India fastest-growing aviation market in the world
The Indian aviation market grew by 27.4% in March making it the fastest-growing aviation market in the world, according to the passenger traffic data released by the International Air Transport Association (IATA). The IATA is an association of 260 airlines comprising 83% of global air traffic. India’s growth rate was over six times more than that of the US, which clocked the second-highest growth rate of 4.1%. “The domestic India market remains the fastest-expanding market, with growth edging up to 27.4% year-on-year, in March. Growth in the Indian domestic market is being propelled by the comparatively strong economic backdrop as well as sizeable increases in services,” the IATA said in a statement. The average flight frequencies within India, it said, are scheduled to increase by 11.5% year-on-year in 2016. Indian domestic airlines carried 23 million passengers in the first three months of 2016 as compared to 18.5 million during the corresponding period last year thereby registering a growth of 24.03%, according to the data released by the Directorate General of Civil Aviation (DGCA). “India’s annual domestic Revenue Passenger Kilometer (RPK) growth rate has now been in double digits for nineteen consecutive months. The combination of such rapid growth in India and slower (even negative) growth in other similarly-sized domestic markets has seen India overtake the others in terms of seasonally adjusted domestic RPKs over the past year or so, most recently Brazil, which it surpassed in March,” the IATA said. Globally, the overall domestic demand rose 3.7% in March this year compared to March 2015, driven primarily by performance in the two largest markets, the US — which accounts for two of every five domestic passengers–and China, the IATA said. However, India accounted for only 1.2% in the over all global domestic traffic. Adrian Wilson Jersey
India passenger growth number 6 times higher than the US
The gap between air passenger growth in India and other countries widen further with the country registering a growth of 27.4% during the month of March, which is six times more than the second highest growth market, shows International Air Transport Association (IATA) data. The second highest growth in passenger number was recorded by the US, which grew by 4.1% during the month of March. However, US is the largest air passenger market in the world with number of fliers exceeds the total number of air passengers. In contrast, only 2% of the country’s population fly in India. The reason behind the growth of the Indian market has primarily been attributed to lower fuel prices, which has led to reduction in fares and rise in passenger number. IATA also credits increase in capacity by airlines in India as one of the reasons for the growth in number of flying passengers. “Growth in the India domestic market is being propelled by the comparatively strong economic backdrop as well as sizeable increases in services (average flight frequencies within India are scheduled to increase by 11.5% year-on-year in 2016). India’s annual domestic RPK growth rate has now been in double digits for nineteen consecutive months,” IATA said in its assessment. Joe Theismann Womens Jersey
Airlines have hiked ticket cancellation charges, says Mahesh Sharma
An analysis has showed that there has been an increase in cancellation charges for air tickets, Union Minister Mahesh Sharma said today while emphasising that airfares are not regulated by the government. In a written reply to Lok Sabha, he said cancellation charges are not fixed and varies from Rs 1,500 to 100 per cent fare of the ticket depending upon the class, price level and time before departure. “Analysis on the increase of the cancellation charge was carried out and it was found that there was increase in cancellation charges. Cancellation charges are not fixed,” Sharma said. The Minister of State for Civil Aviation was responding to a query on whether the ministry has taken note of steep hike in cancellation charges by airlines. However, he did not provide details on whether aviation regulator DGCA has taken any action on the matter. “Airfares are not regulated by the government. With the repeal of Air Corporation Act in March 1994, the provision of fare approval was dispensed with by the government, including charges for cancellation,” Sharma said. In recent times, many local carriers have increased the charges for cancellation of air tickets. Last month, taking note of domestic airlines increasing ticket cancellation fees by a significant amount, aviation regulator DGCA last month sought an “explanation” from the carriers on the rationale for such a steep hike. Jon Bostic Jersey
DGCA circular likely to affect pilot training on hold till September
A Directorate General of Civil Aviation (DGCA) circular which would have severely crippled the expansion plans of airlines that send their pilots abroad for training was kept in abeyance at the eleventh hour after affected carriers raised an alarm with the director general and alleged conflict of interest. The controversial circular, which was to come into force on Saturday , was temporarily held back by DGCA on Friday evening. By then, however, certain airlines, anticipating its implementation, had cancelled the training slots they had booked for pilots at centres abroad for the months of May and June.With no new slots available at the centres for the next 7-8 weeks, the training schedules of at least 60 pilots from six carriers have been hit. Currently, Indian domestic passenger traffic growth is at a global high of 21%. The number one problem facing the Indian