How Kingfisher, Jet made a hash of their business models

Via - Firstpost.com

Running an airline in India is a mugs’ game. Once defined as the simple business of “getting bums on seats”—more “bums” means better bottomline—the way the Indian industry is being run, one wonders if the “bums” are paying enough for the seats they sit on.

Thursday’s newspapers said Kingfisher’s auditor was tut-tutting about the poor state of its balance-sheet. Without owner Vijay Mallya putting in more equity, the airline is on a crash course, with accumulated losses eroding more than “50 percent of its net worth.”

Look at the carnage. Kingfisher hasn’t seen black since 2005. Market leader Jet Airways hasn’t sniffed profits since 2007-08. SpiceJet has got a whiff, but has accumulated sackfuls of losses (Rs 720 crore) in the past. In the first quarter of 2011-12, Jetmade a loss of Rs 123 crore after many accounting adjustments, Kingfisher lost a whopping Rs 264 crore, and SpiceJet Rs 72 crore.

A Jet Airways aircraft (R) and Kingfisher Airlines (L) are seen on the tarmac at the airport in Mumbai. Punit Paranjpe/Reuters

One figure tells it all. Between last year and now, the three listed companies – Jet, Kingfisher and SpiceJet – destroyed Rs 6,600 crore of shareholder wealth, a drop of 59 percent when the overall market (as measured by the Nifty index) fell only 13.48 percent.

As for Air India, the less said the better. When last heard of, it had racked up losses of Rs 22,000 crore against a shrinking market share – and its management is accumulating frequent flier miles to-ing and fro-ing between Delhi and Mumbai, trying to wangle thousands of crores in equity infusion. What it needs is an infusion of cyanide.

The airline business is clearly a value destroyer. And it’s doing it all by itself, without help from Praful Patel.

Or is it? In India, there is clear line dividing successful (or near successful) airlines from the rest. And that line is drawn in sand. It divides the pure low-cost carriers (LCCs) with a clear business model (SpiceJet, Indigo) from the ones who operate both full-service and low-cost carriers (Jet, Kingfisher, Air India).

It’s the full-service carriers (FSCs) that are bleeding profusely for they have a confused business model. They have fallen between two stools.

The world over, there are five keys to airline success: costs, costs, costs, costs, costs. This is where the LCCs score over the FSCs.

The first cost in this bums-on-seats business is a four-letter word – CASK, or the cost per available seat kilometre. It helps to have more bums on seats, but the critical thing is to have the lowest possible seat cost per possible bum. CASK is a metric that measures what it costs to fly every seat for each km of distance.

Indigo and SpiceJet are the industry champs in CASK, though clearly comparable figures are not available. A Forbes India report quotes

Citibank’s airline industry analysts Jamshed Dadabhoy and Arvind Sharma as saying that “the capital costs per passenger for full service airlines have jumped several fold over the last few years, while those of budget airlines have remained stable or moved up very little. SpiceJet, for instance, has a CASK of between Rs 2.30-2.40 while the number for Jet Airways is around Rs 3.60.”

The second cost to control is debt. Debt brought Air India down, with some help from Praful Patel, who was the Civil Aviation Minister when the airline suddenly ordered 50 medium and long-range aircraft for $7.2 billion when the management thought 18 would do. The resulting debt laid the airline low. It current debt: a crippling Rs 42,570 crore.

Contrast that with what Indigo and SpiceJet have cannily done. Both take aircraft only on lease. Even if they buy them, the aircraft are resold to financiers and leased back. Says Antique Stock Broking, which put a buy on SpiceJet in July: “The company has used an asset light model for business growth with sale and leaseback strategy. Its entire fleet is currently leased and the strategy has helped the airline to keep its debt levels to minimum, avoiding debt burden. This strategy has paid off SpiceJet very well and it stands out distinctly amongst its competitors. The company has managed to survive the downturn and grow, while competing players are finding it difficult to expand the fleet due to heavy debt burden.”

Jet is better off compared to Air India, but it is still tottering under debt. In a recent interview, Jet’s Senior Vice-President (Finance) Mahalingam Shivkumar agreed that debt exceeded its airline assets. He said: “We have a debt of about Rs 13,400 crore, out of which Rs 9,000 crore is our acquired aircraft. Against that, we have an asset worth Rs 9,000 crore and we have a balance of Rs 4,000 crore.”

The market agrees. Rs 4,300 crore is the value of Jet’s drop in market capitalisation over the last one year.

The third cost is fuel. Thanks to rising fuel prices over the last one year, SpiceJet’s fuel costs as a percentage of sales have moved up from 37 percent to 56 percent of sales, but if its balance-sheet is looking prettier than its competitors’, its not because it is able to drive better bargains with the oil companies. Aviation fuel costs the same for everybody. So what makes the difference?

Aircraft age. Keep your aircraft fleet young, and you get fuel savings. Says the Forbes article on Indigo: “Indigo has six-year sale and leaseback agreements for most of its planes. The lessor takes the planes back after this and the airline can induct a brand new one in its place. Though at a cost, this is effectively like a perpetual elixir of youth. The most important financial implication is that it never has to undertake the ‘D’ check, where the aircraft is completely stripped down and airlines often discover the need to spend on major repairs. This check is usually done when the plane is about eight years old.”

The average age of Indigo’s fleet, as indicated by aviation website www.airfleets.net is 2.4 years. It’s a fleet-footed toddler in Indian airspace. Go Air’s average fleet age is also a stripling 2.5 years. SpiceJet’s birds are a bit older at an average of 4.7 years.

But the three airlines with a mix of full-service and low-cost operations—Kingfisher, Jet and Air India—had the oldest fleet mix. Kingfisher and Kingfisher Red had 4.6 years and 5.9 (making for an above 5 average for the company as a whole), Jet had 5.8, and Air India had a gerontocratic 9.8 years.

Age is beginning to tell on the big boys.

The fourth cost relates to aircraft maintenance. Globally, airlines have to maintain and service airlines to strict safety standards. This is why airlines with a diverse mix of aircraft tend to have higher costs, because they need separate staff to maintain Boeings or Airbuses or whatever.

The low-cost carriers (LCCs) have cannily focused on having only one basic aircraft (or sometimes two, with the second one connecting the smaller towns). SpiceJet uses Boeing 737s (NextGen). And Indigo Airbus 320s. But the big boys use several types. Kingfisher uses many different Airbuses (from A319-321 to 330) and ATRs. Jet uses Airbuses, Boeings and ATRs. Air India uses Airbuses, Boeings and even a Lockheed L-101 Tristar (anyone’s heard of them?)

In this business, diversity is weakness.

The fifth cost is the cost of idling. Getting bums on seats is one half of the challenge, but there’s no point getting them seated till you can fly them. In short, you have to fly more bums more often and for longer – and this means airlines which keep their aircraft flying for longer hours get better revenues. The figure to watch here is the aircraft utilisation rate – the time the aircraft spends in the air in a 24-hour cycle.

Indigo tries to keep the idle time between two journeys to 30 minutes and manages an aircraft utilisation rate of 11.5 hours a day. Air India’s? Don’t ask. It’s 9.1 hours.

