cruising_heights_december_2010

www.cruisingheights.inDecember 2010 � ` 90

AN EXCLUSIVE INTERVIEW WITH DGCA CHIEFNASIM ZAIDI AS HE PREPARES TO TAKE ON ANEW AND CHALLENGING ASSIGNMENT ASSECRETARY, CIVIL AVIATION

The events that shaped aviation history in the

last 11 months

Good-byedarkness,hello 2011

Airbus A380s around the worldreceive a scare as an engineexplodes soon after takeoff

Flameout!

A new start-up seizesopportunities in the logistics and

cargo sector to begin operation

Kick-startto cargo

WHAT’S YOUR AGENDA,MR ZAIDI?

T3’s teethingtroubles Delhi’s swanky and plush Terminal 3is 100 per cent ready but fliers havebeen facing major problems

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CRUISING HEIGHTS December 2010

EDITOR-IN-CHIEF’S NOTE

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For many of us, who don’tthink twice about walking long distancesto get to the gate at Heathrow or Changiwhat to talk of chaotic John F KennedyInternational Airport or Chicago’s O’Hare,the distance at T3 has become a pain in theleg! Literally! Some have even begun todescribe the airport as ‘monstrous’ afterhaving spent a lifetime asking for a global-sized airport that could compare with thebest in the world. It only leads me to theconclusion that what we are willing to dooverseas, we aren’t willing to do at home.More importantly, neither do we have thepatience nor the time to allow for things tosettle down. We want it ‘here and now’ anddamn the consequences.

It is also this attitude that has nowseen the private airlines go to court tocontinue with their self-handling at Delhiand other major international airports. Forclose to three years, Civil AviationMinister Praful Patel humoured them andkept giving them postponement afterpostponement. Now, even he has said ‘no’and having failed to wrangled anotherextension, the airlines have gone to court.Without going into the merits of theircase, here are a few points to ponder.

Each time the airlines went to thegovernment for an extension, it waswith the explicit assurance that they

would be ready by the time theextension ended to move into thenew ground-handling regime.

Through these three years, the airlinesdid nothing to negotiate and finalisetheir ground-handling agreements atthe major metros. The bigger airlinesare the biggest offenders.

Post-the parcel bomb from Yemen, thegovernment is even more concerned atthe large mass of people congregatingat the back-end at airports and wantsthe whole system streamlined.

What will the government do to apolicy that has been cleared by theUnion Cabinet after a due process ofdeliberation?

What happens to the agreement with theairport developers, who were assuredby the agreement to limit the number ofground handlers at each airport?

The present case is also a milestonefor those airlines that so far have had theirway on everything with respect to policy.It’s a measure of their expertise intweaking the system. For the first time,they have finally failed and have takenrecourse to the legal option.

This must surely tell you somethingabout their mindset too.

Seasons greetings! May you have a wonderful 2011!

The woes at T3

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contents


A wink can bedangerousThe way one views the world isunique. Working on that premise, anIsraeli company has developed anew biometric security system thatexploits a person’s unique pattern ofeye movements to identify them.Most biometric security systemsmeasure physical features that areconstant, such as fingerprints or irispatterns. An eye-tracking system hasthe potential to be harder to fooland easier to use, its creators say.In a Homeland Security Newswirereport, Duncan Graham-Rowewrites that the new system tracks theway a person’s eye moves as hewatches an icon roam around acomputer screen. The way the iconmoves can be different every time,but the user’s eye movementsinclude “kinetic features” — slightvariations in trajectory — which areunique, making it possible toidentify him.According to Daphna Palti-Wasserman, CEO of ID-UBiometrics, the company thatdeveloped the technology, “Theinterface is really very simple…theuser watches a target moving on ascreen and a camera monitors theireye movement responses.” Eyetracking, the report mentions,requires no specialist hardware,other than a camera and a display,so it is cheaper and easier to deploy.Using a standard video camera, thesystem can identify users with anaccuracy of 97 per cent, says Palti-Wasserman. Many cell phones andlaptops already have this kind ofhardware, so ID-U’s system couldbe deployed widely for both desktopand mobile computing. Andpossibly in the future also used forairport security. While other biometric systems canbe fooled by a very accurate copyof, for example, a fingerprint orretina, the new system uses abiometric pattern that’s very hard tocopy. Palti-Wasserman is quoted assaying: “What we’re doing is achallenge-response sequence.” Shefurther says, “The process dependson what is being shown on thescreen.”

An engine failure, that forced the emergencylanding of Qantas A380 recently, poses costchallenges for Airbus and could affect passenger preferences in the choice ofwhich planes to fly in. A report.

An exclusive interview with DGCA Chief Nasim Zaidi as he prepares totake on a new and challenging assignment as Secretary, CivilAviation. Perhaps, the only one to take up the position with deepknowledge about Indian aviation, he lists his priorities.

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SPOTLIGHT p26 NEWS DIGEST p12 Kalanithi Maran emerges as thelargest majority stakeholder bybuying off two promoters; AirIndia continues to face more turbulence on ground than in theair and lots more.

THE NEW MAN IN CHARGE p45

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CRUISING HEIGHTS December 2010 5

ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGSPROFILES NEWS DIGEST

Editor-in-ChiefK SRINIVASAN

Managing EditorTIRTHANKAR GHOSH

Group Consulting EditorR KRISHNAN

Consulting EditorNANDU MANJESHWAR

Deputy EditorP C SINGH

Special Correspondent (Mumbai)ROOHI AHMAD

Copy EditorASHOK KUMAR

Editorial CoordinatorLAKSHMI SINGH

Sub-editor-cum-reportersJASLEEN KAUR

PUNIT MISHRA

DesignRUCHI SINHA, PRADEEP JHA

SHIV, JITENDRA RAWAT

Picture EditorPRADEEP CHANDRA

Photo EditorH C TIWARI

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EEddiittoorriiaall && MMaarrkkeettiinngg ooffffiiccee::Newsline Publications Pvt. Ltd., D-11 Basement, Nizamuddin (East), New Delhi -110 013 Tel: +91-11-41033381-82All information in CRUISING HEIGHTS is derived fromsources we consider reliable. It is passed on to ourreaders without any responsibility on our part.Opinions/views expressed by third parties in abstract orin interviews are not necessarily shared by us. Materialappearing in the magazine cannot be reproduced inwhole or in part(s) without prior permission. Thepublisher assumes no responsibility for material lost ordamaged in transit. The publisher reserves the right torefuse, withdraw or otherwise deal with alladvertisements without explanation. All advertisementsmust comply with the Indian Adver-tisements Code. Thepublisher will not be liable for any loss caused by anydelay in publication, error or failure of advertisement toappear. Owned and published by K Srinivasan 4CPocket-IV, Mayur Vihar Phase-I, Delhi-91 and printed byhim at Nutech Photolithographers, B-240, OkhlaIndustrial Area, Phase-I, New Delhi-110020.

CRUISING HEIGHTS

SNIPPETS p62Wondering what’s happening with airlines, tourismboards and hotels? We bring you the latest from theaviation and travel world: plans, performance, initiatives, great deals, hotel openings and specialpackages across the globe.

SPECIAL REPORT 40It may be a wonder tolook at, but teething problems at the newswanky T3 of Delhi airpor t continue. What isthe real problem? Plus: A look at some other airpor ts and their troubles.

YEAR-END SPECIAL p69Unfazed by the reverses of 2009, the aviationindustry has taken steady steps to growth in2010. And the Indian scenario is no different. Amonth-by-month account of the events of 2010.

CARGO p49Securing air cargo has become the top priority of airlines all over the world after the recent ‘printerbomb’ scare. A report on the challenges to air security and how Indian airports are gearing up totackle the security question.

Volume V No 8

GLOBETROTTING p60Ever heard about bumpy ride onflight or how crime turns intocontest? Just check it out.

BACK PAGE p74Neil Armstrong, Arnold Palmerand Warren Buffet are exhortingAmericans to take flight.Business aviation is importantto the country, its companiesand citizens, say the celebs.

Cover photos: Nasim ZaidiH.C.Tiwari

Cover Design: Ruchi Sinha

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THE STORY on Juhu airport, JaiHo or Juhu Ho (November, 2010)was interesting to read. The Airport Authority of India’s (AAI)plan to use the inoperative Juhuaerodrome as an alternative forsmall aircraft to ease congestion isnot right in the context that it willcause serious environmental dam-

age to the areas in and around Juhu. Mumbai which isalready congested does not need another airport. If theairport gets constructed, it will also hamper the liveli-hood of people living around the area behind the Juhuaerodrome. So there are more negatives than positives,which are heavily stacked against Juhu airport.

Ram Chandran, New Delhi

Busy bizjet business (November, 2010) made veryinteresting points about the business behind businessjets. It is interesting that bizjet manufacturers are working hard to roll out top-of-the-class flyingmachines owing to increasing demands from corpo-rates. As a matter of fact, the business jets market indeveloping countries is fast catching up, thanks to thebooming economy. India is also not too far as Indiancorporates are realising the benefits of owning an air-craft as a business tool. The bizjet companies too shouldprovide momentum to the boom and produce qualityproducts to cater to the demands of corporate.

Riyaz Shah, Surat

The story, The mother of all footfalls (November,2010) was written in the right perspective as the carpet-ing at Terminal 3 of the Indira Gandhi International Airport has attracted many travellers with its exquisitedesign and colours. The pleasant feel of using the carpets has left many passengers satisfied and giventhem a whole new experience. No doubt, T3 has setnew benchmarks for other airport operators to follow.The other airports should take a cue from the carpetingat Terminal 3. It is truly an exemplary achievement byany standard.

Priya Saxena, Kanpur

All correspondence may be addressed toEditor, Cruising Heights, D-11 Basement, Nizamuddin (East),New Delhi -13, OR mail to [email protected].

LETTERS TO EDITOR

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Irked airlinesWe (airlines) had a discussion onthe new ground handling policyand proposed amendments ondelayed flights by the DGCA andAERA, and we don’t want it.

Kingfisher Airways Chairman VIJAY MMALLYA on the government’s move toimplement new ground handling policy.

Still in talksWe are still talking (with Kingfisher).

Jet Airways Chairman NARESH GGOYAL on the codesharing of two airlines to achieve operational synergies and reduce costs.

Flexing muscles All (local) Airlines are flying in thecomfort zone. Last year during thistime, jet fuel prices were around$140 per barrel, which was wayabove today’s $80-85 per barrel. Idon’t think it will climb to last year’speak level.M TTHIAGARAJAN, M D, Paramount Airways on local carriers performingwell in the last two quarters of 2009.

Alcohol policingThe onus of doing this test is withairlines. We will be conducting ran-dom tests to see if this is beingdone or not without any exception.Ultimately we will move towards100 per cent check for all flights.

DR NNASIM ZZAIDI, Director General, DGCA, on making alcohol test ofpilots mandatory on international flights.

Positive outlookThe airline industry is gettingbetter. It’s on its way to recovery.NARESH GGOYAL, Chairman of JetAirways, hoping that the worst is over for the global aviation industry and itwill soon back on track.

That’s optimismI hope the aviation sector will certainly revive in 2011.

Civil Aviation Minister PRAFUL PPATEL with a strong belief that the airlineindustry is likely to rebound by 2011.

Truly speaking!India is very important to us.It is one of our largest mar-kets and we are committedto expand here.AKBAR AAL BBAKER, CEO, QatarAirways on ramping up capacity in the India-Qatar sector.

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Does size matter?Apart from focussing on revenue or passenger numbers, does it matter howmany planes an airline has? The figures collected and put out byarabiansupplychain.com for the top 10 largest airline fleet speak volumesabout the industry. The numbers have been collected from each airline'swebsite, and from other independent plane-spotter websites. The top ten are:

United Continental tops the list with 708 planes. However, accordingto independent websites, it also has around 300 planes sitting in storage.

Delta with 690 planes holds the second position. Its fleet includesmore than 140 McDonnell Douglas models and 400 Boeing planes, withAirbus planes making up the rest of the fleet. The airline currently has almost90 planes in storage.

Although FedEx Express is an all-cargo operation, it is still an airline

and thus worthy of inclusion in this list at the third position, having 664planes. Its fleet includes more than 250 Cessna planes and a mix ofBoeing, Airbus and ATR models.

American Airlines’ fleet with 619 planes ranks fourth andSouthwest Airlines comes in as the fifth largest airline fleet size.Consistency is a key for the airline, which has nothing but Boeing 737sin its fleet size of 544 planes.

With more than 100 Boeing 737s, China Southern is the sixthlargest airline fleet with 354 planes.

US Airways with 339 planes holds the seventh position.Lufthansa and Sky West found their way in the list of top 10 largestairline fleets at the eighth and ninth positions respectively.

Air China bottoms the list with 265 planes.

COLD STATS


Give me a sky, give me aplaneWe can reach great heights.RASHMI MMIRANDA, Commander of AirIndia’s Mumbai-New York non-stop long haulflight that flew for the first time today with anall-women crew to mark the InternationalWomen’s Day.

‘Rule’ of uncertaintyAir India is not very sure what kind oforganisational and managementstructure it is going to be in the nextthree to five years’ time. KAPIL KKAUL, CEO (India and Middle East), Centre for Asia-Pacific Aviation(CAPA), on the unplanned attitude of Air India in recruiting its ChiefOperating Officer (COO).

Coming, a systemThe regulator is developing a system for compensation.DR NNASIM ZZAIDI, Director General of Civil Aviationon the issue of giving compensation to fliers when

the flights are cancelled or delayed.

Yeah…It is revenue lost forever.TONY FFERNANDES, CEO of AirAsia, while talkingabout a full plane with low yield is better than a

half-empty plane with high yield.

Long live PPPWe are looking for private partners to develop amedium-range civilian transport aircraft.PRITHVIRAJ CCHAVAN, Minister, Science and Technology onIndia’s ambitious plans to design and develop an indigenous medium-range civilian transport aircraft.

In harmonyGoa will have two airports — in north andsouth Goa. There is no change in the existing

government policy on construction of airports.AMBIKA SSONI, Minister for Information and Broadcasting, on the decision ofUnion Cabinet that the existing airport at Dabolim will continue to function evenwhen the new comes up at Mopa.

Strong commitmentI appeal to all AI employees toshow everyone that when achance is given in the form of aworld-class airport, we will alsogive back world-class services.ARVIND JJADHAV, CMD, Air India, on the plans of national carrier touse the new integrated Terminal 3 as its hub.

Great vision!India is at the centre of our visionfor the future.CHAI WWOO FFOO, General Manager, India,Singapore Airlines, while talking about seeinga revival in demand on the India route.

Truly speakingWe need to create safe, secure, efficient and environment-friendly systems conducive to healthygrowth of the civil aviation sector.

During the inauguration of T3, PrimeMinister DR MMANMOHAN SSINGH onaligning of policy framework with aviationneeds.

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LOOKING GLASS

Aiming highWe want to be the premier Indian producerof aircraft. We will explore every opportunityto become a top aircraft manufacturer onthe lines of the Brazilian Embraer.ANAND MMAHINDRA, Vice-Chairman and Managing Director, Mahindra &Mahindra, on becoming the first Indian private firm to manufacture smaller civil aircraft for the Indian general aviation market.

High talks!In India, the potential for future growthof air travel, both domestically andinternationally, is among the highest inthe world and Boeing will continue itsefforts to be India’s preferred partner and

aerospace provider.DINESH KKESKAR, President, Boeing India, on raising its aircraft sales fore-cast for India by 15 per cent. India would buy 1,150 planes by 2030 for$130 billion.

It’s not enoughTen destinations in India are not really enoughfor any airline. There are huge opportunitiesfor all airlines to operate more points in India.MAJID AAL MMUALLA, Senior Vice-President, West Asiaand Indian Ocean, Emirates Airline, on expanding Indianoperations and considering India a major hub for the airline.

Take-off troubleThe Navi Mumbai airport needs to take off.

Considering the increase in traffic, G VV KKRISHNAREDDY, Chairman, GVK, believes that if another airportdoes not come up, it is going to be a problem for the city.

Meeting demandsThere is tremendous potential for the use ofA380 by Indian airlines since traffic here isgrowing much faster than that in other partsof the world.KIRAN RRAO, Vice President, in-charge of marketing at

Airbus and head of India operations, on the decision of Indian carriersto add 60 A380s over the next 20 years.

Let's hope for aneven better 2011!

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Detect the right nerveWith the rise in threat perceptionin India, we expect that ourbusiness will increase from $20million to $100 million in nextthree to four years.STEPHEN PPHIPSON, President ofSmiths Detection, expecting a five-foldjump in Indian business as with increase in India’s investment on theprocurement of safety and security systems.

Expanding itswingsWe are looking atexpanding our domestic capacity by 10-15 per cent.NIKOS KKARDASSIS, CEO, JetAirways, sharing the expansion plans

of the airlines during the 18th annual general meeting.

Rosy picture The current numbers arebecause of the strong growthwe’re seeing in the market. AirIndia has got the benefit thateveryone has got.KAPIL KKAUL, India Chief ExecutiveOfficer, Centre for Asia Pacific Aviation onAir India’s improved report card.

Small is beautifulWe are currently evaluating threeairports in three smaller cities in the country, whichwe will be looking at building andoperating. Delhi and Mumbai weremega airports and now the growthwill come from airports in smallercities, which we plan to tap.

VINAYAK DDESHPANDE, President and COO, Hindustan ConstructionCo Ltd, on the decision to enter the business of building and operatingairports.

Money talks!Land is like a gold mine and we are unlockingits value now.GM RRAO, Chairman, GMR Group, on the plans to mone-tise airport land holdings and thereby grow revenues.

Partnering growthIt is our endeavour to make customerexperience the best it can be, and thispartnership is another step towards thatobjective.

IndiGo Airline President, ADITYA GGHOSH, onIndiGo Airline’s partnership with TATA AIG.

Nearing take-offThe Navi Mumbai airportshould have been in opera-tion by 2011, but we will try topush it for at least a partial ora first phase opening by2014-15.

Civil Aviation Minister PRAFUL PPATELon the woes to get a new airport for Mumbai.

Ambitious plansThe vision of the company is to be theIndian ambassador to the world. We alsowant to be a leader in the domestic market.CAPTAIN GGUSTAV BBALDAUF, Chief Operating Officer,Air India, on the airline’s plans to enhance the focus on

domestic operations along with managing the international operations

Right strategyLow fare is the name of the game,as we are operating into price-sensi-tive destinations with travel durationof an hour and half. We can afford tooffer low fares, since our cost ofoperations is lowest in the industry.KISHORE GGUPTA, Director, SpiceJet, on thedecision of the airline to offer low fares evenon international routes.

Hold itIf surpluses are swallowed up intaxes, airlines will not only be unableto invest in cleaner, emissions-reducing aircraft, they will ultimately gobankrupt and the social and economic benefits they bring will dis-appear with them.

British Airways Chief WILLIE WWALSH is furiousover huge increase in air passenger tax, which will have a negative impact onthe airline.

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Air India continues to face moreturbulence on ground than in theair. The recent jam it got into inDIAL’s T3 terminal, which it

hopes to make as its premier hub more thanillustrated the management disconnect theMaharaja is experiencing. This avoidablefracas continued in a different form even inits board room where the independent direc-tors had a totally different take than theCMD and COO on vital staffing as well as ahost of other contentious issues, includingAir India Express.

Let’s look at Air India (NACIIL I + A). Normally, the final P&L accounts of a PSUfor any year ending March 31 need to betabled in the Lok Sabha by the followingDecember of the same year. Air India, sincethe merger, has been going through a badpatch leading to delays, which seems to haveextended to this practice as well. Otherwise,there is no reason why the carrier came outso late with a huge loss figure for 2008-09.Perhaps, we might have missed it but we areyet to find a piece of published paper or Par-liament answer that says Air India made aloss of `7,189 crore during the financialyear 2008-09. All along the loss figure fedfor 2008-09 was `5,642 crore and for thenext year 2009-10 an estimated loss of`5,550 crore. Hence, we do not know if —while disclosing next year’s or 2010-11financials — the loss figure of `5,550 crorefor 2009-10 will also go up as steeply as itdid for 2008-09. After all, the public shouldbe concerned, as its `800 crore has alreadybeen pumped into the airline and another`1,200 crore is waiting to be injected. Fol-lowing the revised higher loss figure for2008-09, the AI management “presented amuch improved” financials for the next fis-cal, i.e. 2009-10, which accounted for11 months of the current CMDArvind Jadhav (he joined the air-line on May 1, 2009). Heinformed the Board that the air-line’s operating losses decreasedby 39 per cent from `5,672 croreto `3,472 crore in 2009-10 andits Earnings Before Interest, Tax-es, Depreciation and Amortisa-tion (EBITDA) increased by`2,417 crore.

On the other hand, the netloss fell sharply from `7,189crore (revised as we mentioned)to `5,551 crore in 2009-10. Theoperating performance in termsof seat load factor rose from 59.5per cent in 2008-09 to 64.8 per centin 2009-10, a nine per cent increaseover the year. The Available Seat Kilo-metre (ASKM) which shows that capac-ity rose from 43,591 million in 2008-09 to44,722 million in 2009-10, was a three per

cent rise. The Revenue Passenger Kilometre(RPKM), which is suggestive of demandincreased from 25,950 million in 2008-09 to28,965 million in 2009-10. But the financialsremained muted because of the increase indepreciation by `164 crore to `1,390 crore in2009-10. Interest and financing charges roseby 46 per cent or `769 crore due to inductionof more aircraft, increase in working capitalborrowings and interest rates. The cost-cut-ting exercise brought down the expenditureby eight per cent to `19,035 crore from`20,668 crore the year before. However, the

total revenues remained almost stagnant. Thiswas a classic case of yields not rising orfalling in 2009-10. Air India’s working capi-tal loan outstanding at the end of March 31, 2010 was reported to be `19,000 crore.

The reviving fortunes of aviation indus-try worldwide also had its positive impact onAir India. In the first half of fiscal 2010-11 orApril-September 2010, Air India saw its pas-senger revenues rising by `1,034 crore andthe airline statement in this regard merelysaid the yields were up by 13 per cent. ArvindJadhav said Air India expected to pare itslosses by around 75 per cent in the currentfinancial year ending March 31, 2011. Thepassenger or seat load factor rose by eight percent in these six months to touch 67.1 percent and cargo revenue rose by `140 crore.EBITDA in the first half of this fiscalincreased by six per cent compared to the firsthalf of previous year. The operating lossesfell by `976 crore as against `2,216 crore inthe first half of fiscal 2009-10.

According to an Air India statement, the airline has embarked on a cost-cutting exer-cise, which will see it rationalising routes andincrease revenues. It is in this context, AirIndia is seriously awaiting the second trancheof `1,200 crore from the government. How-ever, each of the ministries and departmentsconcerned has got own take on the issue. TheMinistry of Finance, which holds the pursestrings, is still awaiting the details from AirIndia regarding the milestones it was sup-posed to have achieved for being eligible forthe second tranche. When the first instalmentof `800 crore was paid to Air India, it hadpromised to bring down the wage bill by ̀ 500crore. In reality, it was able to cut it by only`100 crore. The Ministry of Home Affairs

has its own reservations on the issue con-sidering the fact that its political head PChidambaram was earlier the FinanceMinister and fully aware of the dip-ping fortunes of Air India. After all,he was the Finance Minister whenAir India finalised and signed theaircraft purchase agreement withBoeing and Airbus. The Ministryof Petroleum and Natural Gasfeels the `1,200 crore infusion isokay with it provided the carrierclears its outstanding of `1,800crore owed to public sector oilmarketing companies. The Plan-ning Commission has informed

that it will give its views only afterit gets its new turn-around plan

from Air India. Meanwhile, the Board decision

of September 2010 to dry lease fourA330-200 and 10 A320s seems tohave been kept in abeyance if not out-right reversed. The same Air India,

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which grounded the already acquired Boeing777-300 ER or using it sparingly because ofits inability to fill them is now seriouslythinking of deploying them on the US routesas it carriers nearly 350 passengers in a three-class configuration as against its Boeing 777-200 LR. Air India has been losing heavily onits non-stop routes for many reasons even asits US competitors in American Airlines andContinental make money on the same routes.

With the aviation market rising all overthe world and many airlines beginning acqui-sitions, we see Air India unable to fill its exist-ing aircraft on international routes. To makematters worse, the likes of Emirates, Qatarand Etihad from the Gulf and AirAsia fromthe East have made deep inroads in the Indianmarket. For instance, while the Gulf carriersconnect Indians to various Western destina-tions, AirAsia is planning to do the same onthe Eastern hemisphere. Further, Air Indiawill also face competition from home-grownLCCs shortly like SpiceJet and IndiGo.

