Indian Aviation Review 2010

Air Traffic Growth

The year 2010 has seen a robust growth in terms of aircraft movement and passengers handled. Vis-a-vis 2009 the growth rate has been 3.4% in respect of aircraft movement and 16.2% in respect of passengers handled and 26.9% with respect to cargo.

Passengers carried by domestic airlines from January-November, 2010 were 468.09 lakh as against 393.53 lakh in the corresponding period of the year 2009 thereby registering growth of +18.9%.

There are, at present, 16 Scheduled (11 scheduled passenger airlines, 02 scheduled regional airlines and 03 scheduled cargo airlines) and 121 Non-scheduled Operators. At present there are 419 aircraft with the scheduled operators. The total aircraft in the Non Scheduled category are 360.

This year saw the Ministry of Civil aviation take several initiatives to facilitate the passengers to undertake hassle free and convenient air travel by the issue of CARs through the Directorate General of Civil Aviation (DGCA).

A state of the art new integrated Terminal-3 has been operationalized at the Delhi Airport in July this year creating a new beginning in world class infrastructure, with public-private participation in the aviation sector.

The much awaited environmental clearance has also come through for construction of a New Green Field airport at Navi Mumbai.

Following are some of the important issues taken up by the Ministry of Civil Aviation during the year 2010:

Initiatives of the Ministry in the field of Economic Regulation

To elicit the views of stakeholders, to gain expertise from the concerned experts and to augment capacity to address issues that are predominantly economic in content, the Civil Aviation Economic Advisory Council was established on 9 December, 2010 under the Chairmanship of Secretary Civil Aviation and with members drawn from different fields of expertise that are directly and indirectly connected to Civil aviation sector. The first meeting of the Council took place on 13 December 2010.

Consumer protection measures

(i) On 6 of August, 2010 a Civil Aviation Rule (CAR) has been issued which provides for compensation and facilities to the passengers in case of denied boarding, cancellations and delays. The violation of this CAR is punishable under the provisions of scheduled VI to the Aircraft Rules, 1937. This will be a category III offence attracting a maximum penalty of 6 months in prison or Rs. 2 lac fine or both

(ii) On 31 July, 2010 CAR has been issued in order to promote fair competition in the airline sector and to ensure that consumers do not receive inaccurate or misleading information on airline services, by strengthening the computer reservation system/global distribution system

(iii On 3 September, 2010 the relevant Rule has been amended and circular issued to provide that the Pilot-In-Command may permit the use of cellular/mobile phones after the aircraft has landed and cleared active runway. However, this facility will not be available during low visibility conditions.

Connectivity in North Eastern Region

At present, there are 11 operational airports served by the Scheduled airlines in the North-East region viz. Dibrugarh, Guwahati, North Lakhimpur, Imphal, Dimapur, Agartala, Shillong, Jorhat, Silchar, Tezpur & Lengpui. 348 flights per week are being operated by NACIL, Alliance Air, Jet Airways, JetLite, Kingfisher Airlines, Spicejet and IndiGo to/from these airports.

The no. of flights in the NER has been increased from 286/week in Summer Schedule 2010 which is an increase of 21.67%. In addition, Pawan Hans Helicopters Ltd. (PHHL) is providing helicopter services under the aegis of the State Governments of Arunachal Pradesh, Nagaland, Meghalaya, Sikkim, Tripura.

Further, the DGCA has commissioned a comprehensive study to evolve a roadmap for air connectivity to the North-eastern region.

Bilateral Agreements

Election in the Council of ICAO

In the 37th Assembly session of the International Civil Aviation Organisation (ICAO) held at ICAO Headquarters at Montreal in Canada on 28 September – 08 October, 2010, elections were held for the representation of the Member State countries in the Part I, Part II and Part III of the Council of ICAO. India has contested for continuance of its representation in the Part II.

The total number of seats was 12, equaling the number of contestants. 163 countries cast their votes. India secured 148 votes out of 162 votes and was at number 2 position in the group in terms of number of votes secured.

