign carriers operating to/from India. At the time of compilation of this report, OTP data of 54 carriers was received. On-Time 79.6%

1.5

ON-TIME PERFORMANCE FOREIGN CARRIERS On-Time 78.2% Excessiv e (> 44 min) 4.4%



Excessiv e (> 44 min) 4.8%  Very Late (30-44 min) 4.3%

 

Late (15-29 min) 12.3%







Very Late (30-44 min) 5.1%

 Late (15-29 min) 11.3%

78.2% (Arrivals) 79.6% (Departures)

India, carrying 14.2 per cent of domestic travellers. Consequently, Air India, which had a market share of 15.4 per cent in April, fell to 13.2 per cent in May.  Jet Airways recently announced that its market share in Europe had increased following a year of new product launches in India. The airline posted 81.1 per cent occupancy on its international flights for February this year.

 IndiGo had the highest seat factor (89.4 per cent) among all the airlines. All the other airlines reported seat factors between 79 and 89 per cent. Also IndiGo again had no flight cancellations while 18 per cent of Air India flights were cancelled.  According to reports, there are two reasons for private airlines recording a growth in passengers. Air India carried almost 15 per cent of the total domestic

CRUISING HEIGHTS July 2011

passengers and many of them were transferred to private airlines because of flight disruptions resulting from the pilots' strike. To add to that was the fact that almost all airlines added flights in summer. On the other hand, Kingfisher Airlines has been restoring flights or launching new ones with most of its 13 grounded planes back in operation. Others, including Jet Airways and SpiceJet, too, added flights. 

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GLOBETROTTING

SHORT HAUL

RUN RIOT ONBOARD

An aircraft in Texas made an emergency landing not for any technical fault, but this time around, it was because of strong chemical odour in the flight. Sounds unbelievable, but it's true. With 146 passengers and six crew members, Continental Airline jet returned to the San Antonio airport in the US, just minutes after its take-off as the

passengers could not tolerate the strong unfamiliar smell in the cabin. One flight attendant was even taken to the hospital. Though the passengers were being evaluated by medical personnel at the airport, and a hazardous materials crew was examining the Boeing 737-800, but the source of the odour has not been determined as yet.

ver heard of anyone being rewarded for drinking? Well, yes. A pilot aused of drinking on the job at work, has been awarded $8400 by the Employment Relations Authority (ERA). Air2there, a chartered airline, was ordered to pay former operations manager and

chief pilot David Smith the money for “humiliation and distress�, and three months lost wages. Smith was sacked last September after a series of disagreements with CEO Richard Baldwin, and complained to ERA that he was unjustifiably dismissed. The disagreement began in August last year, when Baldwin handed Smith a letter, and told him he was suspended on paid leave. In the letter, Smith was accused of having a rude and inconsiderate treatment of others and a disregard of safety rules. Baldwin further accused the pilot of stealing of aviation fuel for personal use and had been drinking alcohol while working overnights. Besides, there were also public reports about Smith's drinking. Smith lodged two personal grievance claims and repeatedly asked for his job back, but Baldwin refused. ERA member Eleanor Robinson ruled that the pilot was unjustifiably dismissed. Baldwin had agreed that he lacked sufficient evidence to prove Smith had stolen petrol. ERA awarded Smith $12,000, but cut his compensation by 30 per cent.

E

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Aggressive behaviour of two passengers onboard a flight from Chicago to Warsaw was the cause for force landing in Iceland. Two passengers from the highland town of Nowy Targ, under the influence of alcohol, started to run riot onboard the aircraft. When a stewardess tried to calm the men down, one of the men retaliated by hitting her in the face. Other passengers were asked by the crew to overpower the men, after which the pilot of the aircraft decided to land immediately. On

MY NAME IS BIN

LADEN

AWARD FOR DRINKING

CRUISING HEIGHTS July 2011

Its unbelievable to know that a drunken man created panic and chaos in the airport by claiming to carry a bomb in his bag and saying that he was most wanted terrorist in the world, Osama bin Laden. It all happened when Christian Boncorps, 61, from New York with a grey beard claimed to Air France ticket agent at John F Kennedy Airport that he possessed a bomb in his bag, creating chaos among the security screeners at the airport. By then, the luggage belonging to boozed-up suspect was already aboard a Paris-bound jet that he had planned to get on. The incident occurred when Boncorps allegedly showed up drunk at the Air France ticket counter to get his boarding pass, sources said. An Air France reservation clerk asked Boncorps what he had in his bag, thinking he might be trying to smuggle more booze aboard, that's when the irked Boncorps made his comment about the now-dead terror chief Osama Bin Laden, the source said.