Air India’s survival, then, will largelydepend on how it increases the plane load fac-tor and what kind of yields it manages to get.Mere statements and generalities will certain-ly not help. Even as these developments takeplace, the sharp differences between the man-agement and the independent board membershave added a new twist to the Air India story.The first of these was visible on the Air IndiaExpress front. The recently-appointed COOof Air India Express, Pawan Arora, was askedto deplane mid-flight. We don’t know wherehe para-dropped but his brief 15 days in AirIndia Express saw him express serious reser-vations on the problems confronting the low-cost carrier. He told the media that Air IndiaExpress cannot survive by remaining as anattachment of Air India and needs to be virtu-ally independent. For instance, he said, AirIndia Express can never hope to remainhealthy, should it continue to pay 25 per centof its total revenues to Air India as revenueshare. In 2008-09, Air India Express is report-ed to have earned a revenue of `1,700 croreand hence paid `425 crore to the parent AirIndia. Pawan Arora, before leaving, had told adaily that Air India Express would never beable to survive if it continued operating as itdoes today. He had suggested that Air IndiaExpress needed a full-time devoted manage-ment team and operational staff. It could notbe remote controlled. Its aircraft utilisationhad to be increased from the present nine to11 hours to much more. Its domestic foot-print, which was about 10 per cent of itscapacity, should be increased to 27 per cent.

Air India Express has cut down its flightssharply because of severe crew shortage —both cabin crew and pilots. It flies 24 Boeing737-800, with an average age of less thanfour years. One reason for the cabin crewshortage was the wrong application of a

DGCA approved cabin crew Fund for theDevelopment of Teaching and Learning(FDTL). It is now trying to recruit cabin crewbased on virtual walk-in interviews. On date,Air India Express has 361 cabin crew againstthe required 440. Before leaving, Pawan Aro-ra also stated that Air India Express needed tohave its own pilots, HR, finance and engi-neering managers and staff. Had he got hisway, Air India Express would have become afull-fledged airline and even been in compe-tition with Air India. There was also talk atthe top management that Air India Expressname should be changed to say ExpressIndia. (We thought it would have been betterhad they called it Indian Express as after all

the airline was also full of news !). One of Pawan Arora’s benefactors in Air

India and its COO Gustav Baldauf had in oneof the Board meetings stated that since themarket for Boeing 737-800 was tight, AirIndia should sell them and buy cheaperA320s to make money and do the same job.But after Pawan Arora was asked to go by AirIndia Board, Baldauf had threatened to leave,to which some Board members had even stat-ed that if he wanted to he could also go. Atthe end of the day instead of the aircraft of AirIndia departing on time, it’s newly foundmanagers who began to depart before time.

Managing Air India should not become amockery as it has become of late.

From: [email protected]: [email protected]: Date: Tue, 16 Nov 2010 14:19:47 +0530

Dear Mr Jadhav,As a committed Air Indian, I have been closely

following the developments in Air India, particularly thedecision to employ certain individuals at huge pay pack-ages unheard of in the government sector.

It isn’t clear as to who has been behind the deci-sion to appoint these individuals — the Minister of Civil Aviation, the Ministry of CivilAviation, the Board of Air India or the management of Air India? Some clarity on this iscertainly warranted in public interest.

While those behind the decision may have had their justification in deciding toemploy these individuals at salaries of `one crore-plus and the Chief Operating Officerat a salary of `three crore per annum, the other stakeholders are, by and large, oblivi-ous of the merit behind this decision. As Air India is a PSU, the public is within its rightsto know as to what are these highly paid individuals expected to bring to the table orhave delivered thus far from the perspective of bringing about a turnaround in AI’s per-formance and fortune.

I am personally interested to know more about it because in June 2009, you hadissued a letter to FDs/EDs/GMs painting an extremely dismal financial picture of thecompany, threatening the airline’s very survival and at the same time appealing to thesenior management personnel to forego a month’s PLI/salary to help mitigate the financial crunch to the extent possible. We were all made to believe that in the kind offinancial crisis that we were in even a couple of crores thus saved would ease the financial situation. I was one of the officers to have responded positively to yourappeal.

However, now that the airline is going about offering huge salaries to certain indi-viduals, whose track record certainly does not merit these kind of salary packages andwhich are also not in consonance with established pay structure in the government sec-tor (Chairmans of State Bank of India, NTPC, Coal India, SAIL, ONGC, with far moreonerous responsibilties, are still drawing pay packages of `25-30 lakh per annum andno more), I would like to once again reiterate my request (and if I can be a little impoliteDEMAND ) reimbursement of the salary and PLI given away by me earlier as I simplycannot reconcile to a situation wherein Peters (regular employees) are deprived of theirlegitimate earnings to pay Pauls (contract employees being hired at exorbitant salarieswith no commensurate responsibilty and accountability).

I look forward to hearing from you and receiving my cheque.P.S. At the JRD Tata function held in Mumbai earlier this month, I had met several Aircraft Maintenance Engineers who haven’t received their salary arrears for thepast five years. The amount involved, I am told, is in the region of `200 crore. Pleasedo something for them as well.Warm regards.Jitender Bhargava

14 CRUISING HEIGHTS December 2010

Jitender Bhargav was Executive Director-Corporate Communications, Air India,and he retired in January this year.


official carrier

Document1 10/23/2010 4:04 PM Page 1


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Jet Airways has, by far, registered thebest performance compared to othercarriers and its stand-alone opera-tions have been more robust com-

pared to the previous few quarters. Jetreported a profit after tax of `12.4 crore inthe second quarter (Q2) July-September ofthe current financial year (2010-11) asagainst a loss of `406 crore in the secondquarter of the previous fiscal (2009-10).However, its low-cost arm JetLite made aloss of `62 crore which was, however,lower than `126 crore it made in the previ-ous year's second quarter. Overall, the Jetgroup posted a loss of `50 crore, against`532 crore loss in Q2 of 2009. Jet, as awhole, therefore, made a turnaround of`482 crore. The combined totalrevenue of `3,523 crore was up by31.2 per cent based on year-on-year Q2 performance.

Passenger growth, on the otherhand, was 20.2 per cent highercompared to Q2 of 2009-10.Domestic passenger grew by 17.7per cent versus same period of lastyear. The airline’s EarningsBefore Interest, Taxes, Deprecia-tion and Amortisation (EBITDA)of `730 crore for Q2 in the current fiscal was farhigher than the figure of `228 crore in the same period oflast year.

Stand-alone Jet Airways rev-enues rose by 31.9 per cent at`3140 crore and profit after tax at`12.4 crore. During the quarterunder review, Jet Airways’ sys-tem-wise Available Seat Kilome-tre (ASKM) was up by 22.6 percent at 8,479 million and system-wise Revenue Passenger Kilome-tre (RPKM) rose by 23.3 per centat 6,562 million. Its system-wideseat factor was also higher at 77.4per cent. The number of revenuepassengers carried by the carrierwas up by 23.5 per cent at 3.45million. While the losses made byJetLite have been mentioned, thelow-cost arm registered a seat fac-tor of 74.2 per cent as against 71.8 percent in the same quarter of the previous year. Due to rising yields, its rev-enues rose by 25.6 per cent to `382 crore.

Though Q2 is traditionally a leanseason, and airlines continue to offercompetitive fares, Jet Airways showed amarked improvement in the EBITDAmargin year-on-year. Jet said this was aresult of its managerial efforts toimprove network synergies, variouscost efficiencies, consistent high levels

of seat factor over the last few quarters.Its domestic market operations account-ed for 40.5 per cent of the total rev-enues at `1,271 crore and a seat factorof 71.4 per cent while the internationaloperations registered revenues of `1868crore or 59.5 per cent of the total revenues. Its international operationsregistered seat factor of 80 per cent. Inthe first half or April-September 2010-11, Jet Airways’ system-wide ASKMs

of 16,648 million was up by 22.4 percent, RPKMs up by 27.8 per cent at13,076 million. The seat factor at 78.5per cent showed a good improvementand passengers carried rose by 30 percent at seven million. In monetaryterms, its revenues rose 27.8 per cent at`6,147 crore while profit after tax stoodat `15.9 crore which was a greatimprovement compared to the first-halfloss of `632 crore in the previous fiscal2009-10. In the case of JetLite, its firsthalf performance in 2010-11 showedthe seat factor rising to 78.5 per centcompared to 72.7 per cent in the firsthalf of 2009-10, while revenues rose by18.3 per cent at `858 crore as against

the previous year first half fig-ures. The first-half losses thisfiscal shrunk to `57 crore com-pared to last year first half lossof `124 crore.

Jet Airways and JetLite arenow moving fast to reconnect thosestations that were disconnected fol-lowing the economic slowdown.Jet Airways is also frantically look-ing for more aircraft. It looked forat least seven more Boeing 737-800s and since the market was tightand few available ones were pickedup by Kalanithi Maran for SpiceJet.Jet Airways promoter Naresh Goy-al is seriously toying with the ideaof leasing Airbus A320 of which hedoes not even have one in his all-Boeing narrow-body fleet with theexception of two CRJs and fewATRs. It is not that A320s are avail-able freely. Aviation industrywatchers stated that at least two air-lines in Europe folded up freeingtheir 40 A320s, which are nowavailable at competitive rates.

Another bit of good newsfor Jet Airways is its applica-tion to FIPB for raising $400million through the QIP routehas been approved. This wasafter Jet explained to the gov-ernment that it will not result inthe foreign holdings in the car-

rier beyond the permissible limit of 49per cent. This may also mean thatNaresh Goyal may see his holdingsshrink to say 60 per cent. A never-say-die Goyal has also mounted pressure onStar Alliance to admit its airline as amember. As it is, he has concludedinter-line agreement with most mem-bers which the Indian government sawas an indirect way of settling the issueand hence asked him to stop that lest itadversely impacted the mis-managed stated-owned Air India.

JETSCRAMBLESTO MAKE UP

LOSTGROUND

16

(Top) Jet Airways Chairman Naresh Goyal and(above) Jet Airways CEO Nikos Kardassis


Chennai-based Sun Networkpromoter Kalanithi Maran wasformally inducted into theBoard of SpiceJet and also

appointed Chairman at the airline’sboard meeting on November 15, 2010.He had earlier in June 2010 successfullyacquired the low-cost carrier SpiceJet bybuying off the two promoters — BuloKansagra and W L Ross. WhileKansagra’s Royal Holdings ServicesLimited (RHSL) sold its 12.85 per centstakes, W L Ross sold off his 25 per centheld through the Foreign Currency Con-vertible Bond (FCCB) route. Thus,between the two Kalanithi Maran bought37.85 per cent to emerge as the single-largest majority stakeholder. However,as per Securities and Exchange Board ofIndia (SEBI) norms, he had to make anopen offer to the other shareholderswhich he sought to do just thereafter. Butbecause of certain technical hitches ithad to be abandoned and Maran cameout with his open offer at a higher price,which closed on November 7, 2010.Since the ruling market price was muchhigher, there were no takers for Maran’sopen offer.

If we round off

Maran’s stakes at 38 percent, it is seen that thebody corporate continuesto hold 21.60 per cent,institutions 34.28 per centadding up to nearly 93 percent leaving the generalpublic with only seven percent. Obviously, the cor-porates and institutionscan afford to sit tight andwait for the right pricebefore exiting. Fortunate-ly for Maran, those share-holders are not the typewho will unsettle him and overthrow hismanagement. One of them includesGoldman Sachs, an institution known tobe in the business of making moneythrough share purchase and sale. It is notknown to be interested in managing anairline. As for Maran he has alreadycrossed the critical 26 per cent share-holding limit, which gives him the vetopower over any special resolution movedin the board. The next limit is 51 per

cent, which, he thought, he would beable to get through the open offer. Butconsidering the kind of shareholding pat-tern, even if the general public were tounload their shares to Maran, he will still be below 51 per cent or anabsolute majority.

However, none ofthese calculations shouldbother him or have both-ered him and his manage-ment style is now reveal-ing itself in the aggressiveway he has decided toexpand his carrier’s pres-ence. In the board meetingof November 15, 2010,besides Kalanithi Maran,Kavery Kalanithi was alsoinducted as a non-inde-pendent director. His teamwho joined the boardincluded S Sridharan,

J Ravindran, Nicholas Martin Paul andM K Hari Narayanan. Those whoresigned on that day from the board withimmediate effect included the originalSpiceJet promoter Bulo Kansagra (inci-dentally who did a brief hand holding ofKalanithi Maran and also stitched thedeal with Boeing toacquire 30 Boeing737-800s valued

MARAN SPICES UPAVIATION SCENARIO

Kalanithi Maran




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at $2.7 billion and which was announcedduring the recent visit of US PresidentBarack Obama to India from November6 to 9, 2010), Kishore Gupta who wasthe stop gap CEO after the earlier incum-bent Sanjay Agarwal resigned and laterjoined Kingfisher Airlines, MukharamJan and Vijay Kumar.

On October 26, W L Ross’s per-sonal representative on the boardRanjit Nabha quit. S Natrajhen, whoearlier looked after the finances ofSun Network, was appointed the air-line’s COO and Neil Mills, who wasearlier with flyDubai, was appointedthe airline’s CEO. As per SpiceJet,the airline had in all a paid-up capitalwith a total voting right of404,886,590 equity shares. After theopen offer that led to a marginalincrease in Maran’s shareholdingposition, the new acquirer —Kalanithi Maran — has 156,528,305shares or 38.66 per cent.

Maran’s takeover of SpiceJetnearly coincided with the start ofsecond quarter or Q2 of the currentfiscal 2010-11 or July-September2010. During Q2, SpiceJet saw a16 per cent increase in passengernumbers, a 14 per cent increase inASKM and nine per cent cut in non-fuel cost per ASKM. In Q2,SpiceJet made a net profit of`10.11 crore as against a net loss of`101.29 crore in Q2 of fiscal 2009-10. The airlines income in the sec-ond quarter rose by 39 per cent to `628crore reflective of both a rise in passenger numbers as well as the yield. Income in the previous year Q2 was`449 crore.

During the first half April-September2010-11, SpiceJet’s net profits rose to`65.33 crore as against a loss of `74.95crore in the same period of previous fis-cal. SpiceJet CEO Neil Mills said, at theend of Q2 2010-11, the airline had a posi-tive networth and over `600 crore in cash.

There was every reason for the manage-ment to be optimistic about the future, hesaid. Even Maran said the same, soonafter taking-over as Chairman.

The aggressive expansion plan envis-

aged by Maran was first evident when heplaced an order for 30 Boeing 737-800s.This was followed up soon in late Octo-ber 2010 when his airline placed anotherorder for 30 Bombardier Q 400 turbopropplanes worth $900 million. As Mills said,SpiceJet’s fleet would more than doublefrom 25 of Boeing 737-800s and 900 ERsat present to 50 by 2013. The Q 400s willbe a competition to ATRs operated byKingfisher Airlines and Jet Airways toconnect the Tier-2 and Tier-3 cities or theregional stations.

According to SpieceJet’s calculations,there are about 23 airports-cities, which arefit for the Q 400s and also sufficient pas-senger demand for onward journey to met-ros and major metros. The Q 400s will,therefore, be ideal for Maran’s grand hub-and-spoke plan. To start with, it will beginto connect those cities in the south, whichParamount Airways used to connect. Theseturboprops will be delivered from the sec-ond quarter of 2011 or in less than sixmonths. The propeller-powered Q 400 cancarry 70 passengers and fly 1,567 miles or2,522 kilometres according to the Canadianaircraft-maker Bombardier, which alsomanufactures Q 400s. As for the Boeing737-800s order placed by SpiceJet, the

planes are expected to be deliveredfrom 2014 as there is a massive waitinglist for this type of aircraft.

The B737-800s SpiceJet hopes toget, according to Boeing, will have abrand new interior. It will have spe-cial features that would reduce fuelconsumption and carbon emissionsby two per cent making the airplanea full seven per cent more efficientthat the 737 NGs delivered so far.Performance improvements to theairframe and engine are beginningcertification test soon and will befully in service by early 2012. In themeanwhile, SpiceJet has managed to

get on lease seven of Boeing 737-800s and the plan is to have a 75-plane fleet by 2015. There couldbe a neck and neck race betweenSpice and IndiGo. It may be recalledthat only in August 2010, SpiceJetlaunched its international forays byflying to Kathmandu from Delhi andto Colombo from Chennai. It has nowapplied for rights to fly to Colombofrom Mumbai and Bengaluru as well.Besides, SpiceJet is also working outplans to fly to Singapore andMalaysia from Chennai besides

Male. For the time being, the airline hasno plans to acquire wide-body aircraftand wishes to connect only those foreigndestinations that can be reached by itsBoeing 737-800 and 900 fleet.

Sanjay Agarwal

Bulo Kansagra

Neil Mills

W L Ross

ON THE EXPANSION MODE: (SpiceJet’s order of 30 Boeing 737-800s is a part of Maran’s aggres-sive expansion plan for the carrier.

Pho

to c

ourt

esy:

nam

aste

.net

.in


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The newly-appointed CEO ofKingfisher Airlines (KFA), Sanjay Agarwal, who left Spice-Jet soon after Kalanithi Maran

took it over, is in for more challengingtimes as the Vijay Mallya-owned KFAcontinues to be in a serious financial crisisand is quite a distance from recovery. Butthe Q2 fiscal 2010-11 results announcedshould give him some reason to cheer.

For Q2 ending September 30, 2010,KFA cut back losses by 45 per cent to `231 crore while income from operationsrose 24 per cent to `1,383 crore. In July-Sep-tember 2009, it made a loss of `418 crore. Itsaverage revenue per passenger or ARPPincreased by 17 per cent to `4,620 crorewhile overall seat load factor rose to 79 percent (domestic 82 per cent) from 71 per centa year ago. This helped the partially full-serv-ice carrier and largely low-fare carrier (King-fisher and Kingfisher Red a revised versionof Air Deccan taken over by Mallya nearlythree years ago) in terms of capacitydeployed domestically to raise its head abovethe air pocket. The tighter management of thecarrier was evident from the position wherethe airline registered 24 per cent rise in oper-ating revenues in spite of the 11 per cent fallin the number of departures. The unplannedgrounding of its aircraft caused an estimatedloss of `73 crore during the quarter underreview. The rising load factors helped the car-rier in cutting the adjusted net losses by 18per cent over the previous year. It is also truethat the sharp rise in the load factor was part-ly due to route rationalisation and partly dueto shrunken fleet in the face of rising demand.The Q2 was also significant in that it saw the

airline getting a favourable nod from theReserve Bank of India for its debt recast bycommercial banks that had lent huge amountsof money to the beleaguered airline.

Kingfisher Airlines expects the situa-tion to improve with buoyant domesticdemand and its 13 grounded planes takingoff in batches. The 13 aircraft belongingto KFA fleet got grounded because of seri-ous engine trouble. The airline uses IAE-made V2500 V series engines. After legalwrangling and negotiations the engine-maker IAE has begun resolving the issueand has already got six planes airworthy.At one time, Kingfisher was operating 89aircraft — that came down to 66. Whilesome of the leased aircraft have beenreturned, the grounded ones had to berepaired before flying them again and thishas begun to happen now. This is the rea-

son for KFA to start new connections tonew destinations in India. As it is a stand-alone carrier, it has enjoyed the highestload factor exceeding 80 in September aswell as October 2010.

Sanjay Agarwal was in the US discussing with the IAE or engine-maker toget the planes back on schedule soon andall eyes are on him since he brought Spice-Jet to the profit zone. Will he be able to dothe same for Kingfisher is the issue every-one in the aviation circle is debating. But hemay not find the going easy because Spice-Jet and Kingfisher operate under differentmodels and even within KFA, it has a full-service arm and another an LCC. As men-tioned, the second quarter also saw the RBIextending its nod to KFA’s debt recast plan.The carrier is awaiting each of the fundingbanks to pass an enabling resolution to dothe debt recast. If all goes well, SBI Capswhich represents the consortium of 15banks that lent to the airline may announcethe debt recast plan for Kingfisher byDecember 2010.

The total debt of Kingfisher Airlines isnow at `8,200 crore up from `7,926 crorein March 31, 2010. Its networth slippedfurther to a negative of `4,289 crore from`3,870 crore back in March. Vijay Mallyahas pledged his own stake of up to 69 percent. In September 2010, the airline sawits interest cost shooting up by 25 percent. Taking the two quarters together,during the first half of fiscal 2010-11, theairline incurred an EBITDA profit of `181crore as against a loss of `353 crore in thefirst half of fiscal 2009-10. It is in thiscontext, Kingfisher Airlines has drawn up

GOOD TIMES AREAROUND

THECORNER

TRAF

FIC D

ATA

Analysis of capacity(ASKM) and demand(RPKM) data on year-on-year basis indicates

that the trend of increase in bothcapacity and demand continued inOctober 2010. Domestic passen-gers carried by Indian-scheduledairlines in the month of October2010 were 46.17 lakh; significant-ly up from 39.11 lakh in September 2010.

The break-up for October,2010 — Air India (Domes-tic): 8.16 lakh, Jet Airways:

Airline-wise details of market share of scheduled domestic airlines for the month of October 2010 were:

MARKET SHARE REASONS OF CANCELLATIONS

Go Air6.6%

Technical 42.2%

Operational 0.9%

Commercial27.5%

Consec/Misc14.8%

Weather12.7%

Jet Lite7.4%

Kingfisher19.0%

Spicejet13.6%

Indi Go6.8%

NACIL(I)17.7%

Jet Airways18.8%

Capacity and demand continues

22


a three-month plan for a turnaround fromloss junction to profit junction in terms ofoperational parameters. These include thedebt recast, getting grounded planes air-worthy, slowing down of loss-makingoverseas routes and other cost-cuttingexercises. The airline is regaining confi-dence and that is slowly becoming evi-dent from its decision to reactivate thenew delivery stream from Airbus from2012. Vijay Mallya had earlier stated thathe had deferred delivery of new aircraftdue to the economic slowdown and gener-al over-capacity in India. These orders arebeing reactivated.

The financials of KFA, as per oursources, and as at the beginning ofNovember 1, 2010, was as follows: (1)

Total bank debts are around `7,500 crorewith aircraft acquisition related debts at`1,000 crore. The balance `6,500 crore isshort-term and working capital loans.Non-bank debts could be in the range of`1,000 crore-plus. These could be higherwith rise in interest rate; (2) KFA requiresas stated earlier $400 million for its imme-diate requirements and this is also neces-sary to get its 13 grounded A320s off theground; (3) RBI’s consent to KFA’s debtrecast will give the airline a two-yearmoratorium and convert the loan tenorfrom seven years to nine years and a pos-sible cut in interest rate from 12.5 per centto 11 per cent; (4) UB holdings will con-vert its `732 crore debt to KFA to prefer-ential shares and the airline will also raise

$200 million through ADR or GDR offer-ing besides raising `500 crore via a rightsissue in the domestic market. Banks havealso agreed to a `900 crore credit line tothe airline; (5) Point No. 4 will help King-fisher raise up to `2,300 crore in the nextfew months. But most of the funds will bespent immediately like clearing vendors’outstanding and getting the 13 aircraft offthe ground. Therefore, no capital will beleft for expansion and boosting liquidity.Meanwhile, KFA’s bank debt levels willedge closer to `10,000 crore after the two-year moratorium is over. So, how the debtlevels will be reduced remains to be seen;(6) KFA’s business is in much better shapecompared to two years ago. KFA capacityhas been cut significantly (20 per centlargely owing to return of leased aircraftand lately also due to grounding of someaircraft following engine problems), non-fuel costs have been reduced by `550crore, aircraft utilisation is up by 10 percent and some revenue enhancementmeasures have been initiated. Even afterreduced inventory, the passenger count ishigher. The airline, however, requires evenmore stringent cost cutting both distribu-tion and maintenance related; (7) Going infor American Depositary Receipt (ADR)or Global Depositary Receipt (GDR) willinvolve the risk of the promoter stakeshrinking by between 25 per cent and 30per cent should the issue be a size of over$200 million. These numbers could wellchange depending on the way KFA moves-North or South. It is unlikely to go Southas evident from the Bombay StockExchange (BSE) movement.

