Issue 255

1. Airfares to go higher by 5-8%
There could be bad news for air travellers this summer. Domestic airlines such as SpiceJet, Kingfisher Airlines, Jet Airways, Paramount Airways will increase airfares by 5% to 8% per ticket, from mid-April, due to a sharp increase in aviation turbine fuel. Delhi-based low cost carrier SpiceJet will hike fares by 5% over the next two weeks, CEO Sanjay Aggarwal confirmed. “As ATF rates have gone up by 10%, airlines need to increase fares to partially mitigate the jet fuel price increase. We have decided to increase airfares by 5% on the total fare, which will be implemented in April,” said Mr Aggarwal. ATF prices have increased by an average of Rs 2,750 per kilolitre (10%) on April 1, in Delhi, making it the second such hike in 15 days. In Mumbai, the country’s busiest airport, ATF rates were raised to Rs 30,785 per kl from Rs 28,023 (9.856%). Kingfisher Airlines chairman Vijay Mallya said: “If jet fuel prices go up, we’ll look at adjusting fuel surcharge but so far so good. If there is another hike in ATF, we may have to revisit the issue. Kingfisher will pass the increased cost to consumers because the airline cannot absorb this cost.” Post the proposed hike, a Mumbai-Delhi ticket of SpiceJet would cost Rs 4,807 including taxes. Kingfisher and Jet Airways fares in the sector will be around Rs 5,925, all inclusive. It has been learnt that Jet Airways has called an internal meeting to discuss the airfare issue after the sudden rise in ATF prices in India and globally. A Jet Airways spokesperson said no decision has been taken as of now. Paramount Airways MD M Thiagarajan said: “There could be a marginal increase in fares but the company has not yet made a final decision.” Analysts said an increase in ATF and the falling rupee is denting domestic airlines’ bottom line. Around 30% of an airline’s operational expenses are denominated in dollars, whereas 50% of the operational cost is accounted by jet fuel. ATF spot prices have soared by about 23% in Singapore, in the past week. It rose by 19% in the US Gulf Coast, 17% in New York and Los Angeles and 15% in Amsterdam. Crude oil prices touched $50 a barrel on Thursday rising steadily from $35 in February.
Source: April 03, 2009, The Economic Times

2. ICICI Bank, Singapore Airlines jointly launch credit card
ICICI Bank and Singapore Air­lines announced the launch of "ICICI bank Singapore Airlines Visa Platinum Credit Card to India's in­ternational travelers. This card has exclusive privileges especially de­signed for members. These include automatic enrolment for Singapore Airlines KrisFlyer programme, up to 18 miles on every 200 rupees spent and wide range of special offers on shopping and dining. The card ben­efits include bonus miles, special travel related offers and seasonal fare promotions and are designed to provide cardholders a travel expenence that goes far beyond miles. The other benefits such as access to Golf courses, airport lounges, discounts at International duty free shops. Spa packages in Singapore, Hertz rent a car, Matrix calling cards.
Source: April 03, 2009, Trinity Mirror

3. Kingfisher ties up with Citibank
Private air carrier Kingfisher Airlines said it has inked an agreement with Citibank cards which allows members of its 'King Club' holding the bank's cards re-deem their points for flights on Kingfisher Airlines or its partner airlines. King Club is the airline's frequent-flyer programme.
Source: April 03, 2009, The Financial Express

4. Airasia to Expand In India
Malaysian low-cost carrier AirAsia would start expanding its footprint in India by the end of this year, doubling its daily flights between Tiruchi and Kuala Lumpur from October. As part of its “Look at India” plan, AirAsia’s second daily flight from Trichy would come in the wake of the high load factors it has been receiving on sector where it has been operating daily flights since December 2008 with an Airbus A-320. AirAsia’s network management officer Subashini Silvadas said the airline’s subsidiary, legacy carrier AirAsia X, will operate flights to Delhi, Mumbai and Chennai “by the end of this year or early next year”.
Source: April 03, 2009, DNA Money

