Jayant Sinha: Demand soaring, India needs to triple airport capacity
Citing the rising demand of domestic aviation in the country, Union Minister of State for Civil Aviation, Jayant Sinha today stated that the construction of new greenfield airports and new terminals in Pune and Delhi will meet the demand. Speaking at an interview with CNBC TV18, Jayant Sinha further mentioned the need to triple airport capacity in the country. The aviation minister said that the ministry has a detailed plan for 30 airports for fifteen years. Stating that the aviation sector in the country has grown extraordinarily over the years, Sinha claimed that several safety measures had also been undertaken along with the steps to grow industries. Sinha further said that while the aviation ministry have several initiatives to ensure growth in the number of commuters, issues relating safety and security are primarily focused. The Union Minister also said that he is working on amending Airport Authority of India (AAI) Act to monetise its land bank for the development of airports and is also outsourcing terminals for brownfield airports. J.T. Brown Jersey
Hitting an air-pocket
The paradox is striking. On the one hand, more and more Indians are taking to the skies. But on the other, airlines’ bottom-lines are shrinking. In the recent December quarter, domestic air passenger traffic grew 23 per cent y-o- y to 2.72 crore. But all the three listed carriers — IndiGo Airlines, Jet Airways and SpiceJet — saw their earnings dip in what is considered a seasonally strong quarter. The profit of IndiGo and SpiceJet fell about 25 per cent y-o- y, while that of Jet Airways saw a much steeper fall of about 70 per cent. What gives? Two factors — rising costs, especially that of fuel, and lower ticket prices — took a toll. With crude oil staging a comeback the past few months, the cost of aviation turbine fuel (ATF) headed north. As a percentage of sales, the carriers spent about 4-7 percentage points more on fuel in the recent December quarter, compared with the year-ago period. But rather than increasing ticket prices to offset the impact, the carriers took sharp cuts. Yields in the quarter fell about 16 per cent y-o- y for IndiGo, 10 per cent for SpiceJet and 3 per cent for Jet Airways. Blame this on price wars in the intensely competitive Indian skies. The problem got compounded by demonetisation during the quarter with airlines slashing fares to offset the impact of the high-value note ban on passenger traffic. So, despite high passenger numbers, airlines’ revenue growth lagged far behind costs. This high-cost, low-fares pincer has, in fact, squeezed many airlines for most of this fiscal year. For the nine months ended December 2016, IndiGo’s profit is down about 13 per cent y-o- y while that of Jet Airways has fallen nearly 55 per cent. SpiceJet did very well until September 2016 but it too buckled in the December quarter. Its nine-month profit is up about 14 per cent y-o- y, a fraction of the doubling until the September half-year. Past perfect The weak show this year is in sharp contrast to 2015-16 when airlines’ profits zoomed. The rout of crude oil enabled low fares that drew in passengers in droves. SpiceJet swung from a big loss a year before to a massive profit, Jet Airways saw its earnings jump more than 150 per cent, and IndiGo’s already healthy profit grew over 50 per cent in the year ended March 2016. The market, a slave to earnings, raised a toast. When crude oil and ATF were at their nadir in January-February 2016, airline stocks were touching their zenith. On the bourses, SpiceJet had quintupled and Jet Airways had tripled over two years while IndiGo nearly doubled from its already pricey listing in November 2015. But with earnings slipping over the past year, punishment has been swift and severe. From their peaks in early 2016, the Jet Airways stock has been marked down more than 50 per cent, IndiGo is down nearly 40 per cent and SpiceJet has slipped 30 per cent. No surprise that there is no word yet on GoAir’s initial public offer that was to hit the market this fiscal. The ongoing March quarter could also be weak for airlines, given the base effect of low ATF cost in the year-ago period. Is there a rainbow on the horizon? A few factors should help airlines in fiscal 2017-18. One, oil prices should stay in the current $55-$60 range, given the global demand-supply dynamics. This should keep ATF cost stable; sharp increases seem unlikely. At these levels, most airlines should continue making reasonable profits. Capacity addition Also, with the effect of demonetisation gradually waning, price cuts should moderate. Given the huge potential in the country, passenger growth should continue at a healthy pace, provided tickets are not pricey. That said, the mega aircraft orders of several players, including IndiGo, SpiceJet and GoAir, could mean seat supply growing faster than passenger demand. This could keep yields under check, something that seems to be underway already. IndiGo, the market leader with a nearly 40 per cent share, has been adding aggressively to its fleet and network. But the airline has also taken the sharpest cut in yields. Calibrated capacity expansion in sync with passenger demand and pricing discipline will be key for sustainable growth of the sector. Improved airport infrastructure in big cities to cater to growing demand and fruition of the plan to put Tier II and Tier III cities on the flying map are also imperative. Thurman Thomas Womens Jersey
Pre-devpt works at Navi Mumbai airport site enter final stretch
