Thursday, July 15, 2010

GMR wins 2nd airport project in Maldives

Private Indian airport developers are now becoming a force to reckon with globally. The GMR Group on Thursday beat the Aeroport De Paris (that operates airports in Paris region including Charles de Gaulles) to win the bid to construct the $360-million airport in Male. The only other bidder was the GVK Group. This project also includes building a seaplane port also. Three parties namely Aeroport De Paris, France- TAV, Turkey consortium; Zurich Airport-GVK consortium and the consortium of GMR Infrastructure-MAHB (Malaysia Airports Holdings Berhad) consortium were invited by the Maldives Government to take part in the keenly contested international bid process which was monitored by IFC, Washington. Speaking to TOI, P Sripathy, CEO, GMR Hyderabad International Airport, said that the Male airport is already existing and profit-making airport. GMR will sign the deal papers in a week and six months later it will take over the operations of the airport, which is at present run by the government of Maldives.

The first of modernization will be completed by 2014, and the GMR group envisages an investment of $300 million, he said. The mandate is for the next 25 years. A unique feature of the MIA is that it includes the Sea-Plane port also. Incidentally, this is the second airport that GMR has taken up in Maldives as they had previously signed a MoU with the government of Maldives for the modernization and operation of the Hanimaadhoo airport situated in the Northern Islands of Maldives. With this, the group now has five airports in its portfolio. It has developed and commissioned the greenfield international airport at Hyderabad. The group, besides operating and modernizing the existing Delhi International Airport, has also constructed a brand new integrated terminal T3 which will be operational in July 2010. The group has also built a new terminal, designed to handle 20 million passenger capacity, at the Istanbul Sabiha Gökçen International Airport in Turkey and is operating it successfully.


The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Wednesday, July 14, 2010

EU widens airline deal with US

European Union governments have dropped a threat to scale back flight rights for US airlines in Europe in return for an American pledge to work towards allowing foreign ownership of carriers. EU transport ministers approved the expansion of a 2008 agreement with the US that deregulated trans-Atlantic air travel. As a condition for the ‘open-skies' accord two years ago, the EU demanded future access to the domestic American market and reserved the right to suspend US flight rights in Europe should no broader deal be reached by end-November.

Under the expanded accord that negotiators struck in March, President Barack Obama's administration agreed to ‘engage in a process' to let European investors become majority owners of US airlines, and the EU vowed to grant reciprocal rights once that is done. US carriers have the right to control as much as 49 per cent of European airlines, while EU operators face a 25 per cent limit on voting equity in US airlines. “We hope there will be more progress,” Dutch Transport Minister Camiel Eurlings, told. “It was extremely important that we reached a second-phase agreement in order not to jeopardize everything that we had established till now.” The threat to suspend flight rights was the EU's price, which the UK insisted on, for spurring trans-Atlantic competition two years ago by letting European airlines fly to the US from anywhere in the bloc instead of from just their home country. The broader agreement “points the way towards further liberalization of investment rules in particular in the coming years,” the UK government said in a statement. Mr. Eurlings said the US airline industry “would be in a much better position” without limits on foreign ownership, while also predicting it would take years for American legislation on the matter to change. “For a well-functioning international aviation industry, it is important that you can have cross-ownership,” he said. “We keep on pushing. It is, of course, a very sensitive issue.”


The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Saturday, July 3, 2010

Jet Konnect to fly biz class at budget prices

In a clear sign that the good times are back, Jet Airways Konnect, the all economy service from Jet Airways, will introduce a business class on its flights. The fares will be less than business class fares on the full-service flights of Jet Airways. The new class is being created by reconfiguring seats on Jet Konnect planes and will be available from Monday. This is expected to add five per cent to Jet Airway’s annual revenue, a senior company official said. “A business class one way ticket from New Delhi to Mumbai on Jet Konnect will cost Rs 12,000 all inclusive, compared to Rs 35,371 on the full-service flights,” he said. Jet Airways’ chief commercial officer Sudheer Raghavan said, “With its low fare, high quality, all economy product,Jet Konnect will offer a superior flight product that is close to Jet Airways’ full-service business class product at reasonable fares, as well as additional on- ground Jet Privilege benefits.”
The new seats, in what is touted as ‘Konnect Select’ class, is meant to cash in on the upswing in air travel, particularly by business executives, following the improvement in the global economic environment. The ‘Konnect Select’ premium cabin will be available on several domestic routes, the airline said in a statement on Thursday. The services will include in-flight reading material, a welcome nonalcoholic drink and hot meals, all complimentary JET Konnect has a fleet of 18 Boeing-737s.

