Wings on fire

Paramount Airways is all set to enter the big aviation league. An airline that has been operating what it calls an all-executive-class fleet, is now in final stages of talks with Bombardier and ATR. In not more than two months, by February 2010, Bombardier's Q400s or ATR's turbo props - 10 aircraft in all - will adorn the fleet of the south-Indian carrier. The target for paramount is simple. All ground work is through to operate the turbo props predominantly in Tier II and Tier III cities. Some of the cities that have been shortlisted are Pondicherry, Mysore, Salem, Bellary, Rajamundry etc., all in south India to start with. The number of destinations the airline covers will then increase from the current 17 to 40 by 2011.With a bare minimum fleet of 5 aircraft (all Embraer) the company has maintained the best passenger load factor among all airlines in the country. Paramount is also the only Airline in India that have seen Rs 79 cr profits as of March 2009. Come October 2010, when the airline completes 5 years of its operations, it will spread its wings overseas. Negotiations are already complete with Airbus to buy 10 of their 321 aircraft. The planes are to be acquired at a list price of USD 90 million. The deal is to be funded by the European Central Bank through a 12 year loan.The Airbus 321s will all be used for the company's international flights. Initially, Paramount will fly to South-East Asian destinations like Singapore, Kuala Lumpur, Bangkok, Penang and Middle East designations like Dubai and Abu Dhabi.

DGCA deregisters 3 Paramount aircraft...

Directorate General of Civil Aviation (DGCA), has deregistered three of the five aircraft in the fleet of Chennai-based Paramount Airways Pvt. Ltd. This is the second time since last year that the regulator has deregistered aircraft at the behest of lessors owing to defaults in lease payment. GE Commercial Aviation Services (Gecas) last year confiscated three aircraft from Kingfisher Airlines Ltd, the country’s second largest private airline, for this reason. In October Gecas had sought to de-register Paramount’s aircraft and DGCA was considering the move. Four-year-old Paramount, with a market share of around 2%, largely flies within southern India, using its leased fleet of Embraer 70-75 seater aircraft. “Air traffic control (ATC) has already been informed of the registration numbers of the aircraft today,” said one of two top government officials. The second government official said the airline has told DGCA that the aircraft should not be deregistered as the carrier has won a case over lease payments in London against Gecas. “We will not go on hearsay,” the official said. “When the original copy of any such order comes, then we can register them again with the relevant charges.” A Paramount Airways official who spoke on condition of anonymity confirmed that there was an order to deregister the aircraft but reiterated that the airline has won a case over the issue in London. Paramount will present its case to DGCA, this official said, adding that he expects the planes to keep flying. Paramount’s aircraft carrying the registration numbers VT-PAD, VT-PAE and VT-PAF have been deregistered, according to the officials. The three aircraft were part of a lease agreement with Gecas dated 29 July 2005. The airline is currently operating around 20 daily flights after two of its aircraft were grounded in the past three months due to engineering issues, said another airline official who asked not be named as he is not authorized to speak with the media. Gecas’s spokesperson could not be reached for comments by email or telephone. DGCA’s spokesperson was not available to comment.

Paramount Airways flying in rough weather

Aircraft lessor GE Commercial Aviation Services (Gecas), an arm of General Electric Co. (GE), has asked India’s aviation regulator to de-register three Embraer jets leased to Chennai-based Paramount Airways Pvt. Ltd, after the airline defaulted on payments for the aircraft. Indian carriers have been under financial strain with at least $1 billion (about Rs4,800 crore) in losses in the fiscal year ended March, resulting in defaults on aircraft payments. Simultaneously, the global economic recession has meant that lessors suffering a credit crunch are pushing hard to extract payments. Last year, Gecas confiscated three aircraft from Kingfisher Airlines Ltd, the country’s second largest private airline, owing to non-payment of dues. In a letter dated 25 September to Paramount and the Directorate General of Civil Aviation (DGCA), Gecas says the airline “has failed to remedy the events of default referred in the notice and as at the date of this notice there still remains $215,540.18” in dues. Paramount has informed DGCA that it has already paid 65% of the sum and has a deposit of about $15 million with Gecas, including a $5 million safety deposit and the balance towards maintenance reserve. “As per the contract, Paramount is entitled to refund to the tune of $1.27 million,” it said. A Paramount official said on condition of anonymity that the airline has asked Gecas “to offset the rentals against the reserves”. He added that the matter is being resolved through talks. Paramount, which has a 2% share in the domestic market, runs a fleet of five leased Embraer jets. It has kept its operations limited and manageable so far, unlike other carriers that have outpaced the local industry’s growth. Gecas has sought back three of these aircraft, leased as part of a 29 July 2005 agreement. Gecas said in its letter to DGCA that it has the option to terminate the leases if Paramount continued to default on payments and operate the aircraft in breach of its grounding notice dated 24 September.

