Edits, Columns & Analysis - February 2008

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Asian leadership needed in airline industry
Giovanni Bisgnani
Bangkok Post, Thailand
Feb 29, 2008
Change is the only constant in aviation these days. Just as the industry posted its first profit since 2000 - US$5.6 billion last year - oil prices set records, and a potential economic downturn threatens revenues. At one point, Asia seemed immune to many of the industry's woes. Aviation supports 10.5 million jobs across Asia Pacific and $807 billion in business. Traffic in the region is still growing at breakneck speed. By 2010, Asia will be the largest single market for aviation.
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Bengaluru: Tale of 2 airports
Vicky Nanjappa
Rediff
Feb 27, 2008
Bengaluru: Is the new Bengaluru International Airport jinxed? This was a question asked by several people looking at the number of hurdles it faced till the completion of the project.
First, the Tatas walked out of the project, and then there were problems regarding the acquisition of land and finally a stinker from the Union government, which said it was unhappy with the design.
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Deccan Aviation gears up for logistics drive
Cuckoo Paul
Economic Times
Feb 25, 2008
Mumbai: It is an idea that he has been incubating for over two years now. For Capt GR Gopinath, executive chairman of Deccan Aviation, it is also a second life. An idea that ‘hit him between the eyes’ even as one of his aircraft made an emergency landing after one engine shutdown on a flight from Delhi to Kolkata. But more about that later.
Today, as he disengages from his role as entrepreneur evangelist for the price-warrior airline that he founded five years ago, Capt Gopinath says he is firming up plans to launch a project that will be “much wider in size, scope and reach than his first love ever was.”
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New Hyderabad & Bangalore airports to benefit travelers
Cuckoo Paul
Economic Times
Feb 23, 2008
Sipping coffee on the tarmac at Shamshabad airport, Praful Patel, the minister of civil aviation, looks as happy as a pilot who has just been cleared to land at Mumbai airport on a busy evening. Patel has been taking a lot of flak for poor airport infrastructure for the past three years. Now that he has seen the airport coming up from scratch in the four years that he’s been at the helm, he has reason to be relieved. “The new airports are world-class, and have been designed for profitability,” he says.
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Exempt foreign pilots from income tax: SpiceJet
Siddhanta Sharma
(Executive chairman and CEO, SpiceJet)
Livemint
Feb 22 2008
Studies indicate that the civil aviation industry as a whole is expected to grow at 25% a year for the next five years. The sector is likey to see investments of the order of $50 billion by 2015, most of which will be used to build new airports and modernize existing ones to global standards of excellence. A key reason for this level of investments is the estimated upsurge in passenger traffic to around 100 million passengers by the year 2020 according to one estimate. Another study pegs this figure at four times as much in the same year. The number wass around 16 million in 2006.
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Air India's illusory profits
Anjuli Bhargava
Business Standard
Rediff
Feb 21, 2008
New Delhi: At the Singapore air show on Tuesday, V Thulasidas, chairman and managing director of Air India, made a statement to Bloomberg Television that has quite taken aback his senior colleagues in the airline.
The CMD claims that his company "may" make a profit next year, that is in the year ending on March 31, 2009. The airline's top officials are wondering the basis on which he made that claim, considering that this year (April 2007-March 31, 2008) promises to be a bumper year in terms of losses, far exceeding last year's loss figures of Rs 448 crore (Rs 4.48 billion).
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Tax woes pulling down India's airlines
Raja M
Asia Times Online
Feb 20, 2008
World-record fuel taxes are ripping apart India's civil aviation profits, leaving carriers doing runaway business yet adding red ink every time the engines power up. The cockpit view as captains of the industry try to pull out of a nose dive is no more comforting - flocks of bills for new aircraft orders are heading their way.
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'Five year cap in aviation sector is unreasonable'
S P Ketkar
Economic Times
Feb 20, 2008
Can there be a regulation prohibiting children from playing in public parks, until they grow up to the age of five years within the boundaries of their homes? No. Such a rule can never be tolerated in any independent country.As parents would anyway ensure that their kids do not play in restricted areas and do not indulge in activities causing damage to other persons or property, there is no reason for a regulation confining little ones to their homes for the first 5 years. However, our policy makers appear to be thinking differently for ‘young airlines’ and would not like them to fly to international destinations, until they operate for 5 years in the domestic aviation sector!