Amendments of Air Services Agreements (ASAs) with foreign countries

Keeping in view the recent developments in the civil aviation sector, and with a view to modernize and update the existing ASAs with foreign countries as per the ICAO templates, bilateral air services consultations were held in 2010 with foreign countries viz. Zimbabwe, Indonesia, Ireland, Brazil, UK and Iran and the respective ASAs have been amended and finalized.

Bilateral Air Services Agreements were formally signed with Bhutan, Iceland, Nepal, Bosnia & Herzegovina, South Africa and Iran. Apart from these, new Air Services Agreements have been initialed with Senegal, Barbados and Rwanda.

Technical co-operation agreements with Nepal and Afghanistan

Technical co-operation agreements were signed by the Director General of Civil Aviation (DGCA) and Airports Authority of India (AAI) with the Nepalese and Afghan civil aviation authorities in order to provide active technical support including training of personnel to these countries by India to promote and develop civil aviation sector.

India – EU civil aviation co-operation programme

Under the Joint Action Plan, a Civil Aviation Co-operation Project - II has been agreed to. Its Terms of Reference (TOR) have been finalized. The project called “Institutional Capacity Building in the Civil Aviation sector in India (ICAA)” has been started under India – EU civil aviation co-operation.

India – US Aviation Joint Working Group on Security

The India – US Aviation Joint Group Meeting on Security was held in New Delhi on 20 – 21 January, 2010. During this meeting two MoUs on deployment of Air Marshals and Co-operation in Airport Technical Visits were signed between the Government of India and the Government of United States of America. The two MoUs mark the beginning of an ongoing co-operation between the two countries in matters of security.

Equity Induction by the Government in Air India

Air India is expected to incur a loss of Rs. 5,656.52 crores during the year 2009-10, mainly due to the prevalent economic recession, low yields and load factors coupled with higher fuel costs, higher interest payment on working capital loans and aircraft loans.

The present paid up equity capital of NACIL is Rs. 145 crores which is not sufficient for an aviation company of its size. Therefore, the Government has approved the release of funds to the extent of Rs. 800 crores in tranches of Rs. 400 crores in a month in the form of equity.

Accordingly, an amount of Rs. 800 crores has been released in February and March, 2010. A provision of Rs. 1200 crores has been made in the current financial year, the release of which is expected to happen this year. The equity induction would ease the cash flow situation of the company and preclude borrowing from the markets at high costs to this extent.

Meanwhile the company has seen an increase in load factor from 62% to 67% and also passenger yield from Rs. 2.92 to Rs. 3.30 RPKM.This has resulted in an increased Passenger and cargo revenue of Rs. 1,189 crores.

The company has undertaken several cost reduction measures with active support from the Government.

Security Measures

Keeping in view the security scenario and enhanced civil aviation activities, four regional offices of the Bureau of Civil Aviation Security (BCAS) has been created at Guwahati, Amritsar, Hyderabad and Ahmedabad airport in addition to the existing Regional offices at Delhi, Mumbai, Chennai and Kolkata.

The Anti-Hijacking (Amendment) Bill, 2010

With a view to enhance the punishment, for the offences of hijack of aircrafts and also for the conspirators, to death penalty, the amendment is proposed in the Anti-Hijacking Act, 1982. The final Bill has been introduced in the Rajya Sabha on 19 August, 2010. The Bill has now been referred to the Ministry of Law.

Mangalore Crash - IX 812 of Air India Express operating from Dubai to Mangalore was involved in an unfortunate accident on 22nd May 2010. There were 160 passengers and 6 crew members on Board. There were only 8 survivors. A Court of Enquiry headed by Air Marshal (Retd.) B.N. Gokhale was set up. The Court has submitted its report which is under examination.

Airports

Phase-I of the Modernization of Delhi Airport was completed on 31 March 2010, at an estimated project cost of Rs. 12258 crores. A new integrated Terminal-3 has become operational which has 34 million passengers handling capacity per annum.

The major development works completed Modernization of Mumbai Airport during 201010 are South-West pier, integrated processor terminal, Baggage Handling System (BHS) in the new domestic terminal, six Passenger Boarding Bridges (PBBs) in the new domestic terminal.

