1. Slash fuel surcharge now, demand fliers
Mumbai’s fliers want airlines to reduce fares now. And they do not want to listen to any of the reasons aviation majors may have in not doing that immediately. Airlines had taken barely a couple of days to hike fares and cut down on facilities when fuel prices rose (fares were raised six times) last year, fliers recalled, adding airlines should be similarly prompt in slashing fares when fuel prices dipped. Oil companies announced a 16 per cent cut in aviation turbine fuel (ATF, also called jet fuel) prices on Sunday. But all the airlines have said there is no question of reducing fuel surcharges right now. “They were so quick to cancel flights, cut flights completely on some sectors and withdrew even minor facilities like serving a few candies on board. So, if we were sharing the brunt with airlines in case of a hike, should we also not benefit from a cut in fuel prices?’’ Anoop Varma said. He is a regular on some domestic sectors and remembers how he was stranded in Guwahati a month back as most airlines have cancelled flights on the Guwahati-Kolkata sector. He is now looking forward to switching to call conferencing instead of making frequent business trips. TOI has already reported how the number of passengers travelling by air dipped by 5 lakh between June and July this year after the hike in fares. Experts feel the trend is likely to continue if fares stay north for some time. “The civil aviation ministry was expecting a 26 per cent growth in passenger traffic during 2008-09. But, if the ticket prices remain steep, the growth rate will be a single-digit figure as middle-class families will slowly move away from air travel,’’ Air Passengers’ Association of India (APAI) chairman Sudhakar Reddy said on Monday. It’s not only passengers who feel fares should dip in proportion to the cut in ATF price. Experts, too, say airlines should at least slash the fuel surcharge. “Let them charge the passenger as much as they like. But to charge them more on fuel surcharge is unfair,’’ Reddy said.

Source: September 02, 2008, The Times Of India

2. BA, Lufthansa monitoring Alitalia stake sale

British Airways Plc and Deutsche Lufthansa AG said they’re monitoring Italy’s plans to seek a foreign investor for bankrupt Alitalia SpA, indicating Air France-KLM Group may face a challenge should it bid for a stake. Lufthansa, Europe’s second-biggest airline, said the Italian market is “interesting,” while British Airways ,the No. 3, said “people are aware of the situation and are in touch.” Neither would specify if an offer for the Rome-based company is likely. Italian Prime Minister, Mr Silvio Berlusconi, said on August28 that a foreign partner will be able to take a minority holding once Alitalia is sold to Italian investors, with unprofitable parts of the company liquidated and as many as7,000 workers fired. AirFrance said the same day it wants to remain an ally and is willing to take a stake should the carrier show it has better prospects. Alitalia will be merged with domestic rival Air One SpA  as part of the rescue, leaving the new company with two thirds of the Italian air-travel market and making it more attractive as larger European carriers scramble to consolidate amid declining traffic and higher fuel bills. Lufthansa said Aug. 25 it may also seek a stake in Austrian Airlines, while British Airways said today it too is watching the Vienna-based company. Lufthansa spokes woman, Ms Claudia Lange, said the Cologne- based company failed to bid for Alitalia last year because of the Italian airline’s debt. IBERIA, AMERICAN AIRLINES British Airways spokes woman, Ms Anna McDermid, declined to comment further on Alitalia. The London-based airline said July 29 it’s planning to merge with Spain’s Iberia Line as Aereas de EspanaSA. The pair is also seeking to create an alliance with AMR Corp.’s American Airlines which would see the companies operate as a single carrier on trans-Atlantic routes. Air France, Europe’s largest airline and a partner of Alitalia in the SkyTeam alliance, dropped an offer to purchase the entire company in April after opposition from unions and Berlusconi during his successful election campaign. Od do Securities analyst, Mr Yan Derocles, said British Airways is less likely to come up with the investment needed to secure a minority stake in Alitalia, which he estimates at about €200 million ($293 million). “It’ll be Air France or Lufthansa, but it’s by no means clear which,” Mr Derocles said. “Air France already has a commercial alliance with Alitalia, they’re both partners in Skyteam, and AirFrance had already made an offer. On the other hand, Lufthansa is a partner of AirOne.” The Paris- based analyst has add recommendations on Air France and Lufthansa and a reduce rating on British Airways. The Italian Cabinet on August28 modified the country’s main bankruptcy law to prepare for Alitalia’s rescue. Under the so- called Phoenix plan, drafted by Intes a Sanpaolo SpA, a group of 16 local investors led by Piaggio SpA Chairman Roberto Colaninno will put up €1 billion ($1.5 billion)to buy the carrier’s profitable units and the state’s49.9 per cent stake. Mr Augusto Fantozzi, a former finance minister, was appointed to conduct the sale and liquidate Alitalia’s unprofitable parts.

