‘International flights from Madurai in about 4 months’

The Union Home Minister, Mr P. Chidambaram, inaugurated the Rs 129-crore new integrated passenger terminal building at Madurai airport on Sunday. Speaking on the occasion, he said that focused attention had been given for infrastructure development in the last six years and larger investments have been made in surface transport, shipping and civil aviation than done in the last 50 years. A visible change has come about, with air travel ceasing to be looked upon as elitist. Airports in Delhi, Mumbai, Hyderabad and Bangalore have been modernized. In Tamil Nadu, airports in Tiruchi, Madurai and Chennai have been upgraded. Responding to requests for international flights from Madurai, Mr Chidambaram said that a meeting has been called in Chennai on September 17 by trade bodies with airline operators and in about three-four months, international flights would start operating from Madurai. More importantly, the domestic connectivity from Madurai to Mumbai, New Delhi, Kolkata and Bangalore should be augmented to bring about development in the region, he added. Presiding , the Union Minister of State for Civil Aviation, Mr Praful Patel, said that he was happy to have had the opportunity to both lay the foundation stone and now to inaugurate the new building. Assuring to get international flights started soon from Madurai, Mr Patel said between 2004 and 2010, the profile of the people who fly has changed and the number had increased three-fold , marking the fast growth in the country. The 9 per-cent GDP growth achieved is uncommon in many parts of the world. The yearly growth in air travel is around 21 per cent. A related concern is the augmentation of cargo transport in a big way. The runway is being streamlined for the purpose, he added. The Union Minister for Chemicals and Fertilizers, Mr M.K. Alagiri, emphasized the need to operate international flights from Madurai to Singapore, Malaysia and Dubai. Mr V.P. Agarwal, Chairman, Airports Authority of India (AAI), explained the features of the new terminal building and said that efforts are on to extend the runway immediately to 9,000 ft once land acquisition is completed. Mr S. Raheja, Member (Planning), AAI, proposed a vote of thanks.

---

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).

Finnair to resume daily Helsinki-Delhi flights

Mirroring the return in passenger demand, Nordic carrier Finnair on Thursday said it will resume daily service between New Delhi and Helsinki from January next year, up from the six flights a week it operates now. "We will start daily service between Helsinki and New Delhi from January as there is good demand from the Indian market," Finnair senior vice-president (public affairs & corporate communications) Christer Haglund said.

---

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).

CWG spikes airfares from Delhi

Tourists may or may not line up to see the excavated remains of “world class’’ Delhi during the October 3-14 Commonwealth Games (CWG), but Delhiites’ scramble to fly out of the city is pushing up airfares. Airlines are reporting much higher than usual bookings from Delhi to places like Goa, Udaipur, Port Blair and the northeast through Bagdogra. As a result, airfares to these hotspots have shot up. For example, a return flight to Port Blair can cost up to Rs 54,000 in October. A leading private airline’s website showed that all low-fare economy seats to the island are sold out on October 5 (a random date chosen to check fares) and only tickets for Rs 39,470 (economy class) were available. Returning to Delhi, on the other hand, has fares starting from Rs 12,400. No one seems keen to fly into dug-up Delhi to spend hours caught in traffic jams on roads with CWG lanes. To put things in perspective, the present fares from Delhi to Udaipur, Mumbai, Bangalore and Cochin are about Rs 3,500, Rs 6,000, Rs 8,000 and Rs 13,000 respectively. The current fares for popular nearby international destinations like Bangkok, Kuala Lumpur, Singapore and Dubai are in the range of Rs 15,500 to Rs 18,000. “These fares are likely to rise by 25% to 30% as the industry expects a higher-than usual rush out of Delhi to nearby places over the next month or so,’’ said Samuel, MD of Riya Travels. He said that fares are going to rise in coming days as demand rises. “As a habit, Indian travelers don’t make plans in advance and there is a sudden rush in times like these. We anticipate demand — and fares — to rise sharply. So people should book early,’’ he said. Air India (domestic) says it may operate additional flights to places like Bagdogra due to the huge demand. “While demand on sectors like Jammu goes up traditionally in the festive-holiday season mainly on account of the Mata Vaishno Devi pilgrimage, we are witnessing higher than ever interest in destination like Udaipur, Port Blair and Bagdogra. The lower level fares are almost sold out and only full-fare economy (highest fares) remain,’’ said an official. So from this month-end, flying from Delhi to Goa can cost anywhere between Rs 6,000 and Rs 12,000 and fare to Bagdogra will be between Rs 11,000 and Rs 16,000. That too, if tickets are booked now. While demand and hence fares, always rise in the festive season with people flying home to celebrate Navratri, Durga puja, Ganesh Mahotsav, Eid, the CWG has provided an additional impetus.