Under the Policy for Greenfield Airports the Government, during the year had accorded “in-principle” approval for setting up of a Greenfield airport at Dabra (Madhya Pradesh), Palladi (Rajasthan), Itanagar (Arunachal Pradesh), Kushi Nager (Uttar Pradesh).

Airports Authority of India (AAI) Airports Authority of India registered an all time high revenues of Rs. 4,615 Crores, which was 10% more than the previous year. Similarly, capital expenditure incurred on infrastructure works at various airports rose from Rs. 2547.52 crores to Rs. 2,742.54 crores.

New Terminal Buildings have been commissioned at Varanasi, Barapani (Shillong), Madurai, Mysore and Ahmedabad airports.Existing terminal buildings have been upgraded/ modernized at Pune, airport. Runways/ Taxiways have been extended / expanded at Varanasi, Ranchi, Guwahati, Bhopal, Gondia, Ludhiana, Cuddappah and Coimbatore airports.

Upto November 2010 progress of work for modernization and development at Chennai and Kolkata Airports has been 66% and 46%.Work on the construction of new Greenfield Airports at Pakyong in Sikkim is in progress.

For the implementation of the GAGAN project of satellite based navigation, site acceptance test for Indian reference stations has been completed at Goa, Jaiselmer, Porbander and work is in progress at Dibrugarh, Nagpur and Bhubaneswar.

A dedicated Air Cargo Complex facility at Veer Savarkar Airport, Port Blair has been operationalised.

A new Joint Venture Company under the name “Chandigarh International Airport Limited” has been set up to undertake the construction of a new International Terminal Building at Chandigarh Airport.

Setting up of International airport at Navi Mumbai: After getting the environmental clearance in November this year, the development of the Greenfield airport at Navi Mumbai will get underway. It is projected to have sufficient capacity to handle the additional traffic around Mumbai, which is expected to go upto about 80 mppa by 2031-32

Helicopters

Pawan Hans Helicopters Ltd. (PHHL) In 2009-10 the Company achieved record revenue hours of 29,890 as compared to 27,050 in 2008-09. During 2009-10 the net profit after tax was Rs.35.59 crores as against Rs.25.12 crores in 2008-09.An MOU has been signed with Andaman & Nicobar Administration for introduction of Sea Plane Operation in Andaman & Nicobar Islands. The Sea Plane operation for the first time in India will commence from 27 December, 2010. PHHL has completed and operationalised two projects of heliport /helipad in October, 2010 – one at Akshardham and the other at Rohini, both in Delhi. DGCA has also allowed PHHL to utilize the facilities at Gliding Center at Hadapsar to set up a Heliport and helicopter training institute.

Training and development

Indira Gandhi Rashtriya Uran Akademi (IGRUA): - The Akademi this year, has inducted 14 Single engine DA 40 Aircraft and one twin engine DA 42 aircraft and installed two Flight Simulators. The Akademi has 14 flying instructors and has flown 14934 hrs during 2010. So far this year, 62 cadets have completed their flying and 114 trainees have been inducted. Campus selection team from Air India and Jet Airways visited Akademi in Aug/Sept. and December, 2010 for induction of trainee pilots.

Events and Accolades

India Aviation 2010 - a Civil Aviation air show, was held for the second time at Begampet Airport, Hyderabad in March 2010. The next edition would be held from 14-18, March 2012.

An independent audit by FAA under IASA program confirmed India to be a role model in the Asia Region in the Civil Aviation. The Ministry of Civil Aviation was awarded on 1 December, 2010 the “KPMG – Infrastructure Today Award” for being the most admired Central Entity in the transport sector.

Indian Ministry of Civil Aviation: non-metro airports...