Apart from costs, the full-service carriers compounded their problems by making fundamental strategic errors in their desire to scale up and raise market share.

Domestic market shares in 2001 stood at 26 percent for Jet (including JetLite), 19 percent for Kingfisher, 18 percent for Indigo, 16 percent for Air India, 14 percent for SpiceJet and 7 percent for Go Air, according to data from the Directorate General of Civil Aviation.

Two areas are worth mentioning. Mergers and branding.

All the full-service boys messed up their mergers. Coincidentally, all three—Jet, Kingfisher and Air India—went in for acquisitions and mergers in 2007-08. While Jet bought Sahara, Kingfisher bought Air Deccan and Air India merged with Indian Airlines. The traditional logic of mergers is cost savings and synergy, where two and two equals five.

But, surprise, two plus two ended up as three for all of them. While some cost rationalisations did come through from route swapping and capacity and code sharing, all three made branding and HR errors.

Air India never fully consummated the marriage with Indian Airlines as its human resources issues did not get sorted out (pay structures, etc). Jet and Kingfisher committed cardinal branding errors by renaming their low-cast carriers in their own image.

While Jet renamed Sahara as Jet Lite, consumers wondered what the difference was. Kingfisher converted Air Deccan into Kingfisher Red – and duly landed deeper in the red.

The issue is simple: when two brands—one full-service with all the frills of flying, and another, with low fares—are given the same or similar names, how is the consumer to know the difference? It is easy to assume that Kingfisher Red’s service is no different from Kingfisher’s, when the fares of the former are far lower. If Rolex were to buy Titan and name the latter Rolex Lite, will Rolex’s sales go up or Titan’s?

It is more than likely that many air passengers downtraded to the LCCs due to this brand confusion.

The full-service carriers have clearly to rethink their business models and branding. Or else, they can kiss goodbye to profits forever.

Mahindra's Five-Seat Aircraft To Launch Soon

Mahindra Aerospace said this week its new five-seat airplane, which would be India's first indigenous GA aircraft, is expected to fly for the first time next month. According to Indian news sources, the NM5-100 will sell for "20 percent less than a similar aircraft from Cessna." The company has been working for a several years in partnership with India's National Aerospace Laboratories to design the airplane, which is expected to meet FAR Part 23 standards. A larger version of the airplane also is in the works, which would seat 8 to 10. The company has said it plans to become India's first manufacturer serving the GA market, with four to six models for global distribution.The NM5-100 is an all-metal aircraft, with a composite cowling and fairings. It is expected to be used for air taxi, light cargo and medevac, as well as training. Mahindra acquired a majority stake in Australia's Gippsland Aeronautics in 2010.

Struggling Air India looks to soar again

Air India, the national flag carrier that has accumulated thousands of crores of rupees in losses, is set to fly over uncharted territory hoping to reverse its fortunes in the new year. Arvind Jadhav, head of the National Aviation Co. of India Ltd (Nacil) that runs Air India, says he will use a combination of cost cuts, outsourcing, restructuring and spinning off under-utilized divisions into separate businesses to rewrite the account books of India’s oldest airline. But aviation experts are sceptical, claiming some of Jadhav’s ideas are unlikely to succeed and others are unlikely to be implemented because of Air India’s state ownership. As chairman and managing director of the beleaguered Nacil, Jadhav has the unenviable task of salvaging an airline that saw losses of Rs7,226 crore in fiscals 2008 and 2009. Air India’s outstanding debt stands at Rs16,000 crore, of which Rs11,000 crore is high-cost. It also runs a monthly cash deficit of Rs400 crore. Nacil has asked the government for a loan and equity infusion of nearly Rs15,000 crore, and is already showing signs of revival. To begin with, Jadhav plans to turn two of Air India’s divisions into independent profit-making ventures: engineering, which will become a full-fledged maintenance, repair and overhaul (MRO) firm; and cargo handling, which will become an integrated end-to-end logistics firm. “By April, we would be spinning off our engineering business unit into a different company,” Jadhav said. “This will straightaway take around 20,000 employees out of Air India’s books and Rs1,200-1,500 crore salary bill (with it).” Air India’s annual wage bill for 31,500 employees stands at Rs3,300 crore. Branching out - The engineering division currently services 100 planes a year, or just half its capacity. It is also unable to attract much business from rival carriers, and earns about Rs100 crore annually. But once turned into a separate business, it could make as much as Rs3,000 crore annually. Air India has already entered a strategic alliance with Sharjah-based Aerostar Asset Management FZC for marketing its aircraft engine overhaul facility. The two have created an engine MRO brand called The A Team, which already provides engine repair and management solutions to West Asian airlines. Air India is also in talks with logistics firms to build the support infrastructure for “door-to-door” logistics. “The idea is (to) spin off our cargo airline division into a separate entity and convert that into a complete logistics company that offers door-to-door services,” said Jadhav. Nacil has also entered into an equal joint venture with Singapore Airport Terminal Services Ltd to handle ground services at various airports in India. “If the subsidiaries are hived off and start earning the projected revenue, we will be getting Rs360 crore a month,” Jadhav predicted. Cutting costs - In a market where airlines are selling tickets below cost, Jadhav agreed it was tough to enhance revenues. “You cannot cut salaries, airport charges or catering charges overnight. So one will have to look at cost savings,” he said. He is already attempting this through network restructuring, rationalizing routes and aircraft deployment, and shifting a good number of employees based in US and European cities to India. “These measures have (also) helped in increasing revenues,” Jadhav said, adding that the company was expecting a net benefit of Rs378 crore in terms of cost reduction during the winter schedule of 2009 and Rs563 crore for the entire year. The merger of Air India with other state-run carriers Indian Airlines, Air India Express and Alliance Air will bring down costs further. The government gave its nod to the merger nearly three years ago, but operational delays have hobbled the move. Air India now runs its aircraft on all four operating licences. Jadhav pointed out a merger of such a large scale was not an overnight process. He was, hence, prioritizing the “front end merger”, which will mean the customers will deal with a single airline for all practical purposes, while the merger of books, workforce and so forth—the back end—would happen over time. In India and abroad, the carrier has combined booking offices of Air India and Indian Airlines to save on establishment costs. The office at the Jeevan Bharti building in central New Delhi, a prime location, has also been surrendered, saving approximately Rs5 crore annually. Air India has also withdrawn from some sectors on India–Gulf routes and has transferred them to Air India Express, as part of route rationalization. Wage worries - One will have to see how much can Jadhav do, considering the constraints of a government-owned airline. In the past, he had to drop several ideas, including wage cut. Slashing the massive wage bill has been the toughest task. Aviation expert and aerospace journalist Hormuz P. Mama is more sanguine. “The fact that Air India is a state-run airline does not mean that nothing can be done about it. There needs to be a compromise from the unions regarding salary cuts, a very inconvenient point that has been put on the backburner,” he said. Unless unions were willing to accept realistic concessions now, they could have to settle for a lot less in the near future. He suggested “manpower rationalization”, saying the biggest single source of expenditure was the “grossly bloated staff strength”. But such a measure is not on Jadhav’s radar, given what he calls are the airline’s “social commitments”. Instead, he is looking to outsource some functions. “Since we are an aviation company, we may not be able to give career progression to IT people. Therefore, we may identify certain services for outsourcing to other company after reaching an agreement on terms and conditions,” Jadhav said. Equity boost - Even if they are not substantial in themselves, the cost cuts have had a ripple effect. The government has agreed to infuse Rs800 crore as equity based on various cost-cutting measures. The airline currently has an equity base of Rs145 crore. “Bankers are confident on Air India but have some pre-conditions for restructuring the loan,” Jadhav said. “If the shareholder, that is the government, is willing to infuse additional equity, I could convince the bankers to restructure my high cost loans.” Air India is also toning up his fleet. Air India has phased out 11 medium-sized and six wide-body planes from its system in the current fiscal while inducting 29 new aircraft. “We have operated winter schedule with 56 planes against 67 aircraft in summer schedule without losing passengers,” Jadhav said, adding that better utilization of aircraft had resulted in substantial savings of Rs200 crore. By March 2010, three more Boeing 777-200s, two Airbus A310s and eight Airbus A320s will be returned or retired from the fleet, allowing Air India to induct brand new aircraft. Airlines worldwide are projected to post $5.6 billion (Rs26,152 crore) in losses in fiscal 2011, according to industry body International Air Transport Association, or Iata. Jadhav said he expected Air India won’t contribute to that figure. He agreed both organizational and financial restructuring was difficult, particularly so for a government-run company. “But we are hopeful of both,” he added.