The last tranche of pre-development works for the Navi Mumbai International Airport (NMIA) — in this case, major actions like flattening a hill and diverting a river to create a level ground for the runways and terminals — is in the final stretch. Two city infrastructure companies are in the race for the Rs 545-crore tender for the project and the board of Cidco, the nodal agency for the execution of the major infrastructure facility, is likely to finalize the bid on February 23. The design of the recourse canal for the Ulwe river and guidelines for diverting it have been provided by IIT-Bombay and the Central Water and Power Research Station that is based in Pune. Thanks to the location of the airport, when it is ready — the chief minister has said that the first flight will take off in 2019 — flyers can count on a pleasing view taking off or touching down. Two rivers, the Gadhi on the north and the Ulwe on the south, flank the two east-west parallel runways. A mangrove park coming up on a small island off the Gadhi as it falls into the Panvel creek and the non-fruit-bearing trees — so as not to attract birds — being planted along the rivers promises to bring green cheer to passengers. There will be vast stretches of natural spaces, which will be a sea change from the present terminal blighted by the concrete swell and slums of Santacruz. Both the rivers are seasonal. Gadhi is a spill from the Dehrang dam, fed by the rain water from Matheran hills, and the Ulwe originates from another hill further south of the airport. It currently flows across the core area of the airport into the Panvel creek. As part of the pre-development works, the river will be diverted through a recourse channel parallel to the runway on the south side and it will eventually flow into the Moha creek. The hill that is being flattened occupies a chunk of the western side of the airport core area. It will be cut till 8m above sea level and the debris will be used to level the runway area to that level. The high flood line in the area is 4.5metres and so the airport is being kept at a higher level. Reggie Bush Authentic Jersey
Air India to raise $250 mn through sale-and-lease-back of 2 Dreamliners
State-owned carrier Air India has put on sale two more Dreamliners (Boeing 787—800) to raise $250 million (nearly Rs. 1,700 crore) for the repayment of short-term loan obtained earlier for purchasing these planes. The airline would also lease back these two Boeing 787—800s under an operating lease for a period of up to 12 years with a three—year extension option, the airline said in its Invitation of Offers document. These two aircraft were delivered to Air India between November last year and January this year. Under a Sale and Lease Back (SLB) arrangement, the seller of an asset leases it back from the purchaser for a long—term period and continues to use it without actually owning it. The airline has fixed a reserve purchase price at USD 125 million (Rs 836 crore) for each aircraft. Currently, the airline has 23 Dreamliners in its fleet. The airline has already sold and leased back the remaining 21 Dreamliners under the SLB arrangement. As part of its fleet expansion plan, the national carrier had in 2006 placed orders with Boeing for 68 aircraft —— 27 Dreamliners, 15 B777—300ERs, eight B777—200LRs and 18 B—737—800s. The sale and lease back transaction will be supported by the Government of India guarantee in favour of the bank/ institution/lessor, according to the document. Bo Scarbrough Jersey
Aerospace engineering co Aequs to set up ₹500-cr facility in Goa
Aerospace precision engineering and manufacturing company Aequs announced at Aero India 2017 that it is setting a dedicated facility for Indian defence production in Goa. The company’s multi capability aerospace and defence manufacturing facility will come up at Tuem, Goa. Aequs, which entered into the defence manufacturing business in 2013, has been actively looking for opportunities to partner with many India’s R&D organisations and Hindustan Aeronautics Ltd (HAL). Since then, Aequs has been working with HAL on machined structural parts for various platforms, including Light Combat Aircraft, Sukhoi 30MKI, ALH, among others. “This is the first venture in the private sector, which will manufacture high-end components and systems for aerospace and defence sector and support the ‘Make in India’ initiative,” Aravind Melligeri, Chairman and CEO, Aequs said. The new facility will be set up with an initial investment of ?500 crore towards development of physical infrastructure, plant, machinery and equipment and is strategically located at the Industrial cluster (EMC). Melligeri said the new facility will be a multi-capability precision engineering with Computer Numerical Control (CNC) machines and new age technology to design and produce precision components for the Indian Defence sector. Aequs Aerospace is headquartered within the Aequs Special Economic Zone, Belagavi. Generating jobs “It will also support the ‘Skill India’ initiative by upskilling employees in the fields of precision manufacturing and other new age technologies, thus bringing a key capability in aerospace manufacturing in the country,” he added. The company sees more technology transfers taking place from aerospace giants around the globe adding further to our manufacturing capabilities, besides generating employment to close to 2,000 people. Ameya Abhyankar, Secretary and Director, Information Technology, Goa said: “To support our robust growth and expansion in the aerospace and defence sector, we are happy to host Aequs’s manufacturing facility in Tuem, Goa.” Ed Dickson Womens Jersey
India’s first dedicated heliport to open in Delhi on February 28
