Bids for upgrading Nagpur airport to be issued soon
In a boost to regional air connectivity in Maharashtra and Central India, the state government is planning to expand the capacity of the Nagpur airport and to construct a new runway. “The request for quotations (RFQs) for the upgradation and modernisation of the Dr Babasaheb Ambedkar International Airport (BAIA) will be issued soon. This project will be undertaken on a public private partnership (PPP) basis on design, build, finance, operate and transfer basis,” said a senior government official. He added that a decision in this regard was taken in a recent meeting of the Maharashtra Airport Development Corporation (MADC) – a special purpose company to develop Multi-modal International Hub Airport at Nagpur (MIHAN) and Aviation Infrastructure in the state to provide the regional air connectivity. The BAIA airport is considered among the top 20 busiest airports in the country. According to an estimate, the airport saw a movement of around 1,401,147 passengers and 13,330 aircraft in 2014. The airport also saw handling of around 6,063 tonnes of cargo. The recent development is expected to improve its traffic handling capacity. The official said the decision to add another runway to the existing one would augment the capacity of the airport to handle passenger and cargo traffic. “One runway can be earmarked exclusively for the use of the Indian Air Force… now, there are restrictions on civilian flights. If a new runway is constructed, one can be kept exclusively for them,” he added, stating that the capacity augmentation would also help boost passenger traffic and exports from the units located in MIHAN and the larger region.
ICRA forecasts 16.6% growth in non-aeronautical revenues of airports by 2025
Ratings agency ICRA BSE -1.30 % has forecast that non-aeronautical revenues at Indian airports will grow by 16.6 per cent to touch Rs 16,150 crore over the next 10 years, driven by increase in scope of activities there and growing commercial orientation of the operators. Revenues from such activities primarily consist of fees for the rights to operate businesses at the airport, and rental of leased land and premises. Some of the common non-aeronautical activities include food and beverage business , duty-free shops, leasing of terminal space, and running car rentals/parking and hotels/motels. Over the last 10 years, non-aeronautical revenues at domestic airports have increased at a CAGR of 22.9 per cent — from Rs 450 crore in fiscal 2005 to Rs 3,500 crore in 2014-15, according to ICRA. Over the next 10 years, ICRA estimates that the per passenger non-aeronautical revenue for Indian airports would grow from the current levels of Rs 182 to Rs 410, at a CAGR of 8.4 per cent, the ratings firm said in its forecast, released today. “The total non-aeronautical revenues at Indian airports are expected to reach Rs 16,150 crore in FY2025 at a CAGR (compound annual growth rate) of 16.6 per cent,” it said. Significantly, ICRA’s projections comes at a time when Indian carriers have reportedly sought a ban on the sale of liquor in the security hold area (SHA) at domestic terminals of airports on the ground that drunk passengers on board can be a “safety threat.” At presenet, sale of liquor is allowed both at shops and pubs inside the SHA at airports after passengers have checked-in and undergone the security check. Noting that over the years, airports have evolved from being purely an infrastructure provider to a sophisticated market entity with diversified revenue streams, ICRA said, “this has led to the emergence of non-aeronautical revenues which have become a key contributor to an airport’s revenues.” “As many international airports have evolved over the years in terms of generation of non-aeronautical revenues, the same can be expected from the Indian airports. “The increase in scope of activities at the airports and growing commercial orientation of the airport operators are expected to drive the growth in non-aeronautical revenues at Indian airports,” ICRA AVP for corporate ratings, Harsh Jagnani said. Non-aeronautical revenues constitute 25 per cent of the total revenues for Indian airports, whereas their contribution stands at 37 per cent for the ICRA Sample of international airports. On a per PAX basis, the non-aeronautical revenue in India stands at Eur 2.52 (for FY2015), which is significantly lower than Eur 5.80 for the ICRA Sample of international airports, Jagnani said. For this purpose, ICRA has analysed 25 international airports/airport groups together encompassing 132 airports and including 21 of the 50 busiest airports in the world , with a total passenger base of 1,700 million and non-aeronautical revenues in excess of Eur 11 billion. Andrew Adams Authentic Jersey
Pvt sector urged to invest in civil aviation industry