Isro to join project for passenger plane

India’s space agency will be made a partner in the country’s Rs2,500 crore passenger plane project so it can share its technology expertise, infrastructure and programme management skills and help avoid the mistakes and delays seen in previous projects.

The so-called regional transport aircraft, or RTA-70, being designed to carry 70-90 passengers on short-haul routes, is India’s ambitious attempt to build a civilian plane and bridge the gap in aeronautical expertise with countries such as China and Brazil.

The Indian Space Research Organisation, or Isro, “will be part of a consortium,” said G. Madhavan Nair, chairman of the research council of National Aerospace Laboratories, or NAL, a public-funded agency focused on civil aerospace technologies. “NAL will lead the project.”

Nair, a former head of Isro, said the plane project would be run by an independent commercial body, with public and private partners, including an overseas aerospace firm. He did not name the private firms.

The plane project is yet to get government sanction but is listed in the science and technology plan in the 11th Plan that ends in 2012.

Once approved, the plane project will take around six years to build and be certified for operations, said C.G. Krishnadas Nair, president of the Society of Indian Aerospace Technologies and Industries, or Siati, a body that promotes home-grown enterprises in the aerospace and defence sectors.

So far, India’s attempts to build civilian planes has had little success. NAL has built two civilian planes so far: Hansa, a two-seater trainer, is being flown in some flying clubs but is not a commercial success yet. Saras, a 14-seater plane project in the works for nearly two decades, has been suspended till an inquiry is completed into the crash of a prototype in March that killed two pilots.

In the late 1990s, military plane maker Hindustan Aeronautics Ltd, or HAL, and Franco-Italian manufacturer ATR dropped a plan to make turboprop planes jointly in Kanpur, citing limited market opportunity.

But economic growth since then and the boom in India’s civil aviation sector has presented a fresh opportunity to build planes locally. NAL officials say the sweet spot would be planes that can carry 70-90 passengers over the short haul (up to 1,000km, say, Bangalore to Mumbai) and does not compete with planes of large firms such as Boeing Co. or Airbus SAS.

Currently, only NAL and HAL build planes in India. In December, Mahindra group become the first private Indian conglomerate to acquire the capability to build aircraft when it bought two Australian aerospace firms for up to Rs175 crore over five years.

For the RTA-70 project, HAL is the manufacturing partner and firms such as Infosys Technologies Ltd and the local unit of US technology firm Honeywell International Inc. are building some technology components, Satish Chandra, convenor for the RTA programme at NAL, said in a lecture on 30 September.

The plane is expected to consume around 30% less fuel than existing 70-100-seater passenger aircraft, and have half their maintenance costs through the use of special sensors and coatings. RTA-70 will be able to land and take off on small runways and use satellite navigation, Chandra said.

“We should make use of all resources (in aerospace) within the country. The aim is to make the project a success,” said Nair of Siati.

In addition to building rockets and launching satellites, Isro is building a capsule to carry astronauts into space and later to the moon; some of the facilities and technologies it uses for projects such as these could complement NAL’s plane programme. NAL, too, builds and tests technology for Isro’s programmes.

While Isro’s record of building rockets and launching satellites has improved over the years, it has seen its share of delays. The Geosynchronous Satellite Launch Vehicle, or GSLV rocket, with an indigenous cryogenic engine, was set for launch by January but has been delayed by at least a year.

Analysts caution that Isro’s bag is full with projects, including planetary and manned space missions, and even if it is used as a partner, the lead agency should take on the onus of completing the project.

“Why just Isro, you can use any resource available in the country, but the least you should do is to have one person or agency that should be accountable (for the project),” said retired Air Marshal T.J. Master, chairman of Master Aerospace Consultants (Pvt.) Ltd, an aerospace advisory. “It should be made a commercial success and that should be the drive.”

Airlines see blue skies in FY11 on cost cuts, improved traffic

India’s airlines are expected to post aggregate losses of around $2 billion (Rs9,260 crore) in 2009-10, largely on account of excess capacity and high fuel prices, but most of them are looking forward to a better, even profitable, 2010-11 on the back of their own cost-cutting measures and an increase in passenger traffic. The growth has already started coming in. If the current situation prevails, the next financial year will be good for airlines. Most importantly, the gap between demand and supply will disappear in the year. Demand could outstrip supply by 2014. That marks a significant turnaround for a sector plagued by overcapacity in 2008-09 and part of 2009-10. The aggregate loss of India’s airlines rose 44% to Rs8,557.37 crore in 2008-09 and the airlines expect to post a loss of a similar magnitude this year. Meanwhile, passenger traffic in the country, the fourth highest in the world after that in the US, China, and Japan, fell in 2008-09 on the back of high tariffs; it also fell in the first part of 2009-10. (Negative outlook: The aggregate loss of India’s airlines rose 44% to Rs8,557.37 crore in 2008-09 and the airlines expect to post a loss of a similar magnitude this year.) However, most airlines have started posting better results in recent months. Jet Airways (India) Ltd, the country’s largest airline, showed a 33% increase in its domestic passenger traffic in November, compared with the same period last year. The airline’s international passenger traffic has also registered a growth of 19% in November. Even in what is typically the lean season for Indian airlines, Jet Airways managed to clock an operating profit of Rs44.24 crore for the quarter ended 30 September. However, its net loss in the quarter widened to Rs406.69 crore from Rs384.53 crore a year earlier, largely on account of a five-day pilots’ strike and lower airfares. The Indian aviation market is growing realistically at 4-5% currently, compared to the levels of 2007-08, which was the boom period. The issue of overcapacity has been addressed. That’s an opinion that is seconded by analysts. The airline sector is exhibiting strong recovery, with an increase in passenger traffic and bottoming of yields. This, along with stable oil prices, is expected to lead to (the) sector turning profitable by next year. “I have always been very optimistic about the Indian market. All signs are that traffic is improving but we also need to see an improvement in yields. The yield improvement will come as capacity is constrained and I am sure we will see another wave of orders (for planes) in 2011-12,” said Kiran Rao, executive vice-president, marketing and contracts, for aircraft manufacturer Airbus SAS. Not everyone agrees with that. Airline CEOs (chief executive officers) are always optimistic and they will expect profit every year. As long as the growth is artificial and fares do not cover the cost of operations, profitability will be a question. An industry analyst, who did not want to be identified, pointed out a potential problem arising from Indian carriers cancelling or deferring orders for aircraft. “Most of the carriers have deferred their aircraft acquisition plans. If the revival is true and if they fly back to black, they will miss the wave of next boom.” Over the past month, shares of Jet Airways have risen 19.68% and closed at Rs560.45 each on Wednesday on the Bombay Stock Exchange. Shares of Kingfisher Airlines Ltd rose 15.06% to close at Rs60.35 each, and those of SpiceJet Ltd zoomed 31.22% to close at Rs55.90 each in the same period. The exchange’s benchmark Sensex index has risen by 3.8% in the same period and ended Wednesday at 17125.22 points.