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Fractional Jet ownership Coming to Asia
Alec Rosekrans
HalogenJets, USA
Feb 20, 2008
The Singapore Air Show, currently underway, was the setting for an announcement that could change the face of aviation on the world’s largest continent. The Briley Group, bolstered by a significant investment from the Indian giant, Tata, is set to launch Asia’s largest fractional private jet carrier, Bjets. Bjets will offer fractional ownership and block charter, as well as aircraft manager services.
The demand for private jets in Asia has lagged behind the region’s rising economic fortunes, while executive aircraft sales have swelled in the mature markets of North America and Europe.
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Asian airport hubs losing their edge, as LCCs drive new policy directions: CAPA
TravelBizMonitor
February 17, 2008
Mumbai: The national and regional airport hub argument does not carry the same weight in the Asia-Pacific region as it did a decade ago. Rather, a portfolio of airports, serving different market segments and airline models, is becoming the way forward for policy makers, airport operators and investors in the current and future environment as per a recent Centre for Asia Pacific Aviation (CAPA) news report. India is poised to open new airports in Hyderabad and Bangalore - the first major new airports in India since Cochin Airport opened a decade ago.
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Easing air travellers’ agony
Livemint
Feb 17 2008
The new Rajiv Gandhi International Airport received its first commercial test flights on 12 February. The airport will be formally inaugurated on 14 March. Travellers who have spent umpteen hours at various airports around India have reason to hope that newer private airports will ease part of their agony.
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Flight of carbon
Anjuli Bhargava
Feb 15, 2008
New Delhi: Airlines and governments all over the world have suddenly woken up to the dangers of carbon emissions from aircraft and their potentially deadly impact on the environment. In 2007, the European Union (EU) created quite a stir by proposing a kind of 'tax' on all flights that arrived or departed from any EU airport, arguing that this would help curb the growth in carbon emissions.
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‘Low fares are not sustainable’
Financial Express
Feb 14, 2008
When Wolfgang Prock-Schauer addressed the media during Jet Airways inaugural flight to Doha from Mumbai last month, it became clear that he was not going to relinquish his position as chief executive officer of the airline. Prock-Schauer spent a good deal of time in 2007 denying that he was joining rival Kingfisher Airlines as its CEO. However, being there when it mattered the most, would quash all rumours, Prock-Schauer knew. He said it as much. "There is nothing I can add to it, except that I am with Jet." Now that the air is clear on that front, Prock-Schauer can focus on his work. Jet has lost market share in the last one year, its thrust on international operations is growing, and the airline’s senior management is quitting, the last being Carl Saldanha, who resigned as chief financial officer. All this means that the burden doesn’t get any less for Prock-Schauer. In this interview with FE’s Viveat Susan Pinto he responds to questions on how he is leading the airline through this phase.
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New runway: Managing flights is key to relief
Neha Lalchandani
Feb 12, 2008
Times of India
New Delhi: Once its new runway is completed in August this year, Delhi’s IGI airport will become indisputably the busiest airport in India. From its current capacity of 36 flight movements per hour during peak time, the airport will be able to handle up to 55-65 flights per hour, the number of passengers going up to an astounding 25 million per year.
However, the flight handling capacity of the airport will depend largely on how the two runways-the main runway and the new runway coming up-are used.
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'I was trained to hijack a plane'
Times Now.tv
Feb 12, 2008
The man in question just looks like another boy next door. However, according to the Assam police -- Manoj Tamuly -- is a hardcore United Liberation Front of Asom (ULFA) militant. In a chilling confession, the militant in captivity claimed that he was plotting to hijack a plane. He also added that he was trained to carry out the operation by an Afghan national inside the north-eastern state of Assam. This clear link between the ULFA and Afghanistan militants has shocked the security agencies in the nation.
