Edits, Columns & Analysis - April 2007

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Finding a way through airport congestion
D. Murali and C. Ramesh
The Hindu
Apr 28, 2007
With rising purchasing power of consumers in a booming Indian economy, fuelled by the growth of the services sector in particular, air travel is becoming more and more commonplace among the growing middle class. Moreover, it has become more affordable with the arrival of several low-cost carriers in the past few years. However, a direct fallout of this growth has been airport congestion, which has emerged as a major pain point in the developing Indian air travel story.
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Mumbai vs Shanghai in civil aviation
Economic Times
Apr 28, 2007
Many in India have a desire to see Mumbai as a rival to Shanghai. It is symptomatic of the overall rivalry between India and China. In the field of civil aviation, how does Mumbai compare with Shanghai — and India, as a whole, with China? For the year 2005-06, Mumbai airport had handled 17.66 million passengers, while Shanghai’s Pudong airport had 17.15 million.Thus, the two are currently evenly balanced. However, their future seem very different. Pudong is soon to have a third runway and one more passenger terminal building. Thus, by end 2007, Pudong will have an overall capacity of 55 million passengers a year.
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Airports seek funds in land, retail and hotels
P. Manoj
Livemint
Apr 27, 2007
India’s next hottest shopping destination may not be its swanky malls, but its airports, which are getting a rapid makeover into 21st century jet-setter retreats.
As the airports located in Mumbai, Delhi, Bangalore and Hyderabad get modernized, they are leveraging their huge swathes of renovated interiors to earn extra revenue. In the process, they are bringing to India a new brand of retailers and hoteliers: the airport specialists.
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Flying in the face of hardship
The Telegraph
Abhijit Bhattacharyya
Apr 26, 2007
What could be the story behind the front-page photograph on April 10, showing an Air India Airbus-310-300 in a tilted ‘attitude’ (that is, posture) on the runway of Delhi airport? From the picture, it was clear that the photograph of the distressed aircraft was taken from within the Indira Gandhi International Airport, and obviously from an area where photography is supposed to be strictly prohibited under the law of the land. Then why, when and how was the AI-349 photograph taken? Why has no action been taken against the photographer, if the image has been captured illegally?
All the hullabaloo over the so-called ‘faulty’ landing of the Airbus-310-300 could also be part of a sustained hate-Air-India campaign.
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Infrastructure renewal is answer to airport congestion
D.Murali
The Hindu
Apr 26, 2007
Chennai: Mumbai and Delhi airports have been much in the news for the escalating congestion problem. Look around and you’d find ‘congestion’ in many other places too. For instance, BAA, which owns and runs seven airports in the UK is ‘working hard to ensure that airport congestion is kept to a minimum,’ as http://news.opodo.co.uk reports; BAA has ‘an ambitious target of bringing queuing time down to five minutes or less 95% of the time.’
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Srinagar International Airport
GreaterKashmir.com (press release)
Apr 26, 2007
It was after decades of dithering and wait that the Union Cabinet had declared Srinagar as an International Airport a couple of years back. Right from 1975 when Sheikh Abdullah had taken over the reins of power after Indra-Sheikh Accord, the proposal of upgrading Srinagar Airport to International level had been under the consideration of Central Government. However, as usual the Government had been hesitant in doing the needful for some unknown reasons.
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Spectacular growth forecast for civil and military aviation sectors
Ravi Sharma
The Hidnu
Apr 25, 2007
Bangalore: With estimates indicating that the Indian aviation industry will need investments totalling $120 billion by 2020, the Bangalore-based Society of Indian Aerospace Technologies and Industries (SIATI) has come out with a blueprint that forecasts spectacular growth for the industry through public-private partnerships and international collaborations. Partnerships that include both research and development and production.
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INTERVIEW
Jet-Sahara: Clear skies ahead
Times Now.tv
Apr 23, 2007
It looks like clear skies ahead for Jet Sahara with a financial turn around seen in the current year. Harishree Mehta caught up exclusively with Chairman and co-founder of Jet Airways, Naresh Goyal and began by asking him about the biggest deal in the Indian skies.