The capital will soon get India’s first dedicated “heliport” for flying in and out of Delhi to nearby areas in choppers. Aviation secretary R N Choubey said the Rs 100-crore project will be inaugurated on February 28 and will be an integrated one with a chopper maintenance, repair and overhaul (MRO) unit part of the complex at Rohini. Owned by Pawan Hans Helicopters Ltd (PHHL), the hugely-delayed heliport will have a large number of parking bays and an AC passenger terminal building with car parking area for the flyers. Choubey said that the heliport will bring choppers within the reach of common man. “Being a busy airport, IGI airport does not have much space for helicopter movement. The Rohini one will be a dedicated heliport and will make chopper movement much easier,” he added. Only top VVIPs and industrialists manage to get permission for flying in or out of IGI in choppers. The country’s top dignitaries, including the president, prime minister, home minister and chief ministers of a few states, use choppers from Safdarjung airport. “To promote regional air connectivity, Pawan Hans has also prepared a roadmap to connect all the major destinations from this heliport such as Delhi to Shimla, Haridwar, Dehradun, Mathura, Agra, Meerut and industrial hubs such as Manesar, Bahadurgarh etc,” PHHL had said in February last year. Pawan Hans had successfully carried out the first trial test landing an Eccuriall B3 chopper exactly a year ago to assess standard operating procedures and safety standards. Since then it has carried out many more tests. This heliport has a terminal building having capacity of 150 passengers, four hangers with parking capacities of 16 helicopters and 9 parking bays. DeMarcus Cousins Womens Jersey
GMR wants to demerge airport arm; seeks lenders’ nod
GMR Infrastructure which operates the New Delhi international airport and the Hyderabad international airport has sought the approval of its lenders to demerge its airports arm and list it separately, according to a tweet by CNBC TV18. GMR Infrastructure which operates the New Delhi international airport and the Hyderabad international airport has sought the approval of its lenders to demerge its airports arm and list it separately, according to a tweet by CNBC TV18. According to the same unnamed sources, the demerge will be done to unlock value and to cut debt. GMR which runs the Indira Gandhi International Airport in New Delhi and the Rajiv Gandhi International Airport in Hyderabad recently lost out to GVK to build the new Navi Mumbai airport. This would be the second airport in the country’s financial capital. Giovanni Fiore Authentic Jersey
Over to Hisar: New airport and aviation hub coming soon
Good news for the city: Hisar would soon get an airport. A feasibility report and the Centre’s approval have come in to air-link this counter-magnet city to other parts of the country. Capt DK Punia, executive director of Haryana Institute of Civil Aviation, said that initially the city would be linked to Delhi, Chandigarh and Jaipur. “The small distance air services would begin in the first phase. The 20 seat and 40-seat airplanes would be available on these routes,” he said. Flights to Mumbai, Ahmadabad and other far-off cities would start in the next phase. Plus, the Haryana government has expedited work on the Integrated Aviation Hub in the city. The government thinking is that besides a rise in demand for airport connectivity, there is urgent need for expanding services such as maintenance, repair and overhaul (MRO) and Fixed Base Operation (FBO). An official spokesman said the project would be developed over 3,000 acres adjoining the existing Hisar airfield which will also have features such as aircraft parking and transit facilities, an aerospace park and an aviation training centre. With an existing airstrip of 4,000 feet, spread on 3,000 acres of government owned land, the Haryana government has invited ‘global expression of interest’ for developing the proposed integrated aviation hub. Due to its close proximity with neighbouring airports and states including the National Capital region, Hisar could also serve as a potential location for commercial development, the official said. Stacy McGee Authentic Jersey
A perfect storm gathers for India’s airlines
The nascent recovery in India’s airline industry is under threat as rising costs and seat capacity combine with a crippling lack of airport infrastructure to hobble growth prospects. India’s carriers are likely to report combined losses of as much as $380 million to $450 million in the year to March, 2018, according to a recent estimate from the Center for Asia Pacific Aviation, a Sydney-based consultancy. Meanwhile, fleet expansion plans may be hit given the shortage of landing and parking slots at airports, say observers. That means airlines would be unable to take advantage of the robust growth in passenger traffic. “It will be difficult (for airports) to accommodate the newer planes. Most of the deliveries will be delayed,” said Jeet Ghosh, an analyst with Kolkata-based research firm Stewart and Mackertich. Less than a year ago, India’s airlines seemed on the verge of a turnaround as low fuel prices enabled steep discounts on fares, stirring a boom in passenger numbers and in revenue. Rayshawn Jenkins Authentic Jersey
Competition led to 30% airfare drop in India: Ashok Gajapathi Raju
The Union Civil Aviation Ministry’s role in ensuring competition between commercial airline companies, along with fall in oil prices globally, led to a drop in air fares by as much as 30 per cent, a minister said on Saturday. “If we are looking at the country as a whole, then average airfares have actually fallen by 30 per cent,” Union Minister for Civil Aviation Ashok Gajapathi Raju said on Saturday. “Now, a large part of that is due to fall in oil prices, but the significant part of that is also due to increase of competition and that is where the Ministry comes,” Raju said at a press conference at a resort in South Goa’s Benaulim village, about 50 kms from here. “But the Ministry has a lot of role in ensuring competition and as all of us know, wherever there is good competition, the benefit will then pass on to the flying public and I am happy to tell you 30 per cent reduction in average air fares in the last two years,” Raju also said. A.J. Green Jersey