SpiceJet’s mega order: Indian aviation market set to surpass Japan, become 3rd largest
SpiceJet today announced an order for 100 new Boeing 737 Max aircraft for $11 billion at list prices, the second highest aircraft order ever from India. Combined with an earlier order, this means it will receive 155 narrow body jets between 2018 and 2024, besides also having purchase rights for 50 more wide body aircraft from the same manufacturer. The narrow bodies will be used to service the domestic market as well as select international destinations. The wide body fleet of 50 Boeings – when SpiceJet does firm up the order for it – will enable the airline to launch a long haul low cost service like Singapore Airlines’ subsidiary Scoot and Norwegian Air. Anyhow, the new aircraft are 8 percent more economical on a per seat basis and about 20 percent better in fuel efficiency. Chairman and MD Ajay Singh said today the new aircraft will allow the airline to fly for an hour longer, which means new international destinations will anyway be added to its network. As of now, one in four SpiceJet flights or 25 percent of the network flies to international destinations, with 10 daily services to Dubai alone. So why is SpiceJet going out on a limb to place a mega aircraft order which will require mega bucks? Singh said today that the domestic market has been growing at about 25 percent in recent years. “Indian airlines together have about 400 aircraft now, even if we take growth at 20 percent going forward, this means 80 more aircraft are needed each year….as the market grows, appetite for fleet expansion also increases.” Kyzir White Jersey
Airbus France to set up aerospace, defence cluster at Dholera
Airbus France today signed an MoU with Gujarat government’s Dholera Industrial City Development Ltd (DICDL) for setting up an aerospace and defence cluster at Dholera Special Investment Region near Ahmedabad. The agreement was signed during the ongoing Vibrant Gujarat Global Summit at Mahatma Mandir here. According to the Gujarat government, officials from Airbus France have already visited the place where the company wishes to start their operations. “Airbus France has signed an MoU with state government’s DICDL for collaborating on setting up of aerospace and defence cluster,” state government’s Additional Chief Secretary, Industries and Mines, P K Taneja said. “The MoU will create aerospace and defence manufacturing ecosystem in Dholera region. Airbus France officials have also visited the spot and given their nod to go ahead with the project,” Taneja said. Giving more details about the MoU, Gujarat Deputy Chief Minister Nitin Patel said the company would start its operation with a helicopter manufacturing facility. “This is a very big project coming to Gujarat in aerospace sector. In the initial phase, Airbus France would start production of helicopters at this facility. Investment details are still being finalised,” Patel said. Jaylon Smith Womens Jersey
SpiceJet places order for 205 Boeing aircraft worth Rs 1,50,000 cr
Spicejet has placed an order for 205 Boeing aircraft valued at $22 billion or Rs. 1,50,000 crore at list price. With the earlier order for 55 planes and additional 100 new 737-8 MAX aircraft, the airline has now firmed up order for 155 planes, besides purchase rights for 50 B737-8 MAX and wide body aircraft. The new aircraft will be delivered between 2018 and 2024. “Largest Boeing order in India,” Ajay Singh, promoter of Spicejet, said. He said that the airline could look at launching low-cost long haul service if they decide to acquire widebody. No firm decision as yet. Currently, the budget carrier has 32 next generation B737s and 17 Bombardier Q400s. “We are honoured to build upon more than a decade of partnership with SpiceJet with their commitment of up to 205 airplanes,” Boeing Company Vice Chairman Ray Conner said. Ajay Singh said the induction of the new aircraft, which burn 20 per cent less fuel, would help SpiceJet reduce costs and enhance its ability to compete. “This is a composite transaction for purchase of up to 205 aircraft valued at $22 billion,” Singh said, adding that the focus is on growing the airline in a responsible and profitable manner. After being on the verge of going belly up two years ago, the airline has been in the black for the past seven straight quarters. When asked about financing of the deal and its impact on debt to equity ratio, Singh said there would be no “equity dilution” and the balance sheet would be healthy. In the 2016 July-September quarter, the airline had posted its highest-ever quarterly profit of Rs. 59 crore. In the year-ago period, the same stood at Rs. 29 crore. Jon Niese Authentic Jersey
‘Air India is getting as aggressive as the private sector’