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Aircraft maintenance and repair set to become business
Vinay Kumar
The Hindu
Apr 23, 2007
New Delhi: As a booming civil aviation sector further expands its wings in India with about 300 aircraft criss-crossing the country's vast airspace and more jetliners waiting to be delivered, aircraft manufacturers and aero engineering companies are eyeing the maintenance, repair and overhaul (MRO) market in India, a sector in which India is underserved by aviation standards.
While a passenger awaits to enjoy the comfort and safety of air journey, aircraft mechanics and engineers get the aircraft ready, conducting pre-flight and ramp checks where individual functions are tested. Once a week the ramp check is supplemented by additional tests of the aircraft's systems.
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Give medical aid wings
Daily News & Analysis
Apr 22, 2007
Mumbai: They are fast, efficient and true life-savers. But they are not meant for all. High costs and government regulations have hindered the air ambulance service from taking off. Megha Chaturvedi speaks of this essential service, which should be made available to all those in distress
We’ve seen planes or helicopters transporting patients from place to place on medical shows like ER and Grey’s Anatomy. These planes or air ambulances are de rigueur in the west, and are used in instances where time is of essence or medical expertise is available a state away.
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India is truly incredibly cheap!
JOHN SARKAR & AMITABH BAXI
Economic Times
Apr 22, 2007
NEW DELHI: Everyone loves a good bargain. This weakness of ours keeps us waiting for that perfect deal to fall into our laps. But little do we realise that living in India itself is one of the greatest deals one can ask for. Now, don’t be surprised. We are not talking about our slightly inflated economy, which is currently on the Bull Run. Rather we are trying to figure out how even some simple exercises like reading or flying around the world can make us feel lucky about being in India.
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Aviation blues
Tushar Charan
Syndicate Features
Asian Tribune, Thailand
Apr 20, 2007
The merger of two private airlines has hogged more limelight than the malfunctioning of two aircraft of the national carriers in quick succession resulting in a narrow shave for some 300 passengers. The unrelated events bring into focus two important aspects of the aviation scene in the country--and also how it has remained neglected for long.
One, the safety concerns arising out of the ageing fleet of Indian (formerly Indian Airlines) and Air India, which are awaiting merger; two, the slow pace of fleet replacement.
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Awaiting higher altitude clearance
Jeh Wadia
-Chief of GoAir
Financial Express
Apr 20, 2007
The Indian aviation industry is grafting its presence profoundly on the global aviation map and is flying high with scorching growth—one of the highest in the world. In 2005, the industry grew 25% and in 2006, that figure nearly doubled. The arrival of low-fare carriers has fuelled this boom, bringing air travel within the reach of the common man. Low-fare carriers, which didn’t exist till about three years ago, now account for nearly 38% of the total domestic aviation market, and are expected to touch a share of 70% by 2010, according to the Centre for Asia Pacific Aviation. With air fares now comparable with AC train fares, growth is more or less assured.
Low-fare carriers are undergoing a phase of market stimulation, as a result of which the yields are falling even as costs increase. Aviation turbine fuel (ATF), which constitutes 40-44% of the total operating costs of a low-fare carrier, is priced by the government every month, and suffers from three main ailments:
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THE HUMAN FACTOR
Jet`s work has just begun
Shyamal Majumdar
Business Standard
Apr 19, 2007
Mumbai: Acquisitions are not just about balance sheets; they are also about people making the synergies real.
The Jet Airways-Air Sahara deal has been struck, finally, but the actual work ? that of post-merger integration ? has just begun. Unlike the last time when it started on the wrong note by saying that it would absorb only the pilots and technical staff of Air Sahara, Jet has said it would retain the entire staff of the acquired operations. The country?s largest private sector airline is probably wiser after the three-day flash strike by Air Sahara pilots in February last year (20 of them joined rival Kingfisher Airlines later) soon after the first round of the acquisition plan was announced.