5. Airport alert on women bombers not 'credible', so govt takes it back
With repeated talk of terrorist groups planning to target the elections causing panic across the country, an embarrassed government today withdrew a security alert caused by reports that trained pilots and a women's terror squad had infiltrated India. The Home Ministry instructed the Bureau of Civil Aviation Security (BCAS) to withdraw the security alert. The Ministry said the information, on which the alert had been based, "could not be substantiated" on further assessment An intelligence input suggesting thai a fiday-een group, comprising six-seven trained pilots and about 30 young women terrorists, had entered the country had the security machinery in a tizzy. The input, which sources said emanated from the Military Intelligence, said the pilots would probably try to carry out a hijack ora9/11 type of operation. The BCAS had put all airports on high alert and directed them to strictly follow anti-hijacking measures. But immediately after the report became public, the Home Ministry started a damage control exercise. First it said the intelligence input was not "credible". Later, it advised the BCAS to withdraw the security alert. With repeated talk of terrorist groups planning to target the elections causing panic across the country, an embarrassed government today withdrew a security alert caused by reports that trained pilots and a women's terror squad had infiltrated India. The Home Ministry instructed the Bureau of Civil Aviation Security (BCAS) to withdraw the security alert. The Ministry said the information, on which the alert had been based, "could not be substantiated" on further assessment An intelligence input suggesting thai a fiday-een group, comprising six-seven trained pilots and about 30 young women terrorists, had entered the country had the security machinery in a tizzy. The input, which sources said emanated from the Military Intelligence, said the pilots would probably try to carry out a hijack ora9/11 type of operation. The BCAS had put all airports on high alert and directed them to strictly follow anti-hijacking measures. But immediately after the report became public, the Home Ministry started a damage control exercise. First it said the intelligence input was not "credible". Later, it advised the BCAS to withdraw the security alert.
Source: April 03, 2009, The Indian Express

6. Kingfisher to fly new skies this summer
Kingfisher Airlines has expanded its network to for the summer season. The airline has commenced services on five new routes. Further, it has provided connectivity on the Hyderabad-Aurangabad route, which no other airline offers on this route. The airline has launched Mumbai-Vadodara, Mumbai-Thiruvananthapuram, Hyderabad Bhubhaneswar, Hyderabad-Aurangabad and Bangalore - Kozhikode flights. While Mumbai Vadodara, Mumbai-Thiruvananthapuram and Bangalore-Kozhikode will be served by Kingfisher RED, the airline will offer full-service Kingfisher Class service on the Hyderabad Bhubhaneswar and Hyderabad-Aurangabad route. The one- way fares on the new routes range from Rs 2,779 to Rs 5,246, including taxes and surcharge. Siva Ramachandran, vice-president, global sales, Kingfisher Airlines said, “These new routes will cater to a mix of segments such as small and medium enterprises, corporate travellers, leisure flyers and pilgrim traffic. The addition of these new flights means that travellers from these cities will now be able to take advantage of the unparalleled network that Kingfisher Airlines offers”. The airline connects 69 cities with a fleet of 75 aircraft and operates over 400 flights a day. Kingfisher Airlines has also reinstated a flight that offers a late-night departure option from Mumbai to New Delhi. In the summer schedule, the flights on the Mumbai-Bhuj-Mumbai route will now be operated using aircraft that offer Kingfisher RED class of service. All domestic carriers are expanding their network in summers to cater to an expected increase in traffic. IndiGo is introducing 11 new flights.
Source: April 03, 2009, Financial Chronicle

7. Jet says tax dues to be borne by Sahara
Jet Airways said on Tuesday tax liabilities prior to the takeover of the erst-while Sahara Airlines will have to be borne by Sahara India Commercial Corp Ltd. The income tax department raised certain demands on Sahara, now known as Jet Lite, for the period prior to the takeover and unrelated to the activities of Jet Lite after the takeover, Jet Airways said.
Source: April 01, 2009, The Indian Express