Development works by the Airports Authority of India (AAI) has been completed at various non-metro airports and in many the work is scheduled to be completed by 2009-10. This information was given by the Minister of Civil Aviation, Shri Praful Patel in Rajya Sabha. The details of development works completed by AAI at various non-metro airports are as follows: Vizag (Andhra pradesh)- construction of new integrated terminal building; Guwahati (Assam)- extension of runway; Mangalore (Karnataka)- construction of new integrated terminal Building; Agati(Lakshadweep)- construction of new integrated terminal building; Raipur (Madhya Pradesh)- construction of new apron; Khajuraho (Madhya Pradesh)- construction of new apron at; Aurangabad (Maharashtra) - construction of new integrated terminal building; Nagpur (Maharashtra)- construction of new international arrival hall and expansion of existing terminal building; Amritsar (Punjab)- extension of runway, expansion of apron and terminal building, construction of new terminal building; Jaipur (Rajasthan)- construction of new international terminal complex; Udaipur (Rajasthan)- construction of new terminal building complex and new apron; Madurai (Tamil Nadu)- extension of new apron; Trichy (Tamil Nadu)- construction of new integrated terminal building; Agartala (Tripura)- expansion of apron, strengthening of existing runway and construction of technical block; Agra (Uttar Pradesh)- renovation of terminal building; Dehradun (Uttarakhand)- construction of new terminal building, apron and strengthening and extension of runway. Development works scheduled to be completed in Financial Year 2009-10 at various non-metro airports are as under: Portblair (Andaman & Nicobar Island)- extenion and strengthening of apron; (Raipur (Chattisgarh)- construction of new terminal building; Ahmedabad (Gujarat)- construction of new international terminal building; Ranchi (Jharkhand)- construction of new integrated terminal building; Trivandrum (Kerala)- construction of new international terminal buiding; Bhopal (Madhya Pradesh)- construction of new integrated terminal building; Indore (Madhya Pradesh)- construction of new integrated terminal building; Pune (Maharashtra)- extension and modification of terminal building; Imphal (Manipur)- extension of apron; Dimapur (Nagaland) - extension of apron and construction of link Taxiway. Coimbatore (Tamil Nadu)- expansion and modification of existing terminal building, consruction of part parallel taxi way and extension of apron; Madurai (Tamil Nadu)- construction of new integrated terminal building; Lucknow (Uttar Pradesh)- construction of new international terminal building and new apron, expansion of existing apron; Varanasi (Uttar Pradesh)- construction of new integrated terminal building including aerobridge and extension of apron; Chandigarh (Union Territory) - construction of new terminal building; Khajuraho (Madhya Pradesh)- construction of terminal building. of terminal building. (a): Airports Authority of India (AAI) operates and Airports Authority of India (AAI) operates and maintains 87 operational and 29 non-operational airports including 23 civil enclaves at defence airfields and private airports for air traffic operations. In addition to above, Government of India have given 'in-principle' approval for setting up of new Greenfield airports at Navi Mumbai, Sindhudurg in Maharashtra, Mopa in Goa, Bijapur, Simoga, Hassan and Gulbarga in Karnataka, Pakyong in Sikkim, Durgapur in West Bengal and Datia/Gwalior in Madhya Pradesh. There is no such estimation made. However, Airports Authority of India (AAI) has plan to incur expenditure of Rs.12434 crores for modernisation of airports and air traffic services across the country during XIth Five Year Plan period (2007-2012).Two Greenfield Airports each at Bangalore and Hyderabad with an investment of Rs. 2400 Crores and Rs. 2920 crores have been made operational in 2008 under PPP. Besides,development of IGI Airport, New Delhi and CSI Airport, Mumbai with estimated cost of Rs. 8975 crores and Rs. 9802 crores respectively has been undertaken under PPP.

Unused Airports in India...