The private sector should invest in the aviation industry and ensure high quality of products for the growth of the sector without too much dependence on the government, said K Harinarayana, aviation expert and former Vice-Chancellor of the University of Hyderabad. He was speaking at a seminar on the sector in the Vignan group of educational institutions here on Friday. “Aerospace sector does not have space for too many OEM suppliers but they have to retain their competitiveness by delivering high quality,” he said. He said the government would have to support the development of the ecosystem of high quality suppliers in the aerospace industry. While everyone cannot become a prime manufacturer, there is scope for OEM suppliers of assemblies and sub-assemblies, Harinarayana said. The private sector should stop looking to the government for everything. “The Indian aviation industry has to jump from early phase to maturity phase. It has happened in the automobile industry and can be done in the aviation industry too,” he said. The new aviation policy will open up tremendous opportunity in the maintenance, repair and overhaul (MRO) field and Indian companies can take up manufacture of regional civil feeder aircraft to provide connectivity to regional airports. “There is a strong need for a new generation regional transport aircraft and there are lessons to be learned from countries such as Brazil in the development of the aviation industry, Harinarayana added. Antwaun Woods Authentic Jersey
Jet Airways to take back 6 Boeing planes from Etihad for use in its core market
Private carrier Jet Airways will take back all six wide-body Boeing aircraft leased out to its investment partner Etihad Airways in the next six months and deploy them on some of its core routes including to the Gulf. The six B777-300 ER aircraft are expected to be put into service from August and some of them are likely to be used in the domestic sector as well, Jet Airways Chief Financial Officer (CFO) and acting Chief Executive Amit Agarwal said during a post-earnings analysts’ call recently. “Our wide body (Boeing 777) aircraft currently on lease to partner airline Etihad will be taken back and operationalised from August. Based on the market condition, our plan is to upgrade some of the existing A330 routes with B-777,” Agarwal said. “We will be careful and cautiously deploy these aircraft in the domestic market,” he said. These ultra long-haul operation planes had been wet-leased to Etihad, which holds 24 per cent stake in the Naresh Goyal-owned private airline. Wet lease is an arrangement in which the lessor provides an aircraft along with the cockpit and cabin crew and pays for its maintenance and insurance. The company which wet leases the plane pays by the hours it is operated. In dry lease, only the aircraft is leased out. The Mumbai-based full service airline, along with its subsidiary JetLite, has a total of 116 aircraft, with 92 of them being on operating lease and rest 24 owned by it. “This (replacement of Airbus A330 with B 777) will subsequently result in additional capacity in our core market India and Gulf,” Agarwal said. Jet Airways, the second largest domestic carrier by market share, also plans to deploy these long-haul planes to destinations like Amsterdam, Paris and Toronto by replacing the existing wide-body Airbus A330s, a Jet official had said early last month. Amsterdam became the airline’s new overseas gateway for international operations to Europe and beyond from late March, replacing Brussels. Staying profitable for the fourth straight quarter, Jet Airways posted a net profit of Rs 426 crore in January-March, primarily aided by lower fuel expenses and higher passenger numbers. In the financial year ending March 2016, the airline posted its first annual profit after eight years, recording a net profit of Rs 1,212 crore. In the corresponding period, it had a net loss of Rs 2,097 crore. Miro Heiskanen Jersey
India sitting on bilaterals, want to change that: Civil Aviation Minister Ashok Gajapathi Raju
What gives you satisfaction after being minister for two years? It has been a learning experience. Certain non-performing assets (NPA) have started performing. For instance, Boeing set up an MRO (maintenance, repair and overhaul) facility in Nagpur. For Boeing it must have been the slowest MRO ever — it took 7-8 years. What was the problem? The aircraft tried to reach the facility and the taxiway was not built. Hundreds of crores of rupees worth of assets — which would have given x number of jobs — was unutilised because it was not complete. Timelines were set, now work has started. It still has to reach full capacity. What were the sticky issues after you took charge? How far have you moved? The sticky points are: you have about 31-32 airports of Airport Authority of India today where flights can probably land and take off, but it’s not happening. You can call it low-hanging fruit. There is nothing cheap about an airport. It is basic infrastructure. Even if you put a low price of Rs 100 crore on each of these, that is Rs 3,100 crore of non-performing assets ready to perform, but not performing. In the BJP manifesto, there was an issue of regional connectivity. We are trying to make that a reality. One of the major constraints is: passenger traffic is increasing, but the number of aircraft is not. The aircraft are getting bigger in size. And some of these places will not be able to accommodate those big aircraft. So we need smaller aircraft to make regional connectivity a reality in our country. Two years ago, you talked about a civil aviation policy. The policy is yet to be announced, isn’t that a failure on your part? I don’t think it is a failure. No doubt it is slow, but it is in an advanced stage now. It has gone through its rounds like agnipariksha. First of all, there was no comprehensive policy in the past. It was just knee-jerk reactions to some situations. Why do you need a policy? Because it gives economic activity a chance to plan. It will come out shortly, but I won’t put a time frame.Is a consensus eluding it? A consensus can never happen in certain situations, but a better understanding can. For