Mergers in Aviation...

Ever thought the impact of mergers that’s takin place in Indian aviation will lead to??? The rosy picture what we see is not that rosy if we analyse carefully the complete scenario. Whats the basic reason of mergers, are airlines loving to get merged in order to have some sort of benefits to them…I don’t think so, they are doin it due to compulsion, the financial compulsion. Air Deccan sold its stake to Kingfisher only due to financial crisis, Air Sahara sold only due to mounting losses (the second deal). GoAir is cutting operations, even Spicejet may also be on sale (some stake). So, whats the mergers will finally lead…it will lead to cartels. Cartels of 2-3 airlines coming together like Kingfisher – Deccan, Jet- Jetlite, Air India or even Paramount with Spicejet or GoAir , may be both on Paramounts side. The cartels then formed will lead to some kind of monopoly with big players having there own say, prices have already started to going up, they are already heading north. The big Q is the impact it will have on the passengers pocket???

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Death of Low Cost Airlines from Indian Aviation…

From the time Kingfisher acquired a stake of 26% in Air Deccan, I have a gut feeling that this is the beginning of slow but, steady death of Low Cost Airlines in India. The ticket price has risen from the very next day. The colour of Aircrafts, change in attires of Airport staff etc. has been taking place. If Air Deccan dies its slow death, which I strongly feel so, then, I personally don’t think other small players will able to survive for long. Air Deccan was the largest operator in India, with touching more than 60 cities (even more than state owned Air India). If its gone than other players like Spicejet, Indigo Airlines & GoAir which do not constitute more than combined market share of 18-20%, will not be able to survive the blood bath. Next target is Spicejet for, every one from Kingfisher to Jet Airways & even Paramount is also looking for its bigger pie in the acquisition party. GoAir is already in trouble & Indigo will be left alone to wait & watch, it may also convert itself into a full service carrier. If this happens then, it will be blow for the growth of Indian Aviation, as common man may not be able to take on the sky. All blames to Ministry of Civil Aviation because, why the Jet fuel cost is rising in India, while other countries are still able to provide it much cheaper than India. Jet fuel counts nearly 35-40% of total operational cost for an Airline. Is the common mans airlines still for a common man, when the tax paid on an air ticket is Rs. 1500 & the fare is only Rs 1200 i.e. a person has to shell out Rs. 3700 in this case, which is more than triple of the fare. Due to lack of infrastructure Low Cost Airlines are not able to reduce there turn around time, which is the operational advantage for them. With all these adverse conditions how long will they be able to float them self??? Not much longer I think so…

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The Par-amount (Air)ways...

the only Business Airline in India...providing business class servies @economy fares...it flies only in South -India, where its a mkt. leader with a mkt. share of nearly 26% bt, if v see it on a national perspective its a mere 2%...it connects all the major n small cities in south- India... Paramount is eyeing a controlling stake of 51% in both Spicejet & GoAir... Spicejet is targeted 4 nearly $10 million where as, GoAir is targeted 4 anywhere between $ 25-35 million...if both the deals goes thru... Paramount will become third largest Airline in Indian Aviation industry...Paramount has a fleet 5 Embraer 170/190 series aircrafts the only airline in India using these jets... MD Mr. Thiagarajan was the youngest CEO of any Airline in the world when it took off (then, 27)...the business model adopted by Paramount is now being followed by many interntional airlines... atleast as of now, 4 me its really a Par-amount (Air)ways... Seed Newsvine Dig the Web!

Who's who...???

after so many mergers n acquisitns in Indian Avaiation...i checked out the latest i can get on the directors or CEO's list of all the famous (i tried my best to include all) & listed airlines...bt, yes the list doesnt stop here, its jus a snapshot...--> Air Deccan- Capt. G.R. Gopinath (Executive chairman) & CEO is Mr. Ramki Sundaram...; Spicejet- Mr. Ajay Singh (Director)...; GoAir- Mr. Jeh Wadia...; Indigo- Mr. Bruce Ashby (president & CEO)...; Paramount- Mr. Thiagarajan...; Kingfisher- Mr. Vijay Mallaya...; Jet Airways- Mr. Naresh Goyal...; TAAL (non-scheduled)- Mr. Salil Taneja...; Global Vectra Helicorp.- Mr. Sarabjot Singh Naunihal...; Jagson Airlines- Mr. J.P. Gupta (Chairman)... National Aviation Company of India Limited (NACIL)Air India+ Indian- Mr. V. Thulasidas...!!! if the kitty of ny of the above airlines got other 1 then, this particular list is surely goin to b irrelevant... Seed Newsvine Dig the Web!