POSITIVE OUTLOOK: (The debt recast and the restoration of planes will perk up Kingfisher Airlines

23

8.70 lakh, JetLite: 3.43 lakh, King-fisher: 8.77 lakh, SpiceJet: 6.30 lakh,GoAir: 3.06 lakh and IndiGo: 7.75lakh. The percentage share of the carriers inOctober — Air India (Domestic): 17.7per cent, Jet Airways: 18.8 per cent,JetLite: 7.4 per cent, Kingfisher: 19 percent, SpiceJet: 13.6 per cent, GoAir:6.6 per cent and IndiGo: 16.8 per cent. The seat factor of the domestic air-lines in the month of October 2010was — Air India (Domestic): 70.8 per cent, Jet Airways: 73.6 per cent, JetLite: 80.7 per cent, Kingfish-er: 87.1 per cent, SpiceJet: 84.4 per cent, GoAir: 77.4 per cent andIndiGo: 86.1 per cent.

There are 70 foreign carriers operating to/fromIndia. At the time of compilation of this report,OTP data of 59 carriers was received. Theoverall On-Time Performance (OTP) of these59 carriers for October 2010 was 78.4 per centin departures and 75.8 per cent in arrivals.

ON-TIME PERFORMANCE (FOREIGN AIRLINES)

IT Related2.3%

On- Time78.4%

On- Time75.8%

Excessive(>44 min) 5.1%

Very Late(30-44 min)

5.1%

Late (15-29min) 11.9%

Excessive (>44 min) 8.2%

Very Late (30-44 min) 4.5%

Late (15-29 min)8.9%

Others 57.1%

StaffMisbehavior

10.3%

Lost Baggage18.7%

Refund11.6%

DEPARTURE

ARRIVAL

REASONS OF PASSENGER COMPLAINTS


The International Air TransportAssociation (IATA) recentlyannounced the international trafficresults for October showing a 10.1

per cent year-on-year increase in passengerdemand and a 14.4 per cent year-on-yearincrease in international freight.

“As we approach the end of 2010,growth is returning to a more normal pattern.Passenger demand is five per cent above pre-crisis levels of early 2008, while freight isone per cent above. Where we go from hereis dependent on developments in the globaleconomy. The US is spending more to boostits economy. Asia outside of Japan is bar-relling forward with high-speed growth. AndEurope is tightening its belt as its currencycrisis continues. The picture going forward isanything but clear, but for the time being, therecovery seems to be strengthening,” saidGiovanni Bisignani, IATA’s Director Gener-al and CEO.

Freight appears to be at a turning point.Since May, freight volumes have declinedby five per cent. October saw an end to thedecline in freight with a slight uptick. “Buta single month does not make a trend. Andit remains to be seen if this is the stabilisa-tion in freight volumes or the start of anupward trend,” said Bisignani.

Improvements in demand are being met

by a cautious approach to capacity expan-sion. Over the first 10 months of the year,passenger demand grew by 8.5 per cent,with a capacity expansion of four per cent.A cargo capacity expansion of 9.2 per centwas well below the demand increase of 24per cent. Forward schedules indicate a con-tinuation of this trend, with a 7.5 per centpassenger capacity increase planned for thehalf-year scheduling period beginning atthe end of October.

International Pax DemandThe 10.1-per cent growth in passengerdemand in October is slightly below the10.7-per cent recorded in September,but both months are an improvementover August.North American airlines posted a 12.4

per cent demand increase over October2009. October represented the fastestgrowth rate for the year. With a capacityincrease of 11.9 per cent, the load factorfor North American airlines was pushedto 82.5 per cent, the highest among allregions. Compared to pre-recession lev-els of early 2008, the region’s airlinesare carrying two per cent more traffic.European carriers showed a 9.6-per centincrease over October 2009. This is sig-nificantly better than the 8.6-per centgrowth reported for September. Euro-pean airline traffic grew by 1.5 per centfrom September to October and is nowfour per cent higher than that of the pre-recession levels of early 2008.Asia-Pacific carriers posted a 7.3 percent demand increase, ahead of a 5.3 percent increase in capacity. Volumesremain one per cent below pre-crisis lev-els of early 2008.African airlines recorded a stronggrowth (13.3 per cent) as compared toOctober 2009. With a capacity increaseof 8.9 per cent, load factors improvedto 71.8 per cent.Latin American airlines posted a com-paratively weaker performance with a4.9-per cent increase in demand and a0.7-per cent drop in capacity. The

NEWS DIGEST

BEYONDTHE

TURNINGPOINT

24


region’s results remain skewed becauseof the bankruptcy of Mexicana.

· Middle East carriers recorded thestrongest growth for the month with an18 per cent increase in demand. This isdespite the earlier Ramadan dates, whichnegatively skewed the numbers with aone per cent fall in October traffic ascompared to September. The region alsohad the largest capacity expansion at 13.7 per cent as compared to October2009.

International Cargo DemandThe 14.4-per cent year-on-year increasein freight traffic for October was margin-ally weaker than the 15.5 per centrecorded in September. Nonetheless,international freight volumes actuallyimproved slightly from its Septemberlevel on a seasonally adjusted basis.Asia-Pacific airlines reported a 14.9-percent year-on-year increase in interna-tional freight demand, down from the16.2-per cent recorded in September.October’s growth translates to animpressive 22-per cent annualisedgrowth rate for the region’s carriers,reflecting the strong economic recoveryparticularly in China and India. With a44-per cent share of total freight traffic,

the growth experienced by Asia-Pacificairlines played a large role in the uptickseen in overall industry freight volumesduring October.European airlines recorded a 12.1-percent year-on-year demand increase inOctober. North American carriers saw aslightly larger improvement of 12.2 percent. For both regions, October freightvolumes represented a six per centimprovement on freight volumes carriedin December 2009. Relative weakness inthe Euro and dollar is helping exportactivity and boosting freight traffic.Even so, traffic remains 12 per centbelow pre-recession levels of early 2008for European airlines and just two percent higher in North America.“We are ending 2010 in much better

shape than we were just 12 months ago. Air-lines have turned losses into profit — albeittiny. Despite the economic uncertaintiespeople continue to fly. Airlines appear to bemanaging capacity in the upturn with a gooddeal of prudence. And cost control continuesto be a main theme for airlines everywhere,”said Bisignani.

“A good example of airlines deliveringchange is the conversion to bar coded board-ing passes (BCBP). In 37 days, we willachieve 100 per cent capability for BCBP.

The courage to change brings great benefits:$1.5 billion in cost savings for the industryand greater convenience for our passengers,”said Bisignani.

“Not all in the supply chain have thesame courage to change. We have been wait-ing for decades for the efficiency of a SingleEuropean Sky. Average air traffic manage-ment costs per flight in Europe are EUR 771,compared to EUR 440 in the US. This is aEUR five billion competitive disadvantagefor Europe that affects everybody that flies orships goods by air. Reluctance to change con-tinues to put the programme at risk. It isextremely disappointing to see some European state governments refusing toimplement the 4.5-per cent cost reduction target for 2012-14 agreed by the independentPerformance Review Board,” said Bisignani.

“This is no hardship. With inflationexpected to be 1.6-2 per cent and with trafficgrowth of 3.2 per cent, this is achievable sim-ply by containing costs. If Europe’s air trafficmanagement community cannot see the needfor change, I hope that Europe’s TransportMinisters will. I urge them to support theEuropean Commission in building a morecompetitive Europe, driven by serious per-formance targets and with a modern cost-effi-cient approach to air traffic management thatis the Single European Sky,” said Bisignani.

25


THE AIRCRAFT Airbus A380 Type: A380-842 Registration: VH-OQA Serial number: MSN014 Engines: Rolls-Royce Trent 900 (972-84 variant) First flown: January 25, 2008 Entered Qantas revenue service on: October 20, 2008

Qantas has operated the Trent 900 for two years. Availableexclusively for the Airbus A380, the engines share some featureswith the rest of the Trent lineup and are used by three airlines:Lufthansa, Qantas and Singapore Airlines. It is also worth notingthat Qantas operates a high power variant of the Trent 900, whichhas a higher thrust rating than the ones operated by the other twooperators. Other airlines like Air France and Emirates (that haveordered the largest number of 380s) have their engines from theEngine Alliance (General Electric and Pratt & Whitney) and,therefore, are not beset by these issues.

It happened on November 4 when a rou-tine Qantas flight (A380 Nancy-BirdWalton) left Singapore on the final leg of

its London to Sydney odyssey as QF32.Minutes into the flight (six, actually) —there was a loud bang and the number 2engine (left wing) had blown out causingdebris, including the cowling, to fall on thenearby Indonesian island of Batam. The air-craft returned to Singapore and followinglanding, it was found that the engine debrishad harmed a wiring system, making itimpossible to shut down number 1 engine,requiring it to be shut down by foaming.

Much worse, the aircraft’s left wing hadsuffered damage from the engine blowout —this sort of error, causing parts of engine toblow out, is what is called an ‘uncontainedengine failure’. But the concerns have actual-ly been enlarged by the fact that apart fromthe A380, a Qantas 747 had an engine issuejust one day later, which was preceded inAugust by two other failures concerningRolls-Royce engines. At the end of thatmonth another Boeing 747, also operated byQantas, suffered a fault and had to fly back toSan Francisco airport. This came shortly afterone of the company’s new Trent 1000engines blew up on a test bed at its Derbyheadquarters.

Engine failures can happen, but what hasset alarm bells ringing are that three of thefour events were linked to “uncontained fail-ures”. Dangerously, as it happened on theA380, inner pieces of the engine have comeapart with sufficient force to puncture theouter casing, opening up the possibility ofpieces of metal flying into the aircraft’s fuse-lage at high speed. Passengers on the A380were awfully lucky, the wing was damagedby the blowout, but just about failed to openthe fuel tank. Of all the tests that aircraftengines have to pass, among the toughest arethose that are meant to ensure that if a prob-lem (with inner parts) does occur, it is keptcontained (inside the casing).

SPOTLIGHT

Engine failures are part and parcel ofcommercial aviation but when a QantasA380 suffered an engine flameout recently— and narrowly avoided a major accident— it sent alarm bells ringing. While Rolls-Royce, the maker of the Trent engines islooking into the problem that caused theblowout, deliveries of the super jumbo byAirbus will certainly be affected. Worse,the mishap could affect passengerpreferences in the choice of which planesto fly in. A report.

LLOOOOKKIINNGG TTEERRRRIIBBLLEE:: After the incident ofQantas A380, which suffered an engine flameout,Rolls-Royce — the manufacturer of the Trent 900engine — is in problem.

26

A Rolls-Royce of a

problem!

A 380.qxd 12/2/2010 1:44 PM Page 2

Will the fallout affect Airbus? “I expectthat this event (will) have an impact on supplies, especially in 2011,” because of theinspections and replacements recommend-ed on Rolls-Royce, said Airbus PresidentThomas Enders. It is still not clear on thenumbers that would be affected by delays indelivery. But it is unfortunate from the man-ufacturer’s perspective considering the factthat Airbus hoped to deliver up to 22 unitsof the super jumbo this year, against onlyten in 2009.

“We haven’t had any orders called off;there isn’t any kind of discussion about cancellations going on,” Enders told journal-ists in Berlin. “There is no reason to doubtthe safety of the aircraft.” Nevertheless,Enders described the problems as a “seriousincident,” adding that Airbus wanted to helpairlines “as far as possible with engines thatwe have at our disposal”.

Rolls-Royce has said it will inspect theTrent 900 engines on all A380 aircraft thathave them installed and will replace the part.“I expect that this event, the inspectionregime, plus the modification and thereplacement that Rolls has just beenannouncing, will impact deliveries, especial-ly in 2011,” Tom Enders told reporters. “Ourpriority is to help our customers to keep theaircraft in service flying.”

He added: “I would expect we coulddeliver up to 22 (A380) aircraft before year-end.” Airbus has said previously that itexpects to deliver at least 20 A380s this year.

Officials at Airbus told reporters thatfour of the double-decker aircraft were wait-ing to be delivered to reach the company’sofficial target of handing over 20 planes in2010, double last year’s output. Three ofthose aircraft already have Rolls-RoyceTrent 900 engines fitted under their wings,identical to the one that disintegrated mid-airon Qantas flight QF32. Another two aircraftare nearly ready for delivery and might havebeen squeezed onto the roster for 2010, asproduction hits its stride following birthpangs in recent years.

Although he concedes Rolls-Royce isunder a lot of pressure to push its manufac-turing supply chain to the limit to deliver onan extremely full order book, “all the signsup to now are that the company is able tohandle (the pressure), without its supplychain coming under too many strains”. Headds that the company’s track record onengine safety is “at least as good” as its twobig rivals in this business, with the otherkey player being Pratt & Whitney, also fromthe US.

Even so, the test failure of the Trent 1000in August, followed by the in-flight failure ofthe Trent 900 on the Qantas aircraft, hasfocussed attention on Airbus’s new A350 aircraft. Rolls-Royce is the sole engine sup-

plier for that aircraft and is offering anothermember of the Trent family, the Trent XWB.Rolls-Royce is one of two aircraft engine-makers that dominate the market for wide-body jets; the other is GE of the US. Airlinesare normally offered a choice of engines onwide-body or twin-aisle aircraft but Airbushas opted for one supplier on the A350. Thatputs added pressure on both Airbus andRolls-Royce, as they develop the new com-posite, lightweight A350, which has garnerednearly twice as many orders as the A380 andis due to enter service in 2013.

In a statement, Rolls-Royce’s ChiefExecutive John Rose said: “We regret thedisruption we have caused.’’ However, thestatement provided no detail about why orwhen changes were made to engines for theA380s at production plants in Europe. SirJohn said the failure was confined to a “spe-cific component in the turbine engine area ofthe engine (that)… caused an oil fire’’, whichled to a turbine disc being blown out.

In a speech a year ago, Sir John pointedout that making an aircraft engine, parts ofwhich have to withstand temperatures of2,000°C while propelling air at 1,500 km/hr,demands a “wide range of skills, a complex-ity of relationships (with suppliers) and aconstant focus on quality and reliability”.

But Airbus said it would give priority tothe job of ensuring any retrofitting of newparts required by Rolls and European safetyregulators went ahead as quickly as possible.

It raised question marks over deliveries espe-cially for 2011. “In such a situation, ofcourse, the customer has priority, and the pri-ority is to keep the 39 aircraft flying or backin the air as quickly as possible and I wouldnot rule out some impact on the deliveryschedule,” Enders told reporters. “I do notknow how severe that would be,” he said,referring to deliveries in 2011. The financechief of parent EADS, Hans Peter Ring, sug-gested this year’s remaining deliveries couldalso be affected. “It is a very recent develop-ment and is being managed on a daily andeven hourly basis,” Ring said.

Airbus’ Chief Operating Officer JohnLeahy down under for the Qantas 90 years’celebrations said that Airbus planned to takenewer versions of the Trent engine off itsA380 production line and ship them to Qan-tas so that the airline could change theengines on some of its super jumbos. He alsosaid that three A380s that will be delivered toQantas before Christmas will be fitted withengines that have the design upgrade. Hesaid the engine-maker planned to address theproblem in two ways: replacement partswould be supplied to fix the oil leaks andsoftware would be fitted within the engine’sdigital management system. “In the future,the computer will have software that canidentify a problem at the outset and will shutdown an engine before a turbine disc can goout of control and come apart,’’ Leahy toldthe media.

The potential financial damage to Qantasgoes beyond the immediate costs associatedwith the incident and its aftermath. The air-line spent hundreds of millions of dollars onfitting out its A380s to offer the highest stan-dards — way ahead of those offered aboardthe substitute Boeing 747 aircraft. In addi-tion, there is always a risk in transferring pas-sengers to rivals if they find the alternativecarriers to their liking.

“We’re not going to rush anybody, we’renot going to be putting a deadline on it.We’re going to make sure it’s absolutelyright before we have this aircraft start flyingagain,” CEO Alan Joyce said during the cel-ebration of the 90th anniversary of his air-line, which began as a small-scale flier trans-porting pastoralists and miners across thenorthern Outback.

BLOWN OUT: Qantas Airbus A380 flight experienced an engine trouble, when one of its enginesexploded with a bang.


AIR FRANCE EMIRATES

QANTAS SINGAPORE

Photo courtesy: usnew

strend.com

A 380.qxd 12/2/2010 1:45 PM Page 3

FOCUS


Low-cost airline easyJet markedbetter-than-expected profit fig-ures by announcing plans to paya dividend to shareholders forthe first time — a long-time

demand of founder Sir Stelios Haji-Ioan-nou, whose family controls about 38 percent of the shares and has long called for theeasyJet board to start payments to share-holders. The first dividend will be paid inJanuary 2012.

easyJet also announced it will buyanother 24 planes, expanding its fleet to220 by September 2013, increasing seatsby 7 per cent a year. This is a much morecircumspect order as compared to thenearly 60 that were expected to beordered. Many believe that the LCC’sbacking-down has much to do with Ste-lios’ activism who quit the easyJet board“in order to focus on a campaign as ashareholder activist against the increase ofthe size of the aircraft fleet of the compa-ny beyond the current level of about 190”.

“These new aircraft are the expensivelegacy of an order signed by outgoing CEOAndy Harrison and Airbus in November2006 when entirely different economic

circumstances prevailed,” Stelios claimed.Dozens of airlines around the world havecancelled or delayed orders since the start ofthe global economic crisis to try and protecttheir margins, as demand for air travelwanes. He added: “I have been arguing forsome time that a much higher priorityshould be given to restoring profit marginsfrom the current 1-3 per cent to the morethan 10 per cent level of ten years ago anddelivering value to all shareholders.”

easyJet was launched in 1995, with£30m of his father’s cash, and floated on thestock market five years later. Today it’s thelargest UK-based airline and Europe’s sec-ond biggest, after Ryanair. Ioannou said:“…the board has refused to take intoaccount my recommendations, using thepretext that the rest of the shareholders wantsomething different, and instead remainsresolved to go on squandering shareholders’funds on more expensive aircraft that willprobably destroy shareholder value”.

Stelios was easyJet’s non-executivechairman until 2002, left the board, thenrejoined as a director in 2005, until quittingagain in May this year to pursue thosestrategic differences. He remains by far its

easyJet waslaunched in 1995,with £30m of SirStelios’s father’scash, and floatedon the stockmarket five years later. Today it’s thelargest UK-basedairline andEurope’s secondbiggest, afterRyanair

Europe’s most successful low-cost carrier easyJet recentlyannounced that it would pay out its first dividend in 2012 — like

its rival Ryanair. While the going has been good thus far, thefuture will see a major confrontation between the present easyJet

management — keen to acquire more aircraft — andfounder Sir Stelios Haji-Ioannou, who quit the board to

become a shareholder activist against the increaseof the size of the aircraft fleet. A report.

Ioannou wins the

dividend battle

Easy jet.qxd 12/2/2010 2:24 PM Page 2

biggest shareholder. Since 1999, he has setup 16 other ‘easy’ ventures, which are sepa-rate from easyJet. They are owned by easy-Group, the private investment vehicle forhis Stelios Trust. easyGroup owns the‘easy’ brand, which licenses it to various‘easy’ operations, including easyJet. Thisprivate side embraces easyBus, easyCruise,easyOffice, easyCar, easyPizza, easyHotel,easyInternetcafe — all with the same dis-tinctive orange logo as easyJet.

Now in a brand new move, the airlinehas launched a flexible fare targeted at busi-ness travellers, allowing passengers tochange their flight up to two hours beforedeparture time. easyJet has changed itsbusiness model with the introduction offlexible fares, which are aimed at businesspassengers specifically. Budget airlines likethis one have benefitted from business trav-ellers choosing to fly with them rather thanmajor airlines. This happened during therecession, as companies were cutting backon travel costs. It’s their hope now to accel-erate the trend with the new fare.

About 18 per cent of easyJet customersare business travellers now. The flexiblefare is still anticipated to be a lot less inprice compared to those offered by majorcarriers, even though it will still be higher

priced than the carrier’s own standard fares.Carolyn McCall, the chief executive of

easyJet, said that it’s easy to see why busi-ness travellers are choosing them overmajor airlines, as they have the best Euro-pean network, with flights to main airportsat cheaper prices. The flexible fare has beencreated to meet the needs of business trav-ellers, she added, which makes the carrieran even more attractive choice.

The easyJet dividend follows close onthe heels of Ryanair chief executiveMichael O’Leary, who finalised a £341mone-off dividend. The dividend is the firstsince Ryanair was floated in 1997 andcomes after talks over the delivery of 200new aircraft with Boeing broke down.Ryanair shelved the acquisition putting thebrakes on its famed focus on rapid expan-sion. A portion of the cash pile is now goingout in the form of a dividend.

Because of the sharp reduction in capi-tal expenditure this will lead to Ryanairplans to return another £341m to sharehold-ers by 2013. Although O’Leary was at painsto stress to investors and analysts that thepayments were a one-off, the £341m divi-dend represents a nominal yield of 10 percent and is a hefty payout. However, forinvestors, a potential slowdown in growth

means Ryanair is likely to be a rather differ-ent proposition for the next few years.

He has held out the prospect of paying asecond dividend in 2013, unless Ryanairfound a better use for its growing pile ofcash which, he said, might not happen. Thisprompted some analysts to suggest he wasfinally reining back the airline’s aggressivegrowth strategy that has seen it grow into aairline carrying twice as many passengersas older rivals such as British Airways. Hesaid: “All other things being equal, if we’restill generating this amount of cash and wehaven’t found any acquisition or aircraftacquisition for it, then we would certainlyconsider a second dividend by about the endof 2013. But if I was a shareholder I would-n’t be banking on that yet.”

He said he saw no airline on the marketworth buying, but there was still the optionof purchasing not just the 200 Boeing jets,worth about $15bn (£9.8bn) at advertisedprices, but up to 300 from either Boeingor its rival, Airbus. Ryanair had toldboth manufacturers in early summerthat it could buy “200 to 300” air-craft if suitable prices and termswere offered, he said, thoughthere were no negotiationsat present.


“It’s easy to see why businesstravellers are choosing them overmajor airlines, as they have the bestEuropean network, with flights to mainairports at cheaper prices.”

— Carolyn MMcCall

“Priority should be given to restoringprofit margins from more than 10 percent level of ten years ago anddelivering value to all shareholders.”

— Stelios HHaji-IIoannou

“If we’re still generating this amount ofcash and we haven’t found anyacquisition, then we would certainlyconsider a second dividend by aboutthe end of 2013. ”

— Michael OO’Leary

Easy jet.qxd 12/2/2010 2:25 PM Page 3


TAKE-OFF

CHARITY IN THE AIR:Ryanair’s cabin crewwho are featured inthe airline’s charitycalendar 2011, and(top) the dig at rivalBritish Airways.

Ryanair launched its 2011Ryanair Cabin Crew CharityCalendar, which, it hopes willraise up to `60 lakh for

German charity “Tafel”, which providesfood to people in need all over Germany,many of them children and teenagerssuffering from poverty and malnutrition.

The proceeds of Ryanair’s 2011cabin crew calendar will bring the totalraised by Ryanair’s sexy cabin crew toover `2.4 crore since the first calendar in2008. The 2011 edition, which was shotin Fuerteventura (Canary Islands) inSeptember, will raise `60 lakh throughthe sale of 10,000 calendars onboardRyanair flights.

As per tradition, the Ryanair’s crewchose the German charity “Tafel”, after

over 400 charities across Europe appliedfor the charity calendar partnership. Thisis the first year a German charity willreceive the donation and follows strongsales of the 2010 cabin crew calendar inGermany, where over 30 per cent of the2010 cabin crew calendars were sold.

The calendar also has a page pokingfun at rivals BA, with a picture of anolder woman holding a placard, reading:“We’re off our trolleys.”

Ryanair’s CEO Michael O’Learysaid: “Ryanair’s cabin crew stunners aredelighted once again to strip off forcharity and this year they’re doing it forthe ‘Tafel’ charity in Germany. We hopethat the 2011 charity calendar will help‘Tafel’ deliver even more food to peoplein need throughout Germany.”

Last year’s calendar saw moneydonated to the UK charity KIDS. Thepublication of the 2009 calendar led toLabour MP Mary Honeyball accusingRyanair of “sexualising” the airlineindustry, describing the stunt as “adesperate bid for profits”. O’Learyresponded by describing Ms Honeyballas “anti-fun”, before sending her his owncopy of the calendar.

Meanwhile the Kingfisher calendar,for which a nationwide selection wasdone to select the finalists, is also undershoot in Maldives. Now, why doesn’tVijay Mallya consider getting hisinflight crew to volunteer for the shootand sell the calendar for charity. Goodidea, eh? Or, will there be an uproar in Parliament?