---

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).

Emirates not keen on stake in domestic carrier

Emirates, the world’s biggest airline by international traffic, aims to take advantage of India’s growing market for air travel by increasing flights rather than taking a stake in a local carrier in the event that investment rules change. Indian regulations currently bar foreign airlines from investing in domestic airlines but the civil aviation ministry has proposed that a 25% stake be allowed. “I don’t think we have thought of buying a stake in Indian airlines right now,” Majid Al Mualla, Emirates’ senior vice-president, West Asia and Indian Ocean, said in a phone interview from Dubai, where the carrier is based. “As a growing company, we haven’t reached a saturated mark where we see a need to take a stake in other airlines.” His view runs counter to that of Willie Walsh, chief executive officer of British Airways Plc, who said in a 5 September interview that his company would be keen to buy a stake in an Indian carrier if rules change. An analyst said Emirates shying away from investments may be a result of its experiences in the past. “Emirates must recall the troubled history of its SriLankan investment, so I am not surprised they prefer to pursue organic expansion opportunities,” said Vikram Krishnan, associate partner at Oliver Wyman, a San Francisco-based aviation consultancy firm, in emailed comments. European carriers such as British Airways and Lufthansa compete with West Asia-based airlines such as Emirates in the Indian travel market. They have chosen to increase cooperation with Indian carriers over the past few years. For example, British Airways sponsored Kingfisher Airlines’ entry into the OneWorld alliance this year, while Lufthansa backed Air India’s entry into Star Alliance a few years ago. Al Mualla said 78 Airbus A380s will join Emirates’ fleet of 150 aircraft over the next few years and it will use these to expand into the Indian market and elsewhere. The carrier’s 12 double-decker A380s, with private suites, shower spas and lounges for premium class passengers, fly to London, Manchester, Paris, Sydney, Auckland, Toronto, Bangkok, Seoul, Jeddah and Beijing. Hong Kong and New York are the next A380 destinations on the cards, the airline said. Since the carrier has used up all its seat entitlements, it will wait for additional rights to start new flights to India, Al Mualla said. The civil aviation ministry is not keen to offer fresh bilateral rights right away after a five-year period that ended 2008, during which such entitlements were easily granted, according to a ministry official. Emirates, which says it has 10,400 Indians among 50,000 employees, including 900 in the country in 10 different cities, plans to consolidate and focus on its current offerings. It will open two new airport lounges for business and first class passengers in Delhi and another airport that’s yet to be decided, adding to 25 such lounges at various airports. The carrier also plans to upgrade its Mumbai- based call centre operations to a global hub connected with its Dubai and London call centers this year and add 90 workers to the existing 400. The Centre for Asia Pacific Aviation estimates foreign carriers are offering services to an increasingly diverse range of Indian cities, providing global connections via their respective hubs. “The Gulf carriers in particular have a very strong presence, as seen by the 23% share of capacity they command,” the consultancy noted in its report last year. “Indian carriers currently

---

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).

Aer Lingus steps up talks with British Airways, rivals

Aer Lingus Group is stepping up talks with Oneworld airline alliance leader British Airways and carriers from the rival Star and Skyteam groups as it seeks to decide which of the three global blocs to join next year. The Irish company has been in contact with Oneworld, where British Airways is acting as its sponsor, and those negotiations are set to intensify, CEO Christoph Mueller said in an interview. United Airlines and KLM will fulfill the role of intermediaries in discussions with Star and Skyteam.

---

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).

UK inflation unexpectedly exceeds 3% on airfares

UK inflation unexpectedly exceeded the government’s 3% limit for a sixth month in August as higher costs of items from airfares to food stoked price pressures in the economy. Consumer prices rose 3.1% from a year earlier, the same pace as in July, the Office for National Statistics said on Tuesday in London. The median forecast of 30 economists in a Bloomberg News survey was for a reading of 3%. On the month, prices increased by 0.5%. The persistence of faster inflation may exacerbate the split on the Bank of England’s Monetary Policy Committee to tame prices while other officials say more stimulus may be needed.