the first time, a draft policy was thought of, put on the Net in the public domain, suggestions were called for, lots of suggestions came. Many states do not understand aviation. Those who understand it have benefited — the aviation-friendly states. They have cornered quite a bit of growth. My own state (Andhra Pradesh), for instance. Before we were bifurcated, we had planned an airport in Shamshabad when I was in the state government. We brought down the tax on aviation turbine fuel to 4 per cent. After the project came, the government hiked it to 16 per cent. When the state was bifurcated, it became 16 per cent. I had a chat with the CM, who asked if it should be brought down to 0. As a former finance minister of the state, I suggested: maximum 2, minimum 1. He decided on 1. The state witnessed huge growth. But look at Delhi. Since passenger traffic is inelastic, they increased tax from 20 per cent to 25 per cent. West Bengal wouldn’t reduce VAT in Kolkata, but brought it down in Bagdogra. What holds for Air India in time to come? It is a beautiful Air India. The airline’s problem is cohesiveness. If they work as a team, they will deliver. No government can commit taxpayers’ money for eternity. They have to pull up their socks. They have made operating profit for the first time in so many years. This is a good trend. If they keep the momentum going. I would like it to survive. You won’t look at Air India as a candidate for disinvestment? Its books are not at that level, there will be interest. As far as Air India is concerned, they have to develop confidence for others to see value. Only then can these options be considered. They have the capability. Growth in passenger traffic has been quite good. What about cargo? We are concentrating only on passenger traffic while the world’s largest airline is cargo. The airport is like a road. You run a truck on it, you run a bus on it, you can run a mini-van on it. And India is blessed — you name the climate and we have it, from snow-capped peaks to deserts. But there is a mindset that cargo is not glamorous. But it will contribute to the economy, it will gain from the economy. So we need a push. As it is, Indian cargo is doing well in terms of percentage growth – 6-7 per cent — but it is on a minuscule activity. E-commerce is also growing. There are a lot more areas. Outside the country, dwell time is an issue. We are working with them so that it comes to internationally acceptable levels. How do you see the way forward for India’s bilateral with other countries? Has it been optimum? I don’t want to go the way it was handled in the past, but it doesn’t make economic sense. The air service agreements, or bilateral as we call it, are done on a level playing field with countries. If you look at today’s position, we are not able to perform on it, the partners are able to perform. If you break it down further, whether its the public sector or private sector, India is sitting on bilaterals, not performing. That is what we want to change. If 100 seats are opened up in a particular destination, it means India gets 50 seats and the partner country gets 50 seats. If a country is able to allocate 62 per cent of its bilateral, we are able to allocate just 32-33 per cent of our bilateral. We want a transparent procedure of auction for
DGCA seeks IAF nod for more flights to Jammu, Srinagar
With airlines keen on increasing services to Srinagar and Jammu, aviation regulator DGCA has sought Indian Air Force’s approval for increasing flight movements at the two airports. The airports are under the control of the IAF , which has allowed limited civilian aircraft movements. Sources said the Directorate General of Civil Aviation (DGCA) has sought IAF approval for increasing the number of flights at the two airports from the current eight to 12 per hour. “Airlines want to introduce more flights to the two airports. They (the IAF) have agreed to consider our request,” a senior DGCA official said. While awaiting approval, the aviation regulator has also written to the J&K government seeking increased security for airliners at the two airports. Seth Roberts Womens Jersey
Uber signs pact with Kempegowda International Airport
Taxi aggregator Uber has signed a pact with Kempegowda International Airport to provide people rides who land in the city from the airport. Through this pact, Uber will be given a dedicated parking area and pick-up zone called ‘U Zone’ located within the airport premises, the company said in a release. Stating that the U-Zone has been created to streamline traffic and reduce congestion at the pick up lanes, it said Uber executives will also be at the airport to help passengers find their cars easily and give them access to wi—fi in case they face network issues. Nate Solder Womens Jersey
States want AI to fly new routes between cities