StrippingFOR CHARITY

Year ender25.qxd 12/2/2010 3:14 PM Page 14

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TAKE-OFF

Richard Champion deCrespigny, who has 35 years'flying experience, has beenuniversally praised by

passengers for the way he handled thecritical incident and the manner inwhich he addressed the 466 people on

board after the A 380 Qantas mid-airexplosion (see Pages 24-25 of this issueof CRUISING HEIGHTS). The 53-year-old pilot has been flying for 35 years— all with Qantas apart from aninitial stint with the Royal AustralianAir Force. When the engine blew, deCrespigny said over the plane’sintercom: “I do apologise. I’m sureyou are aware we have a technicalissue with our No. 2 engine ... I’m sureyou are aware we are not proceedingto Sydney at this stage. The aircraft isflying safely at this stage. Thank youfor your patience.”

But it was his wife, Champion deCrespigny who had the final word:“I was not at all surprised to hearhow calm he was when talking to thepassengers. I’m sure he would havebeen thinking, ‘What words would Ilike to hear from the Captain if I wasa passenger? He’s such a smart guy.If I was in a dire situation on a planeI would want to know Rich was up front’.’’

But is her Rich a hero? Not really,says the missus: “He just loves to fly.Every day he goes to work he’s got asmile on his face. It’s not because he’sleaving me, it’s because he loves hisjob. Rich was promoted to captain tofly the A380 when they arrived. He

loves the aircraft so much he’s writinga book about it.’’

Aviation runs in the family:Captain de Crespigny’s father Peter isa private small-craft pilot and two ofhis great-uncles were in the Air Force.Captain de Crespigny joined theRAAF straight out of school andRichard’s son, Alexander, 21, anengineering student, is also training forhis pilot’s licence.

RichIS A DARLING!

CALM AND COMPOSED: Despite a catastrophefacing the A380 mid-air, Richard remained calm and composed while handling the 466passengers.

Photo courtesy: syd

ney morning

herald

The US space agency NASA hasplans to build a hypersonic jet thatwould enable passengers to flyfrom London to New York in just

45 minutes! The craft would travel at anincredible five times the speed of sound,reaching Mach 5, which when you compareit to the iconic jet Concorde that completed

its first supersonic flight in 1969 flying attwice the speed of sound, Mach 2, these arephenomenal speeds!

The aircraft will fly at the limits of theearth’s atmosphere and slash flight times allaround the world to a few hours at theoutside, travelling at around five times thespeed of sound much like a supercharged

Concorde. The project involves designing are-useable aircraft that can travel to Mars,but the spin-off for terrestrial technologycould be considerable.

Under the umbrella of NASA’saeronautics 2010 proposal, the agency is toallocate $5 million each year over threeyears to make the design of the new craft areality. The plane will need to carrypassengers through the thin air and landsafely as well as being re-useable.

NASA is aware of the challenges itfaces in developing the new technology,but has already come up with anexperimental aircraft, which flies at seventimes the speed of sound. Hypersonicaircraft are the next generation afterConcorde and still a fairly new concept,with the experimental prototype onlyhitting Mach 7 for three minutes or so lastJune. Another more recent test saw itlaunched from a B-52 bomber. It reachedMach 6 under its own power and flew forover three minutes.

Scramjetdelight


TAKE-OFF

SYMBOLIC: The Boeing 757 aircraft in new livery — from nose to tail — with logo from The OprahWinfrey Show farewell season.

United Airlines has unveiled“The Oprah Winfrey Show”farewell season plane tohonour the iconic talk show

host’s 25th and last season on CBSbefore embarking on running her owncable channel.

The Boeing 757 aircraft is newlypainted with imagery from the TV show.

The interior also has been redecoratedand passengers will be greeted by a special onboard video welcome from Winfrey.

At a send-off event at ChicagoO’Hare International Airport, passengersheard a special message from Winfreybefore boarding the flight. During theinaugural flight from Chicago’s O’HareInternational Airport to Los Angeles, onepassenger was given enough United

Mileage Plus miles for a trip aroundthe world. All the other

passengers received a speciallymono- grammed “Oprah 25”fleece blanket each.

In conjunction with theunveiling of plane, United islaunching the “Million MileGiveaway” — a sweepstakesthat will award one millionUnited Mileage Plus miles toone winner each month throughMay 2011.

“As Chicago’s hometownairline, United is proud to

celebrate The OprahWinfrey Show’s farewell

season. This uniqueplane represents theglobal reach of twogreat Chicago icons.”

The airline, whichrecently merged withContinental, is basedin Chicago, which isalso the city Winfrey

calls home and filmsher daily show.

A UnitedOPRAH

34

Virgin boss and Knight of theRealm Sir Richard Bransonwill soon be swishingacross the aisle of an

AirAsiaX flight with his legs shaved,in high heels and a fetching redstewardess uniform serving guests anddelighting AirAsiaX boss TonyFernandes. That’s part of the deal afterBranson lost a bet to Tony over whoseFormula 1 team performed better this season.

Branson backs Virgin Racing,while Fernandes is the team principleof Lotus Racing. Both teams are 2010F1 Championship fanatics and travelthe globe to catch their teams rush thepit. At the start of the season, Bransonand Fernandes wagered that the loserof the bet would have to dress andserve as a flight attendant on thewinner’s airline.

“He has an airline, we have anairline, and if we beat him, he cancome and work on one of our airlinesas a Virgin stewardess,” Branson hadtold a delighted media in Decemberlast year when the bet was placed. “Isuspect if he beats us he might ask meto reciprocate. Maybe I’ll have tocheck out how fetching his stewardessoutfits are!” While both team endedthe season with zero points, Lotus hadbetter finishing positions overall andplaced ahead of Virgin Racing in rankings.

“We have had this great betrunning all season and now it’s timefor Richard to start preparing himselffor some hard work and the likely painof a pair of high heels!” saidFernandes. Branson seems delightedwith his AirAsia outfit. Duringcelebrations on track on theconclusion of final F1 race, held inAbu Dhabi, Fernandes gave Bransonan AirAsia uniform and pinned astewardess’ badge on the VirginRacing boss.

“One of the first people to comeand congratulate us on the pitwall wasRichard,” said Fernandes. Judgingfrom Branson’s ecstatic expression,pictured left, you’d think he wasactually excited to have an excuse todon a female uniform. We think itwould be delightful if Branson did asafety demonstration dance routinewhile he’s at it.

“We want him to shave his legs.We are going to try and get him toshave his legs and wear some make-

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Sir Richard, pick your high heels

up,” The Star (from Kula Lumpur)quoted Fernandes as saying. The paperadded that if Richard is sporting, so isTony. He is prepared to make aconcession to his British friend, as heseeks his pound of flesh. “But we willleave his moustache alone, as it is histrademark,” said Fernandes, who isthe Lotus Racing team principal apartfrom being AirAsia Group’s Chief Executive.

Incidentally, if Branson is SirRichard, Fernandes has theMalaysian equivalent, Datuk Seri.The Malaysian media and the onlineworld have been abuzz about the bet,with blogs, twitter and news portalsworldwide picking up on the resultof the wager.

The excitement is fuelled furtherby the fact that Fernandes saidBranson would be expected to wearhigh heels during the flight andperform tasks like any other crewmember, including cleaning thetoilets, the newspaper said.

Branson will serve on a KualaLumpur-London AirAsia X flight.The tickets will be sold in an onlinecharity auction. Details on the dateof the flight and how to enter thecharity bid will be released soon.

Fernandes said, “It’s quite fitting,don’t you think? Our guests will bedelighted to be served by a Knight ofthe Realm. But knowing Richard, thereal challenge will be to prevent himfrom asking our guests ‘coffee, tea orme’?” Fernandes added that Bransonwould serve duty on board anAirAsia X flight.

Fernandes, who once worked forBranson as a financial controller atVirgin Records, had recently jokedthat his only target in the new F1season is to beat Branson, otherwisehe would quit the business and killhimself. Branson responded, “He hasan airline, we have an airline, and ifwe beat him he can come and workon one of our airlines as a Virginstewardess. It will save him havingto kill himself, but we’ll make surethe stewardess outfit is perfect,”joked Branson. “I suspect if he beatsus he might ask me to reciprocate.Maybe I’ll have to check out how fetching his stewardess outfitsare,” he added.

Fernandes has accepted thechallenge and has picked out a lovelycrew uniform for Branson.

POOR CHAMP!: (Top)AirAsia’s Tony Fernandesand Virgin’s RichardBranson being measuredfor stewardess’ uniforms,and (below) a cartoon ofBranson as a stewardesson an AirAsia X flight.


TAKE-OFF

Patdowns are a touchy subject— at least for the Americans.To the unitiated patdown is theAmericanese for body search

and is presently being carried out atairports in the USA with “ferocity”. Infact, the airport security drill is so hatedthat it is snowballing into a majorprivacy row and Americans have startedprotesting against the introduction ofthe TSA full “Montys”.

Demonstrators recently gatheredagainst these body touches in the UScapital. At least a section of theAmericans feel that they’ll take thebus, train or find a ride before theybook an airplane flight. Passengers arerefusing to fly rather than have his orher “junk” felt.

“If you touch my junk, I will haveyour arrested,” John Tyner told securitypersonnel at San Diego airport and senta recorded tape of this experience onYouTube. Tyner even blew upthreatening to have the screenerarrested for patting down his groinarea. He later said he used the word“junk” to keep the atmospherelighthearted. The online video footagespread like a viral across America,fuelled by breathless TV coverage,which turned into a minor celebrity,being called everything from a hero toa nut to a Gandhi-like figure for hiscivil-disobedience.

Amidst all this chaos, US star JulieBenz believes that while it’s not the bestsituation to go through a X-ray scan thatcan peer through your clothes or to besubject to a thorough pat-downinspection, the new screeningprocedures are necessary securityprecautions. “I’d rather be felt up thenhave somebody get on a plane with abomb,” the sportive star was quoted assaying. “I think right now, unfor-tunately we live in a time where securityon flights is very important. They’reworking it out. Is this the right choice?Who knows, but it is a choice, and I’drather be safe than sorry,” she said. “Ifyou want to feel me up, feel me up. Iwould hate to be on a plane where theydidn’t catch the guy when he was goingthrough security,” commented Benz.

Even the Grammy-winningmusician Steve Vaus has penned asong, “Help me make it through theNight” as a source of inspiration to support the airline security for the controversial body scansconducted by them.

Help me make it through the nightTake the ribbon from your hairShake it loose and let it fall

Leave your shoes right over thereNow, get up against the wallI’ll run my hands inside your thighsUp your legs and out of sightBut you can trust the TSATo help you make it to your flight…Trust the Americans to come

up with something like this. As for usIndians, we go through patdowns and patups everyday — even for amovie show.

36

No patdown, NO CRY

DESPITE PROTEST,CELEB SUPPORT: Amidstall the campaigningagainst the patdown procedures, (left)American actress JulieBenz and (above)Grammy-winning musicianSteve Vaus believe thescanners can act as security measures. (Top) A cartoon depicting theeffects of the scanning system.

Courtesy: cartoonaday.com


Advanced technologies

create an oasis of spacious

style and comfort.

www.newairplane.com/style


SPECIAL REPORT

When Prime Minister Dr Man-mohan Singh inauguratedDelhi airport’s glitzy andswanky Terminal 3 on July 3,

2010, the world sat up and took note.Indeed, the terminal was truly international:eighth largest in the world, it has 78 aero-bridges, 63 elevators, 35 escalators, 92automatic walkways, 168 check-in countersand 95 immigration desks. Capable of handling 12,800 bags per hour with 6.4 kmof conveyor belts, Terminal 3 created in just37 months was the world’s most modernterminal. The Prime Minister had comment-ed at that time that the “terminal establishesnew global benchmarks for India. It alsoshows our resolve to bridge infrastructuregap in the country”. An equally impressedSonia Gandhi, who was also at the inaugu-ration, said that T3 “is a most impressivestructure … it is evident global standards ofexcellence have been achieved here.”

As CRUISING HEIGHTS goes to press, T3and airport operator DIAL (Delhi Interna-tional Airport Limited) seemed to be at thereceiving end. Passengers were irked by thelate delivery of baggage and delays inflights. But the fault was not T3’s. AsDIAL’s CEO P S Nair put it rather succinct-ly: “T3 is 100 per cent ready.” So, what

really are the reasons for passengers’ ire?Before finding out the causes, one

needs to look at a bit of history. To beginwith, operations from the terminal did notstart the very next day. In fact, DIALstaggered T3’s operation date by a fort-night after the inauguration to enablestakeholders to deal with any last-minuteglitches, like synchronisation of securityprocedures, baggage handling and otherairport operations.

Everything seemed to be going greatfor the terminal. And, when Air Indiaannounced on July 15, 2010, that it plannedto use the new terminal as its hub, it was feltthat Delhi’s connection to the world wouldbe strengthened. Air India’s CMD ArvindJadhav went on to point out that Air Indiaoperating from the new terminal would pro-vide seamless travel for its passengers on allsectors and would increase business bymore than 20 per cent in the long run. Threenew direct international routes that wouldstart from October were announced by theAir India’s Chairman.

July 28, 2010, was the day T3 was waiting for: the terminal opened for

40

Troubles startedon November 11,2010, when AirIndia shifted itsdomesticoperations:passengersbegan facingproblems

irons out the

HARRIED PASSENGERS: Amidst chaos andconfusion, passengers are a victim of theunpreparedness of the T3.


glitches

Glitzy and swanky, Delhi's T3 has of late,been the sceneof chaos andconfusion. Is itdue to teethingproblems or isthere more to it?Tirthankar Ghoshfinds out.

T3special report.qxd 12/2/2010 3:06 PM Page 2

international passengers. With a handlingcapacity of 27 million passengers a year,to begin with T3 was all set to handle 90flights a day, which would eventually beramped up to 220. Domestic operationsby Air India, Kingfisher Airlines, Jet Airways and their low-cost subsidiarieshad plans to shift operations to the newterminal later.

By September, the teething troublesseemed to be over. The terminal scored abig hit when it screened the one millionthbaggage at its gigantic in-line baggage han-dling system since it was commissioned.And, barely two days later, athletes and delegates arriving in Delhi for the Com-monwealth Games were floored by Indianhospitality right after alighting from theirplanes. They breezed in and out of the air-port as if on song.

Before T3 could begin domestic operations from November 14, the terminalwas reviewed for its preparedness by theSecretary, Civil Aviation, M MadhavanNambiar on October 25, 2010. He held ameeting with representatives of the DelhiInternational Airport Limited (DIAL), airlines concerned, Delhi Metro Rail Corporation (DMRC), Delhi DevelopmentAuthority (DDA), Delhi Police, Directorate

General of Civil Aviation (DGCA) and offi-cials of the Ministry of Civil Aviation. The press release issued by thegovernment’s Press Information Bureaudoes not indicate any shortcomings ofDIAL on the airside as far as preparednessto receive flights were concerned. Instead,the release mentioned issues on the citysidethat had resulted in the postponement ofdomestic operations from T3. Among theissues that were discussed were the connec-tivity problems with the airport. While theMetro connectivity to the airport wasexpected to be in place by mid-November,2010, the integration of the Dwarka Under-pass would be completed by the end ofOctober, 2010. The underpass had to havetrial operations and simulations to ensuresmooth traffic flow and that was expectedby the middle of November 2010.

With an eye on the increase in trafficduring Diwali and to ensure maximum con-venience to passengers, it was decided atthe review meeting to shift domestic opera-tions of three airlines — Air India, Jet Air-ways and Kingfisher Airlines — onNovember 14, 2010. Before that, however,a number of simulation exercises would becarried out in the interim period. However,when consulted by the Press it was assured

Denver International AirportScheduled to open in 1993, the baggagehandling system delayed the opening ofthe airport by 16 months and $2bn incost overruns. After multiple delays, thesystem was stripped down and had to befinally abandoned in 2005.

Kuala Lumpur International AirportKnown as the best airport in the world today,KLIA had teething problems: software glitches forced passenger delays; cargooperations were bogged down — withseafood, vegetables, and other perishablegoods left sitting uncleared for days — badly

Hong Kong International AirportJULY 1988: At the airport's opening, 22core problems appeared: haywire. Cargomishandling resulted in a loss of HK $4.6billion. Five months after its opening, itsuffered severe organisational, mechani-cal, and technical problems that almostcrippled the airport.

Troubled Terminals

special report.qxd 12/2/2010 3:07 PM Page 3

that in a span of 10-15 days, everything willbe sorted out.

Troubles started on November 11, 2010,when Air India shifted its domestic opera-tions: passengers began facing problems.Unused to walking long distances, manycould not claim their baggage because theyreached the baggage belt late. Result: bag-gage was kept in the reclaim area by AirIndia. Additionally, flights out of the airportwere delayed — a result of “consequentialdelays due to late arrival of aircraft”,according to an Air India spokesperson.

As for Jet and Kingfisher, both com-pleted a successful, smooth and unevent-ful migration of the domestic operations toTerminal 3. Kingfisher, for example,pointed out: “By and large, the transitionof operations for our domestic flights toT3 went off smoothly, thanks to the well-coordinated advance planning by all stake-holders involved”.

The delays can be attributed to a variety of factors. To begin with, therewere the merger pangs: Air India and Indi-an (Airlines) were working in coordina-tion for the first time under one roof.Indeed, Air India’s Chief Operating Offi-cer (COO) Gustav Baldauf conceded tothe Air India board that there had beenlack of “proper long-term planning” forthe migration to T3. The switch to T3 wasa key pillar of Air India’s operational turn-around plan.

In addition, the hub and spoke modelthat Air India had worked on had not calculated connection timings betweeninternational and domestic flights.According to experts, connection timingseven in an integrated terminal — one thatoperates both domestic and internationalflights — are crucial and are to be achievable. To top it all, Air India has beensuffering from acute manpower shortage,especially in the AI-SATS ground handling section. Add to that, the unpre-paredness for ground handlers and whatthe passengers faced was sheer chaos.

According to DIAL CEO Nair, most

airports in the world have faced teethingproblems. Way back in 1988, for example,Hong Kong International Airport faced 22core problems and the government had toreopen the cargo terminal at the old Kai TakAirport to handle freight traffic due to abreakdown at the new cargo terminal. Ittook almost six months for the airport tooperate normally. Other airports like Denverhad to have its baggage system totallyreplaced. However, when consulted by thePress, it was assured that in a span of 10-15days, everything will be sorted out.

Experts point out that a new terminalhas to go through a three-phase stabilisationperiod. Phase-1, known as the critical phase,may extend up to 10-12 days. During thisperiod, incidents like delays in baggage,mal-functioning of IT systems and trafficmanagement issues, etc., may often go outof hand. During this time, the airport man-agement in co-ordination with airlines andother regulatory agencies try to put things inplace primarily through fire-fighting efforts.In fact, a lot of hand-holding is done: anaction that was being carried out by DIALwith Air India, as we go to press.

Phase-2 is the stabilisation phase andcan stretch up to 10 weeks. During thisphase, each system and sub-system is gearedto work towards stabilisation. In the last andfinal phase, the airport gears up to providethe promised standards of service to the pas-sengers and that takes around 10-12 weeks.At the end of the phase, the airport reachesthe level of service it has promised.

The teething problems will take sometime to end but till then, as CEO Nair point-ed out, while DIAL will continually upgradeand enhance the facilities — for example,the number of golf carts has been raisedfrom the 16 to 28 after there were demandsthat senior citizens, mothers with kids andthose with physical infirmities were findingit difficult to walk long distances within theterminal — the travelling public will have toget used to the new terminal. After all, whenwe Indians go to Changi or JFK, we walklong distances. So why not in Delhi?

Athens Eleftherios Venizelos AirportWithin two hours of the airport opening,the baggage handling system failed caus-ing baggage delays. On opening day, thecheck-in systems malfunctioned: check-incomputers were generating boarding gateinfo for the old airport confusing airlinestaff as well as passengers.

Suvarnabhumi AirportDifficulties were recorded during the firstdays of the airport's operation: sluggishluggage claims were rampant, manyflights were delayed, failures with thecheck-in system and cargo computersystem and even the departure boardsdisplayed wrong information.

Heathrow Terminal 5Hour-long queues in baggage arrivalsdue to problems with the luggage pro-cessing system and 34 flights were can-celled from the new terminal on the firstday. 300 flights got cancelled and some15,000 bags missed out by passengers infirst four days.

Troubled Terminals


DESPITE CONTROVERSIES, BIG HIT: During CWG, passengers breezed in and out of airport as ifon a song.

SPECIAL REPORT

42

special report.qxd 12/2/2010 3:08 PM Page 4

COLUMN/CHOCKS OFF

R Krishnan


“Happy days are here again!”That was a slogan for a softdrink ad not so long ago. Ithink the sentiment fits quite

well with the rising fortunes of Indian domesticcarriers once again.

Post-2003-04, Indian domestic air trafficrose more than threefold from 15 million to near-ly 50 million in 2010. Much of it came duringthe heady days of 2005, 2006, 2007 and early2008 when the annual traffic growth at timestouched 38 per cent. All this became a distantdream when the global economic slowdown hitthe world aviation industry including our owndomestic aviation sector. The boost helped cata-pult India to the ninth position in internationalaviation ranking and given the current growthrate, India's rank may move up to the fifth posi-tion. Boeing India chief Dr Dinesh Keskar saidrecently at the FICCI seminar, India: The emerg-ing aviation hub, that India could emerge as themost exciting aviation market in the world.

Already global aviation's centre of gravityhas shifted to the Asia Pacific. Now it has begunits tilt towards China and South Asia (readIndia). It will not be just aircraft num-bers but the basis for them — MROs,training schools, other related serviceareas, etc. — that will witness anuptrend. Dr Keskar observed that thegrowth being experienced in Indiathis time was strengthening airlines’financials as it reflected in higheryields and profitability. What he didnot say was that during the boom inthe previous phase from 2005 to early2008, the domestic carriers, in the garb of widen-ing and deepening the market, failed to focus onthe yields. Today, the focus is very much on it.

FICCI Secretary General Dr Amit Mitra saidsomething very significant. He said the elasticityof the airline business in India was high: in factmuch higher than the Indian Railways. So giventhe higher economic or GDP growth rates yearon year, the Indian aviation scene will surely wit-ness a big boom once again — something on thelines of the “Happy days are here again!” DrMitra also pointed out that the day was not faroff when the total Indian domestic traffic couldreach as high as 100 million.

Civil Aviation Minister Praful Patel too,must be a really happy man, as he is witnessinga second boom in his second ministerial inningsas part of the Congress-led United Progressive

Alliance (UPA)-II. Instead of the advertisementtagline, he chose to describe it as: “We are backto the heady days of growth again witnessed in2005-2008.” He was happy that India had recov-ered in a reasonably short time and with the cur-rent growth rates of nearly 20 per cent, the issuein the near future will be how to manage thisgrowth safely, securely and economically. Evenif stretched to the maximum, India could stillexperience a consistent 10 per cent growth overthe next decade. It is precisely to manage suchgrowth institutions like the Aviation EconomicRegulatory Authority (AERA), the DirectorateGeneral of Civil Aviation (DGCA) and, perhaps,its re-shaping into the Civil Aviation Authority ofIndia (CAA) will become important.

It was at this juncture that Minister Pateltook on the airlines that — sensing the travel

boom ahead during the heady winterholidays of Christmas, New Year,etc. — have jacked up their fares

four to fivefold. Against the earlier boom, whichended with capacity mis-match, i.e. more aircraft and fewer passengers, the present boomhas been witnessing lower capacity and higherpassenger demand. Patel thundered that the air-lines had freedom but this could not be at thecost of consumer interest. Obviously, PrafulPatel is right in saying so and we have reason tobelieve what he said. But what do we say of thepast when different yardsticks were used fornearly similar issues like entry into the aviationbusiness. For instance, Ratan Tata remarked thathe was informed by a fellow industrialist about12 years ago when Tata was struggling to get hisdomestic airline, Tata Airline, off the ground thatif he paid Rs 15 crore to the political personality,he would get the required approval. Tata Airlinewas grounded before take-off and the Tatas

The Tatacase wasindeedpathetic.When Tata’ssoughtclearanceduring theNarasimhaRao-ledregime, aleadingprivatecarrier madeit impossiblefor the Tatasto get an entry

43

NO BRIBES, NO AIRLINE LICENCE:The Tatas had plans to start an airlinewith (above) Singapore Airlines and(inset) Tata chief Ratan Tata

On with the happy days!As the country’s aviation sector experiences a second boom, it

would be worthwhile for the government and those handlingcivil aviation to ensure that the country does not go back to

the days of the licence raj, comments R Krishnan.