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KUNG FU AIR HOSTESSES

landing, the two men were taken out of the aircraft and handed over to Icelandic police. The flight, which was supposed to arrive in Warsaw, was delayed by two hours as a result. The men remained in the custody of local police.

High flying air hostesses are being taught high-kicking, kung-fu skills to deck drunk passengers who try to grope them. The Chinese stewardesses are taking classes in deadly Wing Chun which teaches students how to knock an aggressor out cold within seconds. Airline bosses say their flight attendants have to deal with at least three cases a week where amorous drunks try to paw them.

CHAOTIC TOILET PAPER

If terrorism is intended to generate fear, well it sure has, especially when you can make someone fearful of just a toilet paper. Although this example is pretty funny, false alarm can be serious business sometimes. The Alaska Airlines flight 508 was evacuated after a flight attendant reported a suspicious substance in the lavatory. The flight attendant discovered tissue with “white dust” and immediately raised alarm bells. The plane was met by a hazardous materials team when it landed in Orange County, California, arriving from Seattle. According to a spokesperson for the airport, the mysterious substance turned out to be toilet paper remnants. The airplane was put back into service after being cleaned and 151 passengers and six crew members were unharmed in the incident.

BEES IN AIR

Experts were called out to deal with a hive of African bees not found on a tree but discovered on a plane flown into Bournemouth Airport. The insects were discovered in the tailfin of a private plane and the National Bee Unit was asked to investigate. African honeybees are bigger than British ones, and if they interbreed, they can produce a hybrid labelled killer bees. The plane was stored in the JETS hangar on Bournemouth Airport's south-east business area. The National Bee Unit, a subdivision of the Food and

Environment Research Agency, was called out to take samples. A beekeeper was also called out, but could not re-home the animals, so a pest controller was asked to kill them. The plane is believed to have been in storage for three years before arriving. They were quickly destroyed.

MANIAC ‘MECHANIC’

In a bizarre incident, a US Airways mechanic with “mental health issues” stowed away on a flight from Tampa, Florida to Charlotte in North Carolina. The man, who hid in an unpressurised compartment, then bought a ticket and flew on as a legitimate passenger on a second flight to Pittsburgh. Police at Pittsburgh's airport met the man— who was not named, but was in his 40s — after being requested to do so by US Airways, apparently as a result of the man's behaviour at the gate, said Lieutenant Richard Mullen, Allegheny County Police Department, Pennsylvania, US. Lieutenant Mullen stressed the man was not arrested but was taken to a local hospital for a mental health evaluation after officers “decided he did have some issues”. “They (officials) don't know what the next step will be but since he was a ticketed passenger in Pittsburgh, in that jurisdiction he has not violated the laws,” Lieutenant Mullen said in a statement to FOX News channel. While the airline said it was investigating today's incident, as did the Transportation Security Administration (TSA).

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SNIPPETS

DOMESTIC AIRLINES GoAir ranked the best-performing airline

BIG ADDITION: Passengers enquiring at the Jet Airways check-in counters.

Jet to operate additional check-in counters IN AN effort to ensure additional convenience for its guests travelling internationally, Jet Airways has started operating an additional 10 integrated check-in counters at island M of the new terminal 3 at Indira Gandhi International Airport. The additional 10 check-in counters are for the airlines’ international flights and guests are requested to enter the departure terminal from Gate No. 7 of the Terminal 3 (IGI). Importantly, though guests flying to Hong Kong by 9W 78 and 9W 230 to Brussels/Toronto will need to continue to use the counters at island “D” for check in, as done currently. With the addition of the 10 integrated check-in counters, the Jet Airways now manages over 42 integrated check-in counters for the comfort and convenience of its guests, located at islands C, D and M for both domestic and international travel. All of which have significantly helped reduce check-in time for the airline’s guests.