airline industry today is pilot shortage, as an average of 4-5 passenger aircraft are imported each month, which means a demand for 40-50 trained co-pilots and commanders every 30 days. It was in such a scenario that on February 1, the DGCA chief flight operations inspector (CFOI), Capt Ajay Singh, issued a circular which, among other things, made it mandatory for overseas pilot training facilities to be inspected and certified by DGCA flight operations inspectors for their training to be recognised in India. Currently, these facilities, being located in International Civil Aviation Organisation member countries like the UK, US, UAE, Singapore etc, are inspected by their own aviation regulators and the DGCA recognises their certification. The circular would have hit all Indian carriers other than Jet Airways and Air India, as these two have their own in house pilot training facilities with aircraft simulators etc.The rest, like IndiGo, SpiceJet, Vistara, Air Asia, Go Air, Blue Dart, Air Costa, TruJet, and Quick Jet Cargo send all their pilots abroad to train. “The circular in effect says India cannot trust the certifications done by the aviation regulators of the US, the UK, Singapore, Europe etc,” said an airline official, requesting anonymity . After the circular was issued, the airlines con cerned started doing rounds to the DGCA offices to get inspectors to fly to these countries to certify the simulators.”But in the place of about a dozen simulators, only a couple of simulators were certified by the DGCA till April end. So airlines cancelled the training slots they had in the rest of the simulators as the circular was to be enforced from April 30,” said a source. The slow pace of inspection alarmed the carriers, which took the matter to the director general. A day before the circular was to come into effect, on order from the director general, the circular was put on hold till September. “Had the director general not temporarily revoked this circular, these carriers would have suffered huge losses as the aircraft would have come in, but pilots could not have been trained to fly them,” an official said. Every month, over 60 candidates are sent abroad by Indian carriers to train as copilots, commanders, instructors, examiners etc. The director general was not available for comment. Capt Singh, when contacted, said, “This is a circular issued with the approval of the DG.” Another contentious condition imposed by the circular was that ground training and exams should be carried out in India, though ground and simulator training go hand-in-hand. “Imagine the trouble we would have gone through with split training,” said an airline official requesting anonymity. Ted Ginn Jr Womens Jersey
Benefit to 2 airlines leads to conflict of interest claims
The Directorate General of Civil Aviation (DGCA) circular, put on hold on account of a few contrroversial provisions, primarily evoked criticism because of the conflict of interest involved. The circular was issued by Captain Ajay Singh in his capacity as DGCA’s chief flight operations inspector, and put several stumbling blocks before airlines like IndiGo, Vistara, AirAsia, SpiceJet, GoAir, TruJet etc which send their pilots abroad for training..But it would not have affected two carriers, Jet Airways and Air India, as both these airlines have their own training facilities in India where they train their pilots. The circular sparked a controversy as Captain Singh was employed with Jet Airways from 1998 to 2014, after which he joined the DGCA on contract. As is the case with all DGCA flight operations inspectors (FOI) who have come from airlines, once their DGCA contract expires, Capt Singh too will most likely go back to Jet Airways. Other than this, currently , like the other FOIs, he only operates flights occasionally for his airline so as to keep his licence current, a practice sanctioned by the DGCA. “We do have ground to suspect that Capt Singh might have issued the circular to stifle Jet’s rivals,” said an airline official, who had taken the matter up with the director general. “Also, why have the 129 Indian aircraft charter companies, most of whom also send their pilots abroad for training, not been included in the circular?” the official asked Capt Singh, when contacted, said, “This is a circular issued with the approval of the DG.” Responding to a questionnaire sent by TOI, Jet Airways said Capt Singh was not associated with them currently. When asked if it was likely that he would join Jet after his tenure with the DGCA expired, the airline replied in the affirma tive. The airline also confirmed that Capt Singh operated flights for Jet Airways occasionally to keep his licence current. The circular has its plus points, though. For one, it would keep an eye on Commercial Pilot Licence holders who self-fund their A320 or Boeing 737 training programmes so as to better their chances of getting an airline job. “They might cut costs and go to countries where the regulators are lax and training shoddy . Such a circular would check such practices,” said a source. Indian carriers, on the other hand, send their pilots to simulator training centres at Dubai, the UK, the US, and Singapore, among others, all of which follow a training programme certified by the aviation regulators of these countries. The case has exposed the vulnerability of the DGCA, whose top brass consists of government officials who do not possess an indepth knowledge of aircraft and flying.The regulator then is forced to rely on airlines to provide it with experienced pilots. Wendell Smallwood Authentic Jersey
Air India posts profit first time in decade, but still not out of woods