Krishnan’s col final.qxd 12/2/2010 2:31 PM Page 3

COLUMN/CHOCKS OFF

withdrew their application to start a domesticairline.

I still remember when a senior Secretary tothe Government of India told me that the thenPrime Minister of Singapore, Lee Kuan Yew,told the Indian Prime Minister that three govern-ments had changed but the airline could not getan approval. Perhaps, it was some kind of record.So, when Tata made his remarks, Praful Patelwas kind enough to say that he would alwayswelcome the Tatas should they desire to enter theairline business.

The earlier monopoly of Jet Airways and AirSahara has now transformed into a small groupof Jet, Kingfisher, IndiGo, SpiceJet and GoAir.Paramount Airways that came in with southernconnections, lost out and is again in the revivalmode. To a Parliament question, Patel had saidthat nearly 13 applications for starting domesticscheduled carriers were awaiting clearance, ofwhich many have already withdrawn and dema-terialised.

The Tata case was indeed pathetic. Whenthey sought clearance during the NarasimhaRao-led Congress regime, a leading private car-rier made it impossible for the Tatas to get anentry. Then came the regime of United Front firstled by Deve Gowda followed by I K Gujral. Itwas C M Ibrahim, a Deve Gowda confidant, whoheld the Civil Aviation portfolio. As it was near-ing clearance following the advice of the thenIndustry Minister, the late Murasoli Maran, theDeve Gowda government suddenly discoveredthat foreign equity by a foreign airline in anIndian domestic carrier should not be allowed.At that time Singapore Airlines (SIA) hadplanned to hold 40 per cent equity in Tata Air-line. Mulayam Singh Yadav, who was thenDefence Minister, even issued through themedia a statement that said that allowing Tata-SIA to start a domestic carrier in India wouldpose a serious security threat to India and to theIndian Air Force. What he did not want to saywas that his then friend Amar Singh's friendNaresh Goyal-owned Jet Airways had foreignequity from foreign carriers in Kuwait and theGulf besides an airport even as he had registeredhis promoter company Tailwinds in the taxhaven of Isle of Man and continues to keep itthere even today without ever posing any secu-rity threat except to those potential airline com-panies, like the 13 may have to wait permanent-ly outside Rajiv Gandhi Bhawan housing theMinistry of Civil Aviation. So, what the humblefarmer Deve Gowda and his Aviation Ministerdid was to pass a Cabinet resolution to say thatno foreign equity by any foreign airline wouldbe allowed directly or indirectly into a domesticIndian carrier. This rule holds true till date.

We do not know who successive govern-ments wanted to protect. Earlier, we saw gov-ernments that ran the extra mile to finish thestate-owned organisations like Doordarshan(DD), Air India, Bharat Sanchar Nigam Limited(BSNL), Mahanagar Telephone Nigam Ltd

(MTNL), etc. (I am not saying it was a bad thing.All I am saying is that there is no consistency inwhat the ministers have been doing.). Protectionhas been extended to a few more private airlines.So, all new applicant airlines cases are either permanently kept in the so-called “under consid-eration” bin or simply not responded to. The usual plea was and is that the available infrastruc-ture is not adequate to meet the demand of newairlines. What is inexplicable is the same ministrycontinuing to extend approvals to the existingcarriers to acquire more and more aircraft —even up to 100 or 150 at one time. It even clearedthe application of two regional carriers that havefailed to take off. And those that had taken offlike MDLR and Indus Air have since gone under.

What we are witnessing is a going-back to theold days of the licensing raj when existing indi-viduals or those well-connected could manage alicence to ensure that new ones don't come in.

This trait of pre-emption has been the bane ofIndian economic history. No new car manufactur-er, for example, entered or could enter Indiaexcept for Hindustan Motors and Premier Auto-mobiles for a long time. Later, Maruti-Suzukientered the scene in 1984. Such a policy wasapplied to Information & Broadcasting when thegovernment allowed private news channels to dobusiness. The same thing happened in telecom.But when it came to the airline business, thebogey of safety and inadequate infrastructure wasraised to prevent entry of new entrants that couldreally make a difference. Yes, safety is true andvery important. But why is it always believed thatnew entrants will fail on safety vis-a-vis thosealready in business.

In the same vein, the present party or partiesruling at the Centre need not have opposed thefixing of Air India by Atal Behari Vajpayee dur-ing his rule. Today, the same parties are neitherable to fix Air India nor able to do away with it.The monopoly of one airline has grown to aselect few. If the airline business and domestictraffic are going to expand in a big way, asexpressed by Praful Patel, Amit Mitra and DineshKeskar, then as the policy leader Patel needs tore-invent himself. A mere belated invitation to theTatas, as a knee-jerk reaction, is not enough. WhyTatas? Maybe other players will want to come. Ifthe government can debate so furiously the entryof Walmart and Carrefour to enter India's multi-brand retail business, then it would be perfectly inorder to allow — as starters — FDI by foreigncarriers in Indian domestic carriers that are facinga severe cash crunch.

What is the point in denying entry by foreign carriers when India's premier carrierJet Airways continues to believe, locate andfunction from its principal promoter's office ina tax haven rather than in India! Why should afew other major owners of domestic carrierswish to remain NRIs?

(Veteran journalist and long-time aviationwatcher R Krishnan is Consulting Editor at CH.He can be reached at [email protected].)

The earliermonopoly ofJet Airwaysand AirSahara hasnowtransformedinto a smallgroup of Jet,Kingfisher,IndiGo,SpiceJet andGoAir

Prime Ministers all: (top) P V Narasimha Rao,(centre) I K Gujral, and(bottom) H D Deve Gowda


Krishnan’s col final.qxd 12/2/2010 2:31 PM Page 4

COVER STORY

HE IS ONE OF INDIA'SMOST SEASONED'CIVIL AVIATION' CIVILSERVANTS. HAVINGSPENT OVER 10YEARS IN THISSECTOR — AS JOINTSECRETARY, INDIA'SREP AT ICAO ANDTHEN DG AT DGCA(DIRECTORATEGENERAL OF CIVIL AVIATION) —DR NASIM ZAIDI ISJUST THE RIGHT MANTO BE SECRETARY,CIVIL AVIATION. INHIS FIRST MAJORINTERVIEW WITH K SRINIVASAN AND R KRISHNAN, HETALKS ABOUT HISTWO YEARS AT THEDGCA AND THE HUGETASK AHEAD.

“WE NEED A FRAMEWORK

FOR THE NEXT DECADE”

45

interview naseem.qxd 12/2/2010 2:21 PM Page 3

COVER STORY

Q:Your thoughts on the 24 months atthe DGCA?

A:These 24 months have been mostchallenging. In fact, I would say the

most challenging assignment of my career.I began with the looming threat of theFederal Aviation Authority (FAA) and theongoing degradation of the ICAO(International Civil Aviation Organisation)— USOAP (Universal Safety OversightAudit Programme) Audit. I began with theUSOAP Audit where we had lots ofdeficiencies in the system and just twoweeks later, I got the FAA — internationalaviation safety assessment — that was thesecond-biggest challenge.

All the other challenges and the entireset of work that flew from there wasbecause of these two challenges. Therefore,we decided that we could set these twothings right and our entire regulatorystructure will be in order. As I complete mytwo years, I leave with a great sense ofsatisfaction of not only having addressed theICAO Audit of having brought India at parand above international standards andsecondly, brought forth significant changesand retained India in Category One withrespect to the FAA.

It brought recognition from the largestaviation structure in the world — the FAA.They said that India could be a role modelfor Asia as far as the regulatory regime isconcerned. They also came on record tosay that in the shortest time, significantchanges have been made, which isnoteworthy and added that it is rare that acountry that was almost derated and put onalert could come back to Category One.There are over two dozen countries thathave been downgraded to Category Two.So, I leave with a great sense ofsatisfaction and there is a whole series ofaction and changes I have been able tobring about in the DGCA.

Would it be right to say that your twoyears were used largely to clean up theDGCA?

I can say with confidence that Ibrought about a lot of changes, but I mustadd that a lot of changes are still requiredto be done. I began with the biggesthandicap of staff shortage. At thebeginning of 2009, we had only 145technical staff. I am leaving with roughly360 staffers, which is more than double.What also satisfies me is that allrecruitment rules have been revised; UnionPublic Service Commission (UPSC) hasstarted coming out with advertisements forrecruitment.

It is also satisfying that I could bringthe entire DGCA to work as one integratedorganisation. When I took over, most of the

directorates were working as silos withouthaving a larger picture of what they wereworking for. I was able to bring them allinto one and share the common goal andobjective as DGCA. I am happy thateverybody now speaks with one voice. Allthe decisions of this organisation arecollective decisions. Everybody sits downeach week and decisions are shared.

I have also tried to make the DGCA astransparent as possible. My website is avery dynamic website, we started openhouses, I am available on my email, Iattend to all individual complaints. So,transparency in all activities was anothermajor area of improvement.

The fourth plank was an intensiveconsultation process with industry. Noregulation of the DGCA was issued withoutprior consultation, whether 30 days or 21days. We have also reached the next stage ofgovernance, through electronic mode for theAuthority. The project is in the final stagesof approval that will see the entire DGCAautomated. The proposal is with thePlanning Commission and I hope it will befinalised soon.

There has also been progress on theinfrastructure front. The DGCA is an‘international’ kind of organisation and wehave a new building coming up. We have

set up a joint academy with the AAI-NIAMAR (the Airport Authority of India[AAI] training institute is called theNational Institute of Aviation Managementand Research [NIAMAR]) for which fundshave been sanctioned, the building designis ready and it will come up in VasantVihar. Another major area of focus was theinfrastructure of the regional offices and tohave them staffed fully. So these are five-six areas that I can quickly recount wherechanges were made.

…also the decision to move towards anAuthority…

This was a continuing process inorder to bring about transformation. Infact, we are moving very fast into thetransformation of the DGCA into the CivilAviation Authority (CAA). Now, ofcourse, there is talk of having the expandedform of the CAA, including several areasof regulation.

DGCA is a regulatory body and if itbecomes a CAA, what are the additionalfunctions will it have? Or, will it beCAA’s functions versus the regulatory

CONVOLUTED PROCEDURES: Passengers are subjected to additional security checks.

“I leave witha great sense ofsatisfaction of not only havingaddressed theICAO Audit ofhaving broughtIndia at par and aboveinternationalstandards and,secondly, broughtforth significantchanges andretained India inCategory One with respect to the FAA. ”




functions? Who will handle what?ICAO has completed the study. It

recommended that there should be a CivilAviation Authority. Now the study hasgone to the government that has appointeda committee. They are looking into whatadditional functions this Authority shouldhave. Safety regulation is one, air spaceregulation is the second, consumer-protection is the third, environment-relatedissues are the fourth. There is alsodiscussion on the economic regulation.These five-six areas are being thought ofbeing brought under this enlarged CivilAviation Authority so that we have aunified regulatory regime.

But will economic regulation not conflictwith AERA (Airport EconomicRegulatory Authority)?

Economic regulation relates to areaslike fares, excessive fares, predatory fares,transparency in fares and those kinds of things.

Nothing to do with things that AERAhandles?

Of course, some have been advancingthe view that let there be a unifiedAuthority like the one in the UK. But Icannot make any comment on that at this

stage because the committee is examiningthe report and these functions are beingdebated. After the principle clearance ofthe government, it will take a minimum of18 months to go through the legislative andtransformation process, etc. The effort willbe to push this process forward.

Coming to foreign pilots, you want themto go, but there is going to be a severeshortage considering that aviation isnow out of the slump and airlines areexpanding?

Ideally, there cannot be a situationwhere there will be no foreign pilot. This isa global industry and there will always besome areas with surplus and some areaswith shortage. Most important, there willbe a global movement. Moreover,realistically speaking, we do not haveexperienced commanders. If the aircraftarrive, operations have to happen. We havealready issued the foreign pilots regulationand based on that regulation we will goforward. Basically, there were twoconcerns — foreign pilots (commanders)should have adequate level of experience.Now, they will have comparable (aselsewhere) level of experience. The secondissue was their medical. Chennai HighCourt also came out with directions thatthey should have equivalent standards asIndian (pilots). So, we have incorporatedthat as well in the regulation.

Foreign pilots do not wish to come forsix months or one year. Nobody wants tobe dislocated for such a short period.Airlines are asking for two to three yearsfor these pilots. I think we will have to takea realistic view on this, but that does notfree the airlines from their obligation ofgraduating our co-pilots into commandersand that is a process that is going on. But,broadly speaking, the process of foreignpilots coming will have to continue.

What are the major issues confrontingyou as Secretary, Civil Aviation?

Let me put it this way, there are keyissues. We are all aware where we were inthe last decade and where we will be in thenext decade. So, the experiences of thisdecade will have to be utilised, analysed andbuilt upon for the next decade. That is themajor plank. We need to have a frameworkfor the next 10 years that includes issues likemarket access, airport issues, ground-handling, capital inflow, human resources,viability of airlines and sustainability —these are going to be the key areas. I thinkeffective and seamless coordination is also akey issue. One area that has been engagingmy attention is the transaction cost and timefor the industry to work.

Let me give you a simple example. A

“The DGCA isan ‘international’kind of organisationand we have a newbuilding coming up.We have set up ajoint academy withthe AAI-NIAMAR forwhich funds havebeen sanctioned.Another major areaof focus was theinfrastructure of theregional offices andto have them staffed fully.”



COVER STORY

person wants to ply a bus at the airport,he has to take six or seven permissions —airport operator, Customs, BCAS,licences for the driver — there are somany transactions and there is nocertainty that this will last. The industryis spending a lot of time on this and itneeds to be looked into. Another majorarea of regulation will be therestructuring of the DGCA itself. Thereare issues relating to the air navigationservices, whether you need acorporatisation or a subsidiary.

You are now going to licence the AirTraffic Controllers (ATCOs). Oncethey get their licence, it will be at parwith what the FAA or others have doneand once that happens you will see amigration of the ATCOs. How do youhope to handle that?

It is a big challenge. There is anadditional pressure on our workforcefrom the neighbouring countries. In thenext 10 years, our requirement will go upfrom 1,50,000 personnel to 4,50,000personnel. This is only those related toairports, cargo, handling staff, etc. As faras airlines are concerned, it will betrebled from 30,000 to 90,000 personnel.We do not have high standardised flyingand maintenance academies. We do not have adequate infrastructure to trainthis manpower.

Why don’t you allow foreignuniversities to come and set up shop inIndia to help overcome this shortfall?

CAPA (Centre for Asia PacificAviation) is coming up around Mumbaiand there is talk of setting up one aroundHyderabad. I think Concordia Universityof Canada is very actively pursuing it.Education, training, workforce, AME,pilots, those are the key areas.

You have driven the PPP model bycrafting the operation, managementand development agreement (OMDA)as a Joint Secretary. Now as you returnas Secretary, what do you see are thelessons to be learnt?

One important area is the concessionagreement itself. Whether it requires anyimprovement — viability of the airport,viability of another airport, seamlesscoordination of agencies relating toairport — are areas we will have to lookat. In the next 10 years, we need $30billion of investment in the airport sector.We have just finished with $9 billion ofexpenditure. What sort of concessionagreement, if required, what sort ofviability are we looking at are issues thatare of immediate attention.

Is it the best international practice?The regulation of airports worldwide is

with the government. I think we are the onlyone or one of the few who has anindependent authority. Of course, there is agreat responsibility on the regulator also toensure that the larger purpose for which theairport is set up is also achieved.

So what AERA is doing is what FAA orBAA (British Airports Authority) doesapart from other things. In that sensetraditionally, DGCA should have beendoing this job?

In the UK, the counterpart of theDGCAdoes it. That is where I was talking ona discussion on a unified agency. There are somany areas where one needs to prepare ablueprint for the next 10 years.

Your views on Air India and some of theother issues?

I need to spend a few days before I cancomment on these issues. So far, I had beenlooking at these issues from a regulator’spoint of view. We have been emphasisingthat all the regulations must be complied withas a separate AOP (Air Operator’s Permit)holder and they have done so. Let me reservemy comment.

The DGCA is the nodal Authority for allbilaterals. Now that you are in the CivilAviation Ministry, will you take a holisticlook at the whole issue? Take AirAsia, forexample. In eight months, it has got 114frequencies. Very soon it may beatEmirates also, which has the largestfrequencies. So, the two of them from Eastand West will have an excellent umbrellaorganisation over India.

As DGCA, we were issuingoperations authorisation for which thereare certain laid-down regulations, which aforeign airline has to fulfil. Let me reservemy judgment on the economic part till Istudy the issue in its totality.

“We are allaware where wewere in the lastdecade and wherewe will be in thenext decade. So, theexperiences of thisdecade will have tobe utilised, analysedand built upon forthe next decade… I think effective andseamlesscoordination is alsoa key issue.”

DGCA - NODAL AUTHORITY: The airports have to fulfil certain pre-defined regularities set by DGCA.


Industry veteran shows the way — with a finesse

OOlliivveerr EEvvaannss

Do we need all-cargo airports? p56An aircargoentrepreneur lists thechallenges

DD JJ GGhhoosshh

CRUISING HEIGHTSCRUISING HEIGHTS

AIR CARGO SECURITY

THE SEARCH FOR ASILVER BULLET

A I R C A R G O & L O G I S T I C SDecember 2010

Yes, aircargo can beblogged about p58

Aviation security around the world is sitting up after the chance discovery of the innocuous packages containing explosives

that were sent out as bellyhold cargo

cargo cover dec.qxd 12/2/2010 2:11 PM Page 1


“Without air cargo,the global economy

cannot function. Theindustry is working

to improve efficiencywith programmes

like IATA e-freight.But governmentshave not received

clear signals on whatis needed for efficientglobal air cargo oper-

ations. A unifiedindustry voice withthe Global ShippersForum is a step in

the right direction.”

Giovanni BisignaniIATA

“Collectively we represent the

powerful grouping of all parties involved

in the air cargo supply chain.

We want to have thestrongest possible

voice to highlight topolicymakers

the vital role aircargo plays in world trade, in

employment and inthe growth

of developing markets.”

Michael SteenVice Chairman, TIACA

“FIATA is recognised as repre-senting the freight

forwarding industry.We are constantlylooking at how to

bring greater valueto FIATA’s member-

ship. It is time forassociations like

FIATA, TIACA andIATA to look

at how we can collectively

approach the issueof regulatory

and industry.”

Jean-Claude DelenPresident, FIATA

“The importanceand impact that this

group can haveshould not be

underestimated.Suppliers and theircustomers workingtogether can be apowerful force inidentifying supplychain needs. This

new working grouppresents an extraor-dinary opportunity

to be heard bynational

policymakers.”

Peter J GattiExecutive Vice President, NITL

LAST IN/FIRST OUT

Single cargo advisory group formed

Michael Steen, ViceChairman of TheInternational Air

Cargo Association (TIACA),on behalf of the Chairman,Des Vertannes, Global Headof Cargo of theInternational Air TransportAssociation (IATA), Jean-Claude Delen, President ofFIATA, the InternationalFederation of FreightForwarders Associations,and Peter J Gatti, ExecutiveVice President of US-basedshipper organisation, TheNational IndustrialTransportation League(NITL), speaking on behalfof the Global Shippers’Forum (GSF) have signed aletter of intent committingto work towards theformation of an industry

advisory group facilitatedby TIACA to ensure the aircargo industry has a strong,unified voice in its dealingwith worldwide regulatoryauthorities and other bodieswhose decisions have directimpact on air cargo.

The agreement commits

TIACA, GSF, FIATA andIATA to work together tolook at their currentpositions on issues such assecurity, customs reform, e-commerce and theenvironment, and to try tofind common ground tobest protect and promote

the interests of the aircargo industry, theorganisations and itscustomers. The review willalso look at theassociations’ respectiveresources committed toindustry affairs andconsider how to make themost-effective use of theexisting and growingrelationships TIACA, GSF,FIATA and IATA have withrelevant governmentdepartments and otherregulatory bodies.

The associations willalso discuss theinvolvement of other globalindustry groups in the aircargo supply chain andseek the support of bodiessuch as the World CustomsOrganisation (WCO).

IATA's Des Vertannes, TIACA's Michael Steen and FIATA's Jean-ClaudeDelen during the Air Cargo Forum in Amsterdam.

Last in first out.qxd 12/2/2010 2:33 PM Page 2


Just when the goodnews that aircargowas looking upcame a shocker thathas sent every cargo

stakeholder looking at waysto provide 100 per centsecurity. That devices asinnocuous as HewlettPackard printer inkcartridges stuffed with awhite powder-likepentaerythritol tetranitrate(PETN) and connected tocircuit boards could be easilyslipped into the bellyhold ofcommercial airliners withoutarousing any suspicionprompted every stakeholderin the air cargo communityto look at cargo security. It

was sheer luck that theChicago-bound cartridgeswere pulled out from thecargo planes in England andthe United Arab Emiratesbefore they exploded.

The fallout of the printerbomb discovery has been feltthe world over. While cargofrom Yemen — where thebombs originated — has beenhit the hardest, India too hasfelt the shockwaves. Britishauthorities, for example,have instituted measures tocheck cargo from India andPakistan. Britain’s TransportSecretary Philip Hammondwas quoted as saying, “Cargooriginating from some citiesin India, Qatar, Pakistan,

Iran, Bangladesh, Thailand,the Maldives, Sudan andLibya will have to be re-screened after arriving inBritain before being loadedonto onward flights.” Thiswas a move that was startedfor the first time. To add tothe problems, SecretaryHammond even went on totell industry representativesin his country that theauthorities had plans toinstall a system that wouldgrade countries according tothe perceived risk. Simplyput, those countries whichfollowed a screening systemlike Britain’s would be ableto get cargo in quicker thanthe others.

The discovery,incidentally, emphasisedwhat many experts havebeen saying time and again:air freight is the softunderbelly of the aviationindustry. Soft target or not,new security rules arecoming up and the mostaffected are freightforwarders, airlines andcargo stakeholders. And thetiming seemed to be wrongfor an industry that wasemerging from the shadowsof the recession.

The stringent air cargosecurity rules have irkedmany. Last year, forexample, forwarding firmsin the US and Europe made

CARGO

Time to look for the Silver BulletHUNDRED PER CENT SECURITY?: The Yemen

episode has proved that cargo security hasloopholes.

The Yemen-manufactured ‘printer bombs’ have forced air cargo securityexperts to look at the present screening systems. TIRTHANKAR GHOSH takes alook at the cargo screening situation around the world, post-the ‘printerbomb’ scare.

Cargo.qxd 12/2/2010 2:06 PM Page 3


CARGO

it clear to policymakers that100 per cent scanning of seacontainers could not bedone. That sent the decisionto scan each pallet/containerinto a tailspin.

One of the planestargeted by the printerbomber belonged to FedEx.Soon after the episode — andafter the heightened securityregime was ushered in byBritain — CRUISING HEIGHTS

tried to find out if any majorsecurity changes in the Indiaoperations of FedEx hadtaken place. In an emailinterview, Taarek Hinedi,Managing Director,Operations of FedExExpress, pointed out: “FedExsecurity procedures areconfidential and we do notdisclose them publicly. Weremain committed tosecurity and take allappropriate measures toensure the integrity of oursecurity system.” He alsosaid: “It’s important to notethat the FedEx securitysystem comprisesinterconnecting layers ofprocesses and procedures, allof which are effective.”

Even so, a move is on toensure that securityregulators around the worldto work together to ensurethat air freight is safe. On hispart, Giovanni Bisignani,Director General of theInternational Air TransportAssociation (IATA) —comprising about 230passenger and cargo airlines— said in a writtenstatement: “We are muchmore secure than in 2001(the year when theSeptember 11 attacks tookplace), but there is room forimprovement.” He alsoemphasised the fact thatsince IATA is responsible forcarrying about 35 per cent ofthe total value of goodstraded internationally,“transporting these goodssafely, securely andefficiently is critical”.Pointing out that the presentprocesses of looking at“belts, shoes and shampoos”were not enough, Bisignani

said that the time had comewhen “we must shift thescreening focus from lookingfor bad objects to finding

terrorists. To do thiseffectively, we needintelligence and technologyat the checkpoint. The

enormous amount of datathat we collect on passengerscan help governments toidentify risks”.