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Uncertain future for India's airlines
Peter Lloyd
ABC Online, Australia
Apr 19, 2007
ALI MOORE: While the Australian Government sold off Qantas in 1995, the Indian Government still owns two airlines. But that may be about to change. The total number of Indian airlines has risen from just three a few years ago to 10 now as a result of India's booming economy. However the honeymoon could be over with warnings of a turbulent future causing closures, mergers and acquisitions. Here's South Asian Correspondent Peter Lloyd, in New Delhi.
PETER LLOYD: India has two state-owned carriers - Air India for international flights and Indian mainly on domestic routes. Soon the two will become one mega carrier.
PRAFUL PATEL, INDIAN AVIATION MINISTER: The competition is getting much more intense and we need to integrate these two and bring them to make them a stronger airline.
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Jet-Sahara deal, unwanted monopoly?
Kapil Kaul
CEO-Indian Subcontinent&Middle East
Centre for Asia Pacific Aviation
Economic Times
Apr 18, 2007
Consolidation of the Indian airline industry is necessary and inevitable. The financial realities of the airlines are getting more and more visible and the industry still is struggling in the absence of pricing power.
The continued impact of the capacity growth will defer the resumption of rational pricing in the market and drive the yields to painfully low levels. This is in spite of the underlying fundamentals that drive demand remaining very strong.
Jet’s acquisition of Sahara will pose significant challenges for Jet and may close some structural opportunities, and the risks on the downside may have increased in the short term. I expect Jet to place all its efforts to turnaround Air Sahara as quickly as possible but this acquisition will mean that Jet has no room for error.
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Jet deal may help the industry to consolidate faster
D.Murali
The Hindu
Apr 17, 2007
Chennai: A year ago, Jet Airways and Air Sahara were hot on the M&A radar but soon faded off as minor blips, when the two companies began to walk towards what seemed to be a Byzantine process of dispute resolution.
All of a sudden, the deal happened fast ‘amicably’, like a tricky manoeuvre in mid-air, ahead of final arbitration proceedings. Turbulence is over, one learns; within weeks we should be seeing Jetlite replace the Air Sahara brand. For those who still have their seatbelts on, wondering what happened, here is a bit of decoding of the deal by Mr Amitabh Chakraborty, President (Equity), Religare Securities Ltd.
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All set for a smooth take-off
Amit Bhandari
Economic Times
Apr 16, 2007
ET Investor's Guide has not been bullish on Jet Airways in the past. In January ’06, we had a negative outlook on Jet after its bid for Air Sahara was made public. Our opinion was based on increasing competition in the sector. The outlook for the airline can now change, since signs of consolidation in the sector are becoming evident.
The players are unlikely to bleed indefinitely at the current rate and Jet is better-placed compared to its rivals, both financially and operationally.
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How safe is your flight?
R Swaminathan
Daily News & Analysis
Apr 15, 2007
Mumbai: “There were several times when routine checks of landing gear and flaps were ignored. In fact, I know of several pilots who were forced to take off even though routine checks were not conducted. I could no longer justify it to my conscience. I had to quit.”
These are the words of Ravi Unnikrishnan, an aircraft maintenance engineer who quit his job with a private airline three months ago. Ravi’s frustration must be seen in the context of India’s dramatically changing air travel business. It raises an important question: Is our air travel system designed for mass travel?
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Jet-Sahara: Will it soar after take-off?
Aarati Krishnan
Hindu Business Line
Apr 15, 2007
If uncertainty is a threat to stock valuations, then an amicable resolution to the Jet Airways-Air Sahara wrangle should mean fewer air pockets for the Jet Airways stock in the days ahead.
But in reality things may not work out quite so simply for investors in India's premier private sector airline. Even after the final value of the deal has been announced, there remain grey areas on the basis and actual quantum of the acquisition price. What is more, the changed dynamics of the aviation sector call for a fresh look at the benefits from this deal for Jet Airways.
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Round the world for £500
Richard Green
The Sunday Times
Times Online, UK
Apr 15, 2007
At last, low-cost airlines have crossed the Pacific, making the world your cut-price oyster. Richard Green investigates
It had to happen. You can now fly around the world entirely on low-cost airlines.