Airline-Sector Woes Slam India's Highflier

Running an airline is a reliable way to lose money. The turbulent ride of India's Jet Airways shows why. Naresh Goyal shook up Indian aviation when he founded Jet in 1992. With punctual flights, new planes and friendly service, Jet was the first carrier here to truly modernize air travel.

Jet controlled nearly half the domestic market by early this decade, with most of the rest going to state-owned Indian Airlines. In Jet's 2004 fiscal year, as many of the world's carriers were still recovering from the Sept. 11 terrorist attacks on the U.S., it outpaced the industry with net profits of $33 million. Jet's initial public offering, in 2005, valued Mr. Goyal's 80% stake at $2 billion. Now, Jet is scrambling to stay aloft. Low fares from no-frills competitors ravaged revenue. Staff costs soared as rivals poached pilots and mechanics. Airport congestion in India made for a logistical nightmare -- forcing Jet to open an international hub 4,000 miles from home, in Brussels. Amid a glut of capacity, Jet's market share slid from a high of almost 49% in 2003 to roughly 25% this year. The airline started posting sharp losses in late 2007. Jet eked out a net profit in its latest quarter by selling assets, slashing costs and booking tax credits, but the outlook remains tough. "It's been hard," said Mr. Goyal, the 59-year-old founder, in an interview at his $15 million London townhouse. "We were making so much money, and now we're losing money." The carrier's woes began as India's economy boomed in 2005, thus highlighting a broader problem for the global airline sector: Even in good times, the industry struggles to generate sustainable profits. Jet Airways has struggled to capitalize on growth as it got squeezed between uncontrollable costs and increasingly unfettered competition. Jet's slide can be traced to a sea change in the global aviation business. Deregulation, the rise of Internet ticket sales and other factors have made it easier than ever for upstarts to challenge bigger, established carriers. In India, where state-run carriers and government policies stymied air travel for decades, the sudden transition proved tumultuous. Last year was particularly rough. The airline business floundered as fuel prices surged, the credit crunch hit and world-wide travel plunged. Jet is reacting by cutting staff, closing offices around Asia and reducing flight frequencies. Searching for profitable routes, Jet recently took planes from India's crowded domestic market and expanded service to Dubai. It soon plans to start flying to Saudi Arabia. Mr. Goyal cut his teeth in the airline business by working -- and sleeping -- at his uncle's New Delhi travel agency while he was an 18-year-old student. Seven years later, in 1974, he started his own agency, bankrolled by personal savings and a gold bracelet of his mother's that he pawned. As the Indian sales agent for overseas carriers including Air France and Hong Kong's Cathay Pacific Airways Ltd., he learned the ins and outs of upscale air travel. Jet was one of several carriers launched after India began deregulating domestic aviation in 1991, and initial competition was fierce. Jet survived as rivals failed, thanks in part to Mr. Goyal's longstanding links to foreign carriers with which Jet cooperated to fly international passengers. Although Indian law had granted state-owned Air India a monopoly on foreign flights since 1953, Mr. Goyal prepared for the day that Jet would be allowed to extend its network overseas. He entertained politicians, aviation officials and travel professionals in his London townhouse overlooking tony Regents Park. "I was convinced one day India would have to open up," he says. Anticipating the change, Mr. Goyal focused on creating a passenger experience to rival the world's best carriers. He poured tens of millions of dollars into cabin entertainment systems, ergonomic seats and staff training. He also turned the trend of outsourcing to India on its head by hiring American pilots, recruiting managers from leading Asian and European carriers, and unabashedly aping the innovations of up-market trailblazing airlines such as Singapore Airlines Ltd. "Naresh Goyal's policy of hiring expats broke the mold in India -- he was a pioneer," says Craig Jenks, president of Airline/Aircraft Projects, a global aviation consulting firm in New York. In 2004, India allowed private airlines to fly overseas. Mr. Goyal jumped at the opportunity. He ordered 10 Boeing 777s, and fitted the first-class cabins with spacious private compartments modeled after those created by Dubai's upscale Emirates Airline. Jet's initial public offering in 2005 was 16-times oversubscribed amid national enthusiasm for the airline and its whole industry. But Jet's success also spawned competition. Vijay Mallya, chairman of brewing and distilling giant United Breweries (Holding) Ltd., launched upscale Kingfisher Airlines. It was meant to double as a flying promotion for his top beer brand, Kingfisher. A tiny upstart launched in 2003, Air Deccan, proved even more damaging to Jet. Copying the no-frills approach pioneered by Southwest Airlines Co., it served secondary cities that Jet didn't touch. Deccan opened a floodgate by showing the low-cost model could work in India. In 2005, a group of entrepreneurs started a similar low-cost carrier, SpiceJet Ltd. That same year, a major Indian travel-services company started its own budget carrier, IndiGo. Mr. Goyal fought back by acquiring no-frills competitor Air Sahara, which he rebranded as JetLite. Indian carriers grabbed the spotlight at the 2005 Paris Air Show, the aviation sector's big industry event. There, they announced orders for planes valued at more than $15 billion. IndiGo ordered 100 Airbus airliners even before it secured government permission to start flying. Although Kingfisher had only been flying for two months, Mr. Mallya splashed out by ordering five Airbus A380 superjumbos, the world's largest passenger planes. India's growing middle class was helping tug the global aviation industry from its post-9/11 slump. "Everyone is talking about China," observed Airbus Chief Operating Officer John Leahy at the Paris Air Show that year. "But the biggest growth story we see is India." Foreign investors, financiers and leasing companies, all hungry for new markets, raced to bankroll India's breakneck airline expansion. Indians who had long squeezed onto wheezing, sweaty trains began jetting about the country. Jet soon faced another hurdle: India's outdated aviation infrastructure clogged up. Air-traffic delays added 10% to flight times and cost $80 million in wasted fuel during 2006, Jet executives said, and things were getting worse. "The average 70-minute domestic flight spends another 35 minutes circling," Mr. Goyal complained last spring. The lack of modern aircraft-maintenance facilities in India forced Jet to send planes overseas for routine upkeep, adding millions of dollars to its bills. The cost of retaining veteran mechanics, flight attendants and pilots soared as new rivals poached qualified staff. Even Jet's budget subsidiary, JetLite, and other no-frills carriers struggled. "There are no low-cost airlines in India, only low-fare, no-profit carriers," Mr. Goyal said at a Jet media gathering in 2007. Yet Indian carriers kept chasing market share by slashing