It must be pointed outthat a number of freightforwarders and expressmajors have beencooperating andcoordinating withgovernments to ensure safecarriage of cargo. The IATAchief, however, added thatno government should bringabout changes in securityprocedures that could havelong-term consequences forthe industry.

Bisignani was not alone.Veterans of the air cargosector said that knee-jerkreactions to the printer bombepisode would jeopardizeinternational trade. In fact, ifshipments were banned frombelly-holds, global commercewould come to a halt, saidEmirates SkyCargo’s Ram

(Above) A SINGAPORE AIRLINESCARGO PLANE: Cargo securitytops IATA's list; and (left) TSA'sdog squad in action.



Menen at a panel discussionat the recent TIACA meet inAmsterdam. He was quotedas saying: “Sanity will prevailand a ban of cargo carriageon passenger aircraft will nothappen.” His advice: setuniversal standards to secureair freight. In fact, IATA’s‘secured freight’ project —instituting checks andcontrols of every piece ofcargo right from the shipperto the final consignee — wasa move in the right directionand if it was globallyaccepted, it would be a hugestep forward.

Though manygovernments have agreed tohammer out globalstandards along with theInternational Civil AviationOrganisation for collectinginformation about cargo, theprocess is not followed. TheIATA chief, for example, hasoften pointed out that thereis no government-certifiedtechnology to screenstandard-size pallets andlarge items. Along with

Bisignani, US’sTransportation SecurityAdministration believes thatone of the biggest challengesit has been facing is attainingvisibility of other country’ssecurity programmes. It isbelieved that for countrieswith a non-standard datarequirement, it will takeabout $1 million to build

new systems. According toIATA, adding just one non-standard element to datacollection is a $50,000system cost. Bisignanispecially mentioned Indiawhen he said that new datarequirements “consumemoney and resources, butnone improve security orborder control”. Thechallenge, he said, was “towork with governments toimplement harmonisedstandards”.

On its part, our airportshave been on 100 per centscreening mode for a longtime. The use of sniffer dogsthat was discontinuedsometime ago, according toreports, would be restarted.But as always, infrastructure— or rather the lack of it —has been the main obstacle— even for such a sensitivesubject as security. Themajor airports are short ofX-ray machines for cargoscreening. The Delhi airport,for example, has 20 X-raymachines. Result: shipmentstend to pile up and causesdelays. As a consequence,many tend to move towardsa less time-consumingscreening technique that cutsout the use of X-raymachines. How effective thatis only time will tell butexperts believe that the moveis risky.

It is reliably learnt thatthe civil aviation departmentis looking closely atRASCargO, a technique thatis sold by a subsidiary of

ICTS Europe and is used forcargo screening in GreatBritain and France. Thetechnique, according toexperts, is the best way toclear outsize cargo, therebyover-riding the problemcaused by items that cannotbe X-rayed or hand —searched. The processentails taking an air samplefrom the item to bescreened. This is done bydrawing air from cargotrucks or pallets to speciallydesigned filters. Each of thefilters is sniffed by traineddogs for even the minutesttraces of explosives, drugsand other material. Thesamples are then analysedand if any indications exist,the pallet is stopped. For acountry like India, whereeach tonne of cargo costsaround `6000 to X-ray, theRASCargO technique wouldbe certainly cheaper.

While it is almostimpossible to check everyitem of freight movingbecause the volumes arehigh, there has been talkthat like the expressindustry’s track and tracesystem, the whole freightindustry could start using itto find out what it isreceiving in theconsignments. To thatHinedi mentioned that itwould not be fair to“speculate on what should orshouldn’t be done”. FedEx’ssecurity system, he said, “iseffective and we continue tomake security a priority”.

DEADLY: The printer bomb from Yemen.

“We are muchmore secure thanin 2001 (when9/11 happened),but there is room forimprovement.”—Giovanni Bisignani

Courtesy: w

ww

.english.aljazeera.net


54

The resurgencein the air cargomarket isseeing a lot ofmovement.

While new services arestarting and acquisitionsare taking place. To top itall, new big ticket start-upsare also happening. Onesuch is the move byBengaluru-based SeshKulkarni. The formerPresident of UTWorldwide, and aprominent member of theBengaluru Air Cargo Club(BACC), Kulkarni haslaunched UFM. Primarily afreight forwarding outfit,UFM has major plans tomove into the big leagues.

To begin with, theinitiative, barely a fewmonths old, has clearlydefined values andbeliefs. Talking toCRUISING HEIGHTS,Kulkarni pointed out thatUFM believes in customersatisfaction and that willcome from themanifestation of UFM’score delivery strength:“The experience of it all.”

This belief in adhering tocustomer experiencesbeyond just mere verbalassurance would betranslated into a visibleedge for UFM’s customers.With this in mind,Kulkarni would like tobuild people skills,processes and systemsaround client need andrequirement.

When questioned aboutthe timing of the launch ofUFM — considering thefact that there are manywho have been strugglingto keep their heads out ofwater — Kulkarni exudedconfidence that the timing

of UFM stepping into theIndian market was perfect.“The investors in UFM, ourleadership teams in thecompany and I arecompletely convinced thatthis is the right time tohave launched UFM. Infact, we think this is thetime to be Indian.”

He pointed out that in1991-92, India had the firstwave of industrialisation,which lasted for 15 yearstill the global meltdownslowed it a bit. The firstwave put India on the map.Now India is on the vergeof second wave, and thistime, the world is set up in

India. “We are very excitedwith the timing,” he said.

He had his reasons:“We do think that thecentre of trade andcommerce is shifting toIndia and China. India willhave a big say and Indiancompanies will have biggerrole to play in the years tocome.” Confident that thenext big wave ofglobalisation in variousspaces will be driven byIndia and fellow-Indians,Kulkarni and his team areexcited about thepossibilities and, at thisstage, he cautioned that itwould be premature to talktoo much at this point, “butwe do aspire to be presentglobally and with the rightresources, infrastructureand business, that will bevery much a possibility. Asexamples, he said, pharma,automotive and ITcompanies have already setthe tone and shown theway. All UFM needed to dowas follow.

The plans then, for thenext couple of years, havebeen chalked out in detail.Kulkarni stressed upon theword “aggressive”. He alsomentioned: “We would liketo be a pan-India operationin the next few months. Wecurrently operate inBengaluru and Delhi andour offices in Chennai,Hyderabad and Mumbaiwill be functional in 60-90days.” But UFM’s sights are

High growth volumes have not only spurred the cargoindustry to spread wings but have also promptedentrepreneurs to launch their own logistics outfits.Among the handful who have taken the brave stepforward is Sesh Kulkarni. TIRTHANKAR GHOSH met theentrepreneur.

Start-up banks on

rising India

ALL SET FOR THE WORLD: UFMhas ventured into all forms oftransport to service customersaround the world.

CARGO


Sesh Kulkarni story.qxd 12/2/2010 2:51 PM Page 2


not only on India. It seeksto be an Indian globalorganisation. Said Kulkarni,“We do foresee that thelogistics space is going to bea major space and the nextwave of growth andvisibility for this country isgoing to be in this space.Everybody starting frompeople in the remotest partof the world to mostthrobbing business centreslike London, New York andLos Angeles want to be partof this action: India.”

With such focus andattention, he said, it wasimperative that in thecoming years logisticswould get its due space andrecognition — both withindustries and with thegovernment. Looking at theIndian urbanisation index,that is pegged at 15 percent growth per annum,“for the next 10 years wesee a major role forlogistics and logisticscompanies”, he said.

Unfazed about the lackof infrastructure that is acommon complaint frommost aviation and cargostakeholders, UFM and itsmanagement are convincedthat “we are at the rightplace, at the right timewith right infrastructure.Our ERP is very dynamicand completely web-enabled and we are hostedon a cloud environmentwhich allows us to keep ourcosts in check, unlike many

who still work on a server-based environment. Wehave just finalised a veryrobust training modulewhich allows us to trainyoung graduates passingout of the college in thisspace and also bring totable the latest knowhowand best practices for our teams”.

In terms of people, weare a 40-peopleorganisation today and injust about 60 days weshould be close to 100+soon. With regard torevenues, our plan is to bea ‘100-crore company bythe third year”.

IT was one thing butshipments need to moveand for that the country’sinfrastructure was still waybehind Europe or the US.Kulkarni pooh-poohed thepoor infrastructure. Hepointed out:

“Infrastructure in India isonly getting better and weare excited about it. It isnot important for us to bealigned with what Europeand America are. What isimportant is theconsciousness to improveand get better.” He wasconvinced that things weremoving in the rightdirection. Having served invarious associations likethe Confederation ofIndian Industry (CII), theAmerican Chamber ofCommerce in India(AMCHAM — India) and afew others, “I see a verypositive inclination todevelop on part of many inthe political arena. Hence,our infrastructure has to goonly one way i.e., Northand that is good enough!”

Kulkarni knows what heis talking about. He hasdiagnosed what the major

struggles for organisationslike UFM are that in turnmake them into failures:

They are not in syncwith globaldevelopment, beliefsand practices;They are not client-centric; Their IT infrastructureis not enabled toleverage the changinglandscape keeping intune to the demand forinformation andvisibility; and, They are asset heavy.Simply put,

organisations that are notaligned positively to tacklethe struggles will fail. Asfor UFM, it has a lot ofconfidence on itsemployees. Kulkarni said:“Our Employee StockOwnership Plan (ESOP)module is very robust andin many ways it is the firstof its kind in the logisticsspace… We firmly believethat it is important tocreate wealth not just forpromoters, but for theteams too, that work onbuilding the business andcompany.”

He went on to pointout: “Over the last 20 yearsin the business, we havelearnt two things: What todo and what not to do.”Sesh Kulkarni has broughtthese lessons to the table atUFM and is confident that “we will have a storyto tell”.

Sesh Kulkarni

“We do foreseethat the logisticsspace is going tobe a major spaceand the next waveof growth andvisibility for thiscountry is going tobe in this space.”

Sesh Kulkarni story.qxd 12/2/2010 2:52 PM Page 3

The Random House dictionary defines‘dedicated’ as “devoted wholly andearnestly to one single purpose”. Inthe case of ‘dedicated all-cargo air-ports’ this dedication refers to the

airports’ single-minded devotion to one purposealone; the movement of cargo by air, and thesolicitation and retention of all the key playerswho facilitate this singular purpose.

Why do we need ‘dedicated’ cargo airports,which cater exclusively to freighter aircraft?Why can’t air cargo businesses continue to flowthrough mainline passenger airports? Toanswer this question, one needs to understandthat air cargo is no longer a stepchild of the pas-senger business. As recently as 2008, global aircargo revenue topped $80 billion, and while asignificant portion of this business is still car-ried in the bellies of passenger aircraft, dedicat-ed freighter aircraft and freighter operators arehere to stay and are rapidly increasing theirshare and providing the trade with more spe-cialised ‘main deck’ offerings.

‘Dedicated cargo’ airlines operate on a verydifferent business model from that of their pas-senger counterparts. Outside of the higher-priced‘integrated’ cargo airlines like FedEx, UPS andDHL, most freighter operators transport generalcargo with very little pricing power. In this business, it is the freight forwarder or cargo con-solidator who dictates the terms, playing one airline against the other as the price for offeringthem consolidated shipments in bulk. Saddledwith huge aircraft investments, general cargo airlines look for every opportunity to shave costs.In most cases, they generate revenue on only oneleg of their trips, coming back empty on thereturn leg. Thus, when non-hub airports, locatedfar from metropolitan cities, dangle incentivessuch as lower landing fees and ground handlingcharges, often half that of their mainline counter-parts, the temptation to cut expenses is often toodifficult to resist.

Unlike passengers who need to travelthrough major passenger hubs, cargo can quiteeasily bypass these hubs and land at remote loca-

tions. It is this phenomenon that has alloweddefunct and far-flung military bases in WesternEurope and North America to re-invent them-selves as cargo airports, thus giving them a newlease of life, and in the process providing much-needed income and employment to their ruralcommunities.

Cargo aircraft also generally arrive at night.With very few people living in the vicinity of theserural airports, they can be operated 24 hours aday, seven days a week, with no ban on night traf-fic and virtually none of the noise restrictions,which have driven cargo flights away from airports like Brussels, and which imminentlythreaten airports like Frankfurt. The fact that theyare in the middle of nowhere allows them to growexponentially and inexpensively, with very littlelegal interference and tremendous local support.

So what do you need to be a ‘cargo friendly’airport? For the purpose of this article, we polledfour European airports: Frankfurt Hahn in Ger-many, Paris Vatry and Chateauroux in France,and Ostend airport in Belgium. There is a com-mon thread that binds all of these airports. Theyall boast of runways exceeding 3,000 metres, areall capable of handling the largest freighter types,all have leading edge flight navigation systems,outstanding infrastructure, excellent road con-nections, dedicated cargo and ground handlingcapabilities, and most important, significantlylower landing, cargo handling and warehousingcosts at their more rural locations. Since most ofthem cater to the perishable trade, includingflowers, fruits and vegetables, they have investedheavily in special cold storage facilities. Withstrong political support from their local govern-ments and plenty of room to grow, they look forward to a bright future.

However, despite all of this, the numbers forall-cargo airports have not added up. None ofthem are in the big league in cargo like their passenger counterparts in Hong Kong, New Yorkor Seoul, where cargo throughput can easily exceed one million tonnes each year.

Dedicated cargo airports would be lucky toexceed a throughput of 100,000 tonnes a year,

The dilemma forcargo airports isthat to attract acommercialcarrier, theyneed a strongforwardercommunity.Conversely, tobring in theforwardercommunity, you needcommercial airservice; theclassic chickenand eggscenario.

56

COLUMN/CARGO

Quite some time ago, the Civil Aviation Ministry framed apolicy for development of cargo-only airports at severalkey locations in the country. Before we take lessons fromEurope, it would be worthwhile to consider the challenges,writes D J Ghosh.

The case for all-cargo airports


Cargo Colmn.qxd 12/2/2010 2:09 PM Page 2

with most operating in the 40-100,000 tonnesper annum range. Their business model is stillshaky, and the entry or departure of even onecargo carrier can make or break them. ParisVatry Airport, which clocked 41,203 tonnes ofcargo in 2008, saw this figure drop to 23,000tonnes in 2009 with the departure of a majorAfrican-based airline. While cargo airports havehad notched up some successes with the perish-ables trade, most other general cargoes havestayed away. Many survive by leasing out ware-housing space or positioning themselves as logistics hubs, which have not really generatedany significant air cargo traffic. Others are actually soliciting passenger traffic to stay afloatand have opened their doors to ‘low-cost’ passenger services.

There is still no overarching template for atraditional cargo airline to abandon a hub airport in favour of a more rural cargo airport,notwithstanding lower landing and ground handling fees and plenty of cheap real estate togrow a business. Conventional carriers, transporting general cargo, still need to be in airports where they can benefit from other carri-ers, using the network to move cargo, as well as apool of surface transportation providers withnational connections.

The dilemma for cargo airports is that toattract a commercial carrier, they need a strongforwarder community. Conversely, to bring inthe forwarder community, you need commer-cial air service; the classic chicken and egg sce-nario. Forwarders, who grew big at hub airportswhen all cargo moved in passenger bellies, havealready committed major investments in manpower, warehousing space and equipmentat these gateway airports and are very reluctantto move, even though more and more cargonow moves on dedicated freighters. Since over80 per cent of all world air cargo is controlledby the 20 top freight forwarders, they are theones that hold the power to unleash the newdynamics for this business. Unless they areincentivised to move to cargo airports, thisgame will never change.

This challenge has many cargo airport executives scratching their heads for a way to getthe first big forwarder to move. One notable success story is Huntsville, a U S airport locatedin Huntsville, Alabama, which boasts of regularB747 freighter flights operated by Atlas Air onbehalf of global forwarder Panalpina, as part oftheir owner controlled network. However, eventhough Panalpina has persevered with this operation at Huntsville, the airport does notseem to have been successful in attracting anyother major forwarders or cargo operators.

So what will it take to put dedicated cargoairports on the global map of the air cargo world?We believe that the answer is ‘niche marketing’. Since large forwarders are reluctantto move, cargo airports need to set their sights alittle lower and target smaller forwarders whodeal in specialised products that need to move on

special ‘purpose-built’ freighter aircraft.They need to customise all their offerings,

including ground handling, temperature-controlled warehousing and airport access, tocater to these specialised trades.

Rather than adopting a general approach tocargo, they need to concentrate on specific products and industries and develop ‘core com-petencies’ in each of them. They then need topromote branding and product differentiation toachieve market domination in these sectors. Onesuch category is pharmaceuticals and life sciences, which requires major investments inboth training and infrastructure to ensure 100per cent integrity of the final product.

Cargo airports will thus have to concentrateon quality rather than quantity till such time asthey gain the critical mass to attract the attentionof the large forwarders. The persistence andstamina that it will take to prove the businesscase for such airports will separate the men fromthe boys. During this time, they must educatethemselves and become proficient in the dynam-ics and unique characteristics of each and everytype of cargo by attending trade and industryforums dedicated to them. Specialisation andproduct differentiation must become their newmantra. The world must learn that every type ofcargo deserves special treatment. While all of thishappens, more stringent bans on night flying andtighter security regulations for cargo productswill drive more cargo flights from passenger hubsto dedicated cargo airports. Indeed, as JoergSchumacher, Managing Director of FrankfurtHahn Airport (a cargo airport 75 miles fromFrankfurt) observes: “With the discussion on theban of night flights at Frankfurt Main in fullswing, international interest in our flight capaci-ties is growing.”

Indeed, history is replete with examples ofopportunity being created out of adversity. Whilecargo airports work at perfecting their own gameplans, excessive regulation at passenger airportsmight become a new tipping point for revival inthe fortunes of dedicated cargo airports.

(The author is President, AmericanFriendship World Air Cargo Corporation.This article first appeared in InternationalAirport Review.)

57CRUISING HEIGHTS December 2010

Paris Vatry airport is one of the top all-cargo hubs of Europe.

Cargo airportswill have toconcentrate onquality ratherthan quantity tillsuch time as theygain the criticalmass to attractthe attention oflarge forwarders.The persistenceand stamina thatit will take toprove thebusiness case forsuch airports willseparate the menfrom the boys.

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Lufthansa Cargo launches new websiteNINE months after the first-ever air cargo flight took place in theUSA on November 7, 1910, airfreight was born in Germany. OnAugust 19, 1911, a shipment of newspapers was flown fromBerlin-Johannisthal to Frankfurt on the Oder. The airfreightindustry has evolved in recent years to become the engine of theworld economy.

The international division of labour and the globalnetworking of business and commerce would be inconceivablewithout airfreight, observed Lufthansa Cargo CEO and ChairmanCarsten Spohr. But airfreight not only networks business andindustrial centres, he said. “Above all, airfreight also connectspeople. The 1948/49 Berlin airlift or the relief flights to Haiti andPakistan recently are eminent examples of the existentialimportance of air cargo.”

In an effort to highlight the changes in airfreight throughthese 100 years, Lufthansa Cargo has gone in for a totalmakeover — at least its website has. The home page(www.lufthansa-cargo.com) is reappearing in a bright new lookafter an Internet relaunch on October 29. Totally re-styled, thewebsite portrays the company as emotional, innovative andcustomer-focussed in its new online presence.

With its newly re-designed international website, the cargocarrier offers web visitors an entirely fresh approach to thecompany and its services. Website-users, after just a fewnavigation steps, obtain an overview of the diversity of LufthansaCargo and the fascinating world of the airfreight industry. “Wewant users to experience the company hands-on andcommunicate externally the emotionality of our businessactivities,” emphasised Nils Haupt, Lufthansa Cargo’s Director ofCommunications.

Korean Air's strategic move In a strategic move to augment its ambitious growth plans,Korean Air joined hands with Acumen Overseas Pvt Ltd toprovide full range of GSA services for both cargo and passengerdivisions of Korean Air for the whole of India. “Korean Airoperates passenger flights to Seoul from Mumbai, along with

freighter operations from Delhi, Chennai and Mumbai. We haveelaborate plans which will unfold in the near future" said JinKwang Kim, General Manager-India of Korean Airlines.

Korean Air has placed orders for 45 passenger aircraft thatincludes 10 of Airbus's super-jumbo A380 and 10 Boeing 787Dreamliners. The carrier's fleet comprises 105 modern passengerand 27 cargo planes. As one of the world's largest commercialairline cargo operator, the carrier has 12 cargo aircraft on order.“We are honored to be associated with Korean Air which iscommitted to the Indian market and has a great presenceworldwide,” said Pukhraj S Chug, Managing Director of Acumenafter signing the agreement.

Uday Dholakia is cargo ambassador for Asian marketsUDAY Dholakia has recently beenappointed Birmingham Airport’s brandambassador for Asian markets.Dholakia is a senior partner with aMidlands-based consulting firm withover two decades of experience ofbrand development and internationalmarketing, in addition to directexperience of route and cargodevelopment and launching of newroutes. Paul Kehoe, CEO ofBirmingham Airport, said, “We want toembrace the fact that we can connectpeople to over 400 different destinations worldwide and wantpeople to feel proud and excited about the opportunities that lieahead... Uday’s extensive knowledge of the Asian markets androute and cargo networks in the Middle East and the Indian sub-continent will be integral to tempt people away from theHeathrow problem.”

Dholakia pointed out that there are around eight millionpeople living within an hour’s drive of the airport but less than40 per cent of this demand uses Birmingham. “We aredetermined to increase the links with the Indian subcontinent, asa truly global airport,” said Uday Dholakia.

Carriers face EU musicTHE European Commission in Brussels hasfined eleven cargo airlines €799,445,000million for building a global cartel. Carriersaffected are Air Canada, Air France-KLM,British Airways, Cathay Pacific, Cargolux,Japan Airlines, LAN Airlines, Martinair,Scandinavian Airlines, Singapore Airlines andQantas.

Brussels claims the collective manipulationof kerosene and security surcharges by thementioned carriers between 1999 and 2006 was done“without conceding any discounts”. “It is deplorable thatso many major airlines coordinated their pricing to thedetriment of European businesses and Europeanconsumers,” stated Spanish-born EU CommissionerJoaquín Almunia.

The fines were actually expected a yearago at which time the airlines had claimed aninability to pay the fines due to the heavylosses incurred during the global economiccrisis.

Air France-KLM topped the list, havingbeen fined €310 million, followed by BritishAirways (€104 m), Cargolux (€79.9 m),Singapore Airlines (€74.8 m), and SAS(€70.2 m).

Lufthansa and Swiss received fullimmunity under the Commission Leniency Program asthey were the first to provide “valuable information”regarding the cartel. Incidentally, the EU Commission'sfines fall short of penalties imposed by the US on 18cargo carriers for price fixing amounting to €1.15 billion($1.6 billion).

Uday Dholakia

Joaquín Almunia

CARGO JOTTINGS

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Emirates is No. 1 cargo carrierEMIRATES SkyCargo has been named ‘Air Cargo Carrier ofthe Year’ at the 2010 IFW Awards. The cargo division ofEmirates Airline beat off competition from five othercarriers including British Airways, Lufthansa and AmericanAirlines to win the award, which is voted by the readers ofthe online cargo journal International Freighting Weekly.

This is the fifth time the cargo carrier has won theaward, having previously received the honour in 2008,2006, 2005 and 2004.

“To win this prestigious award for a fifth time is agreat honour and a powerful endorsement of our service,”said Ram Menen, Emirates’ Divisional Senior VicePresident, Cargo.

The award comes as Emirates SkyCargo continues toincrease its network of destinations across the globe andhas recently commenced freighter services to Almaty,Bagram (Afghanistan) and São Paulo. The carrier’s networknow stands at 108 cities in 65 countries, comprising 25dedicated freighter destinations and 98 points served byaircraft with belly-hold cargo capacity.

Domestic air cargo operators to meet THE Domestic Air Cargo Agents Association of India(DACAAI) will be holding its second national conventionat Delhi from February 14 to 16, 2011. Barely a couple ofyears old, DACAAI has been urging the government totake steps that would make the domestic cargo industrystronger.

In its first convention at Mumbai early this year,President Arvind Nayak had pointed out that DACAAIwould be a forum for interaction of all stakeholders of aircargo industry, contributing to the overall growth of theeconomy. The domestic air cargo industry is highlyunorganised even though it accounts for about 40 per centof all air cargo in the country and has been growing at arate of 20 per cent every year.