There are 32 airports belonging to Airports Authority of India (AAI) which are non-operational (Unused). They are Cuddapah, Donakonda and Warangal in Andhra Pradesh; Passighat in Arunachal Pradesh; Rupsi in Assam; Jogbani, Muzaffarpur and Raxaul in Bihar; Bilaspur in Chhattisgarh; Deesa in Gujarat; Chakulia in Jharkhand; Mysore in Karnataka; Khandwa, Panna and Satna in Madhya Pradesh; Akola, Solapur and Jalgaon in Mahrashtra; Shella in Meghalaya; Aizwal in Mizoram; Jharsuguda in Orissa; Kishangarh in Rajasthan; Vellore in Tamil Nadu; Kailashahar, Kamalpur and Khowai in Tripura; Asansol, Balurghat, Behala and Malda in West Bengal & Jhansi and Lalitpur in Uttar Pradesh. Expenditure incurred on the maintenance of some of these 32 non-operational airports during the last 3 years as well as the loss incurred at these airports are as under. The expenditure made and loss occurred (Rs. In lakhs) are in bracket:- For the year 2006-07 – Cuddapah (10.51,10.47), Jogbani (0.50, 0.50), Jharsuguda (78.77, 78.11), Kailshahar (1.24, 1.24), Vellore (6.95, 6.93), Balurghat (4.81, 4.51), Behala (24.88, 24.88) and Malda (23.07, 22.76); for 2007-08 – Cuddapah (14.50, 14.48), Jharsuguda (83.73, 83.37), Vellore (11.12, 10.81), Balurghat (10.48, 10.48), Behala (51.36, 43.64) and Malda (36.48, 36.48), and for 2008-09 – Cuddapah (42.33, 41.86), Mysore (13.88, 13.88), Jharsuguda (154.79, 154.79), Vellore (18.78, 18.79), Balurghat (10.76, 10.76), Behala (112.59, 112.59) and Malda (56.41, 56.41). Cooch Behar in West Bengal and Akola and Solapur in Maharashtra were made operational in the last three years. Mysore Airport in Karnataka will be made operational in 2009-10. This information was given by Shri Praful Patel, Minister of Civil Aviation in Lok Sabha.

India as Global Aviation hub...

India’s aviation industry is in a mess.

Pick up any of India’s main papers and stories abound about India’s airlines losing $2 billion in the last financial year. NACIL, the publicly-owned company that runs Air India is in particularly bad shape. The government has rejected a request for a $3 billion bailout package. Instead, the government wants to overhaul AI’s management within a month and has started the hunt for an experienced chief operating officer. With accumulated losses as of March 31 that total a staggering $1.5 billion, for the first time in its history the airline delayed paying its salaries in June. None of the other large carriers, including Jet Airways and Kingfisher, are faring much better. Those two have taken excess capacity out of the market and reduced overheads. Airport operators, oil companies, hotels and others have either threatened to introduce or already are operating cash-and-carry regimes with carriers that have, in some cases, significantly exceeded their credit limits. The spectacular growth rates of 30% to 40% that enticed airlines to ramp up aircraft orders and to devise unsustainable (but until not too long ago universally followed) strategies of buying market share by discounting tickets and adding capacity are now history.

In such a scenario, is there any chance that India will emerge as a global aviation hub?

Looking at its metropolises, including the megacities of Delhi and Mumbai, India should already sport at least one major global aviation hub. Both cities have populations approaching 20 million inhabitants. Delhi is the country’s political capital and arguably its second most important commercial hub. It also does not suffer from the severe space constraints afflicting Mumbai’s Chhatrapati Shivaji International Airport. In fact, the masterplan for Delhi’s Indira Gandhi International Airport envisages a capacity of 100 million passengers at the end of its development. The capital hosts embassies of most of the world’s countries, international schools, good hotels and entertainment facilities, a rapidly growing infrastructure and, if one includes the satellite towns of Gurgaon and Noida, more head offices of multinational companies than any other city in India. Until today, infrastructure has been a major handicap. Lack of efficient connectivity between the domestic and international terminals made transfers from domestic to international flights (and vice versa) an unpredictable nightmare for passengers and airlines. With the airport’s development and the construction of an integrated domestic/international terminal this problem will be resolved by the middle of next year.

“Capacity reduction is still lagging behind demand.”

However, their poor shape and the relatively small size of India’s airlines compared with majors such as Emirates, Lufthansa or Singapore Airlines — all with their already well-established hubs and route networks — will make it difficult for any desi carrier to assert itself. The merger of Air India and Indian Airlines was conceptually the right way forward. It was aimed at giving the state carrier the size and route network to effectively compete with its domestic and international challengers. Unfortunately, the marriage between the two airlines was never properly consummated and hardly any of its envisaged synergies have materialized.

So what should India’s aviation industry do to extricate itself from this mess?

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 India is among the highest in the world. At current prices, fuel accounts for 45% to 50% of operating costs in India. While the central government has instructed the public-sector oil companies to provide generous credit terms to the airlines, it could do more by naming fuel a declared good which attracts a uniform 4% sales tax.