---

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).

Banks refuse to restructure aviation loans

Banks have refused to restructure loans of airlines, estimated at over Rs 50,000 crore, via the CDR (corporate debt restructuring) mechanism, senior bankers familiar with the matter said. One of the main hurdles is that 75% of the lenders to a particular borrower have to come together to trigger the CDR mechanism, one of the bankers said. Indian Banks Association now plans to approach the RBI to allow banks reschedule loans of airlines — such as Kingfisher Airlines, Paramount Airways and Air India — without treating them as bad assets. “I can tell you upfront that it would not be a CDR because it has other implications. So, none of the airlines will be going through the CDR route. What has been taken up to the Reserve Bank is that those airlines loans should be allowed to be restructured in such a way that loans continue to be treated as performing or standard asset,” said a senior State Bank of India (SBI) executive. SBI has an exposure of Rs 3,500 crore to the aviation sector. The RBI has told banks that it could consider restructuring of the debt for aviation sector and not for any particular company. SBI chairman OP Bhatt said on Thursday that restructuring would help airlines raise fresh equity. CDR framework is timely and transparent manner restructuring debt of corporate facing problems. It covers only multiple banking accounts/syndication/consortium accounts with outstanding exposure of over Rs 20 crore. “But the CDR mechanism can be triggered only when a minimum of 75% (by value) of the lenders come forward to it. This is proving difficult,” said a banker. Banks want RBI to allow a simple restructuring of loans outside the CDR framework. Under discussion are a lowering of interest rate in the beginning and recouping it later when the airlines become financially stronger. Airlines also want to replace their high cost rupee loans with low-cost overseas loans. Airlines borrow overseas typically to buy aircraft but turn to domestic lenders for meeting working capital needs. Air India has a debt of Rs 45,000 crore, Jet Airways of Rs 14,818 crore and Kingfisher Airlines of Rs 6,000 crore. RBI has asked SBI Caps to prepare the technical report on the proposed restructuring package for the aviation sector. “Unless RBI gives a clearance, we cannot restructure for the second time as it would render these assets as bad. Since loans of many of the airlines companies have already been restructured by the respective banks, we need a special exemption from the RBI. Thereafter, loans will be rescheduled,” another banker said.

---

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).

Domestic ops at Delhi Airport’s T3 to start only by Sept end

Domestic travelers will get to see the swanky Terminal 3 (T3) at Delhi’s IGI Airport only by September end, a month late, as a host of problems including erratic power and water supply plague the facility. The decision to postpone domestic operations, which was to start from T3 on August 27, was taken after civil aviation minister Praful Patel visited the terminal on Thursday “The position will be reviewed by the minister in mid-September, following which a decision on date of shifting of domestic operations to T3 will be taken,” said a statement from the Civil Aviation Ministry. “Presently, the quality of power supply is erratic, which is affecting the sophisticated baggage handling and security equipment at the terminal,” said the ministry statement. Delhi Trancco was to set up a 220KVA sub-station by July 31. But now, DTL representatives have expressed their inability to commission the it before September 15.

---

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).

Etihad launches “all economy” service

Etihad Airways, the national carrier of the UAE, is introducing its first “all economy” class aircraft into its fleet in October 2010. The launch aims to help the fast-growing carrier deliver an even more competitive product on key short-haul routes, which have high demand for economy traffic and low demand for premium traffic. The two Airbus A320s will be configured to carry 162 economy class passengers, an increase of 42 from the current economy capacity. These will initially operate to Alexandria, Calicut, Colombo, Damascus, Doha and Thiruvananthapuram from Etihad’s Abu Dhabi base. Plans are in place to expand the all-economy fleet to 10 A320 aircraft which will enable the airline to launch new short-haul destinations which have low demand for premium travel and also to existing Etihad destinations. James Hogan, Etihad Airways’ Chief Executive Officer, said: “Etihad has grown at a remarkable pace during the past six and a half years. We have built a strong brand and a robust business, and it is the right time to challenge the way we serve our various markets and segments. “Our all economy aircraft will allow us to offer a more competitive product in key point-to-point markets in Asia, the Middle East, North Africa and the Indian Subcontinent, while maintaining the high standards of service we have become known for.” Customers traveling on the new all-economy aircraft will receive the same award-winning, world-class service and product that is featured on its current narrow body fleet, such as seat back in-flight entertainment screens and hot and cold meals and beverages. Each seat has a 32 inch pitch. Etihad triumphed at the World Travel Awards Middle East Ceremony 2010 in May when it picked up a host of top awards including “Middle’s East Leading Airline”, as well as “Middle East’s Leading Airline Economy Class”, “Middle East’s Leading Airline First Class” and “Middle East’s Leading Airline Inflight”. And last November Etihad was voted “World’s Leading Airline” at the World Travel Awards Grand Final in London.