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‘Airports can’t come up without...grant of rights’
Livemint
C. R. Sukumar
Feb 11 2008
A Lufthansa aircraft would land at midnight of 15 March at the Hyderabad airport in Begumpet and leave for the new international airport at Shamshabad during the early hours of 16 March. From there, it would take off at 2.30am to Frankfurt to become the first aircraft to fly from the new airport built by GMR Hyderabad International Airport Ltd (Ghial). With the opening day near, the new airport is full of activity with trial runs overseen by Munich Airport officials, partners of GMR in the project.
For the last six months, officials of various airlines were busy testing connectivity with their local departure control systems and the efficiency of communication equipment provided at the new airport.
Ghial’s chief financial officer Rajgopal Swami spoke to Mint about issues including connectivity to the new airport and on demands to keep the existing airport open even after the new one takes off.
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India, China can play key role in future of aviation
Ashwini Phadnis
Business Line
Feb 11, 2008
The Director General and CEO of the International Air Transport Association (IATA) is keen that the emerging markets, particularly India and China, play a key role in changing the rules governing international aviation. During a meeting with Business Line at the IATA headquarters in Geneva Mr Giovanni Bisignani outlined his plans.
Excerpts from the interview >>>

Grounded at the word go
Ramesh Ramanathan
Livemint
Feb 10 2008
In the next few weeks, Bangalore will see the unveiling of a new international airport. Billed as India’s first greenfield public-private partnership (PPP) airport, this is a project that has gone through all the challenges an innovator faces. Construction began on 2 July 2005, marking the end of a tortuous process that began in 2001, with the final concession agreement being signed in 2004. During this period, the project was buffeted by the political currents of changing governments at the Centre and in the state. Governments everywhere learnt a lot about the challenges of doing airport privatization from the Bangalore experience.
Unfortunately, there is no happy ending. With the airport set to open in March, there are no smiling faces in Bangalore. There are two fundamental issues with the airport: the first—and more serious long-term problem—has to do with capacity constraints.
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Airlines must decide what’s best for them
Robey Lal
Financial Express
Feb 10, 2008
It is puzzling that organisations with the most experience in their domain, ie, foreign airlines, are specifically the ones that have been excluded from investing in Indian airlines, whereas anybody or any organisation without any relationship with the industry, except in their personal capacity, may do so. No clarification for this policy of creating barriers to prevent foreign airlines from participating in the financing of an Indian carrier has been given.
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Skies are protected all over the world
Capt GR Gopinath
Financial Express
Feb 10, 2008
Although not opposed to FDI in the aviation sector, I believe the present 49% cap is a substantial foreign holding in a domestic carrier. Raising this to 100% will not benefit the Indian traveller or the aviation industry. Foreign participation in India’s civil aviation sector should be leveraged in areas where both the need and the opportunity is greater, such as in the maintenance, repair and overhaul, and non-core functions. Across various sectors, FDI is increasingly regarded as crucial to create a competitive environment and ensure a superior quality of product and service for the consumer.
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Flyers set to gain as airlines vie for West Asian pie
Ananth Krishnan
The Hindu
Feb 10, 2008
Chennai: There are already a dozen airlines that connect southern India with the Gulf countries, and more are now set to enter the picture. Two bilateral agreements signed this week between India and the governments of the United Arab Emirates and Bahrain have opened the doors for new airlines to enter the already crowded — and hugely profitable — skies between India and West Asia.
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User fees, airport charges make flying a costly affair
Ramkrishna Kashelkar & Cuckoo Paul
Economic Times
Feb 09, 2008
Mumbai: Expectations of air travellers that privatisation of Indian airports will bring in efficiency and make air travel cheaper seem to be completely misplaced.User fees and recovery of infrastructure charges by concessionaires on fuel, baggage handling will be passed on to passengers, thereby increasing the cost of air travel. After the much-discussed user development fee of Rs 675 that every passenger using the new Bangalore airport will have to pay, the GMR group-promoted Hyderabad airport has written to oil companies saying it will impose throughput charges of Rs 2,170 per KL of aviation fuel.
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A Nandigram near Nagpur?