Several State governments have asked Air India to look at launching virgin routes connecting different cities. These governments have also asked the airline to consider connecting their States with others, and begin routes from their cities to new global destinations. “Nagpur-Nashik, Raipur-Kolkata, Kolkata-Indore-Jabalpur, Kolkata-Raipur-Indore-Ahmedabad, Chandigarh-Dubai, Kolkata-Ahmedabad and connecting Andaman to Singapore and Bangkok are virgin routes, and were requested for in the meeting that we had with representatives of 16 States,” said Ashwani Lohani, Chairman and Managing Director, Air India. The meeting was held here on Wednesday at the initiative of Air India as it looks to lease more small aircraft as part of plans to enhance its fleet to 100 aircraft in the next four years. The airline plans to lease the smaller propeller-driven ATR aircraft to enhance regional air connectivity that some States have requested. At the meeting, Karnataka requested the airline to look at connecting Mysore to Bengaluru, Puducherry and Goa, apart from connecting Chennai and Hubballi. State government officials pointed to the huge tourist interest in these cities to push their case. Lohani said the States were willing to provide Viability Gap Funding (VGF) or their own funds so that the State-owned carrier does not operate these flights at a loss. “We will not require VGF for all the flights as potential does exist for many of the routes suggested. But where VGF is required, the States are willing to provide us funding,” he said. Andaman also requested that an ATR aircraft be stationed there so that it could be used to operate flights between the various islands which make up the Union Territory. Terron Armstead Womens Jersey
Jet Airways back in black in FY16
Riding on reduced expenses, Jet Airways has posted a profit of ?397 crore on a standalone basis for the quarter ended March 31, against a loss of ?1,728 crore in the comparable quarter of the previous year Income from operations increased 4 per cent to ?4,842 crore (?4,626 crore). For FY16, net profit was ?1,173 crore against a loss of ?1,813 crore in the previous year. Income from operations stood at ?19,556 crore (?18,044 crore). The company in a media statement said that the cost per available seat kilometre (CASK) excluding fuel dropped 3.2 per cent, which helped achieve operational efficiencies throughout its business. The better financial performance has enabled the company to reduce its debt by ?1,680 crore during FY16. Jet Airways Chairman Naresh Goyal said in a statement that the airline has been revitalised over the past two years. The company’s focused efforts have resulted in significant improvement in operational performance. The Indian aviation industry is witnessing a growth phase but the competitive and structural challenges in the domestic market continue to exist. The induction of capacity and the enhanced competitive scenario are creating a constant pressure on yields, he added. John Greco Authentic Jersey
Air India to achieve fiscal targets two years in advance?
Air India hopes to report an operating profit in FY 2015-16, two years earlier than what had been envisaged in the original Turnaround Plan (TAP) approved by the Centre in April 2012. The airline has also advanced its projections for reporting a cash profit to 2017-18 from 2019-20, and hopes to report a profit after tax (PAT) in 2018-19, two years earlier than what was envisaged earlier in TAP (2021-22). While the operating profit is likely to be in the region of ?8 crore, sources indicated it would not be possible to share the other profit figures as these may change. The revised TAP and actual performance vis-a-vis TAP for the state-owned carrier were reviewed by its Board at its meeting here last week. During 2015-16, the airline’s yields were higher at ?5.02 in the domestic sector and ?3.66 in the international sectors than what had been laid down in the TAP. The Board asked the airline to work on increasing yields by 2-3 per cent annually, starting from fiscal year 2017 onwards. The revised TAP envisages an addition of 43 new aircraft between 2016-17 and 2019-20, apart from 12 wide body aircraft that would comprise six 787, three 777-300 Extended Range, and another three aircraft on dry lease. While the induction of the wide body aircraft will be substantially from the order placed by the airline with Boeing in 2005, the narrow body aircraft will be leased from the market. The airline is also planning to add 18 Boeing 737-800 and 35 ATRs in its subsidiary companies on dry lease. The acquisition plan envisages a net addition (after phase out) of 100 aircraft for AI and its subsidiary companies, to increase its market and capacity share both in the domestic and international markets. “The fact that global crude prices are down, the airline’s operating efficiencies have improved, and passenger loads are better than what was envisaged in TAP – have all helped advance the target date for achieving the financial goals, than what was earlier envisaged,” said a senior airline official, who wished not to be named. Besides, the decision to hive off the Air Transport Services Limited (AITSL) and Air India Charters Limited (AICL) has also paid dividends for Air India. AITSL, which provides ground handling services at airports around the country, reported a PAT of ?100 crore in 2014-15 and contributed ?62 crore to AI’s revenues. AICL is an Air India subsidiary that operates Air India Express. AI Express has a revenue share agreement with AI, which earned the parent ?325 crore in revenue, in 2014-15. The Board also noted that while Air India’s ‘On Time Performance’ on a network wide basis at 78.4 per cent was lower than the TAP target of 90 per cent, it was in line with what Star Alliance members were able to achieve. The airline was able to report a better passenger load factor of 75 per cent on its network during 2015-16, higher than the TAP target of 73 per cent. The domestic load factor was even higher at 79.8 per cent. The revised TAP has reset the target at 85 per cent on domestic routes and 80 per cent on international routes going forward. Jacques Plante Womens Jersey