Air India’s promotional fares a hit AIR INDIA’S short-term ‘promotional fares’ offer hits the right chord. The company achieved up to 85 per cent seat factor in Economy Class on its domestic network, in addition to contributing to stabilisation of fares in the domestic market — to much cheer of the passengers during the ongoing peak holiday season. The recovery has been across the domestic network, the spokesperson said, while detailing the seat factor between May 9-18 as 68 per cent, 80 per cent, 84 per cent, 83 per cent, 84 per cent, 84 per cent, 86 per cent, 84 per cent, 83 per cent and 85 per cent respectively. The spokesperson further mentioned that the peak season is witnessing good bookings and that there is a clamour to fly Air India. Introduces ‘Ten-Day Silver’ and Platinum Pass: Air India recently launched a short-term promotion scheme, Silver and Platinum Pass, for passengers in its domestic network. The Silver and Platinum Passes, which will be valid for ten days, are being offered in two variants for unlimited travel in economy and executive class on the domestic sectors of the national carrier. Passengers buying the “Silver Pass” can fly on economy class to any domestic sector of their choice at an attractive fare of `30,000 while passengers who purchase the “Platinum Pass” can travel in executive class to any domestic destination at a fare `50,000. This fare is inclusive of taxes.

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GOAIR has been ranked by Airbus as the “best-performing airline” in the Airbus A320 category operator in Asia Pacific/ Middle East/Africa. The award is presented every two year by Airbus based on both fleet utilisation and performance achievements in each region and worldwide and for two categories of fleet size. Their metrics take into account on-time performance as well as severity of the operational interruptions (based on the Airbus Severity Index calculation). Expressing his gratitude on receiving this recognition, GoAir spokesperson said, “We at GoAir feel absolutely delighted to receive this recognition and strongly believe that this award is recognition of the consistent effort and commitment by all our GoAir employees in particular our engineering, operations and maintenance team, the ground support and the airport service team.”

Joins Arab Air Carriers Organisation (AACO): Jet Airways recently joined AACO as the first Partner Airline of this regional airline association. The partnership, which was simultaneously announced in Beirut and Mumbai, will provide the Jet Airways and the Arab airline members of AACO with opportunities of creating synergies through the various joint projects under AACO in areas such as fuel management, ground services, safety initiatives, and training to name some of the areas. Nikos Kardassis, CEO of Jet Airways, said, “With our growing presence in the Middle East, an opportunity to partner with Arab Air Carriers Organisation (AACO) is an important one. This association is strategic to our continued success in this region. We are indeed looking forward to working with AACO on their various joint projects and initiatives.”

DDF unveils Veuve Clicquot fridge DELHI DUTY Free recently announced the exclusive launch of luxury Veuve Clicquot fridge. Coming from the house of Moet Hennesy, Veuve Clicquot fridge undoubtedly offers a complete package to its clients. With this exclusive addition Delhi Duty Free in order to give the best to its travellers extends its inventory to trendy and lifestyle collections. This collectable cool gift box comes with an ice bucket, some flutes, a bottle stopper, an appetizer and a spectacular Jeroboam ice bucket. The individual mini fridge houses one bottle of Veuve Clicquot and keeps it fresh and chilled for two hours while travelling — thus, adding a little luxury to lifestyle by allowing carrying around a bottle of ELEGANT: Veuve Clicquot Fridge. champagne in a personalised fridge.

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BIA heralds terminal expansion BENGALURU INTERNATIONAL Airport Limited recently announced the expansion of the passenger terminal building. The terminal, when completed, will double the existing terminal area of 70,000 sq metres. This will take the terminal capacity to over 17 million passengers per annum, with flexibility to expand to 20 million, a requirement that will meet the traffic demand for the next few years. Simultaneously, a comprehensive review of the master plan is also underway. “With the commencement of the terminal expansion, we hope to alleviate any hurdles being faced by passengers. At completion, we envision an enhanced airport that befits the city of Bengaluru, enhances its business opportunities, complements its culture and welcomes its visitors”, said G V Sanjay Reddy, Managing Director, BIAL. Wins Best Emerging Markets Airports Award (EMAA): Bengaluru International Airport has been acknowledged with the title of the Best Emerging Airport — Indian sub-continent by Emerging Markets Airports Awards (EMAA) for the second consecutive time. The other top four contenders included airports from India, Pakistan and Sri Lanka. Bengaluru International Airport was declared the winner post the tabulation of the poll results from industry chiefs and leaders across the world airports. The awards ceremony was hosted in Dubai on June 1, 2011, with senior decision makers

RATED BEST: Hari Marar, President, Airport Operations, and Daniel Bircher, Director, Operations, BIAL with the Award in Dubai.

from the airports fraternity, civil aviation authorities, airports and aviation suppliers. The EMA awards 2011 honours airports from the emerging markets of Middle-East, Africa, Indian subcontinent, Russia, CIS and Baltic States by surveying the most diverse and discerning group of professionals involved in airports, aviation, aerospace, cargo and logistics across the emerging markets and based on the values of their endorsement, airports were recognised. This year, the awards evaluated product and service touch points across the airport experience, covering a wide range of passenger types and highest satisfaction ratings in a diverse market.