Source: September 02, 2008, The Hindu Business Line

3. Lufthansa to stop Pak flights from Oct 25
Lufthansa Airlines has reportedly decided to discontinue operating its flights from Pakistan after October 25. The airlines cited commercial reasons for its decision. According to an airline of- ficial, Lufthansa was operating three flights a week between Lahore and Frankfurt and passengers with reservations after October 25 had been offered seats on Gulf Airlines

Source: September 02, 2008, The Hindu Business Line

4. Indian carriers set to ride on the global platform
Aiming to compete with their rivals in the international market, the fast-growing Indian airlines are looking at global platforms to widen their overseas presence. The two Indian international carriers—Air India and Jet Airways—currently have less than 25% share in the long-haul market to and from the country. With the third carrier Kingfisher Airlines joining the ranks this month, the Indian aviation scenario is all set to change. Kingfisher Airlines, which is starting its international operations on September 3 with a Bangalore-London flight, is considering options to join the SkyTeam Alliance led by Air France-KLM and Delta Airlines of the US. The national carrier, Air India, has already joined the Star Alliance, the world’s largest airlines consortium led by Lufthansa and Singapore Airlines. Mumbai-based Jet Airways could eventually become the Indian partner of the Oneworld Alliance, led by British Airways and American Airlines, according to industry sources. Under such global alliances, airlines agree to co-operate, tie up to provide better connectivity to international passengers, share terminals as well as expertise in back-end operations. Indian airlines are aiming for a greater presence in the lucrative international market with the ambition of taking market share from the large number of international carriers such as Singapore Airlines, Emirates, Lufthansa and British Airways, which dominate international traffic to and from India. Kingfisher executives said that it would be “most logical” for the airline to eventually join the SkyTeam alliance, given the growing links with the Air France-KLM. “It is a bit early to comment on our global alliance plans, but we are already looking at developing synergies with Air France-KLM, which are providing back-end technical support in London to our aircraft,” he said. Kingfisher has already entered into a maintenance and technical support pact with Air France-KLM for its wide bodied aircraft used in international operations. Meanwhile, Jet Airways is currently evaluating our options. “We have not decided to join any alliance as of now. There are no specific time frames. The airline industry is going through a phase of consolidation and airline groupings could also possibly change in the immediate future. The recent example being Continental exiting the SkyTeam and joining Star Alliance,” Jet Airways VP (marketing) Gaurang Shetty said. Jet Airways currently has frequent-flier programme partnerships with 16 carriers and has codeshare partnerships with Qantas, American Airlines, Brussels Airlines, Etihad Airways and Air Canada.