Last week, Zoom Airlines announced it will be launching low-cost flights between New York and London; and, from July, Oasis Airlines is planning to start flights from Hong Kong to Oakland, California. Together, these provide the final links in the cheap-flight chain that now encircles the planet.
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Subroto Roy: Loser or gainer?
Surajeet Das Gupta
Business Standard
April 13, 2007
New Delhi: It doesn’t happen frequently that a deal that has fallen apart gets resurrected. Subroto Roy managed to do just that with Jet Airways agreeing to acquire his airline, Air Sahara, on Thursday, after having walked out of the deal last year.
At that point Naresh Goyal of Jet Airways had cited the lack of government approvals as a reason for the fallout. Though, sources in the know of the developments had said the fall in Jet Airways’ share price had crimped Goyal’s plans to raise funds from the market. Whatever, the reason, the Rs 2,300-crore deal had suddenly turned sour and Roy was left in the lurch.
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Winging it on ground means flying on a wing ’n’ prayer
Sunny Verma & Sudipto Dey
Economic Times
Apr 13, 2007
New Delhi: When you book an air ticket, you usually do not check whether you would board an Airbus, Boeing or ATR. That being the situation, the age of the aircraft is the last thing on your mind as you go through the checklist of convenient departure, tariff, in-flight facilities and arrival in time for transit or a meeting.
However, one emergency landing or an aborted take-off could change your outlook. While other aspects, such as fares, are discussed more often, safety is the silent issue over which there is no compromise. Once a company or a brand loses the confidence of customers, the consequences could be disastrous.
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Jet-Sahara deal could be a legal compulsion: Kaul
Moneycontrol.com
Apr 11, 2007
Is the Jet-Sahara deal worth it and what is the implications of this deal on the Indian aviation sector? CEO India and Middle East for Asia-Pacific Aviation, Kapil Kaul and Consultant for Air Deccan, Mohan Kumar debate this issue.
Excerpts from an interview given to CNBC-TV18
Q: Is this deal fair value, what does this deal mean for Jet Airways?
Kaul: The deal at a price of Rs 1,850 crore as reported, is certainly prohibitive. At this juncture for Jet Airways, it?s a strategic mistake and at that price I don?t see a synergy at all for this acquisition.
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Distress Sale
Times of India
Apr 11, 2007
The Maharaja is on life-support, gasping for breath. Capping a series of near-misses for which "providential escape" has become an oft-used byword, two Air India aircraft had to make emergency landings at the same place, Delhi's Indira Gandhi International Airport, within six hours of each other.
In many cases, including the two emergency situations at IGI on the same day, hydraulic defects developed by ageing aircraft appear to be the problem.
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DEBATE/P R Sanjai
Is the congestion surcharge justified?
Business Standard
Apr 11, 2007
Mumbai: If the surcharge being levied by various private airlines results in de-congesting the country's airports then it will have served its purpose
D Sudhakara Reddy,
National President, Air Passengers Assocn of India:
The so-called congestion applies to just three metro airports in the country — Mumbai, Delhi and Bangalore. But the private airlines have applied the congestion surcharge to tickets on flights from and to all airports. On what grounds can this be justified?
Congestion surcharge is an unheard of phenomenon in the aviation world and prevails only in India as of now. And it is not at all justified to make the air passenger bear the brunt of something they are not a partner in. If the airlines want to increase the fares they could have just done that and faced the music.
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Stuck on the tarmac
HS Bhatia
(Former Member (Engineering), International Airports Authority of India)
Hindustan Times
Apr 10, 2007
Since 1986, when Delhi’s Indira Gandhi International Airport (IGIA) was commissioned, the process of development and the restructuring of India’s aviation sector has been painfully slow. In 2000, this came to a virtual stand-still. Subsequently, the service level of airports and of the two national carriers, Air-India and the then Indian Airlines, dipped to an abysmal level.