“We have already replaced a few front economy class seats with eight business class seats each on seven aircraft. The conversion of the remaining 11 planes will be done in few days,” Raghavan added. Jet Airways, the country’s largest airline by market share, has a fleet of 112 aircraft, including 25 operated by its wholly owned subsidiary, JetLite. Jet Airways had launched the all-economy; no-frill Jet Konnect service in May last year. Konnect now contributes about half of Jet Airways’ revenue. “With the new business class, the contribution will rise to 55 per cent,” said KG Vishwanath, vice-president of commercial strategy and investor relations of Jet Airways. Meanwhile, Jet Airways is planning to order three or four ATR turboprop planes, either in outright purchase or on lease, within nine months. These will be used on short-haul routes. It now has 14 ATR planes.

The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Skies open, airlines battle backlog

Europe’s skies were open for business on Wednesday but with so many planes having been grounded by the pall of volcanic ash spreading from Iceland, it could take days or weeks to clear the backlog. About 75 per cent of flights in Europe operated on Wednesday – some 21,000 of the 28,000 flights normally scheduled, European air traffic agency Euro control said. Almost all of European airspace below 20,000 feet was available, with restrictions in some areas such as southern Sweden and Helsinki.

“It is anticipated that these restrictions will gradually be lifted throughout the day,” Euro control said in a statement. Britain, a global air hub as well as a busy destination in its own right, reopened its airspace on Tuesday night, giving a huge boost to travellers and air freight. British Airways said it was operating all its long-haul flights departing from Heathrow and Gatwick airports on Wednesday, but there would be some short-haul cancellations. Air France also said it would run all long-haul flights on Wednesday, Poland will reopen its airspace from 0500 GMT, and the Dutch allowed night flights from Tuesday after taking the lead in allowing passenger flights on Monday. German air traffic control said German airspace would be open, though of the 60 flights listed on the Frankfurt airport Web site on Wednesday, 46 were cancelled.

The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Stranded travellers opt for video talks

The near-closure of the European airspace because of a huge ash cloud from an Icelandic volcano has given the service providers of video¬conferencing suites a rea-son to smile. The air travel chaps has led to an increase in demand for such services by stranded travellers, who still need to interact personally for their global businesses. According to Shabd Sha-ran Mishra, managing direc¬tor of UK-based Renais¬sance e-Services, who has business interests in US and UK markets, "Conducting business through video-con¬ferencing seems to be the only logical solution in the current situation." "I was supposed to be in the UK on Tuesday to negotiate on a business deal taut since the flights got cancelled, the only option I have is to interact with my client via video-conferenc¬ing," he said. Mishra added though inter¬acting via video-conferencing makes a lot of sense economi¬cally and is a very cost-effective communication tool compared to physically travelling to the US or the UK, he would still prefer to communicate to his clients in person. "Communication through video-conferencing only costs a few hundred rupees per hour but a lot of people still prefer to be present on the location.

In person, it gives a better feel of the client's reaction, but given the situation, a lot of people like me have very few options," he said. BT Conferencing, a part of British Telecom (BT), said the company has seen a 35 per cent increase in demand since the beginning of the disruptions in global air travel. Madhusudan Thakur, country head, Regus South Asia, an office-space solutions provider, said the company has seen a surge in requests for its 2,500 video-communication suites across the world. He said thebookings for their video-conferencing suites have gone up substantially in the last five to six days. "We have registered around 20 per cent growth in India, 38 per cent in the UK and 12 per cent across Europe. In the US, book¬ings rose nine per cent," he said. Thakur also said it is common for a major news event to push up the demand for video-con¬ferencing. "We do see a spike in the use of our services when there are strikes, like the Lon¬don Tube strike, which happened in June, 2009," he said, adding that they expect the demand for video-conferencing to continue through next week.

"Travel is expected to be affected throughout the week¬end and even into early next week. So we expect continued need for business people to conduct meetings and commu¬nicate with colleagues via video-conferencing throughout the next week," he said. Reliance World, which oper¬ates the world's largest net¬work of video-conferencing suites, also confirmed that there has been an increase in the demand for video-confer¬encing services. "The figures are yet to be compiled and would be revealed only in the monthly report. But since the last one week, the demand for video¬conferencing service has grown substantially," the official spokesperson said. Reliance Webstore Ltd already offers wired video-con¬ferencing services to over 1,500 corporate clients through its network of over 200 video con¬ference suites at Reliance World stores spread across the country.

The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Friday, July 2, 2010

Bridge-On-Sea Planned At Lakshadweep

India is all set to get its first bridge-on-sea runway. The Airports Authority of India (AAI) has proposed to extend the runway at Agatti Island by building a 1,000-footlong bridge on the sea and link it to the existing 4,500-feet-long runway of the airport. This technological marvel, along with a new terminal building, is expected to be built at a cost of Rs 150 crore within two years of getting the Lakshadweep administration’s nod. At present, ATRs operate to Agatti. But the small airstrip means there’s a load penalty, or in simple terms the 70-seater plane cannot have more than 48 passengers to remain light enough and operate on the available 4,500 feet.