IGIA offers Park n Fly facility

CSIA completes reconstruction of primary runway

DELHI AIRPORT’S T3 now offers its passengers the park-and-fly facility at its Multi-Level Car Park (MLCP), the largest car park in India that can accommodate up to 4300 vehicles. With ‘Park N Fly’, the passengers can have the convenience of parking their cars for an extended number of days, when they fly out of T3. The MLCP at T3

IN LINE with its ongoing efforts to upgrade the cross runway system and create an efficient airside infrastructure, Mumbai International Airport Pvt Ltd (MIAL) has completed the reconstruction of runway 09/27 (Primary Runway) at Chhatrapati Shivaji International Airport (CSIA) in Mumbai. This project, which is an integral part of the overall master plan for the modernisation of CSIA, was completed on time in a period of seven months. The scope of work primarily included upgradation and resurfacing of the primary runway. The existing width of the runway was increased from 45 metres to 60 metres with a compliant runway shoulder width of 7.5 metres on each side, thus making it compatible for operations by Code F aircraft such as the A380. The slope profile of the runway was corrected to address the undulation present earlier.

P S Nair to head ‘Small Airports Network Council’ CLASS APART: Multi-Level Car Park (MLCP) facility will further boost DIAL’s credibility as the best airport.

offers ample space, safety, efficient and courteous staff and most importantly the convenience of travelling in your own car when you are back from your trip. Park N Fly facility is available at the premium parking area on the ground level with attractive facilities like dedicated customer service desk, secured and well-guarded parking space with CCTV cameras, and a dedicated fire fighting system. The passenger stands to gain all the way with Park N Fly, as he pays `500 for the first day, `400 for the second day and `300 for every additional day that he wishes to park his car at the multi level car park. These slabs are over 45 per cent cheaper than the standard parking charges.

P S NAIR, CEO of GMR Airports, recently elected as the Chairman of the ‘Small Airports Network Council’ of Airports Council International (ACI). The announcement was made on the occasion of 7th ACI Asia-Pacific Small Airports meet held in Incheon, Korea on June 2-4, 2011. The Small Airports Network Council is engaged in improving the overall service P S Nair standards and the bottomline of airports which have an annual traffic of less than 4 million. Nair is already an elected Director of the ACI Asia-Pacific Regional Board. ACI Asia-Pacific is headquartered in Hong Kong and represents the interests of over 480 airports around the AsiaPacific region.

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INTERNATIONAL AIRLINES in First Class three — each weighing up to 32 kg. In the future, under the new, standardised baggage rules, the free baggage allowance per passenger (in comparison to the former weight concept) will be as follows: Economy Class: one item of baggage weighing up to 23 kg (previously: any number of baggage items weighing a total of 20 kg). Business Class: two items of baggage weighing up to 32 kg each, i.e. a maximum of 64 kg (previously: any number of baggage items weighing a total of 30 kg). First Class: three items of baggage weighing up to 32 kg each, i.e. a maximum of 96 kg (previously: any number of baggage items weighing a total of 40 kg).

AirAsia X firms up engine supplier

Qatar Airways wins key awards STRATEGIC ALLIANCE: Azran Osman-Rani, CEO of AirAsia X and Kevin McAllister, Vice President of Sales, GE Aviation signing the agreement.

AirAsia X recently signed a firm contract with GE for the purchase of CF6-80E1 engines to power the new aircraft order of the three new A330-200s (with the option of two additional aircraft). The aircraft, which is scheduled for delivery from 2012, will be operated on the carrier’s expanding network, offering low-fare service to destinations in Europe, Asia and the Pacific. In addition, AirAsia X has also signed a 20 year On-Point solutions agreement with GE for the maintenance, repair and overhaul of the CF6-80E1 engines. The CF6-80E1 engines supplied by GE will enhance AirAsia X’s long-haul operations. The agreements valued at over USD600 million was signed by Azran Osman-Rani, the Chief Executive Officer of AirAsia X and Kevin McAllister, Vice President and General Manager of Global Sales, GE Aviation. Supports ‘ASEAN Youth Caravan of Goodwill’: Recently, twenty ASEAN youths boarded AirAsia X flight D7 2652 to Haneda, Japan, with a noble quest to spread joy and support to the people of Japan. The ASEAN Youth Caravan of Goodwill, ran from June 3-5, 2011, saw the group visiting evacuation centres, performing cultural shows and sharing their own personal experiences from similar disasters in the past, strengthening the bond which has long existed between the people of Japan and ASEAN. Wins three major awards: AirAsia grabbed three major awards for investor relations (IR). Dato’ Sri Dr Tony Fernandes, AirAsia’s Group CEO, was named the Best CEO for Investor Relations - Mid Cap, while Benyamin Ismail, AirAsia’s Investor Relations Manager, was named the Best Investor Relations Professional - Mid Cap. AirAsia also won the Best Investor Relations Website award. The three awards were given by the Malaysian Investor Relations Association (MIRA) in its inaugural awarding ceremony.