Praful Bidwai
Khaleej Times, United Arab Emirates
Feb 09, 2008
What do you do when you receive an official notice demanding that you surrender your land at a price under one-hundredth its market value? What are your options when land is your main source of livelihood, and is being acquired for a state-of-the-art airport and Special Economic Zone that won't remotely benefit you? The people of Shivangaon village bordering Nagpur's airport did what any sane person would do. They made representations to the government not to apply the Land Acquisition Act of 1894 for compulsory takeover. They wrote countless petitions to the leaders of the ruling coalition and opposition. Then, eight months ago, they launched a daily dawn-to-dusk relay hunger-strike by 20 to 50 people.
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Aviation Industry Looks to China, India for Growth
Ron Corben
Voice of America
Feb 08, 2008
Bangkok: Asia's airlines are expected to lead the world's travel industry in growth this year.
But travel executives worry about the slowing U.S. economy and possible increases in fuel costs.
The International Air Transport Association, IATA, forecasts that global airline profits last year fell because of high oil prices and tighter credit in economies such as the United States.
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Thiagarajan: The man who came into his own, at 30,000 ft!
K. Sreedevi
Sify Finance
Feb 08, 2008
He was a stargazer of a different kind! The Managing Director of Paramount Airways, Thiagarajan, was enamoured by the skies right from his early years and this passion to fly made him launch an airlines of his own on October 19, 2005. Just 27, he was the country’s youngest chief executive of an airlines firm. Though hailing from an illustrious business family in Madurai, with sound investments in textile, banking and insurance, the aviation bug was simply too much to resist for Thiagarajan.
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NRIs can now invest in airlines, but will they?
Moiz Mannan
The Peninsula, Qatar
Feb 05, 2008
Even as some private domestic operators weigh their wings to break the Air India and Indian stranglehold over the Gulf sector, a new government initiative to allow 100 foreign money of non-residents in the aviation sector may further alleviate the travelers' woes. The Union Cabinet met last week and stuck to its policy of not allowing foreign airlines to acquire a stake either directly or indirectly in Indian passenger airlines, charter airlines or non-scheduled airlines. The only exception is cargo airlines, where foreign airlines may be allowed to pick up a 74 percent stake through the automatic route.
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Lest we forget
Neelesh Misra
Hindustan Times
Feb 04, 2008
A few months ago, I was having a conversation with someone who had spent a sleepless night during the 1999 Christmas vacations, guiding the government’s response during the hijacking of an Indian Airlines plane. As he looked back, I asked him, what were the thoughts that ran through his mind? “It has to do with us as a nation,” he said. “We have made a fine art out of not remembering. Look at the Israelis — would they have ever forgotten something like this?”
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The travel agent by 2020: An industry view
Kanika Mehta
TravelBizMonitor
Feb 04, 2008
IATA Agents Association of India (IAAI) hosted its annual convention, ICON 2008 last month at Hotel Sitara, Ramoji Film City, Hyderabad. In keeping with the convention theme, 'The travel agent by 2020 - Goals and challenges,' the focus was on pertinent issues affecting the travel industry: How can travel agents survive in the imminent age of zero per cent commissions? Should travel agents adopt latest technology and change from agents to consultants? Is diversification the keyword for the future?
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'We haven't even scratched the surface with regard to opportunities in India'
Economic Times
Feb 04, 2007
Ram C Menen, divisional senior vice-president cargo, Emirates Airlines, has hands on experience with air cargo industry of the region. Here he reveals the strategy that made the airline the leading cargo carrier in India.

Could you outline the strategy that made Emirates outstanding cargo carrier in India?
Basically, by looking at the requirements of specific customers, and being able to cater to specific segments for which we spend a lot time and energy. What we do is we work with the customers to see if we are able to help him seize the opportunities. What we actually do, is advocate the role of a catalyst and create trade.
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Are Indian skies among the safest?
Hormuz P Mama
Economic Times
Feb 02, 2007
By an amazing coincidence, during the week (December 10 – 15, 2007) that India’s ministry of civil aviation was celebrating its Air Safety Week, with self-serving advertisements, NatGeo Investigates had featured the mid-air collision over Chakri Dardi on November 12, 1996, that had cost 349 lives. It was the worst mid-air collision in history, involving a Saudia B747 and a Kazakhistan Airlines Il-76. It had happened despite the statistical probability of such a collision being only one in 100 million. While the Il-76 crew was justifiably blamed for the accident, India had not emerged from the inquiry unscathed.
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