Source: September 02, 2008, The Economic Times

5. Hero Motors forays into aviation, to build light jets
Form a humble cycle to commercial jets — that’s where one of India's oldest corporate houses, the $4.5 billion Hero Group, is headed. The Munjals-promoted Hero Motors has firmed up plans to invest Rs 500 crore in a new business vertical to set up a special economic zone (SEZ) for aviation and defence. The company has floated a new subsidiary, Hero Aviation, to spearhead its aviation foray. The SEZ would provide a ready base for global defence and aviation companies to start operations in the country. Hero Aviation is in the process of acquiring 300 acres to set up the proposed SEZ. The company has short-listed three possible locations to acquire the land for its proposed SEZ. People close to the company said an agreement might be freezed with the Rajasthan government to set up the SEZ in Jaipur. Besides inviting investments from overseas players, the company is planning to manufacture light sport aircraft (LSA), used in pilot training, for overseas and domestic markets. "Hero Aviation would be a joint venture between Hero Motors and a few foreign partners. We will tie up with different partners for different verticals. We are already talking to a few European players," Hero Aviation CEO and vice-chairman, Pankaj Munjal, told Financial Chronicle. He, however, refused to elaborate any further. Financial Chronicle was the first to report Hero Motors' plans of an aviation foray on April 22. Hero Motors would hold a majority 76 per cent stake in Hero Aviation while some unidentified foreign partners would jointly hold the remaining 24 per cent. The company is planning to set aside nearly 100 acre from the proposed 300-acre SEZ to set up an LSA assembly unit, a pilot training academy, plane component manufacturing facility and a maintenance, repair and overhaul facility (MRO). "The LSA assembly plant would manufacture jets with an option of buyback in which the foreign partner would buy up to 950 aircrafts for overseas markets. We are yet to ascertain whether we would sell these aircrafts in the Indian market or not," Hero Aviation general manager (project) HD Sharma said.

Source: September 02, 2008, Financial Chronicle

6. Hope for good times ahead
After efforts trying to get the rules to fly abroad change failed, Vijay Mallya used the 'acquisition advantage' to plan daily flights Bangalore to London and also connect US cities like New York and San Francisco. However, the timing could be a bit challenging, even for the ever-intrepid Mallya. What was a profitable sector is clearly in slowdown. Naresh Goel's Jet Airways has cancelled two flights on the Mumbai-Shanghai-San Francisco route. And mounting losses at Air India are forcing cost-cutting of a severe kind. Add the small dip in oil prices doesn't make the story any less grim. Nevertheless, aviation sector watchers who follow the Jet-Kingfisher rivalry now expect Kingfisher to raise the bar on service quality. After all, Mallya is always hoping to buck the odds. At the very least, he will now be able to operationalise his new fleet of ultra-long-range Airbus A-340s. Either way, passengers can be assured of "Good Times" ahead