Lufthansa increases free baggage allowance LUFTHANSA PASSENGERS travelling from India to Europe can now carry considerably more baggage free of charge in all classes. The airline is simplifying and harmonising its free baggage allowance policy, adopting the piece concept on all its flights globally. As a result, Lufthansa’s First and Business class passengers can soon carry more than twice the weight of baggage they were entitled to previously. The free baggage allowance for passengers to and from India travelling in Economy Class has been increased from 20 kg to 23 kg for one piece of luggage. In Business Class, passengers may check in two items of baggage -

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QATAR AIRWAYS has been lauded for its Business Class, earning premier accolades at two separate award ceremonies in Dubai. For the sixth year running, Qatar retained the Leading Business Class Airline in Middle East title, as voted by travel industry professionals, at the World Travel Awards. The airline, was also honoured as the region’s Best Business Class by readers of the prestigious monthly magazine Business Traveller Middle East at its annual awards ceremony in Dubai. Voting was based on the strength of the airline’s inflight service, cabin comfort, ground hospitality and product offerings for travellers in Business Class. Superior seating with a pitch of up to 78 inches, above the industry norm, and fully flat beds are a hallmark of the airline’s Business Class cabin onboard its flagship long-haul aircraft, the Boeing 777. Moves JFK operations to Terminal 8: Qatar Airways recently switched its operations at New York’s John F. Kennedy DESERVED: Qatar International Airport from Terminal WELL Airways Country Manager 4 to Terminal 8 as part of the UAE Mohammed El Emam, airline’s drive to offer passengers left, with celebrity chef Gary enhanced levels of service. Terminal Rhodes, picking up an award at the Business Traveller 8 is one of the airport’s newest and Middle East Awards in Dubai. most modern terminals, offering 5star amenities and services to Qatar Airways’ customers departing, arriving and transiting through New York.

BA announces special offers BRITISH AIRWAYS recently announced its annual promotional offer for outbound university students travelling to the UK, US, Canada and select European destinations. This initiative allows students flying with British Airways between November 1-15, 2011, to carry an extra piece of luggage weighing up to 23 kgs in addition to the permitted checked in allowance. Furthermore, British Airways has teamed up with partners to provide special offers and attractive discounts to students bound for foreign universities. The offer is valid for students holding a valid student visa to the UK, Europe, USA or Canada only. The outbound travel must be completed on or before November 15,2011, originating in Delhi, Mumbai, Bengaluru, Hyderabad or Chennai. Any dependents accompanying the student can also benefit from the free excess baggage and this offer is valid for travel in any cabin. In the case of a return trip, the excess

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baggage is only valid one way, on the outbound half of the journey. To avail the special partner offers, students would need to present their British Airways ticket and student ID card at the respective retail stores.

Cathay unveils summer attractions Cathay Pacific and sister airline Dragonair recently announced a special summer attraction ‘Visit Hong Kong Now’ offer for travellers from India. The offer will allow travellers and vacationgoers to experience world-class service coupled with warmth of Asian hospitality. The special ‘Visit Hong Kong Now’ offer includes return airfare with a free hotel stay for either two or three nights and a choice of added benefits for two people travelling together. Invites students for environmental conservation: Cathay will sponsor 40 students from around the world to take part in the new Cathay Pacific Green Explorer programme — an eight-day programme that will take place in Hong Kong and Sichuan Province in China. The aim of the programme, which runs from August 13-20, 2011, is to give the young participants a better understanding of environmental issues and the importance of conversation. The Cathay Pacific Green Explorer 2011 programme, for students aged from 16 to 18, is a part of Cathay Pacific’s ongoing commitment to sustainable development and corporate social responsibility. Celebrates inauguration of Abu Dhabi service: Cathay Pacific Airways recently celebrated the launch of its new fourtimes-weekly service between Hong Kong and Abu Dhabi with a gala event held at the Fairmont Bab Al Bahr in the capital city of United Arab Emirates on June 8. The carrier became the only airline connecting the two cities when its first flight took off from Hong Kong. About 600 guests, including dignitaries, government officials and business partners, joined the gala celebration hosted by Cathay Pacific Chief Operating Officer Ivan Chu. Officiating at the event were guests of honour Her Excellency Sheikha Lubna bint Khaled bin Sultan