fares and adding planes, even as losses ballooned. By last June, Mr. Goyal saw that competition had made business untenable. "We're all in trouble," he lamented at an industry conference, saying each domestic carrier should slash capacity by 30%. Kingfisher's Mr. Mallya scoffed that Mr. Goyal "doesn't know how to do math." But Kingfisher was losing so much money that it soon canceled airplane orders and new routes vital to its overseas expansion. In a sign of the industry's distress, the bitter rivals last October announced an alliance to share airport facilities, coordinate schedules and reduce capacity. The deal still faces regulatory approval. Mr. Goyal had enjoyed a major edge over rivals in one key battleground: overseas flights. Indian deregulation in 2004 opened up international routes only to private carriers that had flown domestically for at least five years. Jet's experience allowed Mr. Goyal to move first, launching flights to Singapore, London and Kuala Lumpur in 2005. Jet quickly grabbed traffic from state-owned Air India, which had struggled to compete globally due to its poor service. Wealthy Indians who had preferred foreign carriers such as British Airways PLC were glad to have a local alternative. Ajit Balakrishnan, founder of India's largest Internet portal, says Jet staff "deliver a superb product" on the domestic flights he takes weekly from Mumbai, and so he jumped at the chance to fly Jet overseas. The 60-year-old veteran advertising executive often books on Jet, which began offering service to New York-area airports in August of 2007. He recommends Jet to foreign friends for its "modern luxury." But Mr. Goyal's intercontinental ambitions faced huge obstacles at India's overtaxed airports. Flights from India to the U.S. or Europe require big planes to carry sufficient fuel, and big planes need lots of passengers to run profitably. In mature markets, airlines generally fill long-haul flights with traffic from many smaller planes arriving at a hub for connections. To coordinate this, airlines need lots of boarding gates, airplane parking spots and runways slots. India's major airports lacked all of them. Anxious to expand, Mr. Goyal hit on an unlikely option during a state visit to India by the King of Belgium in 2005: using the Brussels airport as a hub for North American-bound flights. The facility had sat largely empty since the collapse of national carrier Sabena four years earlier. Talks with Belgian officials at Mumbai's luxurious Taj hotel quickly yielded an action plan. "It was a proper business meeting with an agenda," recalls Mr. Goyal, who was more accustomed to India's glacial bureaucracy. Winning regulatory approval for the unusual arrangement from Belgium and the U.S. took months, but by late 2007, Jet's wide-body airliners were arriving in Brussels each morning from Delhi, Mumbai and Chennai, mixing passengers and departing again for New York's JFK International Airport, Newark Liberty Airport and Toronto. Another three planes did the same trip in reverse. The four-hour Brussels stopover lengthens passengers' trip time compared with a nonstop flight. It also forces Jet to move hundreds of passengers and their bags quickly through a foreign airport at great expense. But thanks to close cooperation with the privately owned airport, which was hungry for business, Jet was able to offer nine different connections between Indian and North American airports, compared with only three connections possible with nonstop flights. But as fuel prices rose in 2008 and America's financial problems rippled to India's outsourcing operations, Jet flights through Brussels grew emptier. Costs rose. Only weeks after adding a seventh Brussels flight last Oct. 31, from Bangalore, Jet reversed course on Nov. 25 and canceled the route, citing economic turmoil. Jet now serves 60 destinations, including 19 outside India. "The crisis has forced us to look much more closely at costs," Mr. Goyal said at his London mansion. Mr. Goyal says he remains committed to Brussels and predicts the North American operation will break even this summer. But many rivals doubt the long-term viability of a hub so far from home. "It doesn't work," says Pierre-Henri Gourgeon, chief executive of Air France-KLM SA, which operates huge hubs in Paris and Amsterdam. Successful hubs rely on big traffic volumes, which Jet cannot guarantee, he says In mature markets, airlines generally fill long-haul flights with traffic from many smaller planes arriving at a hub for connections. To coordinate this, airlines need lots of boarding gates, airplane parking spots and runways slots. India's major airports lacked all of them. Anxious to expand, Mr. Goyal hit on an unlikely option during a state visit to India by the King of Belgium in 2005: using the Brussels airport as a hub for North American-bound flights. The facility had sat largely empty since the collapse of national carrier Sabena four years earlier. Talks with Belgian officials at Mumbai's luxurious Taj hotel quickly yielded an action plan. "It was a proper business meeting with an agenda," recalls Mr. Goyal, who was more accustomed to India's glacial bureaucracy. Winning regulatory approval for the unusual arrangement from Belgium and the U.S. took months, but by late 2007, Jet's wide-body airliners were arriving in Brussels each morning from Delhi, Mumbai and Chennai, mixing passengers and departing again for New York's JFK International Airport, Newark Liberty Airport and Toronto. Another three planes did the same trip in reverse. The four-hour Brussels stopover lengthens passengers' trip time compared with a nonstop flight. It also forces Jet to move hundreds of passengers and their bags quickly through a foreign airport at great expense. But thanks to close cooperation with the privately owned airport, which was hungry for business, Jet was able to offer nine different connections between Indian and North American airports, compared with only three connections possible with nonstop flights. But as fuel prices rose in 2008 and America's financial problems rippled to India's outsourcing operations, Jet flights through Brussels grew emptier. Costs rose. Only weeks after adding a seventh Brussels flight last Oct. 31, from Bangalore, Jet reversed course on Nov. 25 and canceled the route, citing economic turmoil. Jet now serves 60 destinations, including 19 outside India. "The crisis has forced us to look much more closely at costs," Mr. Goyal said at his London mansion. Mr. Goyal says he remains committed to Brussels and predicts the North American operation will break even this summer. But many rivals doubt the long-term viability of a hub so far from home. "It doesn't work," says Pierre-Henri Gourgeon, chief executive of Air France-KLM SA, which operates huge hubs in Paris and Amsterdam. Successful hubs rely on big traffic volumes, which Jet cannot guarantee, he says. Mr. Goyal says falling Indian wages now give him a leg up, because labor accounts for only around 15% of Jet's costs, compared with more than 20% for most Western carriers. Still, he says Jet will refocus on cutting costs and expanding in less-competitive markets of Bangladesh, Nepal and Sri Lanka. "I want to learn how to buy my insurance for the next four years," Mr. Goyal said of his efforts to protect Jet. "I'm the biggest shareholder, so I suffer the most."

