Edits, Columns & Analysis - Jun 2008

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Turbulence in aviation industry
The Hindu
Jun 30, 2008
The unrelenting increase in crude oil prices and its deadly impact on aviation turbine fuel (ATF) seem to be killing the aviation industry, especially the airlines. Though airlines across the world have been crippled by the rise in ATF prices in the past six months, its impact on the low-cost, no frills domestic airlines operating in India may well be fatal for a few. Most if not all airlines in the country have reported losses not just for the third and fourth quarters, b ut the whole of 2007-08.
The future of Deccan, Spice Jet, Indigo, and Jetlite may hang in the balance till the oil prices stabilise and begin moving downwards. Thanks to the merger of Sahara with Jet and its rechristening of Jetlite, they can manage the turbulence.
Similarly, the take over of Deccan by Kingfisher provides some breathing space and flying space too.
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Turbulent times
Ram Prasad Sahu
Business Standard
Jun 30, 2008
Mumbai: Price hikes on the back of rising fuel costs have led to a dip in customer demand. Expect another round of consolidation in the beleaguered Indian aviation sector.
This is not a good time to be running an airline in India. Reeling as the sector was under a declining trend of lower loads and cut throat competition, a drastic hike in aviation turbine fuel (ATF) was the last thing it needed.
The cost of ATF or refined kerosene has more than tripled in the last four years and risen by over 65 per cent in the last five months from about Rs 40 per litre to about Rs 68 per litre.
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Airlines have no option but to charge realistic fares
Sindhu Bhattacharya
DNA MONEY
Sify
June 30, 2008
The Indian aviation industry is passing through one of its worst phases, with all airlines reporting mounting losses, jet fuel prices climbing week-on week and load factors plummeting.
While ATF price spike is by far the biggest culprit, airlines have been quick to point out that the government's apathy in putting an encouraging policy framework in place is also responsible for the current state of affairs.
Civil aviation secretary Ashok Chawla is not given to dramatic statements but in his own quiet yet assertive manner, he lays the blame squarely on the doorstep of the airlines.
Excerpts from an exclusive chat with DNA Money's Sindhu Bhattacharya >>>

Ground Reality
Times of India
June 27, 2008
Aviation in India is likely to suffer a $2 billion loss this financial year, twice that of last year's billion dollar setback. It is easy to blame the spiralling global price of oil and the consequent hike in aviation turbine fuel cost. However, a wider set of problems is plaguing aviation in the country. Expensive ATF is one. But a central problem is that the unprecedented growth of the economy and subsequent boom in India's aviation — evident in the increase in the number of airlines, capacity, purchase and lease of aircraft and of market demand in passenger and freight traffic — has not provoked a parallel growth in infrastructure build-up.
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`Demand for fuel-efficient aircraft to rise`
Business Standard
June 27, 2008
Aviation industry is reeling under severe margin pressure. It is tough time for the aviation industry and tougher on the manufacturing side.
With airlines staring at a loss of $1.5 billion in India, the question is will the airlines stick to the order book or the glacier is just about to melt. None of it, says Boeing's Dinesh Keskar.
In a conversation with Manisha Singhal, he said, if airlines get the efficiencies correctly there is no reason for worry and his company is still bullish on the Indian market in the long term.
Excerpts >>>

'Cover-up bares poor air safety norms'
Capt A Ranganathan
Times of India
June 27, 2008
The front-page report in Thursday's TOI on pilots dozing in the cockpit of an Air India aircraft and overshooting their destination, Mumbai, has received an overwhelming response.
In this piece, a veteran pilot, Capt A Ranganathan, underlines the safety loopholes in the skies.
Capt Ranganathan has 20,000 hours of flying experience, has worked with Indian Airlines and Singapore Airlines' subsidiary Silk Air, and was part of Directorate General of Civil Aviation's core group on Approach and Landing Accident Reduction.
He has compiled an adverse weather operations training kit for DGCA. Currently, he works as an air safety expert. Last month, he presented a paper at NASA in the US on runway friction.
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Life-saving drug for aviation firms
Ashok Mittal
Economic Times
Jue 13, 2008
Are the hunky-dory days of low-cost airlines over? That seems to be the case with rising fuel costs forcing airlines to increase airfares, slash discounts. Even premium airlines are feeling the heat. Indian airline companies are cutting flights and postponing plans for fleet acquisition on account of lower revenues caused by rising fuel prices. In fact, over the previous eight months crude prices have increased over 70%, from nearly $80 per barrel in October, 2007 to $135 per barrel in May, 2008. A similar increase was seen in the case of Arabian Gulf Jet prices.
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A business that won`t fly
Business Standard
June 09, 2008
New Delhi: Civil aviation is an inherently unattractive business in a competitive environment; so while planes fly all the time, airlines find it impossible to soar. There are reasons for this. The barriers to entry have come down because aircraft can be leased and ground handling contracted out, and there is no shortage of experienced people who can be hired to put operating systems in place and build teams. Also, customers are bargain-hungry. Price competition therefore becomes the weapon of choice in the market, and the relentless cost-cutting that accompanies it reduces air travel to an unpleasant experience. Product differentiation to prevent this costs money.
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Airports Make Different Plans for Different Needs
Hamisah Hamid
New Straits Times
RedOrbit, USA
Jun 09 2008
The sky above Asia is no longer dominated by government-backed airlines as more people are jetting point-to-point with affordable flights served by low-cost carriers (LCCs). According to the Centre for Asia-Pacific Aviation, LCCs now account for some 10 per cent of airline capacity in the region, up from just one per cent six years ago.
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Air turbulence
Daily News & Analysis
Jun 08, 2008
Friday in Mumbai was a day when passengers got the worst of it; first the impending monsoon threw everything out of gear for travellers and the airport. It started with the collection of rain-bearing cummulo-nimbus clouds, which aircraft cannot fly through. This was compounded by a cargo plane which made an emergency landing on a runway closed for maintenance. And then a stray dog ran all over the other runway, leading to five flights being diverted to Ahmedabad and Pune and eight aircraft circling the Mumbai skies for close to an hour before landing and another 25 being delayed. Whoever said flying was fun?
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‘Taxes are the smallest factor influencing fuel prices’
D. Murali and Kumar Shankar Roy
The Hindu
June 06, 2008
Chennai: Will the impact of the duty reductions on the retail price of petrol and diesel really bring in any change, apart from short-term price reduction? Not much, if you ask Mr Vivek Mishra. Vivek is a tax partner based in New Delhi and leads the indirect tax practice of Ernst & Young in India. “In our view, these types of questions are slightly misplaced for one key reason. In a scenario of rising crude oil prices, the taxes on petrol and diesel are a small component of a much bigger phenomenon,” says the expert, who has worked with several leading companies assisting them make the transition into the VAT regime. Business Line caught up with him over the email to quiz on the tax angle affecting fuel prices. Here’s what he had to say…
Excerpts >>>

How India’s airlines can save fuel and their industry
K. Venugopal
Business line
Jun 04, 2008
It would seem the most obvious thing that flights between two cities should take the route that is direct and straight. Yet for various reasons aircraft in this country follow paths drawn up in the days when communication links were limited and aircraft had to fly within the range of certain towns invested with the equipment to track and guide them.
Pilots will tell you that it means the path rarely hugs the straight line, forcing extra kilometres on the journey. For instance, the approved Chennai-Mumbai flight path is a good 14 per cent longer than the straight line, which means the several dozens of aircraft that fly this route each day spend that much extra time and fuel. They do not have to. Modern aircraft fitted with equipment on board can take the flight safely by the shortest route.
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