While the first convention saw participation by morethan 40 members from the major airports in India, thesecond meet is likely to be addressed by industry stake-holders both from the government and the private sectors.

P S Bedi ties up with Israel's MamanTHE 35-year-old Delhi-based logistics expert, P S Bedi Group,has forged an alliance with Maman Group of Israel and as a firststep forayed into records management and archiving ofdocuments, in collaboration with Maman Group’s subsidiary,Archive 2000 Ltd.

The venture, PSBedi Archive 2000, will bring to India theexpertise of Archive 2000 for assisting banks, insurancecompanies, hospitals, corporates, government bodies, etc. topreserve critical and sensitive documents for long periods whilemaintaining reliability and confidentiality.

R S Bedi, CEO of P S Bedi Group, pointed out that thearchiving of documents was the first pilot project of the joint

venture with Maman Group. Major investments have beenplanned in the Indian logistics industry through a nationwidenetwork of warehouses and distribution centres. “In the nextphase we intend to get into cargo terminal handling, third partylogistics and cold chain logistics, which has a huge scope inIndia due to severe shortage of cold chain facilities. The currentproject of records management and archiving is only the firstpilot project and kick-off of the JV.”

Opher Linchevski, CEO of Maman Group, stated that hiscompany had entered into a joint venture since efficientlogistics was the core to the success of well-maintained recordmanagement centres.

P S Bedi Group CEO R S Bedi (third from left) with Israel’s Ambassadorto India Mark Sofer and Opher Linchevski, CEO of Maman Group, photographed during the launch of the joint venture recently.

Air cargo blogger extraordinary WHOEVER said that those working in the aircargo industry had little or no idea ofliterature or an appreciation of the finer thingsin life would be surprised when they readBlogistics — the blog by the Swiss WorldCargochief Oliver Evans. It is at once lively,entertaining and, of course, written in a stylethat would make authors sit up and take note.

Writing on November 11, 2010, Evansrecounts the birth of air cargo when onNovember 7, 1910, “money changed hands for thetransportation of goods by airplane for the first time ever.200 pounds of silk were entrusted to one of those daringnew flying machines only recently invented by Orville andWilbur Wright, and safely delivered after a one-hour, 60-mile flight across the North-Eastern USA, an event thatwill be duly celebrated this month”.

He goes on to point out: “Half-hidden behind the truly

marvellous figures of the Wright brothers andthe courageous young pilot, whocommandeered this strange new flyingmachine through the morning skies… therestands a man who played a part in the adventof aviation that can hardly be overestimated.”He mentions Max Morehouse, “the merchantwho by a stroke of genius devised the plan touse the legendary Model B as a means totransport and promote his valuablemerchandise”.

Evans' story has a message: today, as in all othertimes, there are people who constantly teach us to live inthe future, to see the amazing possibilities of newtechnologies, to envision things that are just not there yet.He ends his blog with a hope: “If we bring just a little bitof their spirit into our industry there simply is no reasonwhy the next hundred years of air cargo should not be asglorious and successful as the first.”

Oliver Evans

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GLOBETROTTING

WITH the busy holiday travel season andwith the virtual security threat from AlQaeda, US Homeland Security made itclear that new full-body scanchecks would become the rou-tine. But a software engineerwas not allowed to board aflight when he refused thescanning, as it revealed animage of what’s under hisclothes. He even refused agroin check. Homeland Security

officials defended the heightened airportsecurity screening measures but said they

would consider adjustments.“This is all being done as a

process to make sure the travel-ling public is safe,” said asecurity official, adding thatthe scans did not pose healthrisks and that privacy safe-

guards had been adopted toprevent the images from being

saved or transmitted.

Bravo!THE quick reaction of an alert flightattendant saved a woman from suredeath. The incident occurred whenMary Kay Stupfel went for shoppingand suddenly went into cardiacarrest. It was then that flight atten-dant Jacqueline Countryman beganchest compressions at the grocerystore, while fire fighters arrived andbrought her back to life. The flightattendant will be honoured with aCitizen Life Saving Award for savingStupfel’s life.

Compassionate cabin crewHOW worthwhile can anyone makeuse of a day-off? The cabin crew ofSriLankan Airlines demonstrated theircompassion and humane side whenthey spent their day off constructing aChildren’s Home for tsunami-affectedorphans. Travelling across the islandon their day-offs, the crew membersof the airline gathered support fromthe army and various organisations tomake this project a success. The homeis constructed on 9,000 square ft,which consists of a girl’s dormitory, aboy’s dormitory, a hall, a study, alibrary, and a large kitchen. Theinvolvement of the Flight AttendantsUnion and the cabin crew in commu-

JOURNEY on air did not turn pleasurablewhen a plane carrying passengers went to adestination other than the one it was supposed to. More than 100 Ryanair passengers spent four hours in adark cabin without food and waterwhen the plane was diverted fromFrance to Belgium provoking theire of passengers. The passengerswere mostly French tourists who were supposed to land near Paris after returningfrom holidays in Morocco. The passengers

No checking, please!

ADAM PEARSON was ques-tioned on a Delta flight overhis ‘atom bomb’ tattoo. A LosAngeles food stylist, Pearsonwas settling into his seat

aboard a Delta Airlines flight at Los Ange-les International Airport, when a flightattendant tapped him on the shoulder andasked him to come to the front of the plane.His first thought: “I’m getting an upgrade!”But that was not to be! Questioned by thecaptain and the flight attendant about histatoo, Pearson said it referred to a child-hood nickname. After answering a few

questions, Pearson, who is a frequent Deltapassenger and has flown more than228,000 kilometres with the airline thisyear, was allowed to return to his seat.Before the plane took off, he posted on hisTwitter account: “Just pulled off Deltaflight, passenger said I was suspiciouslooking due to my tattoos.”

His tweet had exploded on the socialmedia service by the time he landed. It was“retweeted” by many in Los Angeles’sclose-knit food world, where Pearson iswell known. In spite of the ignominy,Adam is still willing to fly on the airlines.

Tattoo trouble

But Liege is not Beauvais

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61CRUISING HEIGHTS December 2010

nity uplift projects in theTrincomalee Districtcommenced in theimmediate aftermathof the tsunami. Inaddition, they trav-elled to most partsof the island, whichwere affected, to phys-ically help out, whichsnowballed into a project thatlater involved building 48 houses for those who had lost their homes.

And they lived happly ever after…IN a novel way to flout American marriage laws, the cap-tain of a flight turned into a priest to sermonise a wedding— that too a gay wedding. When the passengers were fastasleep, two gay men tied the knot aboard a commercialflight in front of the captain. It all started as passengers dis-embarking from the overnight Virgin America Flight 28from San Francisco to New York City began tweeting aboutthe wedding. The plane, they wrote, had diverted overCanada while the captain officiated at a ceremony in thegalley. At least, that was the story. But even as the romantictale spread like wildfire across social media networks, theairline itself cast doubts on its veracity.

“There was a wedding on my flight to New York!”wrote Matt Mullenweg, a San Fran-

cisco entrepreneur, whodeveloped the Word

Press blogging soft-ware. “The captain

flew briefly overCanadian air-space so twogentlemen couldmarry.” A fewpassengers indi-cated they hadn’t

seen the ceremo-ny themselves, but

that a member of thecrew had announced it

over the loudspeaker andthe cabin burst into applause.

Regardless of the story’s dubiousness, it continued makingthe rounds online and was eventually picked up by majormedia outlets.

Bumpy ride on a flight HAVE you ever heard ofgoing on a free bumpyflight? Yes, it’s truethat one of the passen-gers, who was onboard a Westjetflight, had ended uphitting her head whenthe flight hit someheavy turbulence.Jenelle Hynes, airportcommunications coordina-tor for Kelowna InternationalAirport, confirmed that Airport,Operations Specialists attended a medical call for the arriving flight, though the injury was not severe.

Crime turns into contestCAN you believe that an act of criminal mischief did notland Steven Slater in jail but actually earned him a new job?The former flight attendant became a cult hero after hisactions on board a JetBlue plane. In August, an argumenttook place between Steven Slater and a rude passenger.After landing at JFK, he went on the public address system,swore at the passenger who he claimed had treated himrudely, grabbed a beer andexited via an emer-gency chute. Thisinfamous leap bySteven earnedhim a newjob: of judg-ing travellers’“craziest” stories.Slater, who as a result of hisactions, lost his job and wound up in court, will be a judgein the “Mile High Text Club” contest, which invites trav-ellers to SMS their most outrageous travel stories. The job is part of a deal with a mobile communica-tions company that allows in-flight texting on wi-fiequipped planes.

WHAT happens when a drunk-en woman boards a flight? Shecan prove to be danger-ous. A British holidayjet had to be diverteden route to theCaribbean after anallegedly drunkenwoman passengerbegan shouting inco-herently and also attackedthe cabin crew. Staff on the

Thomson Airways Boeing 767flight from Manchester had to

put restraints on thewoman. The plane,

which was headingto the DominicanRepublic with 260passengers aboard,

had to divert toBermuda where police

met the flight and removedthe woman.

Illustra

tions b

y R

aje

ev K

um

ar

said the flight had left Fes, Morocco, three hours late but had beenunable to land in Beauvais, France, because the airport

there had closed. The plane later landed in Liege, insouthern Belgium, instead. The passengers were

furious when there was no water and the toi-lets were locked. Among the passengers wasa two-month-old baby.

Later, the passengers refused to come outeven after the crew had left the aircraft. After

several hours of negotiations, officials convincedthem to leave the plane and wait inside the airport

for buses that took them to their original destination.

ais Drunken capers

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SNIPPETS

DOMESTIC AIRLINES

62

Kingfisher to launch 22 new flights this winterWITH an aim to provide seamless connectivity to its passengers,Kingfisher Airlines has decided to operate 22 more flights thiswinter and has added four new routes on its network, namelyVaranasi-Khajuraho, Udaipur-Jaipur, Jaipur-Jodhpur and NewDelhi-Agra. Apart from it, the airline has also announced one eachadditional flights on the Mumbai-Ahmedabad, New Delhi-Lucknow and Mumbai-New Delhi sectors.

Kingfisher has also decided to reinstate its Mumbai-Kolkata-Mumbai flight, while New Delhi-Indore-New Delhi flight wouldprovide better connectivity to Lucknow, Srinagar, Ludhiana,Dehradun, Amritsar and Nagpur. In addition, two additional flights

between Mumbai and Ahmedabad would allow the travellers to taketheir connecting flights to London, Bangkok, Singapore, Hong Kong,Coimbatore, Goa, Bengaluru, Kochi and Thiruvananthapuram.

Manoj Chacko, Executive Vice President, Commercial,Kingfisher Airlines, said, “These new services will offer easyconnectivity to popular winter destinations which featureprominently on the tourist circuit. Besides, the launch ofadditional frequencies on existing routes will mean thatKingfisher Airlines will offer far more connectivity andmultiple options to travellers on these routes both onour domestic and international routenetwork.”

Jet’s transition to DIAL’s T3JET Airways along with its low-cost arms — JetLite and JetKonnect — has successfully shifted its domestic operations to theswanky Terminal 3 of the Delhi’s Indira Gandhi InternationalAirport. Nikos Kardassis, CEO, Jet Airways, said, “The smoothand successful migration of the flight operations to DIAL’s T3 hasbeen possible due to the hard work, dedication, commitment,meticulous planning and efficient execution by all the members ofour team. I would also like to thank senior officials from theMinistry of Civil Aviation, the DGCA and DIAL for theirinvolvement, support and guidance in making this a successfultransition... Going forward it will help Jet Airways transformDelhi into a critical international transit hub and I am certain thatour guests will significantly benefit from the world-classinfrastructure of DIAL’s Terminal 3.”

For the convenience of its guests, the airline group mannedover 32 integrated check-in counters, located at islands C and D,for both domestic and international travel, significantly reducingcheck-in time for the airline’s guests. All check-in counters andboarding gates for the domestic services close 45 minutes and 25minutes prior to departure respectively.

Italian getaways with Jet: Jet Airways has introducedexclusive Italian holiday packages through JetEscapes, theairline’s range of domestic and international travel packages.

Designed to provideguests with an enchantingItalian travel experience,the JetEscapes packageswill coincide with theairline’s launch of a dailynon-stop service to Milancommencing December5, 2010.

The JetEscapes ‘Tourof Milan’ packages will

offer guests a range of six attractively priced holiday packages toItaly, including such famed and historic destinations as Milan,Rome, Venice and Lake Como. JetEscapes Italy packages havebeen priced competitively with three price options starting at anattractive offer price of `45,975, which includes Jet Airways’return Economy air tickets to Milan, accommodation at a three starhotel with breakfast, airport/local transfers, travel insurance andsight-seeing. In addition to which JetPrivilege members may alsoavail of five JP miles on every `100 spent.

Jet’s fan following: Jet Airways has become the first Indian,and among the top five carriers in Asia, to add over one lakh fanson Facebook. The airline will mark the crossing of this importantmilestone, which was achieved in less than a year, with the launchof an exciting new Jet to Milan contest with immediate effect, untilDecember 14, 2010, on Facebook at www.facebook.com/jetairways, to celebrate the launch of its maiden service to Italy.

As part of the contest, guests must upload an image of anydestination in Italy, tell us a little bit about the place in not morethan 200 characters and answer three simple questions on Jet Airways’ new services to Milan. A lucky winner will win return couple tickets, on Jet Airways’ daily, direct service to Milanfrom Delhi.

For your consideration, travel needs to be undertaken beforeMarch 31, 2011.

From Delhi/Mumbai to Colombo: In order to enhanceconnectivity, Jet has introduced daily direct flights to Colombofrom Mumbai and Delhi. The commencement of these two newflights between India and Sri Lanka, is in addition to the existingdouble daily Chennai-Colombo-Chennai services, which werelaunched in 2004.

The airline will deploy the state-of-the-art Boeing 737-800aircraft, offering eight Premier and 162 Economy Class seats andseamless connectivity onto several destinations across NorthAmerica, Europe, as well as destinations across the Gulf, MiddleEast and Far East on the Jet Airways network.

ITALIAN EXPERIENCE: Jet is offering its passengers an opportunity to explore ahitherto unknown side of Italy.


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IndiGo spreads its wings in the EastIN an endeavour to strengthen its existing route network in EastIndia, IndiGo has launched three new flights, connecting theeastern hub of Kolkata to Agartala, Ahmedabad and Jaipur. Theairline operates its third non-stop daily flight on the Kolkata-Agartala route, while second non-stop daily flights to Jaipur andthree daily on Ahmedabad route. The new flights will provideincreased frequencies on the routes and offer greater traveloptions for its customers.

Speaking on the addition of new routes to its services, AdityaGhosh, President, IndiGo, said, “Kolkata is a very important

destination for us. I am humbled by the support that we have gotfrom this market. Despite the fact that we are the youngest airline,the people of Kolkata as well as the entire eastern region havemade us the fastest-growing airline. IndiGo is also reinforcing itscommitment to on-time performance by announcing newfrequencies from Kolkata to Ahmedabad, Agartala and Jaipur. Itis our constant endeavour to provide greater flexibility of choicefor our customers, and we continue to offer them an on-time,hassle-free and affordable experience.”

With this expansion, the airline now serves 207 daily flightsconnecting 22 destinations across the nation.

Good karma, indeed!: Taking the joy of celebratingChildren’s Day to a more meaningful level, IndiGo has launchedits ‘Good Karma’ campaign, in partnership with an NGO ‘Savethe Children’. The special initiative, for lesser privilegedchildren, will honour the spirit of childhood, wherein all 6Epassengers will have the opportunity to contribute to theirwelfare, and collectively help them provide good basicnecessities of life, including quality education, protection, and health.

This programme is purely voluntary for IndiGo passengers,who can contribute `10 by simply visiting the ticket page on theairline’s website www.goindigo.in and ticking on the box called‘Good Karma’. Passengers’ contribution will be added to the totalfare of the ticket, and will be given to the NGO.

Delhi Duty Free launches websiteDELHI Duty Free Services Pvt Ltd (DDFS), at T3 has launchedits website — www.delhidutyfree.co.in. The website features awide range of duty free products across categories such asperfumes, confectionery, cosmetics, liquor,tobacco and destination along withinteresting information on specialityconcepts — Uisge Beatha and walk-inHumidor. The Uisge Beatha is an innovativewhisky concept developed to showcase maltwhisky exclusively from Scotland. While,the walk-in Humidor is a concept to presentthe finest premium cigars from Cuba,Honduras and Dominican Republic to givecigars a specialist positioning and thus

create the right ambience in which to purchase.Abhijit Das, Head of Marketing, Delhi Duty Free, said, “The

idea behind launching the website was to provide travellersaround the world an opportunity to browse through the extensiverange of products available in our duty free shops at leisure, fromthe convenience of their homes, and to hence save them the timeand last-minute hassle of browsing through products at the airport. We are sure travellers will find this feature

extremely useful.”The website takes and extends the

brand attribute throughout its design,contrasted by a sharp white back-ground. Images are large, bright andcolourful and used to compliment thecontemporary look of the site. Thewebsite is designed in such a manner soas to ensure that users find relevantproducts and promotions withminimum clicks.

Children’s day out at BIALBENGALURU International Airport Limited (BIAL)played host to 50 children from KannamangalaGovernment School. On the eve of Children’s Day, aspecial programme was put together by the CorporateSocial Responsibility (CSR) team of the airport to engageand enthral the little ones with a quiz and a grand tour ofthe airport.

Ashwathappa, a teacher at the school, commented,“While the airport tour was very well organised andeducated the kids on how an airport works, the fun andgames organised just for them kept them in high spiritsthrough their special day. Accompanied by eight of ourteachers and 15 volunteers from the airport, this is a daythat they will cherish for a lifetime.”

Aged between 10 and 15 years, the children hail fromfamilies of farmers. Most have watched with awe asaircraft soared above their houses but never have theyseen where they landed or took off from. BIAL, in itsactive CSR programme, engages children from schoolslike these around the airport to give them a first-handglimpse into a world unknown to them.

“I always wave out to the aircraft in the sky, but todaywe actually got to see where they stand still. I hope totravel in one of these someday,” said Sangeeta, a 12-year-old from the school. With aspirations soaring, anotherchild Mohan, said, “When I grow up, I will become a pilotand fly one of these aircraft!”

SMALL INTERVENTION, BIG CHANGE: BIAL filled with smiles on Children's Day, engaging little ones from aneighbouring school.


64

SNIPPETS

INTERNATIONAL AIRLINESCX simplifies extra baggage chargesCATHAY Pacific Airways (CX) has introduced a new andsimplified method of calculating extra baggage charges for flightsto all destinations in its network. The key element of the newsystem will be a switch from the current charging rate for extrabaggage, which is based on ticket fares, to a system that iscalculated in accordance with a structured system of travel zones.

The main reason for the change is to simplify the handling ofcharges for extra baggage and special baggage. Now passengerscan view a transparent and easy-to-understand grid of chargesthrough the airline’s website, www.cathaypacific.com, and cancalculate exactly what charges they will have to pay by referringto the zones in which their travel originates and ends.

BBC shows on BA flightsBBC Worldwide, the commercial arm of the BBC, has secured adeal with British Airways (BA) to supply fresh new programmingtitles, presented in branded channel environments reflecting BBCWorldwide’s thematic channels, including BBC Entertainment,BBC Knowledge, BBC Lifestyle and CBeebies — the first-evertailored pre-school channel for the airline.

From this December, over 100 BA aircraft equipped with theairline’s in-flight entertainment service will feature the newchannels and become home to critically acclaimed series such asLuther (BBC Entertainment), Celebrity Master Chef (BBCLifestyle) and Top Gear (BBC Knowledge). While, CBeebieswill appear as a bespoke channel, hosted by well-loved presentersSid Sloane and Andy Day, and will show universal favourites in

the Night Garden, Zingzillas,Charlie and Lola and Penelope K,by the way.

Ian McDonough, SVP & GMEMEA, BBC Worldwide Channels,said, “As a company, we are

committed to serving our international audiences with the bestBritish content across a range of media platforms. This dealenables viewers to access some of their favourite BBC shows onBA aircraft as well as providing us with a valuable opportunity toextend the reach of our channel brands. The deal forms part ofour wider channel strategy to provide content wherever,whenever and however they choose — even when they’rethousands of feet in the air.”

Qatar CEO honouredQATAR Airways CEO Akbar Al Baker has been recognised forhis role in the airline’s long-term contribution to the economicgrowth of Qatar at the Leaders in Aviation Awards held at theGrand Hyatt Doha. The awards ceremony, hosted by Qatar’s CivilAviation Authority, marked the beginning of this year’s DohaAviation Summit. Chairman of Qatar Civil Aviation AuthorityAbdul Aziz Al Noaimi presented an award trophy to Al Bakerduring the evening’s proceedings.

Al Baker was duly delighted to receive the recognition: “It iswith pride that I serve my country to help develop a nationalairline that truly is Qatar’s first global brand. Thirteen years ago,I was given a mandate to create a national airline with one


Emirates boosts operations to Saudi ArabiaEMIRATES will advance its existing operations in the Kingdomof Saudi Arabia with an additional 10 services per week to Riyadhand Jeddah, underscoring the increased economic ties betweenthe UAE and Saudi Arabia. With a 71 per cent increase inoperations and a 75 per cent increase in overall passengercapacity, the new services will further boost business and leisuretrade between the two Arab nations. However, the service hasalready started to Riyadh with five additional services per week,taking its weekly service to 12 flights, while service to Jeddahwill commence from January 2, 2011.

The additional services to Riyadh will be serviced by anAirbus A330-200 with 12 First Class seats, 42 Business Classseats and 183 Economy Class seats. Jeddah will benefit from asecond A380 service with capacity to seat 517 passengers in a

three-class configuration.Emirates remains committed to the Saudi marketwith a total of 38 flights per week to four cites,

including Riyadh, Jeddah, Dammam and AlMedinah al Munawarah.

Bend it like Emirates: For footballfans who missed the FIFA 2010

World Cup or those who justcannot get enough of the

“beautiful game,”

Emirates is offeringcompetitively pricedpackages for the AFCAsian Cup Qatar 2011.The tournament, whichtakes place in Dohafrom January 7 to 29,2011, will see 16 ofAsia’s top nationalteams compete for theAFC Asian Cup 2011,including the UnitedArab Emirates, as well

as Korea Republic, Japan and Australia, who played in the FIFA2010 World Cup tournament.

Russell Sheldon, Senior Vice President, Network PassengerSales Development, Emirates Airline, said, “The packageshave been designed so that football fans living in the UAE andthe rest of the Gulf region can fly to Doha, watch theirfavourite team play, and fly back the next morning.”

Packages can be purchased through travel agents andEmirates offices worldwide, and they include a choice ofhotels, as well as a match ticket. Participating hotels in Dohaare La Villa Palace, Ayana Golden Coast Hotel, MovenpickHotel and Ritz Carlton Hotel.

FOOTBALL ACTION: Emirates’s sportingspirit will take football fans to AFC AsianCup Qatar 2011 in Doha.


goal — to be the best onthe global stage. It has beena remarkable journey since1997. Year-on-year, QatarAirways has pushed theboundaries in the aviationindustry achieving whatmany airlines have beenunable to do.”

The awards ceremonywas part of a welcome reception and networking dinner to start thesecond instalment of the Doha Aviation Summit, a three-daymeeting that brought together senior executives from across theairline, airport and general aviation industries to discuss themes andtopics relating to the region and the global industry as a whole.

Pioneering effort by LufthansaLUFTHANSA and ET Now have launched a unique televisionseries: ‘Pioneering Spirit — A Product of Lufthansa’, wherepioneers of today will select pioneers of tomorrow. Shot on anelegant set modelled on a Lufthansa First Class Lounge, thetelevision series comprises eight episodes. Each episode featuresone pioneer, who has blazed a new trail to write business history andthis includes Dr Prathap Reddy, Founder, Apollo Hospital Group;Jagdish Khattar, CMD, Carnation India; Raman Roy, Founder,Quatrro; B S Nagesh, Vice Chairman, Shopper’s Stop; VikramBakshi, MD & JV Partner, McDonalds India (North & East); AnjanChatterjee, Founder, Speciality Group of Restaurants; RajeevSamant, Founder & CEO, Sula Vineyards; and, Shantanu Prakash,CMD, Educomp Solutions

The show follows an interesting format divided into threedistinct segments. The first showcases defining moments from thelives of the pioneers in an interview conducted by Shaili Chopra,

Senior Editor andPrimetime Anchor atET Now. In the second,the pioneer reviews

innovative business plans of three entrepreneurs selected out ofhundreds for their pioneering spirit. In the third and final segment,the pioneer of today selects one among these as a “pioneer oftomorrow” to be rewarded with a free return ticket to Europe onLufthansa Business Class and a coveted mentorship by The IndusEntrepreneurs (TiE), Knowledge Partners on the series, to helptransform their business.