---

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).

AI to begin direct flight from Delhi to Melbourne in Nov

Government-owned Air India is starting a direct flight from Melbourne to Delhi in November. It will also book passengers from there for destinations in West Asia and Britain, via their hub in Delhi. “We will be the first airline to have a direct flight to Melbourne,” said a senior AI official, who did not want to be identified. AI used to operate flights to Melbourne, Sydney and Perth in Australia but these were not direct; they went via Singapore. These flights were later stopped. AI recently said it would make the new Terminal 3 at Delhi airport its hub and committed to the airport operator to bring in 10-13 million passengers annually, a third of the unit’s annual handling capacity, in two years. It also committed to go in for a three-fold increase in its deployment of flights in and out of Delhi, from 480 a day to 1,200, starting from the next summer schedule. Currently, AI operates a little over 800 flights a day across the network.

---

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).

Nine airlines seek fleet expansion

In a sign of recovery in the aviation sector, nine private airlines have obtained government permission for expansion of their fleet by importing 49 aircraft for scheduled air transport services since August last year. This permission is valid for one year. The private airlines which have been granted permission include Jet Airways (13), JetLite (2), Spice Jet (7), Zav Airways (3), Deccan Cargo (8), Aryan Cargo (2), Go Airlines (2), Jagson (2) and IndiGo (10). The government has also granted “in-principle approval” for import of 375 aircraft for scheduled operations. These aircraft have to be imported by 2025, the civil aviation minister, Mr. Praful Patel, said in reply to a question in the Lok Sabha. Replying to another question on licensing of airports, he said there are about 53 operational airports of Airports Authority of India (AAI), out of which 47 airports are used for scheduled or regular flight operations. “There are five airports of AAI which have obtained licence from DGCA. There are nine licensed airports belonging to joint venture companies (JVCs), state governments and others, out of which six are being used for scheduled flight operations,” he said. The minister said before 2004, aerodromes belonging to AAI or government were exempted from licensing requirement as these were in operation as per ICAO regulations and guidelines. “Amendment (Aircraft Rules) 2004, made licensing mandatory for all the airports, including AAI or government, however, these are allowed to operate until they obtain licences,” Mr. Patel said. The provision in amended aircraft rules had the requirement of obtaining the licence for existing operational aerodromes by the date notified in this regard. The said date had been extended from time to time as the licensing procedure is lengthy and took time, he said.

---

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).

India sore over UK move to tax airlines on seat basis

The UK government’s move to charge airlines even on empty seats has not gone down well with the Indian civil aviation ministry. The UK authorities have proposed that every airline from across the world flying there should be taxed on the number of seats instead of passengers carried by them. This means, even if the load factor is below flying capacity of its aircraft, the airline will have to fork out for vacant seats. The aviation ministry is opposing the idea as it may cost heavily to the airlines and so the passengers. “This is just not possible. We are not the only one opposing the idea. We have asked the Indian high commission in London to give us a report on the exact proposal, and then only we would take up the issue,” an aviation ministry said. The UK levy is christened as London departure tax that varies between Rs 4,500 to Rs 7,500 per passenger, depending on economy or business class. Currently, domestic carriers Air India (AI), Jet Airways and Kingfisher fly to UK. While Air India has 17 weekly flights to London from Delhi and Mumbai, Jet has 21 flights a week, two from Mumbai and one from Delhi every day. Kingfisher has 11 weekly flights to London. The average load factor on this route hovers around 70 per cent for all the carriers. The ministry official said even if taxes are levied on reciprocal basis, it would impact domestic carriers. “There are hardly two UK airlines flying to India, the biggest one being British Airways. British Airways schedules are such that it would have better load factor than any of our carriers that usually reach in the afternoon in UK. That is also the case with Virgin Atlantic. This means, a lower load factor for our carriers,” the official said. This is not the only way that UK is trying to push up its revenues. It charges over £400 per passenger for using VIP lounge at the terminal-5 of Heathrow airport. The Indian government is not happy with that too as there are no such charges levied by Indian airports. “We have taken up the matter with UK officials. We should sort it out soon,” the aviation ministry said.