ew routes, aircraft purchase, recruitments will turn the airline around, says CMD One-and-a-half years after he took over as Air India CMD, Ashwani Lohani is confident of a turnaround of the airline. In an interview with BusinessLine, Lohani shared his plans and ambitions for the national carrier. Excerpts: Air India was recently featured as the third worst airline in the world. What do you have to say about that? There were no details, no analysis given in the report. Several international airlines are not on the list. We’ve asked for the basis of the findings — we don’t agree with the findings. We have scope to improve but we are not that bad. We are fairly good. How would you rate your performance in the last one-and-a-half years? The performance has definitely improved. In the past, we were getting abused by the media everyday but now we are getting praise as well. Recently, Amartya Sen tweeted about us, appreciating our service. Yes, issues are there but the main thing is not the presence or absence of issues. The main thing is whether we are doing anything to address them. The fact is the airline is trying its best. What are your biggest focus areas for Air India’s turnaround? Our biggest problem is heavy debt. Because debt servicing itself requires so much money that we are unable to find that kind of money. And if we don’t service that debt we become defaulters. On an operational basis we are doing well. Last year we were operationally profitable, this year also we’ll have operational profits more than last year. We have introduced a lot of flights in both domestic and international circuits. We have progressed. We have recruited pilots and crew members. Last year, we used to have strike calls so often — all that has vanished. The airline is stable. There are a lot of internal issues that lead to processes and that’s what we keep discussing with the staff. What are your growth plans? On the domestic route we’ve already started over 12 new connections and another dozen connections will be added this year. On on the international routes we’ve started four non-stop flights including direct flights to San Francisco and Madrid from Delhi. We are soon going to connect to Washington as a new port of call in the US. We’ll also connect to Copenhagen to connect with Scandinavia and we’ll have some connections with Africa and Tel Aviv. A lot of expansion plan is there because any company which is in an operational business has to be active. If I stop, I start stagnating. Despite your increased connections, the load factor remains low. In such a case is it financially prudent to add more connections? Before we started the Madrid flight, three international flights which we had started used the aircrafts that we had on the ground. We didn’t buy any new aircraft. Most of these flights that we are increasing on the domestic route are using existing aircraft. We are therefore increasing the utilisation of planes. Even though load factor has marginally gone up by 1-1.5%, overall passengers carried has gone up at a higher proportion because we added more flights using the same planes. Our load factor is about 76 per cent totally and it should go to 85 per cent. We are coming out with a lot of new schemes. We are trying to be as aggressive as the private sector. We are becoming competitive in pricing, we are meeting travel agents. How are you looking to reduce debt? All I can say is that the airline needs to be financially restructured. Some of it can be turned to equity. There are several options. What is your fleet induction and fleet retirement plan? For retirement, we had 15 classic aircraft (Boeing 747s) which are very old. Four of them have already been retired. Eleven more are to be retired. About seven will go in 2017 and the remaining in 2018. At the same time, we would inject 22 new aircraft. We’ve already entered into an agreement for leasing 22 aircraft. Fourteen Airbus 320s will come in this year. Five Boeing 787 are coming; three Boeing 777s will come in next year. We’ve also placed an order for 10 ATRs that’ll come in this year. So, we’ll have at least 29 aircraft coming in this year. In the next two years, we are looking at inducting about 100 planes in Air India and its subsidiaries. How are you working towards improving operational efficiency? We are empowering our staff at the field level. We are authorising them to take decisions, take financial calls. Even though it is termed risky in a government company. We want them to take on-the-spot decisions. For example, we’ve given our cargo managers full power to quote rates that they deem correct without taking permission from the headquarters and wasting valuable time in the process. So far we’ve been losing business because by the time the quote comes from the headquarters, we would’ve lost it to competition. We are similarly empowering our managers in commercial operations to ensure simplicity of operations. How are you addressing the staff shortage issues? That is getting resolved now. We have injected a lot of cabin crew. We’ve just inducted 50 cabin crew who are joining the 777 fleet and we are recruiting 300 cabin crew from Chennai. We recruited 300 separately from Delhi. We are now doing regular recruitment for pilots as well. This never happened earlier. We are an aged airline with staff having an average age of 50 years. It is unthinkable to have 50-years average age in the service sector. Other airlines have average age of staff at about 30 years because you require youngsters. We don’t have youngsters. We just have oldies including me. We haven’t done recruitment in 18 years and this is the result of that. Other than pilots and cabin crew, we would be hiring another 300-400 people. Nick Shore
