Indian Aviation - News, Views, Reviews & Analysis on Aviation Industry in India.......
Saturday, September 19, 2009
Cleaning aircraft-cabin air
Tuesday, August 18, 2009
India's Airline Industry Goes From Boom to Bust...
A few years ago, India 's airline industry was flying high. A booming economy made India one of the fastest growing and most competitive aviation markets in the world. Six new carriers launched while established airlines laid on new routes and bought new jets. In the last four years, Indian carriers ordered 400 Boeing and Airbus jetliners worth about $37 billion.
Brace for impact. The global recession has hit air carriers everywhere, but a sharp decline in passenger numbers is especially bad news for
That change includes deferring aircraft deliveries, cancelling orders, rationalizing routes and trimming staff to stave off financial collapse. "It's going to be tough, but we mean business," says
Hardest hit by the economic downturn has been national carrier Air
With no bailout help from
Following similar logic, private players Jet Airways and Kingfisher, owned by the liquor baron Vijay Mallya, are expanding existing budget operations to try to increase business during the economic downturn. They aren't starting from scratch. Both airlines already had rechristened budget carriers — Jet Lite and Kingfisher Red — acquired in 2007. Now they are transferring capacity to the economy fleets. Kingfisher Red jets are flying more routes; as a result, about 75% of all domestic passengers that now fly with Kingfisher are traveling budget class, up from 50% a year ago. Meanwhile, Jet Airways,
Officials for both carriers say they hope to resume normal operations once the economy rebounds. But analysts say that may be difficult because the industry has yet to solve a basic problem: too many airlines flying too many flights in a country that, despite its economic growth, is relatively poor.
Wednesday, August 12, 2009
India as Global Aviation hub...
Pick up any of
In such a scenario, is there any chance that
Looking at its metropolises, including the megacities of
“Capacity reduction is still lagging behind demand.”
However, their poor shape and the relatively small size of
So what should
To begin with, the airlines will have to start addressing the problems that they themselves have caused. This process has already started with Jet and Kingfisher deferring orders for new aircraft, mothballing new deliveries or, where possible, leasing or selling them to foreign carriers. In short, with the exception of some of the low cost operators, a significant amount of capacity has been taken out of the market. Jet has transferred much of its remaining capacity to its economy-only Jet Konnect product as well as to its low cost subsidiary JetLite. Kingfisher has followed the same strategy by shifting passengers onto its no frills Kingfisher Red product. On another front, a truce in the price wars has yet to be reached. Yet capacity reduction is still lagging behind demand. With all airlines chasing bums on seats, charging prices that will cover costs and hopefully leave a margin for profit remains difficult in such a hotly-contested market. We will surely see more consolidation or bankruptcies in the medium term. This is precisely an area where the government should step in. Before the elections, the Ministry of Civil Aviation contemplated allowing up to 49% foreign domestic investment in domestic airlines. This would include foreign airlines as potential investors – something that is currently explicitly prohibited. It seems obvious that in an industry where average profit margins do not exceed 1.5%, the most likely investors would be other airlines seeking to strengthen their market position, increase their route network or realize economies of scale. Since the elections, however, nothing more has been heard of this proposal.
Another deterrent: The cost of fuel, which in
At present, it is up to individual states to charge fuel taxes as they see fit. Some of them are charging well over 30% – a figure that keeps on rising in absolute terms as fuel prices go up. Internationally, aviation fuel does not attract any levies in many major markets. For
Furthermore, service tax and other levies have been a bone of contention between the airline industry and the government. A review and streamlining of the entire tax regime would surely be a sensible thing. Getting the fundamentals right is obviously a prerequisite for the establishment of a successful hub. To date,
For the sake of its national economy, the current plight of the national carrier should not discourage
Air
Overall,
Tuesday, August 11, 2009
BJETS delays aircraft deliveries as economic crisis bites
Asian fractional ownership firm BJETS has asked manufacturers to slow the delivery of the business aircraft it has on order due to the ongoing economic crisis.
The company, which is backed by USA-based investment firm Briley Group and Indian Hotels, operator of the Taj brand of luxury hotels in India and part of the Tata Group conglomerate, ordered 20 Cessna Citation CJ2+s, nine Hawker 850XPs, 11Hawker 900XPs, and 10Hawker 4000s last year. It had planned to take delivery of all the aircraft within five years.
However, it had only five aircraft in its fleet at the end of 2008, down from the seven it envisaged, says chief executive Mark Baier. BJETS will have 11-12 aircraft by the end of 2009, below the 15 it originally targeted. Several will be managed aircraft, he adds.
"Clearly, it is a smaller business than what we envisioned a year ago. But that is expected given the economic climate and tight credit situation," says Baier. "We began to talk to the manufacturers about delaying deliveries just before the stock markets crashed and as demand faltered. That was a good move as we can now manage the delivery schedules better."
The company, which places jets in Singapore for the South-East Asian market and Mumbai in India for south Asia, has attracted some fractions since it began operations last September. While its block charter and traditional charter businesses are slowly growing as well, BJETS is also moving into the aircraft management business.
"We did not expect so many owners to turn to us for quality management services. We will begin to manage several aircraft this year," says Baier. "The charter business is holding up. Some companies and top executives are shelving or delaying plans to buy business jets, but they still keen to on the idea and so turn their interest to the charter market."
