Travel |Update|
Issue 243
1. Airlines told to pass ATF benefits to consumers
The civil aviation ministry has asked domestic airlines to reduce fares and pass
on the benefit of falling jet fuel prices to passengers. It has also instructed
them to review their security systems and verify background of their employees
in the light of recent terror attacks in Mumbai. “We took stock of the entire
aviation sector. Various issues right from aviation turbine fuel (ATF ), to
security and airlines’ preparedness to land in airports during foggy weather
conditions,” civil aviation secretary M Madhavan Nambiar told ET after a meeting
with airline CEOs, and officials of Bureau of Civil Aviation Security (BCAS) and
Directorate General of Civil Aviation (DGCA). Mr Nambiar said airlines can’t be
forced to slash air fares. It’s a commercial decision of air carriers, he said.
An official present in the meeting, on condition of anonymity, said that
airlines had been categorically asked to reduce airfare to attract more
passengers. “All of us should work together to put passengers on aircraft. Fares
have to be competitive to fill up seats,” he said quoting the top civil aviation
ministry official. As per an estimate, there is still about 20% excess capacity
in the market that may put pressure on airline operators to slash fares. High
airfares and slowdown in major economies has hit the domestic aviation sector.
The domestic air traffic declined 22% to 3.04 million in November this year. Air
traffic growth is expected to be negative for the full year with the sector
witnessing double-digit fall in air passengers for the last several months.
Source: December 16,
2008, The Economic Times
2. Travel agents demand reinstatement of commission
Air travel agents from across the country on Monday demanded the government to
direct airlines, including state-owned Air India, to reinstate commission paid
to them, which has been abolished on the “pretext” of incurring, loses. In a
meeting, attended by several airline unions like TAAI, TAFI, IAAI, IATO and
ADTOI here, the travel agents have also demanded the Parliament to pass a law
for commission, so that “it could not be changed by the air carriers for their
monetary benefits”. The associations submitted a mass petition to the Petition
Committees of Lok Sabha and Rajya Sabha.
Source: December 16, 2008, The Economic Times
3. Foreign airline phobia
Eleven years ago the Civil Aviation Ministry introduced a guideline that said
only foreigners who had no experience in running an airline can pick up a stake
in a domestic airline. It was an odd policy especially when the same Government
of the day had framed rules quite to the contrary for investment in the telecom
sector, where it had sensibly insisted that the foreign investor should have had
a credible track record in managing a large telephone network. Foreign telecom
majors were welcome but not foreign airlines in India’s domestic market. Whether
the Civil Aviation Ministry’s guideline had a specific kill target may never be
known but, as it transpired, an application from the Tata group and Singapore
Airlines to start an airline in India was disqualified. It is a matter of
considerable concern that such an absurd policy has survived to this day even as
the investment regime has become less rigid and more open across most sectors of
the economy. Now the time is good as any to jettison it. Not just because the
International Air Transport Association last week was asking the Indian
government to review its policy. Many countries even in the developed world do
fetter foreign investors when it comes to ownership of their domestic airlines.
Indian restrictions on how much stake foreign investors can hold in an airline
are not exceptional in that sense. Yet it would be opportune to do away with the
quaint clause that disqualifies foreign airlines from participating. Domestic
private airlines, deep in losses inflicted by high fuel prices and a steep
decline in passenger traffic, will be happy with a sizeable infusion of equity
at this juncture. Airlines have tried it all: cut flights, lower fares and yet
the seats are unfilled in what is peak travel season in normal times. It will
take more than the reduction in fuel prices — which has been done in recent
weeks — to nurse them back into profits. The airlines need to wait it out, but
lack the financial stamina to do so. They are not the most attractive clients
for bank loans given the business uncertainty over the next few months. As they
look to raising equity, they find that foreign airlines with cash and with a
longer-term strategic intent are more likely to pay a higher price for an equity
stake than most others in these conditions. By removing the bar on foreign
airlines investing in domestic airlines, the government will not only correct an
erroneous policy; it will help domestic carriers in desperate times. Indeed, it
will carry far less moral hazard than the fiscal bailouts contemplated.