Mid Year assessment of Aviation Industry...

Its exactly half of 2009, lets have a assessment of Aviation industry in India. This report has been take from IBEF : -

*Sector structure/Market size : With a growth rate of 18 per cent per annum, the Indian aviation industry is one of the fastest growing aviation industries in the world. The government's open sky policy has led to many overseas players entering the market and the industry has been growing both in terms of players and number of aircrafts. Today, private airlines account for around 75 per cent share of the domestic aviation market. India has jumped to 9th position in world's aviation market from 12th in 2006. The scheduled domestic air services are now available from 82 airports as against 75 in 2006. *Potential for Growth : The Indian Civil Aviation market grew at a compound annual growth rate (CAGR) of 18 per cent, and was worth US$ 5.6 billion in 2008. The Centre for Asia Pacific Aviation (CAPA) has forecast that domestic traffic will increase by 25 per cent to 30 per cent till 2010 and international traffic growth by 15 per cent, taking the total market to more than 100 million passengers by 2010. India's civil aviation passenger growth, presently at 20 per cent, is one of the highest in the world. By 2020, 400 million Indian passengers are likely to be airborne. By 2020, Indian airports are expected to handle more than 100 million passengers including 60 million domestic passengers and around 3.4 million tonnes of cargo per annum. Moreover, significant measures to propel growth in the civil aviation sector are on the anvil. The government plans to invest US$ 9 billion to modernise existing airports by 2010. The government is also planning to develop around 300 unused airstrips. *Airport Infrastructure : Mumbai and Delhi airports have already been privatised and are being upgraded at an estimated investment of US$ 4 billion over 2006-16.Greenfield airports are operational at Bangalore and Hyderabad. These are built by private consortia at a total investment of over US$ 800 million. A second greenfield airport being planned at Navi Mumbai is going to be developed using public-private partnership (PPP) mode at an estimated cost of US$ 2.5 billion. 35 other city airports are proposed to be upgraded. The city side development will be undertaken through PPP mode. Over the next five years, AAI has planned a massive investment of US$ 3.07 billion—43 per cent of which will be for the three metro airports in Kolkata, Chennai and Trivandrum, and the rest will go into upgrading other non-metro airports and modernising the existing aeronautical facilities. *Aviation Policy : Many policies supporting the infrastructure are now in place. 100 per cent FDI under automatic route is permissible for greenfield airports. For existing airports, FDI up to 74 per cent is permitted through automatic approvals and up to 100 per cent through special permission (from FIPB). Private developers allowed setting up of captive airstrips and general airports 150 km away from an existing airport. 100 per cent tax exemption for airport projects for a period of 10 years. 49 per cent FDI is permissible in domestic airlines under the automatic route, but not by foreign airline companies. 100 per cent equity ownership by Non-Resident Indians (NRIs) is permitted. overhaul (MRO) and training offer high investment potential. A report by Ernst & Young says the MRO category in the aviation sector can absorb up to US$ 120 billion worth of investments by 2020. 74 per cent FDI is permissible in cargo and non-scheduled airlines. The Indian government plans to set up an Airport Economic Regulatory Authority to provide a level playing field to all players. *Major Investments : Over the past year, various companies have shown an interest in the Indian aviation industry. US-based business jet maker, Hawker Beechcraft Corporation (HBC), opened its first authorised service centre in Delhi in partnership with Interglobe General Aviation with a total investment of US$ 8 million. Richard Branson, who controls UK carrier Virgin Atlantic Airways Ltd, has sought permission to start a domestic airline in India. GMR Infrastructure is looking to tap the growing corporate jet market in India with investment plans to the tune of US$ 151 million. It is also in talks with aircraft component manufacturers such as Honeywell and Safran to set up a components assembly plant in the country. The company plans to invest US$ 60 million for the proposed JV. US aircraft maker, Boeing Co, will deliver 100 planes worth US$ 17 billion over the next four to five years to India. *Road Ahead : The Indian aviation sector is likely to see clear skies ahead in the years to come. Passenger traffic is projected to grow at a CAGR of over 15 per cent in the next 5 years. The Vision 2020 statement announced by the Ministry of Civil Aviation, envisages creating infrastructure to handle 280 million passengers by 2020. Investment opportunities of US$ 110 billion envisaged up to 2020 with US$ 80 billion in new aircraft and US$ 30 billion in development of airport infrastructure. Associated areas such as maintenance, repair and

Dealing with Challenges at Air India

Air India has been going through a major transformation over the past two years. It has been inducting new aircraft for the first time in well over a decade, has introduced new long-haul flights and in-flight products that are getting decent reviews, has merged its operations with the former Indian Airlines, is modernising IT systems and is preparing to join the Star Alliance. In reality it is all long overdue, as Air India had been stagnating for so long. Chairman and managing director Raghu Menon is the first to admit that the change process should have started long ago, but as he puts it: "It is better late than never." India's air transport market has itself seen massive change over the past five years, since Air Deccan was launched as the country's first low-cost carrier. Its success led to the launch of many more airlines, which in their fight for market share brought airfares down sharply, resulting in huge growth in demand. At the same time the government opened up air services agreements to allow foreign airlines to operate more services to India, and began modernising airport infrastructure at last. The new players put immense pressure on state-run Air India and Indian, which had long been regarded as employment machines with apathetic staff, ageing aircraft and outdated in-flight products. The plan was to create a true network carrier operation to help the combined entity compete effectively with the new players. Air India had until then focused on international services while Indian focused on the domestic market, with some international services to Southeast Asia and the Middle East. "The merger is one of the best things that has happened. It has made us an airline of competitive scale in the region, in the South and Southeast Asian region. The main gains that we anticipated have turned out to be quite realistic, particularly the network synergies and the synergies in operations, and despite all doomsday predictions the human resource merger has also been of great ­benefit," says Menon, who only became ­chairman and managing director earlier this year after moving over from the Ministry of Civil Aviation. Air India still has real problems and some rival airlines say privately that its change process has largely been cosmetic without addressing the real issues of ­improving the balance sheet and cutting staff ­numbers. Officials at Air India feels other way costs have been reduced due to the enlarged entity's increased purchasing power. Offices abroad are being merged, and there has been a significant revenue boost which has exceeded all expectations. The feed is the major positive development. Its trying to ensure that the traffic from the domestic network feeds into two major hubs of Delhi and Mumbai, from where most of our international operations take place, so that passengers travelling abroad as well as passengers coming to India are able to get good seamless connectivity. The route duplication is almost completely removed. Also the duplication in offices and personnel in various locations has been removed, helping a big saving in cost. Financial benefits are impossible to quantify as the carrier does not release earnings at timely intervals since results must first be ­presented to Parliament. The last published accounts were for the year ended 31 March 2007, when Air India posted a loss after ­several years of profitability. It admits it is still losing plenty of money. Insiders say it lost more than Rs20 billion ($406 million) in the last financial year and the civil aviation minister himself was recently quoted as saying losses could hit Rs30 billion this year. One of the assurances which the government gave at the time of the merger was that there would be no retrenchment of employees. Another major problem is with information technology, particularly the lack of a single reservations system. This means that although only the Air India name is now used, the old Indian Airlines code remains. Passengers booking online, for example, still need to choose their flights from one of two websites. Changing this is a priority and a new booking system should be in place by the middle of 2009 from vendor EDS which will allow the two airlines to merge fully under the Air India code. Pushing it to speed up the implementation is the fact that it is due to join the Star Alliance in 2009. Air India will be the first Indian carrier to join an alliance and this should give it an edge over its competitors at home, all of which are struggling financially as a result of increased costs, overcapacity and a recent drop in demand. The tougher times have led to major changes in the operating environment and over the past two years there has been a wave of consolidation. Aside from the Air India-Indian merger, Jet Airways acquired the former Air Sahara (now JetLite) and Kingfisher acquired the former Air Deccan.These three groups now control 77% of the market by passenger numbers. Air India is looking for injection of equity,as its equity base is very low. The second proposal is for a soft loan. Air India holds a lot of promise and should not be underestimated. It is an airline which has performed for over 75 years, and with the transformation that is taking place it will perform even better.