Government to sell 51% stake in Pawan Hans
Moving ahead with the strategic sale of Pawan Hans, the government today said it will sell its entire 51 per cent stake and transfer the management control of the helicopter service operator. Pawan Hans is a joint venture where state-owned ONGC holds 49 per cent. The government has sought applications from entities to act as transaction advisor for the proposed disinvestment of its stake in the company. “The government of India intends to divest its entire shareholding of 51 per cent in Pawan Hans Ltd, through strategic disinvestment with transfer of management control,” a public notice said. As per the notice, issued by the Department of Investment and Public Asset Management, a transaction advisor is to be roped in from “reputed professional consulting firm, investment bankers, merchant bankers, financial institutions and banks” who would provide advisory services and manage the strategic disinvestment process. The deadline for sending the applications is February 2. Set up in 1985, Pawan Hans currently has a fleet of 46 helicopters. It was incorporated with the primary objective of providing helicopter support services to the oil sector for off-shore exploration operations, services in remote and hilly areas as well as for charter services. Earlier this month, defence equipment maker BEML said government would offload 26 per cent stake through strategic disinvestment that could fetch the exchequer Rs 10 billion. Government has set a disinvestment target of Rs 565 billion for the current financial year and so far around Rs 240 billion has been mopped up through share sale and buy backs. Shawn Lauvao Womens Jersey
Flightstats clarifies Air India not third worst airline
Clarifying on reports about Air India being the third worst airline in terms of operations, aviation insights company Flightstats has clarified, in a letter to Air India, that their list does not put Air India as the third worst airline in the world. According to a reports a couple of days back, Air India was the third worst airline in the world in terms of operational performance. “The Worst 10 International Airlines of 2016 10. Hainan Airlines – 30.3 percent 9. Korean Air – 31.74 percent 8. Air China – 32.73 percent 7. Hong Kong Airlines – 33.42 percent 6. China Eastern Airlines – 35.8 percent 5. Asiana Airlines – 37.46 percent 4. Philippine Airlines – 38.33 percent 3. Air India – 38.71 percent 2. Icelandair – 41.05 percent 1. El Al – 56 percent,” the report had stated. The rating was contested by Air India, which wrote a letter to FlighStats, which responded by saying that Air India’s projection as third lowest is not accurate. “We understand that a recent article by Bloomberg has portrayed Air India in a negative light and we want to assure you that FlightStats by no means endorsed their portrayal of your performance. While we do highlight exceptional performers, we do not, and have not, highlighted low performance or maintain a list of worst performing airlines,” said Flightstats response The response added that Bloomberg requested and was provided a list of 122 international carriers with their accompanying arrival on-time percentage for the year of 2016. All data is reported using the industry standard A14 metric, which measures the percentage of on-time actual gate arrivals within 14:59 of scheduled gate arrival. “Our data, which was a measure of 97.7 per cent of your arriving flights, indicated that 61.29 per cent of Al’s flight arn’ved within the A14 threshold. Bloomberg applied its journalistic license to invert the A14 result to highlight the percentage of delayed flights being 38.17 per cent and indicated that the number was a predictor to future delays. This is not how we would portray airline OTP; nor were we given access to the Bloomberg article prior to its publication. Please note we are making a formal statement about this on our website as well as via our social and media channels,” reads the missive, written by James E Hetzel, Vice President, Business development at FlightStats, Inc. Blake Wheeler Authentic Jersey
SpiceJet to seal $10 billion deal with Boeing for 737 jets: Sources
India’s SpiceJet is set to seal an order for at least 90 new 737 jets from Boeing, two sources said on Thursday, as the low-cost carrier targets an expansion to tap into the South Asian nation’s booming air travel market. The announcement for the 737 MAX aircraft – which includes at least 42 of the narrowbody jets SpiceJet had previously agreed to buy from Boeing in 2014 – is expected as early as Friday when SpiceJet’s chairman holds a press event in New Delhi, the sources, who were familiar with the matter, said. One of the sources said the SpiceJet order could be for as many as 100 new planes. Boeing last week posted an order for 100 737 MAX jets from an unidentified customer. The sources declined to be identified ahead of Friday’s press announcement. An agreement with SpiceJet, which has a current fleet of 40 planes, would be a much-needed boost for Boeing in India, as its rival Airbus has won