Source: December 16, 2008, The Hindu Business Line
4. Airlines non-committal on fare reduction
Domestic flying will
not become cheaper immediately despite oil companies reducing aviation turbine
fuel (ATF) prices by 11.5 per cent. The latest downward revision in prices
creates a situation where diesel costs almost Rs 3 a litre more than the price
of ATF in Mumbai while in Delhi, diesel is costlier by Re 0.17 per litre than
the fuel used by domestic aircraft. These two metro airports are the busiest in
the country and account for a majority of flights operated. In the case of
Kolkata and Chennai, however, the situation is different. While in Kolkata, ATF
costs Rs 7.08 a litre more than a litre of diesel, in Chennai consumers pay Rs
34.98 for a litre of diesel or Rs 1.45 less than what airlines pay for a litre
of ATF. The latest reduction announced by the oil companies will see domestic
airlines save more than Rs 4.20 on every litre uplifted at the four metros
compared with what they were paying previously. “We are not looking at further
fuel surcharge reduction until ATF is considered as a declared good,” the newly
appointed Chief Executive Officer of SpiceJet, Mr Sanjay Aggarwal, said. A
spokesman of Kingfisher Airlines said that the airline is “evaluating the impact
of the announcement and will take a view” on what steps should be taken.
Officials of Jet Airways said they would not like to comment till the official
notification listing the new prices was issued.
Source: December 16, 2008, The Hindu Business Line
5. GE arm takes back Kingfisher planes
US-based GE Commercial Aviation Service or Gecas has taken possession of three
A320 aircraft it had leased to Kingfisher Airlines Ltd after a dispute over
lease payments. Gecas had asked aviation regulator Directorate General of Civil
Aviation to de-register four A320 aircraft from its India registry as, the
lessor said, the airline had defaulted payments and it (the lessor) could take
over its aircraft, according to a civil aviation ministry official who asked not
to be named. ‘DNA’ newspaper reported the return of the planes on 14 December.
Airbus A320 aircraft command a lease varying between $300,000 and $500,000 a
month depending on the negotiations between lessor and the airline. The dispute
had ended in the Karnataka high court. On Monday Kingfisher, too, said the
aircraft have been handed over. “It is Kingfisher Airlines’ case in the court
proceedings that there is no money owing from Kingfisher Airlines to Gecas and
that, in fact, Gecas is holding surplus funds of Kingfisher Airlines,” said
Vijay Mallya, chairman and chief executive officer of the carrier who has also
been defusing a payments row with state-run oil firms such as Indian Oil Corp.
Ltd and the airports regulator Airports Authority of India in the past three
months. An email sent to Gecas India remained unanswered. The civil aviation
ministry official cited above said the issue was an “embarrassment” as no other
“major carrier” has in the recent past defaulted on lease payment. An analyst
too said it was unusual from airlines to default on lease payments. “I have been
covering the Indian market for the last five years and cannot recall such an
incident during that time, but it’s possible that it may have occurred earlier,”
said Binit Somaia, Sydney-based director of Centre for Asia Pacific Aviation,
for India and West Asia.
Source: December 16, 2008, Mint
6. Dream airport off to flying start
Take an aerial view of the international terminals in Sahar and you will see a
portion or the rough heart-shaped plot when the new shiny airport will come up.
Fur the next two years, the airport operator will demolish terminal 2A and
rebuild it. Taking the modernization process closer to the final master plan —
integrated terminal for international and domestic travel. However, the work
will not affect our travel from the country's busiest airport. In early May. all
airlines from Terminal 2A were shifted to the refurbished international
terminals 2B and 2C m phases. "The aim is better travel experience to passengers
even while the construction is on/' said Sanjay Reddy managing director of
Mumbai International Airport Limited (MIAL), the CVK led private consortia
modernizing the airport. "For an airport, currently in operation and running to
its full capacity, this was carried out in a systematic and planned manner
without inconveniencing fliers/' he said. The approach to the airport cut in
ties tube a problem with a six-lane elevated road dedicated to the airport under
construction. Post 26/11 attacks, the one-way approach with the security
barricades becomes choc-a-bloc Once you enter the terminals, 135 check-in
counters make queues shorter, seven conveyor belts in the departure section and
nine in the arrival make handling luggage easier Besides, there is a Flight
Information Display System, which provides passengers with not only the status
of their (lights but also with information on check-In counters, boarding gate
details and baggage information. There are about 132 such screens across the
terminal International travellers will have a sprawling retail spread spanning
27.000 sq m — nearly half a soccer field, "This area would have branded food
courts' said a MIAL spokesperson. On the airside, a new taxiway N9 opened last
month has cut down the time you spent hovering above the airport by 20 minutes.
The Rs 10000-crore airport in Panvel, which hit an air pocket after objection by
Ministry of Environment, continues to hover in uncertainty "We have nut gut the
clearance from ministry. We cannot set deadlines unless we get that." said M.S.