Once the runway is 5,500 feet, ATRs can operate to capacity and Canadian Regional Jets can also fly in, said a senior official. In fact, the bridge-on-sea has emerged as the greener option to the original AAI plan of linking Agatti with the next island by connecting the sea in between in the direction of the runway. The idea then was to make the runway long enough to accommodate the big Boeing 737s and Airbus A-320s. This plan did not get environmental clearance as there’s a turtle colony in the direction of the runway where land was proposed to be reclaimed, said sources.

The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

List of tax-exempt port, airport services soon

THE finance ministry will soon put out a small list of essential services that will not be taxed at airports or ports, as it kicks off experimental enclaves of a comprehensive service tax regime that could be extended nation-wide later. This will only give marginal relief to consumers of services — travellers and businesses — as most of the services that are currently out of tax net will face tax. “We will tax even non-taxable services but spare some essential services such as medical, education, pollution control and emergency services such as fire fighting, special services provided at time of emergency landing from the tax,” the official said.

The change indicates the direction for the service tax regime as the country pursues a unified goods and service tax regime and a change from the positive list approach followed so far. Globally, governments follow a negative list approach —only services exempt from tax are mentioned explicitly and the rest face tax. The ministry is expected to issue the notification shortly, putting into effect the tax from June this year. Service tax is levied at the rate of 10%. The budget 2010-11 had proposed to tax all services provided at port and airports. Strictly interpreted this means any service provided at an airport or port will be levied service tax even if that service in itself may not be taxable elsewhere. This would have brought essential services such as health and education provided, otherwise not taxed, under tax net at port or airport. “Exempting essential services within the airport will be a positive step towards implementing a jurisdictional service tax in right earnest. It is essential that the term ‘service’ be defined in the statute for proper interpretation of the definition of airport service,” said Bipin Sapra, partner, Ernst & Young. Some other services that are provided and consumed at port and airport but are not generally taxed and also do not fall in the category of essential services will have to face tax, the official added. These include services such as short maintenance services. However, services consumed by exporters that are exempted from tax will continue to enjoy their tax-free status. Abatement available in some services such as transportation will also be available if such a service is provided at port or airport.

The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Jet to strengthen route network before tapping global alliances

The country’s largest private carrier by market share, Jet Airways, has decided to build its bargaining power by expanding its global footprint before joining one of the world’s leading airline groupings like Star Alliance and OneWorld. As part of this strategy, the airline plans to widen its partnership with existing code-share partners such as Etihad, Brussels Airlines and Malaysian Airlines to expand its network. “The strong global network would enable us to bargain with foreign airlines when we join any of the major alliances. If we are weak, we will end up paying more as fees to other airlines for each passenger that takes connecting flights on our network,” a Jet official not wishing to be named told FE. Stronger airlines stand to gain more in a code-share agreement as they pay less interline service charge and commission to the alliance partner that has a smaller presence. The Naresh Goyal-owned carrier has, therefore, sought government permission to partner with Etihad for offering an alternate route for its customers flying to Paris, Munich and Frankfurt. This is part of a dozen applications which also include permission for tie-ups with Brussels Airlines and Kenya Airways besides additional seats on its Dubai, Oman, Kuwait and Colombo routes. It also plans to fly to Manila.

“As the global economy is mending and air travel is recovering, we as a growing and responsible carrier will always be on the lookout for growth opportunities that offer a quick maturity of flights to profitability,” Jet Airways chief commercial officer Sudheer Ragahavan said. It posted a net profit of Rs 106 crore during October-December in 2009-10. A code-share or marketing alliance allows carriers to cross-sell seats and generate additional traffic, which brings revenue at a relatively lower cost. Becoming the member of an alliance brings synergies among carriers as they use each other’s airport infrastructure. Jet, along with its wholly-owned subsidiary JetLite, has a fleet of 112 aircraft and operates 790 daily flights. The airline generates nearly 60% of its revenue from international operation. “Jet is taking a very thoughtful and calibrated decision. The alliance structure would change in the next 12 months due to consolidation in the market,” Centre for Asia Pacific Aviation (CAPA) India head Kapil Kaul said. While it plans to expand in Sweden with the Brussels Airlines deal, its proposed tie-up with Kenya Airways would help it book customers for Dar-es-Salaam. Two other full-service carriers Air India and Kingfisher Airlines have, however, already announced their plans to join Star Alliance and OneWorld respectively.