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 India, this means a distorted market, putting its carriers at a relative disadvantage especially on international routes and making technical or fuelling stops in India for international carriers non-viable.

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, India has been fairly liberal in its approach to so-called bilateral agreements which regulate how many flights and/or to which points carriers from two contracting countries can serve. This is a good thing. An open bilateral regime stimulates competition and traffic growth as the examples of Singapore and Dubai have shown. It is also instrumental in bringing down the cost of travel and promoting economic growth.

For the sake of its national economy, the current plight of the national carrier should not discourage India from keeping its aviation market open. Instead, liberalization should be used as a tool to make its industry more competitive and its national carrier a leaner, more focussed and especially a more customer-centric organization.

Air India has taken a couple of encouraging steps. It has selected a European hub at Frankfurt, its first outside India. It is phasing out its unreliable fleet of old B777s and B747s. It has been selected as a member of the Star Alliance and is in the process of joining. That will give Air India a greater reach into the coveted U.S. market in addition to its flights from India. It is through its alliance membership that Air India could widen its appeal and route network from India to the rest of the world.

Overall, India either has or is building the necessary ingredients for establishing a successful aviation hub, most likely in Delhi. But to fulfil that promise will require a broader partnership involving alliance partners, regulators, airport operators and local authorities to overcome the many hurdles that remain.

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 India are amongst the highest in the world," it said. In a survey conducted in 2008 by Jacob Consultancy, which specialises in aviation consultancy, Mumbai airport was ranked 50th in a sample of 50 worldwide representative airports. "This indicates that charges at Mumbai (Delhi airport has similar charges) were amongst the lowest," said APAO secretary general K L Kanthan.

Mumbai's charges are 16 per cent of what Toronto — which charges the maximum fee — collects from airlines. However, airlines do not buy the argument. "There are three components to airport charges. The passenger service fee (PSF), the navigation charges and finally the airport charges. Taken together, it forms a substantial chunk of our operating costs," said a senior official from Air India.

The APAO has also argued that airport charges in India were increased by 10 per cent only once after eight years against the aggregate inflation of 48 per cent, based on average annual cost inflation of 5 per cent. "The fact is that airport charges in India constitute only about 3.25 per cent to 3.5 per cent of total operating cost of airlines as compared to ATF (aviation turbine fuel) which constitutes 40 per cent of the costs."

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 India should understand that such investments need to be absorbed. But from their point of view these new charges came at a very wrong time when the industry was in bad shape and the extra costs passed on to passengers could not be absorbed by them”.

"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.

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.

Indian Aviation dying steadily & quickly...

I was just going through the sites of couple of airlines to know the fare structure. I was surprised to see that the tax charged is more than Rs3500/- per ticket. The ticket price for Delhi-Mumbai on a GoAir flight was just Rs. 885/- & rest was the taxes. I still remember those days (just 6-7 yrs back) when one need to pay just Rs. 225/- as charges over a ticket. So who is responsible for this. I totally believe that its the Govt. All airlines are in red, whatever any body may say or claim but the truth us none of them is making money. All are losing tonnes of cash. Even for the condition of Air India, which is now struggling to even pay salaries. Govt. may say that it has liberlised the industry & has come up with Open Sky policy. All this is really bullshit. Aviation Ministers' have made crores & crores of money (present & past). No clear policies on any thing. Be it airport infrastructure or any other facility. There is no point that LCC airlines will survive in India. They need budget & smaller airports to operate. Future is really bleak for this industry, beacuse of Govt. apathy. Soon there will be a time that there will be 2-3 airlines (max.) if things dont change. All the rosy picture shown will just fade away. If govt do not do any thing concretely, trust me on this future is dark. A black spot.

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.

Shutting Down HAL Airport...

Pressure on the government to keep Bangalore's HAL airport running is beginning to gain ground. While much of the angst is over traffic snarls, the arguments are substantive and deserve attention. The government on it's part is committed to close the current airport. It has signed a concessional agreement (CA) with BIAL where one of the terms is to not allow any other airport within 150 kms radius of the new one.