Air India has reported a modest operational profit for the first time in a decade, two years ahead of the target as per its turnaround plan. This is significant since any profit, even if it is at the operational level, has been generated for the first time since the erstwhile Air India and Indian Airlines merged to create the present behemoth. Representational image. PTIRepresentational image. PTI Lower fuel prices coupled with improved operational performance are being cited as the two main reasons for this happy state of affairs and airline officials have indicated that net profit could similarly be advanced by two years. Aircraft availability, increased cabin manpower and more aggressive marketing are some other reasons the airline’s financials are improving. Civil Aviation minister A Gajapathi Raju informed Lok Sabha on Tuesday that the airline has turned in an operational profit of Rs 8 crore last fiscal by cutting operational expenses by almost 11 per cent. Here are five reasons why this milestone in Air India’s lifespan is a significant one, but the airline is not out of the woods yet: 1) Fuel saved the blushes: As per data given in Parliament during the first part of the Monsoon Session, Air India may have saved close to 9 percent or about Rs 720 crore on fuel costs alone in 2015-16. Since fuel expenses may have accounted for about 30 percent of total expenses during the fiscal, savings from benign global crude prices helped the airline significantly in showing an operational profit in 2015-16. Other improvements, though welcome, would not have helped the cause unless fuel prices also helped. In other words, when global crude prices begin to rise, Air India’s operating profit will also get squeezed significantly unless it takes giant stride in improving other operational parameters. The airline is estimated to have flown close to a million more revenue passengers last fiscal at 17.77 million versus 16.88 million in 2014-15. A report in Mint newspaper earlier this year cited the CASK – Cost per Available Seat Kilometer – of India’s airlines to drive home the point that fuel prices are make or break, since cost rationalization does not seem to be successful for India’s airlines. 2) Losses pile up: According to data provided in Parliament, Air India’s losses stood at Rs 5490.16 crore, Rs 6279.6 crore and Rs 5859.91 crore in 2012-13, 2013-14 and 2014-15 respectively. As per Budget Estimates, the airline would have still declared a net loss of Rs 3529,8 crore during FY16 despite being profitable at the operational level. While fuel accounts for the single largest cost head, employee expenses also account for close to 10 percent of total costs. In other words, 10 paise out of every rupee spent by AI is used to pay employee salaries. This, when the airline has already hived off two subsidiaries – one for ground handling and another for engineering – and halved total manpower. 3) Debt worries remain: Air India, which accounts for the largest share of Indian airlines’ total debt pile, was sitting on borrowings of over Rs 51,000 crore till March 31, 2015. MoS Aviation Mahesh Sharma said in Parliament in March that Air India’s total debt burden of Rs 51, 367.07 crore includes Rs 22,574.09 crore outstanding on account of aircraft loans. As per the Turnaround Plan (TAP), the equity infusion by the Government into Air India also includes Rs 18,929 crore for the repayment of the government-guaranteed loans/interests till FY 2020/21. Air India’s interest bill alone for FY16 is estimated to be around Rs 3,700 crore! Since government is the owner of Air India, the airline seems to have a perpetual cushion to fall back on, something no private airline can boast of. So a modest operating profit is good news but provides little relief on the airline’s actual financials. 4) Privatisation: This government has blown hot and cold over any move to consider offloading the white elephant called Air India. Sources tell us that there is stiff opposition from the top management of the airline over any such move. This can only spell disaster for the airline, which has been guzzling public money at an alarming rate. Last year, the independent directors on the board of the airline had met minster Raju to convince him about the need to privatise Air India. In March this year, the heavy industries ministry had created a flutter by classifying Air India as ‘sick’, reviving a discussion on whether the government should get Air India off its hands as its financial situation is not improving despite continuous equity support. At that time, airline officials had said that there has been some talk of initiating the process of privatisation by starting with two businesses which were earlier spun off from the airline – engineering and ground handling. They had said then that Air India Express could also be considered under this scheme. A proposal to recommend privatisation of Air India has been discussed informally at several board meetings of the airline – a subject usually taken by its independent directors, but no formal resolution has been drafted in this regard. Now that AI is operationally profitable, time is ripe for at least a discussion over privatisation. 5) Image problem: Air India suffers from an image problem due to service standards, frequent delays and engineering issues. According to DGCA data for March, Air India continued to have top ranking in the complaints’ register with 32,518 passengers affected due to various issues like denied boarding, delays and cancelled flights on the domestic sector. Though the airline has less than half the share of the domestic market compared to IndiGo, the number of people affected due to flight delays alone was more than twice that of IndiGo passengers similarly affected. For its operational performance and therefore revenues to improve, these image issues need to be settled. The government is committed to spend over Rs 30,000 crore in equity support to Air India as per the Turnaround Plan. Of this, over