Etihad welcomes Katrina to Dubai BOLLYWOOD STAR Katrina Kaif paid a visit to Dubai in June to show her support as Brand Ambassador of Etihad Airways. During a private evening function, Kaif met with Etihad business partners to discuss her own experiences with the UAE’s national airline and thanked them for their loyalty both to her as a movie star and in her capacity as the airline’s Brand Ambassador. Of her role as Brand Ambassador, Kaif said, “When you are flying with Etihad, not only are you impressed by the world-class luxury of the airline, but you also experience the unique hospitality of modern Arabia. I am honoured to work with Etihad because I am continually impressed by the superior product and high standards of service. I am thrilled to hear that Etihad will be bringing its world-renowned service to exciting new destinations, as well as making its product more accessible than ever here in the UAE.”

Al Qasimi, the UAE’s Minister for Foreign Trade, and Charles Ng, Associate Director-General, Invest Hong Kong of the HKSAR Government.

Emirates summer surprise for children EMIRATES AIRLINE recently launched its summer bonanza offer “Summer Smiles in Dubai” offering families with children under 12 years an incredible offer while they visit Dubai this summer. Passengers who book a three-night package with select hotels in Dubai between May 14-September 30, 2011, can have up to two children under the age of 12 years to fly at 50 per cent off the adult fare while their stay, meals and play in Dubai are absolutely free when travelling with two paying adults. The Summer Smiles in Dubai package from Delhi begins at `74,823, which comprises a three-night stay for two adults and two children ,which includes the visa cost for the children. The visa costs for the two adults are not a part of the package. Links Dubai with Geneva: Emirates recently linked two renowned international hubs by launching flights between Dubai and Geneva. In true international style, passengers were booked on the inaugural flight out of Dubai from places such as Australia, Ethiopia, Tanzania, India, Bangladesh, Kuwait, Iran and Mauritius. “This launch, in particular, has a strong international feel about it — linking Dubai, as a global aviation hub and centre

for business and tourism with Geneva, a home to so many international organisations and an important financial and banking centre,” said Tim Clark, President, Emirates Airline. Commences services to Baghdad: Emirates recently commenced passenger flights to Baghdad from the November 13, 2011, marking the airlines’ second destination in Iraq. Operating four times per week Baghdad will be Emirates’ fifth international destination to launch in 2011 with Basra and Geneva already operational and Copenhagen and St Petersburg to follow on August 1 and November 1 respectively.

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TRAVEL & TOURISM Malaysia gears up for food festival KOTA KINABALU’S first food festival makes its inaugural debut from July 9 to 22 July 2011. Appropriately themed as “A Tasty Turn of Events”, the KK Food Fest is a two week showcase of Food and Beverage establishments in and around Kota Kinabalu. The KK Food Fest promotes delicious experimenting by way of a specially designed “Festival Menu”— available only throughout the duration of the festival. Diners will be able to enjoy unique offerings from participating establishments in this first-of-its-kind event. Participants of the KK Food Fest include restaurants, lounges and bars attached to hotels, stand-alone F&B outlets, qualified chain eateries, as well as gourmet food products and wine suppliers.

Leela Kempinski Gurgaon: top-ranked hotel EXPEDIA NAMED The Leela Kempinski Gurgaon among the top-ranked hotels on this year’s Expedia Insiders’ Select list. The Insiders’ Select list formally recognises individual hotels worldwide that consistently deliver excellent service, a great overall experience and a notable value. The full list represents only 500 of Expedia’s top-ranked hotels selected from more than 130,000 properties offered by Expedia. “In the short time this wonderful hotel has been open, national and international recognition has inevitably reflected the incredible commitment of over nine hundred carefully selected, highly motivated and impeccably trained hospitality professionals. At the end of the day, recognition like this Expedia Award, which reflects feedback from the myriad of satisfied and returning Leela Gurgaon guests, remains the ultimate accolade for all 5-Star hoteliers”, said Roger Wright, General Manager of The Leela Kempinski, Gurgaon.

The 2011 Expedia Insiders’ Select list is compiled based on the more than 500,000 annual guest reviews collected by Expedia, combined with a value rating and the local market expertise of more than 500 Expedia employees in local markets worldwide, resulting in an easy-to-browse list that provides travelers with a powerful way to find the perfect hotel using the trusted insight of other travelers like them. The list showcases the diverse selection of travel destinations and hotel properties.