Article by Samuel Jacob

To know more please click on the title, for complete article.

Developments in Indian Aviation

Important Developments in Indian Aviation -

• Four airlines given NOC to operate as Regional Airline – M/s. Star Aviation for Southern Region, Jagson Airlines for Northern Region, M/s. MDLR Airlines Pvt. Ltd., for Northern Region and M/s. Zav Airways for North-East/Eastern Region.
• Air India will become the full-fledged member of the Alliance formally by 2009, when the IT Integration and other issues will be completed. Specialized teams at Air India, Star Alliance and its member carriers are now working on the integration process.
• Approval given by Government to set up Greenfield airports in Kannur (Kerala), Navi Mumbai and about the international airport at Jewar, Greater Noida that is under the consideration.
• Andhra Pradesh State Government announced the reduction in the sales tax on ATF from 33% to 4%.

more details about Zav Airways can be taken from http://zavairways.com/

Future Airports in India...

Presently India have 460 airports n airstrips. The Govt. now plans to have nearly 500 airports n airstrips in India by 2020. This will include the ongoing redevelopment of currently unused airports or little used airports and development of greenfield and cargo airports. There are another 368 landing strips that function as makeshift airports for limited purposes. As many as 156 belong to the defence or semi-defence sectors and various state governments while 63 are owned by the private sector. The peculiar situation in India is that air traffic is concentrated at a few key airports. They include 16 offering international services and another eight that connect domestic sectors. These 24 airports together account for a whopping 94 per cent of traffic and the balance is spread over 36 smaller or regional airports. A very liberal aviation policy is requires to reach the target of 500 full-fledged airports in the country, which has to be backed by an aggressive programme to upgrade existing small airports. Airport development in India is expected to be largely a private sector play in the near future.

Some state governments like Andhra Pradesh, Karnataka and Maharashtra have also identified as many as 15 airports for development.

Private conglomerates already run some airports like those in Mumbai, Kochi, Bangalore, Hyderabad and Delhi.

taken from www.ibef.org

Infrastructure development at Indian Airports...

By 2020, Indian airports are estimated to handle: 100 million passengers Including 60 million domestic passengers Cargo in the range of 3.4 million tonnes per annum. The Government’s airport modernisation plan proposes investments of US$ 9 billion by 2010. The Government plans to develop around 300 unused airstrips across India - a move that has raised projections for jets required for regional connectivity. Boeing and Airbus, along with Embraer (Brazil), Bombardier (Canada), Sukhoi (Russia), ATR (France) and BAE System (UK) are keen to tap the emerging regional jet market in the country. Increased activity in the maintenance and repair operations (MRO) sector has attracted many foreign companies. Lufthansa has tied up with GMR Hyderabad International Airport Limited (GHIAL) to open an MRO facility for which it intends to invest US$ 23 million. Similarly, Boeing intends to invest US$ 100 million in a facility in Nagpur. With airport infrastructure being upgraded, non-aeronautical revenues (from malls, bookshops and entertainment centres) are expected to contribute almost 50 per cent to revenue of airports. Several pilot training shops are being set up across the country:

• Airbus has decided to set up an aviation school in Bangalore to train 1,000 pilots a year
• Rajeev Chandrasekhar's Jupiter Aviation is looking to set up a similar venture in Bangalore or Hyderabad
• Aviation consultant Praveen Paul has set up his own aviation school
• Deccan Aviation's venture with ATR, and Jet Airways and budget carrier UB Group planning to set up training centers.

http://www.ibef.org/

Private Airports goes Commercial…

The Ministry of Civil Aviation (MCA) has given approval to 03 private airstrips to go commercial. These are –

• Jamshedpur Airport owned by Tata Steel Ltd.
• Vijaynagar Airstrip owned by JSW Steel.
• Mundra Airport (Gujarat) run by Adani Group.