Indian decision-makers paid no heed to international agencies like the International Civil Aviation Organisation (ICAO) and the International Air Transport Association (IATA) making projections in the 1970s about Asia and the Pacific Region capturing almost 43 per cent of the market share of global air transport in the 1980s — compared to the 34 per cent share then. This meant airports and airlines in the region had to go in for massive expansions.
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No flight plan
Daily News & Analysis
Apr 10, 2007
It was a bad day for Air India that two of its planes had emergency landings on the same day, and at the same place, Indira Gandhi International Airport in New Delhi. The plane from Shanghai had a snag in its undercarriage, while the second plane from Dubai had a cockpit problem. The pilots could not monitor the landing gear, even though it was working.
The problems are mainly due to airplanes that are really old and should have been put out to pasture years ago. The problem is, Air India has no new planes.
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Will the metropolis get a greenfield airport?
The Hindu
Apr 10, 2007
Chennai: Hyderabad and Bangalore will have new greenfield airports, perhaps by 2008. Chennai had a head start over them in becoming an aviation gateway to southern India. More international airlines and flights connect Chennai to the rest of the world, and many of these airlines want to increase their services to the Tamil Nadu capital.
But strangely, Chennai's pitch for comprehensive modernisation and expansion of the existing airport has not taken off. Between the Centre and the State Government, a decision needs to be taken whether the metropolis will have a greenfield airport, or just have a new terminal added to the existing facility near Meenambakkam.
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Passionate about flying into uncharted skies
Vishakha Talreja
Economic Times
Apr 08, 2007
Expats are flying high in the Indian skies. Not only have they occupied the coveted seat in cockpit but are also working in key management positions in the aviation industry.
Sample this: Wolfgang Prock-Schauer is the CEO of Jet Airways, Warwick Brady is the COO of the common man’s airline Air Deccan, Bruce Ashby is the president and CEO of IndiGo and Steve Harfst is IndiGo’s COO.
Moving down the line, we have Kingfisher Airlines which has five expats on its advisory board and Captain Wilm Reinhard working as head of training, Air Deccan and numerous examples of expat pilots. The list of expats working for India’s booming aviation industry is not just long but interesting as well.
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Readying for take-off
Vijay Mathur
Business Standard
Apr 08, 2007
New Delhi: The growth of civil aviation in India has surprised everyone — even those in the government bodies associated with it! In a 10th Plan Strategy Session in the mid-nineties, annual passenger traffic growth was projected at 1.5-2 per cent. When it was argued that such low growth in the preceding years was essentially on account of inadequate capacity, this view was strongly contested on the ground that a higher rate of passenger traffic growth was not consistent with projected growth of per capita income.
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Shippers leverage air cargo as global sourcing extends supply
David Hannon
Purchasing.com, US
April 5, 2007
Demand for global air freight continues to be strong, fueled by increased demand from Asia both on the inbound and outbound side. Carriers are rapidly increasing their investments in equipment and infrastructure to meet the increased demand of global shippers.
The Airports Council International (ACI) predicts global air freight will triple by 2025, fueled by growth in Asia. "High growth of manufacturing in Asian countries such as China and India is expected to drive this growth but cargo flows are predicted to remain imbalanced with most freight volume outbound from Asia," ACI's latest report says.
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Indian Aviation: First Blood Drawn?
Capt. Anup Murthy
Apr 04, 2007
Desicritics.org
I have been away in Macao and almost missed some stories from back home in India. When I got to Singapore, the first news from India that caught my eye was about Indus Airways stopping flights and shutting down. It brought back memories from the 1990's when start-up airlines in India started folding, one after another.
Funnily enough, I had written in December last year, that some of the airlines in India are run on ego and not on sound business plan and I had predicted their closure. This included Indus, as evidenced from one of my replies to a comment from a reader.
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DGCA’s overtures on pricing unwelcome
Sunny Verma
Economic Times
Apr 02, 2007
New Delhi: Congestion is a big issue in the aviation industry. Its effects can be felt both at the airport terminals and in the air. While passengers sometimes have to fight for a seat at the terminal, they have to wait for quite some time in the air before the plane finally lands, especially at busy airports such as Delhi and Mumbai.
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