Source: September 02, 2008, Mid-Day
 

 7. Putting Malaysia On The Global Aviation Map
As Malaysia celebrates the 5lst anniversary of its independence, the country's aviation industry is also marking a new chapter in its history - thanks to the efforts of one company in transforming the Sultan Abdul Aziz Shah Airport in Subang into an ultra modern general and corporate aviation hub. The company Subang Sky Park Sadan Bld, through its RM350 million redevelopment plan, hopes to give the facility a brand new image as well as return the grand dame of Malaysia's airports to its rightful place on the world aviation map. And as the team at Subang SkyPark will tell you, this is no mere pipe dream. Phase 1 of the redevelopment project, called SkyPark Subang, is already well underway; involving the RM35 million refurbishment of the airport terminal, dubbed SkyPark Terminal. When completed in October this year, the terminal will boast a rejuvenated ambience, with new facilities and amenities such as flight visual directories, broadband WiFi. Additional food and beverage (F&B) outlets, trendy retail stores as well as better public conveniences befitting a modern day airport. Catering for community flyers - on Berjaya Air and FireFly - the airport will be a far cry from what it was during they ear sitc eased to be the country' s primary airport hub. "Subang Airport has been quiet for the last 10 years and we plan to put it back on the world map, "says the man at the helm of Subang SkyPark, Executive Director Datuk Ravindran Menon. Subang Airport was officially opened to traffic in August 1965 and had, at the time, the longest runway in Southeast Asia. By the 1990s, the airport had three terminals - Terminal 1 for international flights, Terminal 2 for shuttle flights between Singapore and Kuala Lumpur and Terminal 3 for domestic flights. With the opening of the Kuala Lumpur International Airport in Sepang, operations at Subang scaled down to that of general aviation and turbo-prop operations at Terminal 3. Then in December2007, Subang Sky Park unveiled its ambitious plans to transform Terminal 3 - turning it into an up-to-the-minute general and corporate aviation hub. Excited about the progress at Subang Airport, Ravindran says: "The refurbishment at Sky Park Terminal is a major development aimed at realising the government's broader vision of the Malaysia International Aerospace Centre. It's a big vote of confidence in the Malaysian Government's vision of forming a world-class general and corporate aviation hub to serve this growing market, placing Subang once again on the world aviation map and bring-ing with it greater investments and spin-offs to the aviation industry" Malaysia's Dy PM Datuk Seri Najib Tun Razak echoed Ravindran's sentiments recently at the unveiling of SkyPark Subang's fixed base operation (FBO) earlier this month. The Dy PM said the establishment of the FBO - operated by SkyPark FBO Malaysia Sdn Bhd - is a step "forward in our journey towards setting up the region's first general and corporate aviation hub with world-class standard of products, services, facilities and amenities." SkyPark FBO is a JV between two of the world's leading players in business aviation, Swiss-based Execute Jet Aviation Group and Australia's Hawker Pacific. The coming together of these two players is in itself a significant milestone in that it is the first partnership of its kind in this segment of business aviation. SkyPark FBO expects to rake in RM3 million to RM5 million in its first year of operation. Equally Austria-based Vista Jet Holding SA has expressed its confidence in the SkyPark Subang concept, choosing it as its Asian hub following an 18-month due diligence exercise covering locations in Singa-pore, Hong Kong, India and China. That VistaJet - the fastest growing private jet company offering charter services to des- tinations worldwide, with over 500 passengers and at least 300 flights per month -chose SkyPark Subang is seen a major coup for both the facility and Malaysia in general. The five-star FBO is Asia's largest and is touted to be the most impressive in the world. It boasts meeting rooms, a luxury lounge with F&B facilities for private jet passengers, a private WIP lounge, a cigar lounge, a bar, kitchenette, gym, meditation room as well as a crew lounge and rest area. It also houses its own Customs, Immigration and Quarantine facilities for passengers' absolute convenience. For Subang SkyPark, the successful establishment of the FBO is just the beginning. As the concepteur, developer, manager and operator of general and corporate aviation hubs for the region, the company hopes to replicate its success at Subang to other locations. Buoyed by the success at SkyPark Subang to date, it's no surprise that the company has already received several requests from various parties to develop general and corporate aviation hubs in India. The company is also looking at Thailand, the Philippines and Indonesia as other possible locations. Work onPhase2of SkyPark Subang involving the creation of a Regional Aviation Centre, including maintenance, repair and overhaul (MRO) facilities, dedicated hangar age and corporate aviation related industries is expected to start soon. This will be followed by Phase 3, which will see the development of a Commercial Nexus - a leisure mall that is tourism-centric revolving around an aviation theme. These components, when completed in 2010, will truly stamp Malaysia's mark on the world aviation map