---

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).

Gopinath join hands with Tatas

Following on its partnership with the Mukesh Ambani-led Reliance Industries for a cargo airline venture, aviation entrepreneur Captain Gopinath has now joined hands with the Tata Group for a charter air service. The two deals with two of the country’s largest business houses have come in less than four months for Capt. Gopinath, who had founded the country’s first budget airline Air Deccan that he later sold to the Kingfisher Airlines. Capt. Gopinath first dallied with the aviation space through a private sector commercial helicopter service, Deccan Aviation, in the late 1990s, which he followed with the launch of Air Deccan in 2003.

---

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).

Awaiting RBI decision on airline debt recast: Bhatt

Breaking its silence over debt recast for the airline industry, State Bank of India (SBI), the country’s largest lender, today said it was awaiting a decision from the Reserve Bank of India (RBI) to restructure loans and yet treat them as standard assets. The move will help private carriers Kingfisher Airlines and Paramount, as Jet Airways has indicated that it is not facing problems in clearing its dues. National Aviation Company, which operates Air India, was also paying its instalments on time, in spite of being debt-ridden, bankers said. “The aviation sector is on uptick but it needs equity to survive. By restructuring some of the loans, we can reduce the stress for which regulatory clearance is required,” SBI Chairman O P Bhatt told reporters while announcing the bank’s quarterly results. Like the real estate sector, which got a helping hand from RBI, banks want to get the regulatory go-ahead to restructure the debt, and still treat the accounts as standard assets. In normal course, during the first year of restructuring, banks need to treat the account as a substandard asset which requires additional provisioning.

---

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).

Qantas H1 profit may be 'materially stronger'

Qantas Airways Ltd said first-half earnings 'may be materially stronger' after Australia's biggest airline returned to profit on rebounding corporate travel and higher income from frequent flyers. "We can see as the recovery happens that the leverage to earnings in our airlines increases dramatically," chief executive officer Alan Joyce said in a telephone interview today The carrier had a net income of A$54 million ($48 million) in the second half ended June compared with a year-earlier loss of A$93 million, based on annual results. The carrier boosted earnings at its frequent-flyer program 12% in the second half and the Qantas-brand unit returned to profit on rising business travel and a company-wide cost- cutting program. Profit at the Jetstar budget unit fell as rising competition from Tiger Airways Holdings Ltd and Virgin Blue Holdings Ltd squeezed fares on domestic routes. "They've done very well in tough conditions," said Will Seddon who helps oversee A$350 million at White Funds Management in Sydney. "The worst is now behind them in terms of demand and yields, and the cost structure is now much leaner, so that bodes well for earnings growth." Joyce, 44, cut costs by A$533 million in the 12 months ended June, the first year of a three-year plan. The airline intends to save A$1.5 billion over the course of the program by flying more direct routes, using more fuel-efficient aircraft and paring the time planes spend taxiing to runways. The carrier fell 1.2% to A$2.48 in Sydney, matching the drop in Australia's benchmark S&P/ASX 200 index. Qantas hasdeclinedl7% this year, the second-worst performance among the 31 stocks in the Bloomberg World Airlines Index. First-half profit in the current fiscal year "may be materially stronger" than a year earlier subject to fuel prices and trading conditions continuing, Qantas said without providing a specific forecast. The carrier plans to increase group capacity 9.6% from a year earlier, it said. The airline's full-year net income fell 4.3% to A$112 million, trailing the A$181 million average of eight analyst estimates compiled by Bloomberg. Sales declined 5.4% to A$13.8 billion. Full-year pretax profit to-taled A $377 million, compared with the airline's forecast of A$300 million to A$400 million. The result included a A$46 million impact from the Icelandic volcanic ash cloud that shut much of European airspace in April. "The A$46 million wasn't originally in our outlook when we talked aboutA$300to A$400 million," Joyce said. "The number we reported today would have been better by that amount if the volcano hadn't occurred." Second-half underlying earnings before interest and tax at the carrier's frequent flyer program, its most profitable unit, rose to A$171 million.

---

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).