8. Now, flights must have wheelchairs
In order to make flying a comfortable experience for the disabled, the Directorate General of Civil Aviation (DGCA) has made it mandatory for all airlines to carry aisle wheelchairs by July 31. This chair will be used for taking physically-challenged passengers from their seats to the toilet during flight or for being wheeled around on long or ultra long sectors. Interestingly, the DGCA had prepared its civil aviation requirement (CAR) for providing certain minimum facilities to the physically challenged last year but it remained a draft so far. Recently, the court of chief commissioner for persons with disabilities pointed out that the DGCA had prepared a draft CAR but without the power to enforce it. The directorate then sought time to change its rules and has now amended them. “The CAR for persons with disabilities is going to be strictly implemented. If the things this rule provides for, like having aisle wheelchairs on all flights by July 31, are not adhered to, action will be taken against airlines,” said a senior official. In the past, there have been several instances where airlines have refused to take physically-challenged passengers on their flights. Now under the CAR, airlines can do so only in extreme cases where the safety of the aircraft or of the fellow passengers could be endangered. In fact, airlines can’t refuse an assistive device or even a guide dog if the passenger has told them at the time of booking that he or she would be using them. It also lays stress on training employees to take care of the special needs of the physically challenged, including at the airport. The DGCA has also addressed the airline industry’s objections to the provision of providing assistance to the disabled free of cost, as the original CAR draft had contained. The carriers said assistance charges should be left to them alone. So under the CAR, airlines are allowed to charge for stretchers and any extra material that it provided to the passenger. In fact, the DGCA has, in the recent past, made several draft rules for passengers’ convenience. But the slump has meant that the aviation ministry has given higher priority to saving airlines and airport developers. As a result, CARs on passenger rights have taken a backseat. A case in point is a draft that provides compensation to fliers over deficiencies in service, like a confirmed ticketholder being denied boarding.
Source: April 01, 2009, The Times Of India

9. SpiceJet to rejig route strategy
SpiceJet Ltd will rework its existing route strategy and will also replan the future route map both in the domestic and international markets as the low-cost carrier (LCC) will be eligible to fly to international destinations by May 2010. According to Sanjay Aggarwal, chief executive officer of the airline, “there is still demand in the market especially for LCCs. Nearly 15 million people travel by train everyday and out of that about 8-10% spend more to travel by AC 2 tier and above. This segment can be tapped by the LCCs, which means we can fly 1.5 million more passengers per day. Today, all airlines put together fly 1,30,000 passengers per day. This can happen if connectivity is made available between tier II cities and if the LCCs implement an effective pricing and route strategy. Depending on the demand on a particular route, airlines can decide on the size of the aircraft”. He said, there is no question of over capacity in the case of LCCs. SpiceJet has garnered a market share of 12.5% in February 2009 as against less than 8% during the same time last year. “In the January-March 2008 quarter, SpiceJet had 115 daily flights with 19 aircrafts and during January-March 2009 quarter we had same fleet strength. However, the passengers movement went up by 11% this year compared to last year”, he said. In April, SpiceJet would be adding four flights in the summer schedule and later in the coming months would add more flights, he added. Talking about the aviation industry, Aggarwal said, “Yes, these are tough times for the industry. But I am quite optimistic that the industry should continue to grow by 13-14%. And if that happens, LCCs should also grow anywhere between 15% to 20%. LCCs today have about 50% of the overall market”. He said, SpiceJet was not desperate to participate in any mergers and acquisitions (M&As) in the current market conditions. The airline can look at acquiring, if and when the aviation industry revives, . Wilbur L Ross, who invested $ 80 million in SpiceJet, is committed to SpiceJet and its growth plans, he said adding, there is no truth in the media reports which said that Wilbur is keen on enhancing his share in the Indian skies by integrating LCCs-SpiceJet, GoAir and Jetlite.
Source: April 01, 2009, The Financial Express

10. Routes Asia awards announced
The Rajiv Gandhi International Airport (RGIA) has won the Routes Airport Makreint Award at the seventh edition of Routes Asia 2009 held here. Mr Kiran Kumar Grandhi, Chairman (Airports) of GMR, and Mr P S Nair received the award from the organizers at the three day event concluded here on Tuesday. Announcing this here on Wednesday, Mr P S Nair, the Chief Executive Officer of RGIA, said that the airport won the award in the Indian- Sub Continent area, scoring over four other airports in the region.
Source: April 02, 2009, The Hindu Business Line


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