Govt fixing air fares will kill airlines
There are many lessons the government can draw from the stupendous growth of the telecom sector and one of the top most would be to not meddle in tariff fixation in any sector unless there is something that can distort market competition. But, the current NDA government appears to be ignoring this in the case of the civil aviation sector, which in effect will harm the consumers though the politically-expedient idea is to help them. Civil Aviation Minister Ashok Gajapathi Raju said in the Lok Sabha yesterday that the government is considering a proposal to ensure that only Rs 2,500 is charged per ticket for one-hour flights, and his ministry will soon start the consultation process with the stakeholders to explore the possibilities of containing fares. It is true that steep airfares during emergency situations like unprecedented floods in Chennai and Srinagar and the recent Jat agitation raise concerns, but that can’t be seen as a case for imposing restrictions on air fares across the board, which can derail the airlines’ business completely. The price of any commodity or service is best left to the market dynamics and if the government wants to support any segment, it should upfront do it through subsidies allocated in its budget, instead of forcing it on the business entities — the Indian Railways is a burning example of how regulated tariff is forcing it to lose both passenger and freight traffic. So, the better idea would be to let the airlines fix the air fares that they think is necessary to run their business and then leave it on the market competition to decide whether those prices could be sustained or not. The government needs to remember the findings of the Directorate General of Civil Aviation (DGCA) analysis of airfares on 18 routes, including high density routes (Delhi-Mumbai and Bangalore-Mumbai) and low-density ones (Kolkata-Port Blair) during the four quarters of 2014. The study revealed while there was a big difference between the minimum and maximum fares, the average was closer to the minimum fare. This means that the bulk of tickets is being sold closer to the minimum fares. If the government is really serious about reducing air fares, it should focus on reducing the cost of operation of the airline companies, especially ATF prices and taxes, instead of imposing restrictions on air fares in a high-handed manner. Matt Breida Authentic Jersey
Aviation policy before Cabinet soon
The civil aviation policy is likely to come before the Cabinet next week, sources in the civil aviation ministry said. It may retain the proposal of auctioning unused bilateral rights. According to sources, the proposal for auctioning the bilaterals will remain as part of the first civil aviation policy despite opposition from private airline firms. They contend that the proposal would favour foreign airlines, especially the gulf carriers. They have also argued that such a policy doesn’t exist in any other country. Shelby Harris Authentic Jersey
Jet Aviation Basel refurbishes first Legacy 650
Jet Aviation has refurbished its first Embraer Legacy 650 business jet on behalf of a private owner. The project was undertaken at the business aviation services provider’s completions centre in Basel, Switzerland, during its scheduled C-check heavy maintenance inspection. The large-cabin business jet has since been sold to Johannesburg-headquartered company Planair Enterprises. The refurbishment included a full-carpet replacement, seat and divan re-upholstery, wood repairs, re-covering of the dado panels, new flooring in the galley and a full exterior repaint, says Jet Aviation. The Basel facility is the only service centre in Europe that is authorised to perform the full suite of MRO services on Embraer business jets, including Part 21 design organisation and interior work, it adds. According to Flightglobal’s Fleets Analyzer database, there are around 90 Legacy 650s in service globally. The Rolls-Royce AE3007-A2-powered aircraft was introduced in 2009 as an extended-range version of the 14-year-old ERJ-135-derived Legacy 600. Meanwhile, Jet Aviation’s facility in St Louis, Illinois, is to install for the first time Honeywell’s JetWave satellite communications terminals in a Bombardier Global Express. The project will be undertaken as part of a major refurbishment contract for the long-range business jet and will provide passengers with much faster high-speed connectivity during flight. Frostee Rucker Womens Jersey
China plans $11.9 billion investment in aviation infrastructure
China plans to invest 77 billion yuan ($11.9 billion) this year in the construction of civil aviation infrastructure, particularly airports, the country’s chief civil aviation regulator said. China will begin with 11 key construction projects and 52 aviation-related upgrades, the Civil Aviation Administration of China (CAAC) said on Wednesday. “The general aviation sector, especially aircraft research and manufacturing, has become a hot spot of both industrial upgrading and social concern,” Feng Zhenglin, head of the CAAC, said. The aviation sector will get preferential treatment to improve transportation, foster new growth engines, and boost employment and the service sector, state-run Xinhua news agency reported. Richard Rodgers Authentic Jersey