The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Thursday, July 1, 2010

Service fee for travel agents may be part of your airfare

In the coming months, fliers who book airline tickets through travel agents may see a change in the mode of payment. If travel agents win the battle with the airlines for commission, the service fee that you currently pay your travel agent may soon be a thing of the past. Instead, the fee would be built into your air fare by the airline. The matter pertains to the March 6 DGCA order stating airlines should pay a percentage of commission to travel agents for selling their tickets.


 The quantum of commission was to be decided by the airlines and agents. Currently, Air India and Jet Airways pay a 3% commission to agents. But 16 foreign airlines, like Singapore Airlines, Lufthansa, Delta, British Airways withdrew commission from 2008. The agents have since been protesting. However, there has been no response from the airlines on the matter so far. In fact, airlines like British Airways and Etihad have decided to withdraw their ticket stock from hundreds of travel agents from May 1.


The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

Volcanic clouds: It came to light with ‘Jakarta Incident’

Volcanoes are a much-feared peril in civil aviation, disgorging fine ash that can damage jet engines, choke the hi-tech probes used in modern avionics and scour a plane’s windscreen to the point of invisibility. In the past 20 years, there have been 80 recorded encounters between aircraft and volcanic clouds, causing the near-loss of two Boeing 747s with almost 500 people on board and damage to 20 other planes, with repair costs totaling hundreds of millions of dollars. “Volcanic ash in the upper troposphere, where jet aircraft fly, can cause jet engine failure, damage to turbine blades and pitot static tubes with the possibility of the loss of the aircraft and lives,’’ the journal Natural Hazards warned last year. The threat first made the headlines in a 1982 episode now known as the “Jakarta Incident’’. At 35,750 ft, a British Airways jumbo en route from London to Auckland entered a cloud of ash disgorged by an Indonesian volcano, Mount Galunggang. All four engines flamed out, leaving the plane and its terrified passengers on a glide towards doom before the crew were able to restart the engines at 13,325 ft. The plane made an emergency landing at Jakarta, with the crew flying on manual, following a roughly calculated glide slope. 


It was impossible to see out because the windscreen had been sandblasted to opacity. In 1989, a KLM 747 bound for Anchorage, Alaska, endured a five minute powerless descent with 231 passengers on board when it inadvertently entered a cloud of ash blown from Redoubt Volcano, 177 km away, which had erupted 10 hours earlier. After the engines were restarted, the plane landed safely at Anchorage. Repairs cost $80 million, for all four engines needed replacing. “The threat to aviation is very obvious,’’ Kjetil Toerseth, director of regional and global pollution at the Norwegian Institute for Air Research, said. One of the most problematic areas is in the Pacific, home of the ‘Ring of Fire’ where volcanoes are most active, said Toerseth. In the biggest eruption of recent decades, Mount Pinatubo in the Philippines spewed out an ash cloud on June 15, 1991 that in less than three days traveled more than 8,000 km to the east coast of Africa, the US Geological Survey says. The KLM incident led to a global effort to track volcanic clouds and notify aviation of the hazard.


The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

China builds airport next to Everest

Come October, and Everest aspirants may find a new foothold in China, just about 100km from the Qomolangma (as the mountain is known in Tibetan) base camp. In a bid to turn its side of the world’s tallest peak into a climber’s paradise, China is building a new airport, to be called ‘Peace Airport’, in an apparent message to Tibetan rebels and, probably, India as well. The $71.7 million airport coming up in Xigaze (also called Shigatse) prefecture in Tibet, which shares borders with Nepal, Bhutan and India, also appears to be a politico-cultural coup of sorts. Besides climbers, the airport is expected to draw more visitors to the Tashilhunpo monastery of the Panchen Lama, appointed by the government and recently inducted into the Chinese parliament. 


Notably, the Panchen Lama has played a key role in helping the government run a campaign against the Dalai Lama. Xigaze, the second largest city in Tibet after Lhasa, falls on the China-Nepal highway, which will make it easier for air passengers to travel to the Himalayan nation by road. This will be the fifth civilian airport in Tibet Autonomous Region. The four other airports are in Lhasa, Qamdo, Nyingchi and Ngari. China is also building another airport; the world’s highest, at an altitude of 4,436 meters in Nagqu Prefecture. Construction of the Peace Airport began in April last year and will be completed by October. It is built to handle 2.3 lakh passengers and 1,150 tones of cargo and take care of 2,580 takeoffs and landings a year till 2020, the official media quoted Xu Bo, director of the Civil Aviation Administration’s Tibet branch, as saying. Climbers will be looking at no less than four Tibetan peaks higher than 8,000 metres besides Mount Qomolangma (8,843.13m): Lozi (8,516m), Markalu (8,463m), Qowowuyag (8,201 m) and Xixabangma (8,012m).


The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).