Axel Hilgers, South Asia Director, Lufthansa, said, “Pioneeringspirit is a core value at Lufthansa. The business legends and freshentrepreneurial talent featured on the show reflect the amazingpioneering spirit that is the driving force of Indian entrepreneurship.”

Entries to the programme are being invited through a simple one-step online registration process at a special microsite dedicated to theshow at www.pioneeringspirit.in. Aspiring entrepreneurs can also logon to the Lufthansa India page on Facebook and upload theirbusiness models, for an additional chance to be voted the ‘BusinessModel of the week’ to win a Lufthansa gift hamper.

Special eco-friendly coffee onboard!AS part of its complimentary onboard beverage service,American Airlines now offers Java City coffee to all itscustomers inflight. This special eco-friendly, hand-roasted coffee is 100 per cent Rainforest AllianceCertified, grown on sustainably managed farms.

Rob Friedman, Vice President, Marketing, AmericanAirlines, said, “We are committed to exploring greeneroptions for all of our products, both inflight and on theground, to enhance the travel experience for our loyalcustomers. Java City strikes the perfect balance byoffering a high-quality, great-tasting, eco-friendlycoffee.”

Coffee onboard the airline is served in 10 ounce cupswhich are co-branded with Java City and the RainforestAlliance logos in addition to theAmerican brand.

Java City uses a sustainablygrown, Central American blendof 100 per cent Arabica Beans.The specialty coffee blend isRainforest Alliance Certified, aseal awarded to farms, planta-tions, and cooperatives that meetcomprehensive and rigorous standards covering social,labour, and environmental conservation issues.

“American Airlines’ commitment to sourcingRainforest Alliance Certified coffee shows thatconsumers around the globe are embracingsustainability,” said Tensie Whelan, President of theRainforest Alliance. “Passengers can enjoy their cup ofcoffee knowing that it comes from well-managed farms,where ecosystems and wildlife are protected and whereworkers enjoy access to health care, education, decentwages and dignified housing.”

AA’s Chicago-Delhi route turns 5: AmericanAirlines (AA) has celebrated the fifth anniversary of thelaunch of its daily non-stop flights between ChicagoO’Hare and Delhi. AA began operating the service, whichis the longest non-stopflight in its global network,on November 15, 2005.Operating with Boeing777 aircraft, the 7,483-mile-long flight features16 First Class, 37 BusinessClass and 194 EconomyClass seats.

In India, AA employs53 people, who joined incelebration beforepreparing for the arrivaland departure of the day's flights.

Philip Lewin, Country Manager, India, AmericanAirlines, said, “It is hard to believe that it is already fiveyears since American became the first airline to operatenon-stop daily service between India's capital city and thebustling city of Chicago. We have remained committed tothe US — India market despite the global economicdownturn and we look forward to growing our business inthe years to come.”

In a further boost to its commitment to India, AA willmodify the timing of its Chicago-Delhi flight schedule, toprovide more convenient onward flight connections forcustomers arriving in Delhi.


Anjan ChatterjeeDr Prathap Reddy

Shantanu Prakash Raman Roy Vikram Bakshi

Jagdish Khattar Rajeev Samant B S Nagesh

THE MAN OF HONOUR: QatarAirways CEO Akbar Al Baker (left) ispresented with the award by AbdulAziz Al Noaimi, Qatar’s Civil AviationAuthority Chairman.


SNIPPETS

TRAVEL & TOURISM

Yatra.com, American Express in pactYATRA.COM, an online travel company, has partnered withAmerican Express (AXP) to provide enhanced value and exclusivebenefits for AXP’s corporate card members. This partnership willallow American Express Corporate Cardmembers to avail five timesreward points on all hotel bookings made on the dedicated micrositewww.americanexpress.yatra.com.

With this new alliance, Yatra.com is aiming to attractbusiness travellers to expandits corporate travel business.American Express is apreferred supplier of corporate

card solution to a significant number of top corporates/organisations in the country.

Speaking on the alliance, Pratik Mazumder, Head ofMarketing and Strategic Relations, Yatra.com, said “We arehappy to partner with one of the largest and globally renownedbanks to expand our corporate travel business. This initiative hasbeen taken to extend value-added services to our customers and toreach out to the business travellers.”

A deal to promote ‘farm tourism’MAHINDRA Homestays, part of Mahindra Holidays and ResortsIndia Ltd. (MHRIL), has signed a memorandum of understanding(MoU) with Punjab Heritage and Tourism Promotion Board(PHTPB) to promote and market ‘farm tourism’ spread acrossvarious regions of the state. The Punjab Tourism has currentlyregistered 23 farmstays. Realising the potential for rural tourism,PHTPB has decided to promote farmstays as an exciting

alternative to hotels, mirroring an authentic experience of truePunjabi hospitality.

As per the agreement, Mahindra Homestays will assist thetourism board in training, branding and marketing the farmstaysto its members, inbound foreign tourists and domestic travellersand will also impart professional training to the identifiedfarmhouse owners on aspects of hospitality, safety and hygiene.

Vimla Dorairaju, Head, Mahindra Homestays, said, “We arevery happy to be associated with PHTPB. Today, we offer touristsa bouquet of more than 753 rooms in 270 plus homes in 49locations spread across 14 states. We believe that we will be ableto replicate our success in promoting farmstays in Punjab.”


Click and win!India has a wealth of creative and photographic talent thatis waiting to be acknowledged. The Better Photography‘Photographer of the Year 2010’ is back yet again torecognise, appreciate and honour the best in imagery.Singapore Tourism Board in association with BetterPhotography Magazine and Mercury Travels has launcheda special microsite www.betterphotography.in/singapore/to enhance reader experience. The microsite is launchedwith the aim of engaging with the viewers and updatingthem about interesting developments, special packages andpromotions like the ‘Online Voting Contest’. Participantsneed to shortlist their much-loved Singapore picture andvote for it. Whether you are a photographer or an avidexplorer, these 80 images are sure to inspire you! Luckywinners stand a chance to win an enriching and enjoyablefour nights/five days photography package to Singapore byMercury Travels. With the Mercury Travels BetterPhotography package, you can explore picture-perfectSingapore in a never seen before manner!

The final face-off is back with bang and will be heldyet again at its inaugural destination — the multi-facetedand vibrant cosmopolitan of Singapore. The eight finalistswill get a chance to travel to Singapore for the ultimatechallenge where they will explore the vivacious island-nation. From food, fashion, nature and shopping, toromance, sports and nightlife the contestants will sharetheir stories and their journeys through these images.

This exciting contest is valid till January 15, 2011. Sograb your cameras and start clicking!

STAY IN PUNJABI STYLE: Mahindra Homestays tying-up with Punjabtourism to promote a unique concept of farmstays as an exciting alternative to hotels.


FOCUS FEATURE

New Delhi’s The Metropolitan Hotel isnow known simply as 'The Met'. After itsrecent makeover, the hotel unveiled itsnew avatar on October 10, 2010(10.10.10). Ringing in its tenth

anniversary, 'The Met', with its smart and swanky lookprovides a peek into the future of hospitality. It hasraised its own benchmark of elegance — from designelements to understated service standards — severalnotches higher.

If you really want to enjoy luxury, The Met isthe place for it. With its innovative design, moderntechnology and eco-friendly practices, the hotelhas incorporated new ideas and bright insights. Asa complete package for business and travelcomforts, The Met is the perfect destination forinternational business or upscale leisure travellersas it is conveniently located in the heart ofbusiness and commercial hub of New Delhi.

The makeover with its modern andcontemporary designs — albeit with an Indiantouch — has been conceptualised by TID, a wellknown Singapore-based interior design firm. Thetransformation in the hotel's personality becomesapparent the moment you step in to the lobby, agrand space highlighted by a unique mix of

natural and surreal amoeba lights. The use oflighter colours and customised interior finishes notonly adds to the lively atmosphere but also makesthe hotel environment-friendly.

The renovated rooms are more luxuriousensuring the guest is relaxed and the staypleasurable. High-end facilities, state-of-the-arttechnologies like LCD TVs, lighting/air-conditioning management systems and enhancedsecurity systems make the hotel truly modern andurban. Improved design and amenities have beenadded to give the bathrooms too, a chicinternational feel. RESTAURANTS & ENTERTAINMENT

Sakura - Authentic Japanese RestaurantIndia’s first Japanese restaurant and an all-timefavourite with expats and high fliers, Sakuracontinues to delight guests with its authentic farefrom the land of the rising sun.

Chutney, Bar + TandoorIt consists of an indigenous fusion of pan-Indian cuisine. To entice the taste buds ofIndian cuisine aficionados, the menu offersclassical dishes from across the subcontinent withkebabs, curries, clubbed with exotic concoctionsof cocktails and mocktails too.

Zing - All Day World Cuisine RestaurantImpeccable service, scrumptious food and refreshingbeverages make the “All Day Dining” an unparalleleddining experience.

Zing GourMET ShopFor those with a sweet tooth, the Zing GourMET Shopputs forward a wide range of mouth-wateringdelicacies with its freshly cooked pies, cakes andsavories.

Garden of JoyAn outdoor venue for hosting celebratory events withits swimming pool courtyard is an appealing andwelcoming.

EcoMet ProgrammeThe hotel has upgraded its environment conservationpractices to maintain a balance between consumptionand availability of natural resources. Complying withits ‘Smart’ personality The Metropolitan Hotelstrengthens its EcoMet programme (the ecologicalphilosophy of the Hotel based on the wisdom ofAyurvedic Science and knowledge of ModernScience) by implementing new policies based onthree ‘R’s — reduce, reuse and recycle.The Met, a fine blend of style and substance invitesguests to LIVE MET SMART at this prestigiousproperty in New Delhi, India.


SimplyThe Met

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SNIPPETS

Sikkim gets the taste of Zuri hospitalityAFTER destination properties in the UK, Kenya, Bengaluru, Goaand Kerala, The Zuri Hotels & Resorts now spreads its wings tothe untouched East of India with the launch of the Retreat atBaiguney that combines plush luxury and exclusive guestservices with the breathtaking vistas of Sikkim.

Known as “The Retreat by Zuri, Baiguney, Sikkim”, theproperty is Zuri’s first adventure sports destination resort to offeroptions like paragliding, river rafting, river camping, mountaincamping, jungle hiking, village trekking, etc, all under one roof.Tucked away amidst a breathtakingly natural environment, theresort stands against the backdrop of the Himalayan foothills,complementing flora and fauna and the pristine river Rangitflowing alongside. The rooms here are done in contemporarychic, swathed in orange, green and white linen with their cosybalconies. The experience extends to more pleasure with the LilGreen Bar, a muti-cuisine outlet and lounge Papillon and poolcafe The Jalapa.

Bookings for the resort are now open and tariffs range from`4,000 to `8,500 inclusive of meals with additional packages onsightseeing and adventure sports.

The Dutch connectionINDIAN travellers will now get an intellectually stimulating andcreative vacation in Holland. The Netherlands Board of Tourism

and Conventions (NBTC)and KLM Royal DutchAirlines have joinedhands to woo Indiantravellers.

“We are famous forour windmills and tulips,but there is much morethan that — ourmuseums, our history, ourmodern-day design etc. Itis therefore not so strangethat the Netherlands hasbecome such an attractivetourism destination forIndian visitors,” said BobHiensch, Ambassador ofthe Netherlands. Indiantourists will get a glimpseof Dutch heritage and

traditions with its lovelylandscapes, windmillsand bewildering varietyof cheese. And, ofcourse, all these can betoured with the eco-friendly mode oftransport; on a bicycle.And what else you canindulge in! All the

flourishing cities from Amsterdam toRotterdam can be toured to know of the impressive

architecture. And also Utrecht, to get a glimpse of its history withits nice antique stores.

Both the countries are well connected. According to AirFrance-KLM, India remains one of KLM’s important growthmarkets and the airlines aims to provide better services to itscustomers in India. Celebrating 55 years of flying KLM to Delhi,the airlines is coming up with various promotional offers to

further strengthen ties with India. At least 15 airlines connectIndia with Holland, of which there are 14 direct flights eachweek, operated by KLM from Delhi, and KLM and Delta Airlinesfrom Mumbai.

Fortune Select Excalibur, Gurgaon welcomes youITC’s fully-owned subsidiary Fortune Hotels brings its special‘Select’ brand to one more location in Gurgaon. Opened recentlyon the main Sohna Road in Gurgaon, Fortune Select Excalibur isthe chain’s 34th operatingproperty, with135 elegantlyappointed rooms offering theFortune brand of hospitality ina new contemporary package.

Living up to thecontemporary high-flyingmood of India’s fastest-growing business hub FortuneSelect Excalibur is an elegant,upscale, full service businesshotel with in-room check-inand check-out facilities withpersonalised butler assistance.Equipped with the latesttechnology and amenities, the hotel offers a variety of rooms,including Standard Rooms and Fortune Club Rooms with itsFortune Club Lounge. In addition, there are nine suites that havebeen carefully designed to offer splendid views, space, luxury andpersonalised butler service. Important in-room facilities for allcategories of rooms include 24-hour room service, tea/coffeemaker, satellite LCD TV, mini bar and high-speed wi-fi andbroadband connectivity.

Fortune’s branded dining options ensure that guests will beable to experience plenty of variety. In keeping with the fitnessregime practiced by today’s high-flyers, Fortune Select Excalibur,offers its guests the facility of a state-of-the-art health club with amodern gymnasium, spa rooms for massages, a salon and an openair swimming pool picturesquely located on a landscaped terrace.

Zuri’s new wine sommelier THE Zuri Hotels & Resorts welcomesonboard Khuselo Mputo, the first winesommelier for all their properties acrossIndia. A South African national, Khuselocomes with over a decade’s experience andlearning in the Food & Beverage industry.Apart from his exceptional skills in tasting,he has a deep understanding of budget

preferences, thereby making him the perfect wine connoisseurfor a young and chic brand like Zuri.

Having worked at some of the best restaurants in London,his journey into wine began at the Sofitel St James’ BrasserieRoux where he was offered the job of sommelier. Afterheading Delaire Graff Restaurant in South Africa as the HeadSommelier, Khuselo has made his way to India to help theZuri customer choose the right wine for the right occasionwith the right kind of dish.

His key areas of focus at Zuri would involve procurementof the best wine, wine storage and specialised service to theguests and wine customers. This wine-lover will also play alead role in all the aspects of wine workshops, wine and dineevents and training the hotel staff on wine.

A P P O I N T M E N T S

Khuselo Mputo

DUTCH EXPERI-ENCE: Indiantourists have theopportunity to get aglimpse of Dutchheritage and tradi-tions throughNetherlands TourismBoard and KLMRoyal Dutch Airlinesalliance.

SELECT FORTUNE: Experiencethe Fortune brand of hospitality ina new contemporary package.



CALENDAR 2010

20101

UNFAZED BY THE REVERSES OF 2009, THE AVIATION INDUSTRY HAS TAKENSTEADY STEPS TO GROWTH IN 2010. AND THE INDIAN SCENARIO IS NODIFFERENT. WHILE THE BEGINNING OF THE YEAR SAW THE HORRIFICCRASH AT MANGALORE, THERE WERE ALSO EVENTS TO CHEER ABOUT —ESPECIALLY THE NEW TERMINAL 3 AT DELHI. CRUISING HEIGHTS RECORDSTHE EVENTS MONTH-BY-MONTH THROUGH 2010.

JANUARYIndia’s domestic airlines flew a total of 43.846 million passengers in 2009,according to a Civil Aviation Ministry report. R K Tyagi Committee unveils investigative report on the late AndhraPradesh Chief Minister YSR Reddy’s helicopter crash on its website. Thereport said that the crash occurred due to pilot’s error. SpiceJet announces its Q3 results (best ever) of `108.9 crore; Jet Airwaysmakes a profit of `105.80 crore for the quarter ended December 31, 2009and Kingfisher Airlines announces losses of `419.9 crore in Q3.India Post signs an MoU with Thomas Cook to provide foreign exchangeand travel-related services through post offices.

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CALENDAR 2010

APRILTerminal IC opens at Mumbai airport; CSIA receives “Airport Ser-vice Quality” award. Delhi airport launches a new website.IATA reports continued growth in air cargo.UPS announces the appointment of Mark Khambatta as CountryManager of India.Jet Airways adjudged as “Best International Airline” in Conde NastTraveller India awards. Qatar airlines starts daily services to Bengaluru; Air Arabia com-pletes five years in India.AirAsia X becomes first low-cost carrier in the world to introduceflatbed premium seats; CEO Tony Fernandes receives France’shighest honour: “Officier of the Legion d’honneur”.

2 FEBRUARY Budget 2010-11 allocates `1,200 crore forfinancial restructuring of NACIL.Jet Airways announces daily non-stopflights from Mumbai to Johannesburg fromApril 2010, while Kingfisher is all set tointroduce daily non-stop flights from NewDelhi to London from March.CISF unit of Mumbai international airportgets ISO 9008:2001 for quality certification.Middle-East carriers shine: Etihad wins“Best Long-Haul Airline” at Business Travels Awards in London and EmiratesSkyCargo bags “International Cargo Airlineof the Year”. Lufthansa names its first two A380s whileits cargo section expands freighter servicesfrom India.

4

3MARCHIndia Aviation 2010 is heldfrom March 3 to 7, 2010, atBegumpet Airport, Hyderabad.More than 200 exhibitors participate. DGCA decides to introduceseparate VFR corridors at Delhiand Mumbai airports.Air India becomes serviceprovider for Genx. The airlinealso approves appointment offive new directors — AmitMitra, Anand Mahindra, HarshNeotia, Yusuf Ali and FaliMajor. Aryan Cargo plans to launchinternational air cargo opera-tions by April.Pawan Hans and Eurocopterannounce two new JVs.Kingfisher joins Oneworldleague. NIIT and SATS join hands.



5 MAY Air India Express Flight IX 812 crashes at Mangalore airport. According togovernment data, 158 passengers died while only eight survivors escaped deathmiraculously. Media reports confirm that it was pilot’s error that led to theMangalore crash. Hyderabad and Delhi airports bag top honours from Airport Council International;Bengaluru International Airport Limited (BIAL) is awarded the best emergingairport by Emerging Markets Airports Awards (EMAA) and also receives ISO 27001certification; P S Nair, CEO, Delhi International Airport Limited, elected theDirector of Airports Council International (ACI), Asia-Pacific Regional Board; andHyderabad International Airport bags “Routes Airport Marketing Award” for secondconsecutive year.Lufthansa Cargo receives “Best European Cargo Airline Award” at the 2010 CargoAirline of the Year Awards.Emirates launches services to Al Medinah; Nas Air announces that it will introduceflights to India from June; and Safi Airways announces to enter India.

JUNEDes Vertannes takes over as Global Head of Cargo of IATA.DHL invests to enhance service logistics market in India.Qantas’ B777 freighter starts operations while the car-rier goes for Trivandrum-based IBS’ Cargo. Lufthansa Cargo AG and Austrian Airlines form a newcompany Austrian Lufthansa Cargo gmbh; LufthansaCargo voted as top European cargo carrier in Asia by Cargonews Asia.Kingfisher joins OneworldAir India signs a lease agreement for Nagpur base.Dragonair is awarded as world’s best regional airline.

6



CALENDAR 2010

9 SEPTEMBERJet Airways announces that it will start daily flights fromNew Delhi to Milan from end 2010.IndiGo launches insurance package in association withTATA AIG.Cathay Pacific launches flights to Moscow.Etihad admits first female captain.South African Airways receives Today’s Traveller Awardfor best international airline connecting India to Africa.Singapore Airlines announces the name of future CEOGoh Choon Phong.

8 AUGUSTPraful Patel launches final opera-tion phase of satellite navigationsystem GAGAN.Airports Authority of Indiaannounces its keenness to buildairports overseas. Tata Steel announces the signing ofan agreement with Deccan Char-ters to start three daily charterflights between Jamshedpur andKolkata.Fedex connects South India to theworld.IndiGo bags the Skytrax WorldAirline award for being the low-cost airline of India.

7 JULYWorld-class Terminal 3 of DelhiInternational Airport Limited inaugurat-ed by Prime Minister Dr ManmohanSingh. India’s biggest and the eighthlargest terminal in the world covers 5.4million sq ft area with a capacity of han-dling 34 million passengers per annum. BIAL receives a high rating in a surveycarried out by Airport CouncilsInternational.Juhu airport gets consultant.Lufthansa Cargo meets TSA require-ments.Jet Konnect launches flight to Ranchi.

Pho

to:

H.C

.Tiw

ari



10 OCTOBERICAO (International Civil Aviation Organization) gives nod to stabilise carbon emissions.India-Iraq bilateral arrangements finalised.DHL receives "Custom House Agent of the Year" Award at the Maritime and Logistics Awards 2010.ACAAI (Air Cargo Agents Association of India) first President J N Guzdar passes away.Jet Airways enters into a reciprocal frequent flyer partnership with BMI.Travelport named best GDS in the Asia Pacific.Etihad announces launch of services to Bengaluru from January 1, 2011.AirAsia named ‘best asian low-cost carrier’ by TTG.Oberoi, Lufthansa forge long-term ties.KLM celebrates 55 years of flying to India.Sanjay Agarwal, former CEO of SpiceJet, joins Kingfisher; SpiceJet appoints Neil Mills as CEO.Oberoi hotels ranked amongst the 30 best in the world by readers of Condenast Traveler , USA.

11NOVEMBERDomestic air traffic perks up.The inquiry committee confirms that pilot error caused Manga-lore crash. Pilot was sleepy and many operating procedures werenot followed during landing.World’s first integrated aviation university in Bengaluruannounced by Centre for Asia Pacific Aviation and Subra-manya Construction and Development Company.Airbus A380s operated by Qantas Airways might be groundedfor weeks as Rolls-Royce plans how to fix an engine problemthat forced the plane into an emergency landing on November 4.Civil aviation ministry decides to roll out the new ground-han-dling policy in January 2011.The printer bomb found on the cargo plane at East Midlands air-port. The bomb was removed from theplane during a two-hourstopover in the UK.China’s Commercial Aircraft Corp (COMAC) in a directchallenge to Boeing and Airbus, announces the first order forits single-aisle passenger plane, breaking into a market thatmay be worth $1.68 trillion over 20 years.The much-delayed project Navi Mumbai airport finally getsgreen nod on November 22. The environment clearance bythe ministry has been accorded.


74

SUPPORTERS OF BUSI-NESS AVIATION: Formerastronaut Neil Armstrong,golf’s original superstarArnold Palmer and successful investorWarren Buffet have been appearing in advertisements to emphasise the messagethat business aviationhelps companies be productive, communitiesbe viable, and thus, thecountry be strong.

Thumbs up for business

aviation!BACK PAGE

The hard times that the aviationbusiness has been going throughin the US have seen a few indi-viduals — all celebrities — com-ing together to exhort fellow

Americans to start flying. In a unique move, the group comprising

the National Business Aviation Associationand General Aviation Manufacturers Asso-ciation and known simply as ‘No Plane NoGain’, has taken upon itself to educateAmericans about the importance of businessaviation to the country and its communities,companies, and citizens. After all, businessaviation contributes over $150 billion to theUS economy every year, and provides over1.2 million high-wage, stable jobs.

Three top personalities — former astro-naut Neil Armstrong, successful investorWarren Buffet and golf’s original superstarArnold Palmer — have been appearing in

advertisements to emphasise the message thatflying is good for the country and the econo-my. Armstrong’s message is loud and clear:“You can settle for email and conferencecalls, but nothing beats being there.” InvestorBuffet points out: “I originally called myplane indefensible. Today I call it indispensa-ble.” And golfing legend Palmer emphasises:“Some folks say they have no use for busi-ness aviation. The truth is that it’s essential toall Americans. By using business airplanes,I’ve been able to live in a town not served byairlines, and compete all over the world likeanyone else from any other place for morethan 50 years.”

Here is a lesson for all of us in the aviation business. Even if flying makesstrange bedfellows, it is high time we forgotour differences and all of us got together toboost the business.

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