CRJ 700 in India

The first CRJ 700 Aircraft entered in to service in India with Air India Regional. The 70- seater is flying six days a week between Delhi-Raipur & Delhi-Vishakhapattanam. Load factor is repoetrd to be nearly 80 percent. With Increasing jet fuel prices & drastic decrease in Air travel, lets wait & watch for how long it will able to have a high load factor?

Aircraft Fractional Ownership & India...

I was wondering why I have never posted about any of the charted airlines, even though i did my internship in a charted airline. Let me break this unsaid rule. With so much hype of B-jets (entering in India, Tata has stake in this) & Netjets offering what is known as Aircraft Fractional Ownership (AFO). Being the only person in India (i think so) who has done a project on Aircraft Fractional Ownership (I did a my Internship with Club One Air on the project titled - "Feasibility of Aircraft Fractional Ownership in India"), i believe its my duty to tell my readers about this AFO thing. The concept of AFO can best known on Netjets website, as this company introduced the concept to the world. I would like to cover issues pertaining to AFO in specifically in India. These issues are a roadblock to this concept-

1. Inappropriate Infrastructure.
2. Charted Flights are not allowed to take off on busy timings.
3. Secondary preference given to charted flights.
4. Even Indian Corporates love to have discounts in AFO, how these players will overcome that.
5. Indians dont love to share thier vehicles, how they will share an aircraft.

Well I will not discuss my findings but, these are the million dollar question to be answered.

Freedom... I Doubt...

Ever noticed the Registration of Aircrafts in which you fly. There is one thing common in all & that’s all the registration starts from VT. So what actually does that mean. In good olden days, I am talking about British Raj period, all the aircrafts at that point were registered as Viceroy Territory. The Irony is that it still holds good & today aircrafts are registered for the short form of the same that’s our VT. None of the associated authorities have considered to think about that. We may have got freedom some 60 odd years back but, are we really free???

Snapshot of Aviation Industry in India

Growing at a rate of 18 per cent annually, the Indian civil aviation market holds out great promise for potential investors into the sector. India's civil aviation ministry expects 80 million passengers by 2020. The number of air travellers increased by a record 38.5 per cent in 2006-7. India anticipates doubling of passenger traffic over the next decade. The second largest aviation industry of the world, the Indian fleet comprised 370 aircrafts by the end of the year. And growth is expected to continue apace: the Government estimates that India’s fleet will reach approximately 500-550 aircraft by the end of 2010. India's civil aviation passenger growth, at 20 per cent, is among the highest in the world. The sector is slated to cruise far ahead of other Asian giants like China or even strong economies like France and Australia. The number of passengers who will be airborne by 2020 is a whopping 400 million. The Centre for Asia Pacific Aviation (CAPA) predicts that domestic traffic will grow at 25 per cent to 30 per cent a year until 2010 and international traffic growth by 15 per cent, taking the overall market to more than 100 million passengers by the end of the decade. Indian carriers have 480 aircraft on order for delivery by 2012, which compares with a fleet size of 310 aircraft operating in the country today. the number of air travellers is about 0.8 per cent of the population. By the time even 10 per cent of the population begins to fly, India will need about 5,000 aircraft.

• taken from http://www.ibef.org/ for more information plz click on the title.

Jet flying in turbulent weather...

The problems for Jet Airways are incresing just like the taxes n surcharges on air tickets... it all started when Kingfisher changed its business model from being a LCC to a full service premium airline & started taking on Jet... Then came its IPO & the Jet sahres were listed above Rs. 1000 per share. But, only then its decision to acquire Air Sahara came. The market & even the department heads of Jet reacted to it very sharply (agianst the deal). Share prices tumbled by nearly 50%, which till now have not been able to touch its listed prices, many of the department heads left Jet . Every body knows the end result of the deal... Air Sahara becoming Jetlite. By that time there were so many entrants & tough competition from LCC's started eating up its profit. In the mean time, International routes were opened for Indian private carriers & Jet tried to capitalise on this oppurtunity. Jet purchased new aircrafts...exactly the same time competition came from Air India with its new image, services, planes, etc... Jet just trying to handle this situation, Kingfisher announced its acquisition of Air Deccan to directly take Jet Airways head on. As of now Jet & Kingfisher have equal market share of nearly 29% (with thier combined entities respectively). As of now, all the decisions taken by it are going against Jet's favour... but, if Jet is able to survive this turbulance, I believe that Jet will return to its earlier position not only in Indian Aviation but, it will show the same performance internationally.

The Spicejet Way...

The most quite n non-controversial airline "Spicejet" has made a deal with Air India. Air India will take 02 of its boeing 737-800 aircrafts on wet lease. the aircrafts will be used for Haj Pilgrimage only, the flight number will be of Air India but the logo will be of Spicejet...its a great achievement for Spicejet as it is only in its 3rd yr of operation. A setback for all those airlines who are making a lot of hoopla to fly abraod, as they dont meet the criteria required of 05 yrs experience domestic flying. It will be connecting Varanasi, Jaipur & Lucknow with Jeddah for 75 days starting this november.

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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 Air India Experience…

I was in Delhi on 24th & I would not like to discuss how I landed in Delhi, it was complete chaos for me… but, ya sure about my return flight to B’lore. I decided to fly by Air India (Indian), really a brave decision 4 me due, to all my previous experiences with the airline bt, I had made my mind for that. I flew with Air India, Delhi – Bangalore, 30th Aug., IC-403. I went to Airport counter on Sunday 26th to buy my tickets… the counter (with new Air India logo) was nearly empty with a short ‘Q’. my turn came n I asked for the 1630 hrs flight, the gentleman over there was a little confused stood up, strolled here n there for a few minutes changed his counter then, asked me to come over to that counter. Not a big deal 4 me n the whole ‘Q’ (although the short 1) shifted its counter. I again told my details etc. n asked for the cost, he said go to cash counter n pay…he he he… I went to cash counter n paid whatever I was asked to.