Ankur Bhatia is ‘India Business Icon 2011’ ANKUR BHATIA, Executive Director of the Bird Group, was recently awarded the India Business Icon 2011 award for his valuable and outstanding contribution to the travel and tourism industry. The Business Icon Awards were jointly hosted by Entrepreneur Magazine and Network 18. On receiving the award, Bhatia said, “This Ankur Bhatia recognition is an inspiration for me and my team to excel further and take Bird Group to newer heights in the travel and tourism arena. This will further strengthen Bird Group’s position as an emerging travel and tourism conglomerate in India.” The awards ceremony was held on June 10, 2011. The awards recognised entrepreneurs who have left a mark in their arena of business with the help of a sharp business acumen and corporate style. Bird Group is one of the largest diversified groups in the travel and information technology arena. A conglomerate of independent companies, Bird Group has business interests ranging from travel technology, education, hospitality and luxury retail. As Executive Director, Ankur Bhatia provides the strategic vision and direction to the consortia of the Bird Group of Companies.

Fortune on a launching spree

Gurgaon. Soon to be added are a Chinese Restaurant. FORTUNE HOTELS, ITC’s mid-price segment hotel chain, Eco-friendly moves: Over the last month, ITC hotels launched its 38th property: Fortune Park DJ Avenue at have been celebrating World Environmnet Day. ITC Gardenia, Ghitorni, on the busy Mehrauli Gurgaon Road near Delhi. With the world’s largest and Asia’s first LEED Platinum Luxury a sprawling lobby and coffee shop, extensive lawns and car Hotel at Bengaluru, adopted contemporary green practices and parking facilities, Fortune’s newest hotel is an important initiatives that embrace sustainability. addition to the chain. The hotel offers Fortune’s branded multiAs an energy saving initiative during the week, ITC cuisine restaurant ‘Orchid’ and the ‘Neptune Bar & Lounge’. Gardenia switched off or dimmed all electrical consumption With a la carte and buffet meals, it is the perfect location for a between 7.30 pm -8.30 pm local time and observed ‘Twilight coffee break or a meal. Rhythms’ enhanced by the melodious music of a flutist and a A beautifully designed hotel with butler presenting organic sweets to an eco-friendly water feature, this guests in the lobby. boutique hotel with its 21 wellWith a conscious desire to appointed rooms is perfect for a educate and raise awareness amongst weekend getaway. It offers the generation of tomorrow, 25 8th & convenient conference and 9th graders from a local school banqueting facilities - ‘Citadel’ the participated in an interactive banquet hall and the spacious ‘Green discussion with the management of Lawns’ are ideal for open-air ITC Gardenia on a ‘Greener Future’ entertainment and weddings. as the way forward. With the convenience of the In Kolkata, ITC’s ‘greenest Metro Rail services, Ghitorni is fast hotel’ and the only one in the world developing into an up-market location to have garnered ‘carbon credits’, for custom-built furniture, carpets and celebrated World Environment Day boutiques. Fortune Park DJ Avenue, is FACILITIES GALORE: Orchid, the Ghitorni-based Fortune with a ‘Green Walk’ involving located equidistant from Delhi and Park's multi-cuisine restaurant. students from 17 Kolkata schools.

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India’s first-ever Readers’ Travel Awards Condé Nast Traveller India recently announced the launch of India’s first-ever Readers’ Travel Awards, recognised internationally as a benchmark for excellence in the travel and tourism industry. Readers are invited to vote for their favourite travel experiences by filling out the Readers’ Travel Questionnaire available in the current issue of Condé Nast Traveller or by logging onto www.cntraveller.in. Entries are open from June 3- July31, 2011. Winners will be announced at an awards ceremony in December. The awards enjoy global, industry-wide credibility because they are judged by the most important stakeholders — travellers themselves. Now CNT India readers will have the opportunity to vote across 24 categories for their favourite destinations, hotels, airlines, spas, airports and more. Their choices will be scored on several parameters unique to each category. Five lucky winners will win luxury hotel stays at destinations including Phuket, Dubai, Singapore, Tokyo and Bangkok.