Gill, managing director of the City and Industrial Development Corporation, the
nodal agency handling the project.
Source: December 15, 2008, Hindustan Times
7. Lufthansa restarts talks with SAS
Lufthansa AG has resumed talks with SAS Group on buying a stake in the
Scandinavian airline, Sueddeutsche- Zeitung said, without saying where it got
the information. Initial talks earlier this year collapsed because Lufthansa and
SAS had different visions, the newspaper said.
Source: December 15, 2008, Business Standard
8. Finnair eyes flights from south India
Beating the slow down in the aviation sector where airlines are reducing their
flying zones, Finland’s national carrier Finnair, is keen to start operations
from Chennai and Hyderabad as there is a lot of traffic for Finland from these
cities. “We are waiting for government approval to operate from these cities as
a large number of engineers from India working with Nokia are posted in
Helsinki,” said Kari Stolbow, director-Indian subcontinent, Finnair.
Source: December 15, 2008, Hindustan Times
9. Mid-air recharge for cell-powered jets
A team of scientists has devised a unique way of refueling aircraft, using a
high-powered laser to recharge on-board batteries. A fundamental problem with
aircraft is the amount of fuel they have to carry. Designers are forced to make
compromises to reduce fuel consumption and to squeeze the necessarily large fuel
tanks into the craft. All this drives up cost and reduces maneuverability. One
alternative is in-flight refueling, but that can be logistically difficult as
well as dangerous, requiring to aircraft to meet in mid-air and transfer liquid
fuel via a flexible hose. But now, according to a report in New Scientist,
Taysir Nayfeh and colleagues at Cleveland State University have devised a way of
refueling aircraft using a high-powered laser to recharge on-board batteries.
The team said that the aircraft would be fitted with panels capable of
converting up to 60% of the laser light that hits them into electricity. A
single ground-based laser could then keep numerous aircraft airborne
indefinitely. The most obvious use would be for light, uncrewed surveillance
aircraft, but, with improved laser and battery technology, larger craft could be
kept aloft. According to the team, a similar idea could be used to refuel
spacecraft, but only if a way could be found to dissipate the excess heat that
the light converting panels would generate. The invention uses vertical
multi-junction photocells that receive laser energy and convert it into
electrical energy. A heat exchanger can be coupled to the receiver to dissipate
laser energy which has not been converted.
Source: December 15, 2008, The
Times Of India
10.
Security fears force closure of luggage rooms at airport
Transit passengers at the Mumbai airport, wanting to catch a glimpse of the city
while there is still time for their flight, might have to tote their luggage
along or cancel their plans in order to look after their bags. The reason:
Mumbai International Airport Pvt Ltd (MIAL) has pulled down the luggage rooms,
where transit passengers could leave their luggage behind and go about their
business around the city. Considering the high security threat to the airports,
MIAL has decided not to re-open the luggage rooms inside the terminal building.
“It is difficult to ascertain the contents of a bag inside the luggage room. We
discontinued it due to security reasons,’’ said an MIAL spokesperson. While the
luggage room at the domestic terminal was discontinued three months ago, the one
at the international terminal was pulled down when part of it was evacuated for
reconstruction. The non-availability of luggage rooms is posing a problem for
those transit passengers who have a significant time to spend between their
flights. Most of them are unable to move around or are forced to carry their
luggage along. Though there is a provision of leaving the luggage with the
airline, passengers are unwilling to do so. “I had to cancel my appointment in
Mumbai as it was too uncomfortable to move around with three check-in bags,’’
said 29-year old Zubin Jal, a chartered accountant who was flying to Bahrain by
a Jet airways flight. “The airline refused to provide any such facility so I had
to stay at the airport for the five hours I had in between,’’ he added. Jal was
told that the facility was discontinued because of heightened security at the
airport. Though Mumbai airport would reopen the luggage room, it does not seem
to be happening any time soon. Also, with the airports being on red alert, the
luggage rooms would be located outside the terminal. “This is to leave no room
for uncertainty about the luggage. The way things stand now, we would not want
to take any chances,’’ said a security official. Once the revamp of the
international terminal is complete, the passengers would be required to drop
their bags at the collection centre of the airline, from where it would be
transferred to the room. The luggage would also be screened before it is
deposited there. “We have issued a letter of intent to the vendor who would take
care of this facility in the future. There are plans to do the same at domestic
terminal,’’ said an MIAL spokesperson. At the domestic terminal, luggage rooms
are likely to be located near the car park.
Source: December 15, 2008, The
Times Of India
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