BJETS is also trying to offer value added services. In India, for example, it has an agreement with helicopter operator Global Vectra Helicorp - which has seven helicopters available for charter - to provide access to destinations in the country without a landing strip.
"This association will strengthen our product offering in terms of accessing more destinations that do not have a landing strip but offer a helipad. While BJETS can access over 120 airstrips in India already, our partnership with Global Vectra will enable our customers to fly to all those destinations that cannot be reached by other aircraft," says Baier.
Saturday, August 8, 2009
Study says airport fees in India among the lowest in world
Even as airlines hit out at private airport developers against the "exorbitant" charges being collecting from carriers, the Association of Private Airports Operators (APAO) — comprising private airport operators of India — has come up with a study that puts operating costs at major Indian airports as among the lowest when compared to other major airports around the world.
"The association wishes to clarify the misconception that airport charges in
Mumbai's charges are 16 per cent of what
The APAO has also argued that airport charges in
However, according to Centre for Asia Pacific Aviation (CAPA), while there has to be a recovery model in the billions of dollars being invested in these airports, the introduction of airport development fees (ADF) and user development fees (UDF) came at a very wrong time.
"Airlines in
"Unlike airlines, which have the flexibility of focusing on profitable routes and reducing capacity, airports have to maintain the same level of service and facilities irrespective of numbers of passengers. Investment in airport capacity needs to be done with a 5-10 year future horizon to take care of future growth in traffic," the APAO statement said.
India's struggling airlines
“FLY the good times,” urges the slogan of Kingfisher airlines. But for
Until recently
For Kingfisher and its main competitor, Jet Airways, both full-service carriers, times are especially tough. Kingfisher, which reported a net loss of 2.43 billion rupees ($51m) in the quarter to June, owes more than 9.5 billion rupees in unpaid fuel bills and is surviving on bank loans. Jet Airways recorded a net loss of 2.25 billion rupees in the same period.
High fuel costs certainly exacerbate Indian airlines’ woes. Fuel tax is set by most of
But burdensome though the taxes are, they are not the only reason why
Today those egos are badly bruised and, in line with trends elsewhere, it is low-cost airlines that are taking an increasing share of the market. Of
Tuesday, July 28, 2009
Firemen declare Delhi's new airport terminal 'unsafe'
The Delhi Fire Service has declared the brand new departure terminal 1 D at the capital's Indira Gandhi International Airport (IGI) unsafe.
Delhi Fire Service chief R.C. Sharma has refused to provide a no-objection certificate (NOC) for terminal 1 D, citing many shortcomings during the two inspections conducted by his team in the past few months.
In his last report on May 13, Sharma cited six shortcomings. He said the ventilation system in the VIP lounge, baggage area and the office area was yet to be completed. Further, he stated, the exit route in the retail area should have a separate staircase or passage.
"In some places sprinklers are hidden in the false ceiling, which should be brought down. Some of the restaurants are under construction and are using wooden material. The wood works need to be painted with fire retardant chemicals. Necessary fire alarms or sprinkler system should be extended to these areas," Sharma noted in his report.
He further said systems at the new departure terminal could not be checked due to passenger movement and asked for arrangements to test the systems whenever possible.
But so far the Delhi International Airport Ltd (DIAL), a joint venture between the state-run Airports Authority of India and a consortium led by infrastructure major GMR, has not made any arrangements for the inspection of the systems.
In his report Sharma concluded that "terminal 1 D cannot be considered safe from the safety point of view till safety arrangements are fully completed."
Terminal 1 D, which is spread over 33,000 sq m, has replaced 1 B, the old terminal. It was opened for operations April 19. Kingfisher, Kingfisher Red and IndiGo, Jet Airways, JetLite and Spice Jet are operating from the new terminal, while GoAir, Air India and others are operating from terminal 1 A.
According to the airport officials, around 200 flights operate daily from the new departure terminal, which has been built at a cost of Rs.500 crore ($100 million). The terminal is able to handle 10 million passengers annually and is equipped with 72 check-in counters. It was inaugurated by Civil Aviation Minister Praful Patel.
The airport authorities had first invited the Delhi Fire Service officials April 8. At that time, the fire service wrote in its report that fire pumps and the fire control room were yet to be fully operational and that the sprinkler line was not charged with water at many places.
DIAL sent a report to the fire department May 4 stating that measures suggested had been complied with. The fire department again conducted an inspection and highlighted fresh shortcomings.
When asked why necessary clearance was not sought before the new terminal came into operation, DIAL spokesman Arun Arora said the terminal was absolutely safe for operations and for passengers.
"DIAL is very much alive to the required fire safety norms. We have been following all fire safety norms (domestic as well as international) for all equipment and procedures".
"All necessary documents have been submitted to the fire department and inspections have been carried out by the Delhi Fire Service officers. All observations and suggestions made by them were carried out by DIAL. The suggestions made by them during their subsequent visit to terminal 1 D are also being carried out," he added.
Arora said to ensure fail-proof fire safety DIAL has taken many initiatives.
"We have deputed 18 well trained firemen who keep patrolling all areas of the terminals - like the check-in area, airline ticketing areas and security holds. More than 50 fire hydrant outlets have been deployed inside and outside the terminal for greater safety," Arora said.
Though DIAL has been running the new terminal without fire safety clearances, the Delhi Fire Service was silent on why no action was being taken against the airport authorities. As per the powers conferred upon the fire department, it can cut electricity and water supplies to a building or even shut it down if the fire safety norms are not met.