• (fare- Rs. 3200 tax- Rs. 225+1100 = total Rs. 4525).

Luckily I checked the fare frm its site. Well this, a fair experience for me coz I know it works like this only…I dnt have much expectations frm it. on my scheduled date by 3 pm I was @ airport. Went to check-in counter n asked 4 aisle seat (this time also, very short ‘Q’, may b coz @ dat time there’s no rush). To my surprise I was awarded aisle seat, seat no. 10C (twice before, I asked 4 my preferences bt, was declined so I nvr I asked again, bt this time I jus did it). Everything went on smoothly, @ 1600 hrs passengers were asked to board the plane (hey, on-time). Now, the real experience was there, the plane was latest1. Aircraft registration no. VT-PPA (if I remember properly), which was delivered to IAL in July itself, (confirmed frm DGCA website). The aircraft was A-321, a 172 seater aircraft. Only 1 aircraft in its fleet ill now. “Air India” written on the plane. Entered the aircraft, saw the seats in economy class, enough leg-space, personalized TV screen. Flight took off nearly on scheduled time, flight time announced as 2.15 hrs for the flight. I will not bore u with wat they in snacks, it was as usual, bt, improved than b4. I would rather like to inform u abt the personalized TV, a touch-screen (can b operated frm handrest) 12 audio & video channels each.

• Video channels - 02 channels showin same stuff.
• channel 1&2 – English movie (Marc Lawrence directed “Music & Lyrics”, with Hugh Grant & Drew Barrymore)
• channel 3&4 – Hindi movie (Abhishek & Aishwarya starrer blockbuster – “Guru”).
• Channel 5&6 – comedy shows (Hindi & English)
• Channel 7&8 – Shows (Travel, sports etc.)
• Channel 9&10 – Music Videos (hindi)
• Channel 11&12 – south Indian songs (may be Kannada, as flight was to blore)
• Audio channels - bear with my very limited knowledge of music.
• Channel 1- Indian classical
• Channel 2- western classical
• Channel 3- Ghazals
• Channel 4- Raga’s
• Channel 5- classical (Tabla)
• Channel 6- classical (Veena)
• Channel 7- combo classical (many instruments)
• Channel 8- Hindi songs (1980-90s)
• Channel 9- Hindi songs (New)
• Channel 10- south Indian songs
• Channel 11- Oldies Hindi songs
• Channel 12- south Indian songs

Well this was all about the entertainment system. A good way to compete head on with Kingfisher Airlines & Jet Airways. The only turn off was that there are too many announcements in b/n (jus too many even, tried to count bt, lost the count). Landing was also on time. B4 leavin the plane I said to an air hostess standing at the doors –“Excellent flight, Thank U”… to b honest I never said so in ny flight, nt even in my fav. Jet Airways (I wonder is Jet still my fav… hv to gv a serious thought).

A couple of suggestions –

1. plz announce Air India & not Indian Airlines
2. aunties (older than my mom, I can say so, coz my mom still dnt hv ny grey hair) as air hostess… he he he…

A-321 is available on routes Delhi-Mumbai-Thiruvanantpuram-Mumbai-Delhi, Delhi-Chennai-Delhi (02 flights), Delhi-Bangalore-Delhi & Chennai-Singapore-Chennai. Lets wait n watch hw far can this go… ***best of luck*** to it. All this has been my written by my own personal experience.

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The Youth Movement In Indian Aviation...

One can see the youth movement in the cockpits of some Indian airliners. 19-year-olds are flying as first officers in aircrafts like Boeing 737s and A320s and the four-striper beside them might be as young as 25. In India about 5 percent of commanders on jet aircrafts are under 30 years of age. Thnax to the rapid expansion of Indian aviation. Indian pilots are now, trained almost exclusively for airline positions and the training has become very focused. A young pilot can be commercially rated at 18 years of age and, for some airlines, it needs just 1,500 hours of flying hours to get control of the wheel. Is it good or bad??? especially given the demanding flying conditions in India. If one becomes a commander after flying as a copilot for only two years, there is a level of risk involved due to lack of experience. One must remember that a 19-year-old copilot may be sharing the cockpit with a 25-year-old commander -- there are hardly any years of experience between them. to read complete click on the title...

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The Taste of India...

Mr. Ram Vilas Paswan having his food in an Aircraft, flying so high but, still down to earth...the innocence in his eyes says it all...having the true Indian spirit...the way millions of Indian still live their life is truely shown by the leader of India...hats off to him... to view it (taken from The Times of India) plz click on the title...

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No Small aircraft @ Delhi...

On the eve of Independence day the Business-Standard published a news on front page regarding not allowing small aircrafts @ Delhi Airport... the excerpts from the news-->

• Delhi Airport will not allow additional smaller planes from winter of 2007-08, these aircraft include ATR's, Bombardiers, Embraers & Sukhoi Superjet 100.
• DIAL's decision maight be followed by GVK grp-controlled Mumbai Airport (MIAL).
• Small aircraft movements (landings & take-offs) account for 10% of the 650 aircraft movements a day. the industry estimates that with thee regional airlines policy, at least 150 movements of small aircrafts will b added in the nxt 12 months.
• The Govt.'s policy to encourage connectivity, most of these aircraft (below, 40,000 kg) do not pay landing charges to the airports. this move is expected to act as a dampener for the Govt. recently announced policy to encourage regional ailrines.
• DIAL is also considering a move to impose landign charges on smaller planes currently landing in Delhi, though nothing has been finalised.
• Its said that the higher runway occupancy time of Bombardiers & ATR's reduce the movement of heavy aircraft, which provide the main chunk of airport revenues.
• Small aircraft lacked the category III equipment landing in a fog, which would result in delays & inconvenience to passengers.
• DIAL may consider permitting smaller aircraft once new runway is commissioned in 2008. The ban of smaller aircraft will impact the growth of regional airlines, which will primarily b using ATR's & Bombardiers. (for complete story plz...click on the title of the news)

I personally feel that this is a ploy against the development of regional airlines. may be any of the big or established airline is ploying hard to hinder the progress of regionnal airlines.

A few of the points that clicked me are-

1. how come this move is taken only after the announcement for new policy for regional airlines.
2. why this move is to be implemented in the winter season of 2007-08 at not right from now.
3. how come a small aircraft like ATR or Bombardier takes much longer time on the runway, whereas, they need shorter runway to takeoff.
4. also, the new aircrafts always have new avionics(all equipments used by pilots while flyin an aircraft...) installed in them, so how come they dont have the so called "cat-III" equipment, where as all the delays in fog are caused by bigger aircrafts which are older & the cost of implementing these equipments is much higher.
5. when, the Govt, has announced that it will gv concessions in landing charges, how come DIAL announcing that it may charge the landing charges.
6. to b on safer side DIAL says that it may allow smaller aircraft, when the new runway is ready, which I feel that is not likely to be completed on time.

these are a few questions which put creates a lot of confusion...some of the Delhi & NCR based airlines are-

• Spicejet
• Indigo Airlines
• Indian (now, Air India)
• Jagson Airlines
• MDLR Airlines...

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