record-sized orders with InterGlobe Aviation’s IndiGo, India’s biggest budget airline, as well as a recent deal with GoAir. SpiceJet and Boeing did not respond to requests for comment. India is the world’s fastest growing aviation market and among the most attractive for planemakers seeking a new wave of growth. Indian passenger numbers are increasing by more than 20 percent annually thanks to low prices and rising disposable incomes. SpiceJet has been in talks with Boeing and Airbus since 2015, and it is expected to have secured a discount from the roughly $10 billion cost of 90 737 MAX jets based on list prices. Airlines typically get discounts from list prices when placing large orders. Under chairman Ajay Singh, SpiceJet has been rebuilding its business since almost collapsing after running out of cash in late 2014. The airline has grown its market share and returned to profitability but it remains far smaller than market leader IndiGo. Despite soaring passenger numbers, Indian carriers have struggled to achieve consistent profitability because of fierce competition, regular price wars and high operating costs. Anthony Duclair Womens Jersey
Govt to spend $10 billion on airport infrastructure: Civil Aviation Secretary
A sum of $10 billion would be spent in next five years to develop airport infrastructure in India so that the country could become the world’s third largest aviation market in seven years, Civil Aviation Secretary RN Choubey has said. As many as 400 unused airstrips across the country that had become cattle grazing grounds, would be brought back to life, he said. Addressing a day-long India Aviation Summit here today, Choubey said the Civil Aviation Ministry was determined to maintain the “historic” 23 per cent growth rate achieved in the aviation sector in the country. “$10 billion would be spent in next five years to develop airport infrastructure. Our aim is to become the third largest aviation market in the next seven years. We are determined to stay ahead of the growth curve,” he said. India’s nearest rival in terms of aviation growth was China with 14 per cent. Progressive and proactive industry-friendly policies played a significant part in Indian aviation’s growth story and not just the fall in fuel prices, Choubey remarked. “Our ultimate objective is to take the flight to the masses and to this end we have come up with a progressive policy. We have also undertaken a very very bold experiment called Regional Air Connectivity Scheme at the national level,” the bureaucrat said. “For the first time, the civil aviation sector has achieved rail parity. While the railways turnover is Rs 1.6 lakh crore, civil aviation turnover touched Rs 1.4 lakh crore and the number of rail and air passengers has also become almost equal,” Choubey pointed out. “Civil aviation is now just as popular and just as necessary. Airfares are now comparable to air-conditioned train fares. No one could imagine subsidy for air travel but under the RAC Scheme, we have been extending 50-60 per cent viability gap funding,” he said. Stating that RAC Scheme created a lot of “excitement”, the Civil Aviation Secretary said they received enquiries for as many as 800 routes. Civil Aviation Minister P Ashok Gajapati Raju, Union Urban Development Minister M Venkaiah Naidu, and FICCI Chairman (Aviation) Pratyush Kumar were also present on the occasion. The Civil Aviation Ministry organised the summit in collaboration with Andhra Pradesh Government and FICCI, for the first time in Vijayawada. Justin Faulk Womens Jersey
Few airlines, fewer flyers make hit air connectivity of Bhopal
In 2011, when the new terminal building of Raja Bhoj airport was inaugurated it was billed as the best airport among tier-II cities in the country. With its extended new runway, it was claimed Bhopal will be connected to all prominent cities in the country and even international services would begin. In 2017, Bhopal is not even among top 30 airports of the country. The airport has limited operations connecting few cities while the footfall dropped to less than half. Surprisingly, none of the private airlines are interested to operate from here. This, at a time when several private carriers have expanded their operations in Indore and Raipur. Bhopal currently is connected only to Delhi, Mumbai, Raipur, Pune and Hyderabad with limited number of flights. It has practically no flight service to East and South India. In past two years, Bhopal has lost connectivity with important destinations like Ahmedabad and Lucknow. Marcus Peters Jersey
45% flights delayed at Mumbai airport in December
If you boarded a flight or landed at the Mumbai airport in December, then you may have been among those flyers whose flight was delayed. The flight schedule punctuality was at its worst last month with nearly 45% arrivals and departures being delayed by over 15 minutes. Last year, the best on-time performance was recorded in February with only 25% departures/arrivals being delayed. On average, about 25-30% flights get delayed every month at the airport. But since September, the number of delayed arrivals and departures at Mumbai airport has been on a steady rise. Sean Davis Authentic Jersey