These can boost Regional Airlines, which will use smaller airports. Air Traffic Control will be manned by AAI, but airport charges can be levied by their own discretion. Air Deccan has started operating a flight b/n Jamshedpur & Kolkata with an ATR. Tata has guaranteed a minimum number of seats to the airline. All these gives a rosy picture about boom in Indian Aviation, bt, I have a couple of serious questions-

• What if the govt. do not complete its 5 yr. term? (shows the current tussle b/n Left parties & Congress Party )
• Even if it completes 5 yr. term bt, do not come to power after the gen. elections in 2009. What if new govt. change its policy or even slow down the whole process? (the way it happened in the case of much-hyped golden quadrilateral by the then, NDA govt. & as soon as UPA came in to power the whole process slowed down). Well I am not against any govt. or taking a political side bt, a fair question to be asked… because all this happens in India… Jus hope 4 d best.

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SOMETHING WAITING FOR AVIATION SECTOR

GOM is planning to draft a new policy for aviation sector. The issues to be included for discussions are – 1. GOM is planning to ease out polices and rules for Indian airlines to fly abroad. The scheduled airlines can run on international routes after 3 years of operating as domestic airlines. 2. To open the gulf route for other players which currently are the monopoly market of Air India. 3. To ease out rules for foreign airlines to fly into India. 4. 100% FDI for merchant airports. 5. Sharing of airspace between civil and defense aircraft. 7. Modernization of 35 non-metro airports, 8. Route dispersal guidelines expected to be changed. 9. Under new policy the air traffic control is to be corporatized 10. Setting up the Airport Economic Regulatory Authority (AERA) for regulation of airport charges. 11. The amendment of the Aircraft Act 1934 to enhance the powers of the Directorate General of Civil Aviation. These are issues which want to be included in new aviation policy, let’s see once they will include in the policy what effect they will have on the aviation sector.

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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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The new begining with Merchant Airports !!!

With so much of buzz regarding Indian Aviation, hw can the Airport infrastucture can b (left) behind...from privatisation to PPP models. here comes the merchant airports...

They have been conceptualized as airport infrastructure entirely in private sector with private resources and with no Government funding. The entrepreneur will set up and operate airport on the basis of commercial viability subject to the safety and security oversight of the Government. Such a proposal would dispense with the requirement for investment of Government resources and therefore, a more liberal and only a license based approval procedure could be considered. It is proposed to allow 100% FDI in such airports.‘Merchant Airports’ would be totally built by private companies, land being a State subject, the assistance of State Government would be necessary. Similarly, facilitation by the Central Government in terms of clearances from Defence, Environment etc. would be essential besides the regulatory oversight. The Ministry of Civil Aviation has received 03 proposals so far to develop merchant airports. these are at -

• Gwalior (Madhya Pradesh) - Cargo Airport to be developed by Gwalior Sugar Corporation Ltd.
• Durgapur (West Bengal) - Passenger Airport by a JV of KOlkata based Reality Developer & Haryana based HUDCO.
• Jhhajjar (Haryana) - Cargo Airport (Int'l) by Reliance Industries, may be to supplement its supply chain for which it is also planning to set up a Cargo Airline...

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The Mind “Googling” Problem of Mumbai Airport …

Why I used the word “Googling” here because as Google find out search results, similarly the problems at Mumbai Airport has also some solutions may be correct or not, only time will tell. The forecast says it all that passenger traffic at Mumbai airport will increase to 50mn by 2012, so the need for a bigger airport has arisen. But, the current airport cannot be increase to that extent, so as to handle such a huge increase in passenger traffic. The solution lies in the form of airstrip @ Thane district (35km approx. from Mumbai). The plan is to transfer the smaller aircrafts from Mumbai to Thane airstrip and the larger aircrafts will be handled at Mumbai airport. The Mumbai airport has 88 night parking bays for planes, of which 24 are used by smaller aircraft. Small aircraft clogs traffic and the time they take in terms of navigation and runway use also reduces the speed. So if they (small aircrafts) are transferred to some other place then the space vacant can be used for bigger aircrafts. In this way Mumbai airport may come out of its problem. Well the benefit of using thane airstrip is that the space at Mumbai which is being occupied by smaller airplanes, that can be used for larger planes. So that the increased passenger traffic can be provided on time service. But as there are two sides of any coin, the problem will be that if I have a flight to catch the next connecting flight from Mumbai, how am I supposed to catch that one… Seed Newsvine Dig the Web!