Source: September 02, 2008, The Financial Express

8. Kingfisher Airlines may join SkyTeam Alliance
Aiming to compete with their rivals in the international market, the fast-growing Indian airlines are looking at global platforms to widen their overseas presence. The two Indian international carriers—Air India and Jet Airways—currently have less than 25% share in the long-haul market, to and from the country. With the third carrier Kingfisher Airlines joining the ranks this month, the Indian aviation scenario is all set to change. Kingfisher Airlines, which is starting its international operations on September 3 with a Bangalore-London flight, is considering options to join the SkyTeam Alliance led by Air France-KLM and Delta Airlines of the US. The national carrier, Air India, has already joined the Star Alliance, the world’s largest airlines consortium led by Lufthansa and Singapore Airlines. Mumbai-based Jet Airways could eventually become the Indian partner of the Oneworld Alliance, led by British Airways and American Airlines, according to industry sources. Under such global alliances, airlines agree to co-operate, tie up to provide better connectivity to international passengers, share terminals as well as expertise in back-end operations. Indian airlines are aiming for a greater presence in the lucrative international market with the ambition of taking market share from the large number of international carriers such as Singapore Airlines, Emirates, Lufthansa and British Airways, which dominate international traffic to and from India. Kingfisher executives said that it would be “most logical” for the airline to eventually join the SkyTeam alliance, given the growing links with the Air France-KLM. “It is a bit early to comment on our global alliance plans, but we are already looking at developing synergies with Air France-KLM, which are providing back-end technical support in London to our aircraft,” he said. Kingfisher has already entered into a maintenance and technical support pact with Air France-KLM for its wide bodied aircraft used in international operations. Meanwhile, Jet Airways is currently evaluating our options. “We have not decided to join any alliance as of now. There are no specific time frames. The airline industry is going through a phase of consolidation and airline groupings could also possibly change in the immediate future. The recent example being Continental exiting the SkyTeam and joining Star Alliance,” Jet Airways veep (marketing) Gaurang Shetty said. Jet Airways currently has frequent-flier programme partnerships with 16 carriers and has codeshare partnerships with Qantas, American Airlines, Brussels Airlines, Etihad Airways and Air Canada.
Source: September 01, 2008, The Economic Times

9. DIAL unveils magazine for air travelers

DIAL (Delhi International Airport), a subsidiary of GMR Infrastructure and Outlook Group on Monday launched a premium monthly magazine, Outlook Lounge, catering to the air travelers. The company said that the magazine would be available at free of cost to the passengers at all departure terminals of Delhi Airport. B S Shantharaju, CEO, DIAL, said, “DIAL is happy to partner with the Outlook Group, to launch the magazine for passengers. It will help passengers stay in touch with the latest updates in the development of IGIA.”

Source: September 01, 2008, Business Standard

10. Air Astana flying higher

Air Astana, the flag carrier of the Republic of Kazakhstan, continued to experience strong growth during the first half of 2008, with available seat kilometers up by 20% to 4.2 billion compared to the same period in 2007. Passengers carried during the first six months of 2008 increased by 16% to 1.3 million, with the total expected to reach 2.4 million for the full year. Passenger revenue increased by 26% to US$312 million and cargo revenue was up 30%. Almost 14,000 scheduled passenger flights were undertaken, with an average load factor of 64%. The Air Astana fleet grew to 21 aircraft during the first half of 2008 following the delivery of three additional Airbus A320 family aircraft. The airline confirmed orders for six A320 family aircraft during the first half of the year, with the fleet on track to grow to 34 aircraft in 2014 and 63 by 2022, Additional aircraft capacity enabled Air Astana to increase frequencies on domestic trunk routes from both Astana and Almaty, whilst international service frequencies were increased to Frankfurt, Istanbul and Moscow. Other achievements during the first half of the 2008 were the 100% implementation of electronic ticketing, the popularity of the new Nomad Club frequent flyer programme and the opening of a new aircraft maintenance facility in Almaty. “Air Astana has rapidly established itself as the industry leader in the CIS region, with a commitment to a modern, Western fleet, operational reliability and constant innovation in passenger service," said Peter Foster, president of Air Astana He added, “Air Astana continues to perform strongly despite the clear challenges facing the air transport industry today and has a very exciting future ahead.” Air Astana is a joint venture between Kazakhstan’s Samruk State Holding (51%) and BAE Systems (49%). The airline commenced regular flight operations in May 2002 and currently operates a network that serves 25 domestic and 21 international destinations from its hubs in Almaty, Astana and Atyrau. Air Astana is a full member of the International Air Transport Association and is the only airline in Kazakhstan with EASA Part 145 aircraft maintenance certification.

Source: The Times of India,28.8.2008

Prepared by
Jennifer Kumar, BBA (NAU) Alumni
Skyline Business School
Hauz Khas Enclave, New Delhi 110 016
Tel: 2686 4848, 2652 4399
http://www.skylinecollege.com