Thomas Cook unveils newly created team In an endeavour to continue its focus on developing and enhancing strategic trade relationships, Thomas Cook (India) Ltd recently set up a “Trade Relations and Communications” team. Suzanne Pereira, Vice President, Trade Relations and Communications will head the newly created team and will be assisted by Farah Muncherjee, Associate Vice President, Tourism Relationships and Kruti Sharma, Senior Manager, Communications. The team would focus on building, managing and leveraging synergies between strategic trade partners such as tourism boards, airlines, hotels, car, and rail in addition to the various verticals of the Thomas Cook enterprise. The combined experience of the newly formed team will offer the right rapidity and support for effective management

BEST OF THE BEST: Cape Town emerged as one of the best tourist destinations in the world.

Cape Town named top tourist destination CAPE TOWN has been named the top tourist destination in the world at the 2011 Travellers’ Choice Destinations awards. Cape Town outdid Sydney, Machu Picchu, Paris, Rio de Janeiro, New York, Rome, London, Barcelona and Hong Kong to win the top spot. Commenting on the accolade, Hanneli Slabber, Country Head India, South Africa Tourism, said, “This is a great honour for South Africa and its people and exhibits our commitment towards the tourism sector. We believe that the vibrancy and diversity of Cape Town have earned us this accolade in spite of being pitted against some of the most renowned places around the world. This honour would only encourage the travel and tourism industry in South Africa to consistently achieve greater heights of service excellence.” Travellers’ Choice Destinations awards honour the top travel spots worldwide based on millions of real and unbiased opinions from TripAdvisor travellers. Award winners were determined based on a combination of travellers’ favourite places and overall destination popularity.

Chalets Naldehra: A home away from home

peaks play hide and seek! Sip steaming hot tea, as you gaze TUCKED IN a cedar forest at 6000 ft, with breathtaking through the fluttering curtains at the most scenic mountain views of the Himalayas. Here every room comes with a view. views and landscapes. Discover a sky which is like an artist’s The Chalets Naldehra is a place of leisure, recreation, family canvas with its ethereal cloud formations and often a rainbow and corporate bonding, an ideal base for adventure activities sketched across. Watch the lengthening shadows and dusk and golfing. Delicious food and settling around as the warmth personalised service are a given. of a crackling log fire in your A boutique mountain resort, room envelops you. The Chalets offers The resort houses an accommodation in quaint indoor, all weather swimming pinewood log cottages built with pool that is temperature imported technology and wood controlled and offers from Finland. Set against a spectacular views of the valley backdrop of deodars, this hill and mountains. A spa adjoining resort with its idyllic ambiance the pool is a haven for those beckons you to revel in the lyrics seeking rest and relaxation of nature and the music of the with soothing massages and mountain winds. Enjoy the magic ayurvedic treatments and a of the Himalayas as the mist and SERENE: Exotic background makes Chalets Naldehra more exciting. Jacuzzi.

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WELL-CHARTED JOURNEY: (Above) US Airways flight 1549 also known as the “Miracle on the Hudson” which crash landed on the Hudson River in New York is being taken to the Carolinas Aviation Museum where it will be on permanent display and (below) the airplane being fished out from the Hudson River; and, passengers evacuating the airplane after it landed on the river.

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ocial networking is this year for his role in the catching on like never transportation of the A320 that before and the aviation survived the January 2009 sector is reaping divicrash on the Hudson (US Airdends — witness the number of ways Flight 1549) and made a airlines on Facebook and Twithero of Captain Chesley “Sulter! The social sites were put to ly” Sullenberger to the Caroligood use recently by a man nas Aviation Museum in Charwhose only link with aviation lotte, North Carolina. Charles Sullenberger strangely was the carriage of an Now known as the “Miracle accident-stricken and damaged A 320. on the Hudson” jet, the plane had been in The man in question is Joseph Supor Supor’s warehouse since the crash and it III, owner of J Supor & Son Trucking and would have, probably, made a quiet jourRigging Co from New Jersey in the US. ney to the museum. At the prodding of the Supor was in the spotlight in June museum, Supor and his management made the most of the 123-foot plane’s historic week-long travel on a specially constructed trailer through Facebook and Twitter. The plane journey was anything but plain: every move was recorded on its own Facebook page, which was updated regularly with photos from those who had taken pictures of the plane on its journey. In addition, the trip was also documented by the museum, which Tweeted photos and details along the way. All the attention apart, Supor is a low-profile entrepreneur and wants to remain behind the scenes. For him, Capt Sullenberger’s heroism outshines everything and were it not for “the combined effort of all, this move

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(to the museum that, incidentally, he did for free) could not have been accomplished. The outpouring of support throughout the country has been overwhelming and I’m reminded again why  I’m so proud to be an American.”


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